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Miner Crystallex seeks injunction against Venezuela's PDVSA

Published 2017-04-10, 10:00 p/m
© Reuters.  Miner Crystallex seeks injunction against Venezuela's PDVSA

CARACAS, April 10 (Reuters) - Canadian miner Crystallex on Monday asked a U.S. court for an injunction against Venezuelan state oil company PDVSA, which it accuses of illegally transferring assets out of a U.S. subsidiary to avoid paying compensation in an investment dispute.

A separate U.S. court last month upheld an award by a World Bank tribunal that orders Venezuela to pay Crystallex $1.2 billion in compensation plus $200 million in interest for Venezuela's 2008 expropriation of the Las Cristinas gold project. said in a motion in U.S. District Court in Delaware that PDVSA had carried out nearly $2.8 billion in operations involving U.S. subsidiary Citgo and pledged Citgo shares to Russian oil firm as a guarantee for a loan, which Crystallex called an effort to block it from collecting compensation.

"Crystallex is entitled to interim injunctive relief to prevent (PDVSA) from making further illegal transfers or otherwise encumbering its assets outside the normal course of business," the motion reads.

PDVSA did not immediately respond to an email seeking comment.

Las Cristinas was Crystallex's flagship project and at the time was regarded as one of the world's biggest undeveloped gold deposits. But development was delayed for years by legal disputes and permitting holdups.

Venezuela faces more than a dozen disputes in the tribunal known as the International Centre for Settlement of Investment Disputes, or ICSID, which is often used by global companies to seek compensation for assets taken over by governments.

Companies generally seek to collect on such awards by obtaining court orders to seize foreign assets owned by those governments.

Citgo's pledge of shares to Rosneft has also caused concern in Washington.

U.S. Senator Bob Menendez of the Senate Foreign Relations Committee on Monday said Rosneft efforts to buy U.S. energy infrastructure could compromise national security. He released a letter to a U.S. government panel asking officials to "proactively monitor" Rosneft's potential acquisition of Citgo.

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