THE AUTHOR:<\/strong> Sara Ewad<\/strong>, Associate at Debevoise & Plimpton LLP<\/a> <\/em><\/p>\n\n\n\n Who is the current President of Venezuela? Governments, courts, and tribunals alike have repeatedly had to grapple with this question since the uncertain results produced by the last round of presidential elections in January 2019. Initially, the incumbent, Nicol\u00e1s Maduro, announced a landslide victory in his favour, but the fairness of the elections and the results it produced were questioned both domestically in Venezuela and internationally by the United States and the European Union, among others.<\/p>\n\n\n\n The leader of Venezuela\u2019s National Assembly, Juan Guaid\u00f3, subsequently declared the elections as illegitimate and himself the Interim President. Over two years later, the political deadlock between the two \u2018Presidents\u2019 and their factions shows no sign of abating, resulting in numerous courts and arbitral tribunals having to decide for themselves who is duly authorised to appear on Venezuela\u2019s behalf in ongoing litigation and arbitration proceedings.<\/p>\n\n\n\n This post will briefly examine two recent instances in which this issue has arisen: the English Court of Appeal\u2019s judgment in The \u201cMaduro Board\u201d of the Central Bank of Venezuela v The \u201cGuaid\u00f3 Board\u201d of the Central Bank of Venezuela & Ors<\/em><\/a> [2020] EWCA Civ 1249; and the Decision on Respondent\u2019s Representation<\/a>, dated 1 March 2021, in ICSID Case No. ARB\/07\/27 Venezuela Holdings B.V., Mobil Cerro Negro Holding LLC and Mobil Cerro Negro Ltd v Republic of Venezuela<\/em>.<\/p>\n\n\n\n The English proceedings concern a dispute as to who precisely is entitled to provide instructions regarding assets belonging to the Central Bank of Venezuela, held in accounts at the Bank of England and at Deutsche Bank (the \u201cBanks<\/strong>\u201d). Each of Maduro and Guaid\u00f3 had appointed a board that purported to govern the Central Bank (nominally, the \u201cMaduro Board<\/strong>\u201d and the \u201cGuaid\u00f3<\/strong> Board<\/strong>\u201d), with each claiming to be the entity that could give instructions in relation to the relevant assets.<\/p>\n\n\n\n In order to determine which Board was, for the purposes of English law, entitled to instruct the Banks as to the assets, the English courts were faced with a number of complex issues of public international law. This included the interrelated questions of (i<\/em>) whether the UK government had formally recognised either Guaid\u00f3 or Maduro as the Head of State and\/or Head of Government of Venezuela; and (ii<\/em>) if so, whether that required the English courts to speak with \u2018one voice\u2019 with the UK Government and uphold that recognition for the purposes of the proceedings.<\/p>\n\n\n\n In the Commercial Court at first instance, Teare J held that the UK Government had expressly recognised Guaid\u00f3 as Venezuela\u2019s Interim President, and thereby implicitly no longer recognised Maduro. Issuing statements of recognition was the sole prerogative of the Crown (acting through the UK Government), and the \u2018one voice\u2019 doctrine obliged the courts to accept that recognition as conclusive. Consequently, the Guaid\u00f3 Board held the appropriate authority to instruct the Banks.<\/p>\n\n\n\n The Court of Appeal disagreed with Teare J\u2019s findings on the question of recognition, on the basis of the following:<\/p>\n\n\n\n The ICSID arbitration proceedings brought by subsidiaries of Exxon against Venezuela have had a long and tortured history. The original proceedings commenced in 2007, when the Exxon subsidiaries filed a Request for Arbitration under the Netherlands-Venezuela BIT<\/a>, claiming that Venezuela had nationalised two oil projects in which the Claimants had interests. In an Award<\/a> dated 9 October 2014, the ICSID tribunal found in favour of the Claimants, determining that there had been a direct expropriation<\/a> by Venezuela of those interests, as well as breaches of other investor protections such as fair and equitable treatment<\/a> and minimum standard of treatment<\/a>. Consequently, the tribunal ordered Venezuela to pay damages<\/a> in the sum of USD1.6 billion.<\/p>\n\n\n\n In 2017, the Award was annulled<\/a> in significant part, with the ad hoc<\/em> Committee<\/a> finding that the tribunal had manifestly exceeded its powers<\/a> in its determination and assessment of the compensation<\/a> due to the Claimants, and had failed to state the reasons on which its decision was based<\/a>.<\/p>\n\n\n\n The arbitration was re-submitted by the Claimants in October 2018. In December 2018, the Respondent, represented by its agent and Attorney General, Reinaldo Mu\u00f1oz Pedroza, notified ICSID that Curtis, Mallet-Prevost, Colt & Mosle LLP (\u201cCurtis<\/strong>\u201d) had been instructed as legal counsel. In March 2019, Mr Pedroza notified ICSID that Curtis\u2019 instructions had been revoked and that De Jes\u00fas & De Jes\u00fas (\u201cDe Jes\u00fas<\/strong>\u201d) would appear as Venezuela\u2019s new legal counsel. Shortly thereafter, ICSID was contacted by Jos\u00e9 Ignacio Hern\u00e1ndez, who proclaimed to be Venezuela\u2019s Special Attorney General as appointed by Guaid\u00f3.<\/p>\n\n\n\n The Claimants, Mr Pedroza and Mr Hern\u00e1ndez subsequently exchanged a series of correspondence, during which it became clear that the parties could not agree as to who was entitled to appear as agent on behalf of Venezuela. The Tribunal was formally constituted in August 2020, at which stage the Claimants requested that the Tribunal determine which of Venezuela\u2019s \u201cpurported representatives<\/em>\u201d were in fact properly authorised to represent the Respondent in the proceedings as a threshold issue. The Tribunal agreed to do so.<\/p>\n\n\n\n Matters were further complicated when, in September 2020, Enrique S\u00e1nchez Falc\u00f3n contacted the Tribunal to state that he now held the position of Special Attorney General of Venezuela appointed by Guaid\u00f3 (impliedly replacing Mr Hern\u00e1ndez). He provided electronic contact details and a postal address of a location in Bolivia. Mr Falc\u00f3n also notified the Claimants, Mr Pedroza and the Tribunal that he had (re)appointed Curtis as counsel for Venezuela.<\/p>\n\n\n\n Curtis argued that the Tribunal did not have jurisdiction<\/a> to determine the matter, as it was principally a political question, and that a decision (whatever the outcome) would effectively amount to the recognition or otherwise of which Venezuelan government was the \u2018legitimate\u2019 one. The Tribunal disagreed, finding that the issue of Venezuela\u2019s representation was merely a procedural issue falling within the ambit of Article 44 of the ICSID Convention<\/a>. It consequently had the power to address procedural issues that arose in the course of the arbitration. The Tribunal further noted that it had no capacity to recognise a government, but had a more \u201climited and functional capacity consisting in deciding the issues submitted to <\/em>[it] by the disputing parties<\/em>\u201d. This meant that it was empowered to decide on the representation of the parties before it to assure the proper conduct of the proceedings.<\/p>\n\n\n\n The Tribunal thus held that it had jurisdiction to determine the representation issue, and ultimately, by favouring the \u201cstatus quo\u201d position, found that Mr Pedroza, on behalf of Maduro\u2019s government, was Venezuela\u2019s rightful representative. Specifically, the Tribunal held reasoned that:<\/p>\n\n\n\n
\n\n\n\nThe Litigation in England<\/u><\/strong><\/h2>\n\n\n\n
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The ICSID Arbitration<\/u><\/strong><\/h2>\n\n\n\n