Rusoro to pursue $1.5B award against Venezuela following French Supreme Court ruling

The French Supreme Court, the Cour de Cassation, overturned a decision by the Paris Court of Appeal which had annulled part of the damages portion of the arbitral award granted to Rusoro Mining (TSX-: RML) in its decade-long dispute with Venezuela.

In 2016, the International Center for the Settlement of Investment Disputes granted the Canadian miner a US$966.5 million award, following the expropriation of its 95%-owned Choco 10 mine and 50%-owned Isidora mine by Venezuela’s former ruler Hugo Chávez. 

According to the World Bank tribunal, the South American country had breached its obligations under the Canada-Venezuela Bilateral Investment Treaty. 

But Venezuela filed an appeal for the annulment of the sentence before the Paris Court of Appeals, alleging that the ICSID exceeded the scope of its authority in awarding damages to Rusoro Mining. In 2019, the court partially annulled the arbitral award, even though it upheld the tribunal’s finding on the merits that Venezuela is liable for the unlawful expropriation of Rusoro’s investments.

Following this decision, the miner continued to pursue remedies and in late March 2021, was able to obtain a reinstatement of the arbitral award in full.

In a media statement, Rusoro said that this decision will allow management to continue to pursue recognition and enforcement of the award, the value of which is currently approximately $1.58 billion, representing the original award amount of US$966.5 million, plus approximately US$612.23 of interest as calculated by the company. 

Back in 2018, the junior miner and the Nicolás Maduro regime reached a settlement that required the Bolivarian Republic to pay Rusoro over US$1.28 billion to acquire the company’s mining data and for the full release of the arbitral award. 

Even though an initial US$100-million payment was sent on December 18, 2018, and after this payment the legal enforcement of the award was to be suspended, Rusoro has not reported further payments. Thus — and as per the settlement deal — the Canadian firm is entitled to resume legal procedures to collect the ICSID award.