Foley Hoag Wins Dismissal of Suit against Venezuelan Government that Hinged on Energy Minister’s Forged Signature
Boston, MA - May 2, 2008
Why would minister waive sovereign immunity and assign jurisdiction of Venezuelan mining dispute to U.S. courts? It turns out he didn’t….; case dismissed by New York federal court
In an unprecedented case in which a pair of Venezuelan mining companies sought more than $200 million from the Venezuelan government in compensation for giving up their concessions to a dam project, a federal judge in the Southern District of New York has dismissed the plaintiffs’ suit, citing lack of jurisdiction – as well as evidence that an apparent agreement between the parties to transfer jurisdiction to the United States was fraudulent.
Venezuela was represented by two international law specialists from Foley Hoag LLP, Paul Reichler and Ronald Goodman.
The case began in 2002 when the two mining concerns, Caromin and VMC, were required to give up their 20-year concessions so the government could begin construction of a dam in the southeastern part of the country. Although the companies’ concessions were worth little at the time, a plaintiffs’ expert valued them at almost $210 million.
When the government refused to accept this inflated claim, the mining companies filed suit in New York, in April 2007. Central to their case was a document purportedly accepting jurisdiction of a New York court, which appeared to bear the signature of Venezuelan Minister of Energy and Mines Rafael Ramirez. The mining concerns claimed the document waived the Venezuelan government’s sovereign immunity from suit.
Venezuela contended that the document was fabricated by the plaintiffs, and that the Energy Minister’s signature had been forged.
“We argued that the purported agreement was incredible on its face,” says Mr. Reichler. “To think that Venezuela would entrust a case like this to U.S. courts stretches the imagination.”
“The evidence established that the document and signature were fraudulent,” says Mr. Goodman. The Energy Minister’s passport and flight logs indicated that he was not even in the country when the alleged agreement was signed. Moreover, the companies presented two different versions of the document, with signatures in different places, casting doubt on the authenticity of both versions.
Finally, neither side’s handwriting experts supported the validity of the Energy Minister’s signature. Indeed, District Court Judge Naomi R. Buchwald wrote in her decision that “the conclusions of plaintiffs’ handwriting expert are entirely consistent with the probability of fraud.”
Given that neither mining concern had connections to the United States, and that the dam project was an entirely internal matter, Judge Buchwald wrote, “consent to a waiver of sovereign immunity in this case would have been an unprecedented act.”
Mr. Reichler and Mr. Goodman specialize in representing nations before U.S. courts, the International Court of Justice in The Hague, and international arbitral tribunals around the world.
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