A new chapter unfolds in the extensive saga surrounding the CITGO auction, as a wave of lawsuits against Venezuela and Petróleos de Venezuela S.A. expands with a new case filed by Hong Kong-based Asia Genius Investment Limited against Bariven and PDVSA in the Delaware Court.
Between 2012 and 2014, Bariven purchased equipment for PDVSA from Asia Genius, which was received but never paid for. Consequently, on March 20, 2023, Asia Genius obtained a ruling from the arbitration court in The Hague for USD 56,780,663.80, which represented the amount due at the time of judgment, along with interest and legal costs that the Venezuelan oil company also failed to settle.
Due to Bariven’s non-compliance with the ruling and the fact that the company holds no significant assets against which Asia Genius can enforce the judgment, the plaintiff invokes the alter ego theory and now demands the affirmation of the ruling by the Delaware court along with payment of USD 131,053,484.75, plus interest and legal costs.
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Affirmation of the Arbitration Ruling
Asia Genius also invokes the alter ego theory between Bariven and PDVSA.
On December 16, 2024, Asia Genius Investment Limited, through its attorneys, filed a request with the United States District Court for the District of Delaware for confirmation of the arbitration ruling against Bariven S.A. and Petróleos de Venezuela S.A.
With this action, the plaintiff seeks:
the recognition and enforcement of a foreign arbitration ruling in its favor against Bariven, S.A., a subsidiary of PDVSA; and
a judgment against Bariven and its alter ego, PDVSA, in virtue of the ruling.
To support its request, Asia Genius submitted the Declaration of Alexandra Schluep to the court, noting that the court is already familiar with many key facts about the Defendants due to the case Crystallex Int’l Corp. v. Venezuela.
They assert that as Bariven is one of PDVSA’s subsidiary companies, it does not operate as an independent entity—unlike other subsidiaries—but as a department of PDVSA. In this instance, Bariven functions as the purchasing and inventory management department for PDVSA.
Since several cases against PDVSA have occurred in the Delaware Court establishing that the Venezuelan oil company acts as an alter ego of Venezuela, and in Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, it was determined that “if the relationship between Venezuela and PDVSA cannot meet the extensive control requirement of the Supreme Court, we know of nothing that could,” the assets of PDVSA are available to satisfy its creditors.
Asia Genius believes that the ruling can be enforced in the Delaware district based on quasi in rem jurisdiction, since PDVSA owns assets subject to the court’s jurisdiction.
The lawsuit states that as PDVSA owns 100% of PDV Holding, Inc. (PDVH), which in turn owns 100% of CITGO Holding Inc., and this company owns CITGO Petroleum Corporation, all incorporated in Delaware, these assets can be utilized to enforce the judgment.
Moreover, U.S. law stipulates that “any party to the arbitration may request any competent court under this chapter for an order confirming the ruling against any other party to the arbitration.”
Asia Genius’s Demands
Asia Genius Investment Limited requests the Delaware Court to acknowledge, confirm, and enforce the foreign arbitration ruling in its favor against Bariven.
The plaintiff demands the amount of USD 131,053,484.75, plus any legal interest accruing from the date of the judgment until payment is made, against Bariven and its alter ego, PDVSA, based on the ruling, as well as any other relief deemed just and appropriate by the court.
Affidavit of Asia Genius’s Attorney
In an affidavit, Alexandra Schluep, an attorney licensed to practice in the Netherlands, who represented Asia Genius in the arbitration against Bariven, asserts that PDVSA itself acknowledged Bariven’s alter ego status in its 2011 management report.
She explains that in this report, intended to reassure investors about PDVSA, Bariven is described as “responsible for acquiring all necessary materials and equipment for the activities of the Corporation [i.e., PDVSA].”
In Schluep’s view, this statement by PDVSA leaves no doubt that Bariven operates as a department or, at the very least, as an agent of the Venezuelan oil company. Under this condition, Bariven accepted goods from Asia Genius on behalf of PDVSA, but never paid for most of them.
Among the clauses of the agreement, it was established that in case of disputes, arbitration in The Hague, Netherlands, would be pursued in accordance with the International Chamber of Commerce regulations. Consequently, Asia Genius initiated this arbitration in 2019, but Bariven did not facilitate it, instead ignoring the notifications and failing to appear.
Alexandra Schluep states that the tribunal did not only issue a default judgment but also analyzed the case and evidence before granting the ruling to Asia Genius on March 20, 2023, which “as expected, Bariven has not complied with.”
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