ExxonMobil Must Comply With FSIA to Enforce $188 Million ICSID Award
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The United States Court of Appeals for the Second Circuit has ruled that an ExxonMobil Oil Corporation subsidiary may not enforce a $188 million International Center for Settlement of Investment Disputes (“ICSID”) arbitral award against the Venezuelan government in the United States without first complying with the notice requirements provided for in the Foreign Sovereign Immunities Act (“FSIA”). In Mobil Cerro Negro, Ltd., et al. v. Bolivarian Republic of Venezuela, No. 15-707 (2d Cir., July 11, 2017), the ICSID ordered Venezuela to pay the oil subsidiary, Mobil Cerro Negro, $188 million in connection with the government’s 2007 takeover of the oil industry. After the award was issued, Mobil Cerro Negro filed an ex parte petition to collect the funds in the Southern District of New York. The federal court granted the company’s petition and entered judgment in favor of Mobil Cerro Negro.
In response, Venezuela sought to vacate the judgment by arguing the federal court lacked subject matter jurisdiction over the case. According to Venezuela, the FSIA supersedes the statute that created the ICSID. The New York federal court rejected the country’s motion after determining it had jurisdiction in the case based on 22 U.S.C. § 1650a. Venezuela then filed an appeal with the nation’s Second Circuit Court of Appeals.
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