Plaintiff ConocoPhillips Gulf of Paria B.V. ("ConocoPhillips") respectfully submits this brief in support of its motion, pursuant to Federal Rule of Civil Procedure 69, the Delaware Code and Section 1610(c) of the Foreign Sovereign Immunities Act (the "FSIA"), for an order authorizing the issuance of a writ of fieri facias ("fi fa writ") against shares of the Delaware corporation PDV Holding, Inc. ("PDVH") owned by Petróleos de Venezuela S.A. ("PDVSA"), subject to the same terms already imposed by the Court in parallel litigation and as described below.
The Bolivarian Republic of Venezuela ("Venezuela") and its state-owned oil company PDVSA nationalized ConocoPhillips' interests in several major oil projects in Venezuela worth billions of dollars. Having not received compensation, ConocoPhillips brought three arbitration claims against Venezuela, PDVSA, and several PDVSA subsidiaries. In one of them, a tribunal of the International Chamber of Commerce issued a final award on July 29, 2019 in favor of ConocoPhillips and against Corporación Venezolana del Petróleo, S.A. ("CVP") and PDVSA (together, the "Defendants") for approximately US $33,700,000, plus interest running from October 22, 2002 (the "Award").1 On December 3, 2020, the Award was confirmed and recognized in the United States District Court for the Southern District of New York as a judgment in favor of ConocoPhillips (the "SDNY Judgment").2
ConocoPhillips submits the SDNY Judgment for registration with this Court pursuant to 28 U.S.C. § 1963. By this motion, ConocoPhillips requests the Court to enter an order pursuant to 28 U.S.C. § 1610(c) and to authorize the issuance of a fi fa writ on the shares of PDVH owned by PDVSA (the "PDVH Shares").
This Court has already ruled,3 and the Third Circuit has affirmed, in Crystallex Int'l Corp.
v. Bolivarian Republic of Venezuela, C.A. No. 17-00151 (the "Crystallex Enforcement Case"), that the PDVH Shares are commercial assets located within the United States subject to execution by a PDVSA creditor.4
This Court has already ruled, in Phillips Petroleum Co. Venezuela Ltd. v. Petroleos de Venezuela S.A. et al., C.A. No. 19-mc-00342-LPS (D. Del. Mar. 2, 2022) and in Red Tree Investments LLC v. Petroleos de Venezuela S.A. et al., C.A. No. 22-mc-00068-LPS (D. Del.
Apr. 28, 2022), that the regulations of the U.S. Treasury Department's Office of Foreign Assets Control ("OFAC") do not prohibit the Court from issuing an order finding that ConocoPhillips has met all the requirements for a fi fa writ and authorizing the issuance of a writ upon either the lifting of sanctions or the granting of a license.
That the PDVSA parties have petitioned to appeal the Court's decisions in Phillips Petroleum and Red Tree should not impede the granting of this motion. The Third Circuit has not yet determined whether to take up those interlocutory appeals. If it does, any interlocutory appeal from an order granting this motion, if permitted, could be decided alongside them or effectively by the outcome of those appeals.
The only issue presented by this motion is whether, pursuant to Section 1610(c) of the FSIA, a reasonable amount of time has passed since the entry of the SDNY Judgment. There can be no serious dispute that sufficient time has passed since the entry of the SDNY Judgment in December 2020.
First, more than 18 months have passed since the entry of that judgment. That is by any measure under the case law a reasonable period. Second, the SDNY Judgment was itself entered by the express consent of the Defendants in exchange for ConocoPhillips' agreement to delay any enforcement in Delaware for this 18-month period, which has expired.5 The Defendants, by that agreement with ConocoPhillips, have had advance warning of this motion for more than 18 months and ample opportunity to arrange for voluntary payment. The purposes of Section 1610(c) have been served.
The Court should enter Plaintiff's proposed order, granting the same relief here that has already been granted in Phillips Petroleum and Red Tree: authorizing the eventual issuance of a fi fa writ, conditioned upon lifting of OFAC sanctions or the grant of a license to ConocoPhillips.6
SUMMARY OF ARGUMENT
1. A reasonable period has passed since judgment was entered recognizing ConocoPhillips' arbitration award.
2. PDVSA engaged in commercial activity in the United States.
3. PDVSA owns property in Delaware; namely, the PDVH Shares.
4. Neither PDVSA nor its assets are entitled to immunity from attachment in aid of execution or from execution.
5. The Court has already found that OFAC sanctions do not bar the relief ConocoPhillips is requesting.
I. The Arbitration Award and Judgment
Until 2007, together with the Defendants, Plaintiff participated in a Venezuelan offshore oil project known as the "Corocoro Project." As part of its investment, Plaintiff helped finance CVP's acquisition of an interest in the Corocoro Project. However, beginning in 2004, the Venezuelan government initiated a series of adverse measures that, in 2007, culminated in the delivery of the Corocoro Project into Defendants' hands without repayment to Plaintiff of the CVP financing.
In December 2016, ConocoPhillips brought an arbitration against the Defendants, asserting claims for breach of contract and failure to repay the loan to CVP. On July 29, 2019, a tribunal rendered the Award in favor of ConocoPhillips and against PDVSA and CVP in ConocoPhillips Gulf of Paria B.V. v. Corporación Venezolana del Petróleo, S.A. and Petróleos de Venezuela, S.A., Case No. 22527/ASM/JPA. The United States District Court for the Southern District of New York confirmed and recognized the Award as the SDNY Judgment on December 3, 2020.7 ConocoPhillips registered the SDNY Judgment with this Court pursuant to 28 U.S.C. § 1963. The Defendants have not paid ConocoPhillips any portion of the judgment.
For the foregoing reasons, ConocoPhillips respectfully requests the Court enter its proposed order, authorizing the issuance of the proposed fi fa writ upon receipt of evidence that either the OFAC sanctions regime has been lifted or materially changed, or that a license has been granted to ConocoPhillips.