Foley Hoag Wins Second Circuit Summary Affirmance on Behalf of Government of Venezuela in Mining Company Challenge

Decision Follows 2008 District Court Dismassal; Case Hinged on fraudulent Signatures Assigning Jurisdiction in Mining Dispute to U.S.

August 17, 2009

A three-judge panel of the Second Circuit Court of Appeals in New York has issued a unanimous summary affirmance in favor of the government of Venezuela that effectively ends a case brought by two Venezuelan mining concerns claiming over $200 million in damages.

The appeals ruling follows a dismissal won by the Venezuelan government in 2008 in New York district court.  Venezuela won in the district and appeals courts by proving that the alleged signature of a senior government official agreeing to give United States courts jurisdiction over the case was a fraud.

Venezuela was represented by Foley Hoag LLP, led by international law specialists Paul Reichler and Ronald Goodman.

“The summary nature of the decision reflects the overwhelming case the government of Venezuela made at both the district and appeals court levels,” said Lawrence Martin, the Foley Hoag partner who handled the matter on appeal. “This should be the end of the matter. There is no serious basis on which the Supreme Court might grant review.”

The case began in 2002 when the two mining concerns, Caromin and VMC, at the end of their concession periods, had to give up their concessions in southeastern Venezuela to make room for a dam project. When the government refused to accept their claim that they were due compensation for more than $200 million, they brought suit in New York in 2007. The companies produced a document, purportedly signed by Venezuelan Minister of Energy and Mines Rafael Ramirez, waiving sovereign immunity and accepting the jurisdiction of New York courts.

Venezuela successfully demonstrated that the document was fabricated, and that the Energy Minister’s signature had been forged.

“To think that Venezuela would entrust a case like this to U.S. courts stretches the imagination,” says Mr. Reichler, who along with Mr. Goodman has represented the Venezuelan government in various international legal disputes. Mr. Goodman added, “Given that neither mining concern had connections to the United States, and that the dam project was an entirely internal matter, it is inconceivable that the Minister would have consented to a waiver of sovereign immunity.”

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. Last month Mr. Reichler represented Nicaragua at the International Court of Justice in a case that reaffirmed Nicaragua’s exclusive sovereignty over the river boundary between it and Costa Rica.

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