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IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

RESPONSE TO MOTION FOR STAY

On February 22, 2019, the undersigned Venable LLP attorneys entered
appearances on behalf of The Bolivarian Republic of Venezuela (the “Republic”)
on instruction from the current and acting Attorney General of the Republic,
Reinaldo Muñoz Pedroza. The Republic submits this response to the Motion for
Stay filed by Arnold & Porter purportedly on behalf of The Bolivarian Republic of
Venezuela on February 12, 2019 (the “Motion”). The Motion was granted on
February 14, 2019.

The purpose of this response is not to oppose the request for a stay, which in
any event has already been granted, but rather to provide further context for the
request and to formally object to some of the positions that Arnold & Porter has
taken on behalf of the Republic.

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By way of background, Arnold & Porter historically represented the
Republic in this and other matters, on instructions from Attorney General Muñoz.
(Mot. at 2, n.1.) Arnold & Porter first appeared on behalf of the Republic on this
Appeal on May 21, 2018, again on instruction from Attorney General Muñoz and
President Nicolas Maduro. Arnold & Porter states that it is now instructed by Juan
Guaidó, who “declared himself Interim President of Venezuela” on January 23,
2019. (Mot. at 1.) President Maduro vigorously disputes that Mr. Guaidó is the
President of the Republic, and asserts that he remains the rightful leader of the
Republic.

Arnold & Porter observes in its Motion that President Trump has “issued a
statement officially recognizing President Guaidó as the Interim President of
Venezuela and rejecting the legitimacy of the Maduro government.” (Mot. at 2.)
Arnold & Porter concludes that “[b]ecause the President has recognized President
Guaidó as the rightful representative of the Republic, only President Guaidó or his
representatives may assert the interests of the Republic in U.S. courts.” (Id.)
Arnold & Porter did not seek the Republic’s permission to represent Mr. Guaidó,
nor did it seek or obtain any conflict waiver from the Republic.

The Republic respectfully disagrees with Arnold & Porter’s position in its
Motion. Not one of the cases Arnold & Porter cites is directly on point. None
concern the situation where two “competing factions within a foreign government”

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(Mot. at 3) both ask to be heard in order to defend claims that have been filed
against their country (as opposed to bringing claims on their country’s behalf).
And this is an important distinction. While there is well-established law about
whether an unrecognized state is entitled to certain privileges and immunities, it
has never been suggested that an unrecognized state may not defend itself when
haled into court. See Kadic v. Karadzic, 70 F.3d 232, 244-245 (2d Cir. 1995)
(while unrecognized states do not enjoy privileges and immunities accorded to
recognized states, international law authorizing suits against states still applies and
they are entitled to defend themselves in those suits); Ali Shafi v. Palestinian
Authority, 686 F.Supp.2d 23, 28-30 (D.D.C. 2010) (citing Kadic for principle that
international law applies “without distinction between recognized and
unrecognized states”); Knox v. Palestinian Liberation Organization, 306 F. Supp.
2d 424, 439-443 (S.D.N.Y. 2004) (citing Kadic for authority that “an
unrecognized state is not a juridical nullity” and is “accorded de facto existence
with respect to adjudications of strictly commercial transactions,” and
“adjustments of private rights”). Regardless of any executive order, the Republic
has the right to defend itself against the arbitral award obtained by the Petitioner-
Appellee by pursuing this appeal.

The only case cited in the Motion regarding “competing factions,” Bank of
China v. Wells Fargo Bank & Union Trust Co., 104 F. Supp. 59 (N.D. Cal. 1952),

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aff’d 209 F.2d 467 (9th Cir. 1953), does not in fact stand for the proposition
claimed, that “courts must recognize only that faction which has been recognized
by the Executive Branch as rightfully representing the foreign state.” (Mot. at 3.)

The Bank of China case concerned the competing claims of the Nationalist
Government of China and the People’s Republic of China to control over the
plaintiff, Bank of China, and the money it had on deposit at Wells Fargo.

Importantly, the district court held that the U.S.’s recognition of one of the
competing factions (the Nationalist Government) as the representative of the State
was not “per se . . . determinative” of the issue of which faction was entitled to the
deposits. Id. at 63. The court observed:

If whenever this court is called upon to determine whether there
is a government justly entitled to act on behalf of a foreign state
in respect to a particular matter, the court is bound to say, without
regard to the facts before it, that the government recognized by
our executive is that government, then nothing more need be said
here. To permit this expression of executive policy to usurp
entirely the judicial judgment would relieve the court of a
burdensome duty, but it is doubtful that the ends of justice would
thus be met.

Id.

The district court concluded that there was “no rule of law obliging the
courts to give conclusive effect to the acts of a recognized government to the
exclusion of all consideration of the acts of an opposing unrecognized
government.” Id. at 63. Instead, “[i]n any particular situation, executive policy . . .

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is a fact which properly should be considered and weighed along with the other
facts before the court.” Id. at 64.

Moreover, executive policy is not immutable, nor is Mr. Guaidó’s place as
the legitimate leader of Venezuela by any means assured. In fact, as a matter of
Venezuelan law, there are serious issues with Mr. Guaidó’s “claim [which] derives
from a creative interpretation of a constitutional provision, rather than from
popular will or the due process of the law.” Max Fisher, Who Is Venezuela’s
Legitimate President? A Messy Dispute, Explained, N.Y. TIMES, Feb. 4, 2019.

In sum, while the Republic does not oppose the stay that has been granted, it
strenuously objects to Arnold & Porter’s position that the Republic has no right to
participate in these proceedings by virtue of President Trump’s official statement.

Respectfully submitted,

Dated: February 22, 2019

/s/ Moxila A. Upadhyaya
Moxila A. Upadhyaya
Michael B. MacWilliams
VENABLE LLP
600 Massachusetts Avenue, NW
Washington, DC 20001
Telephone: 202-344-4000
Fax: 202-344-8300

Attorneys for the Bolivarian Republic
of Venezuela

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CERTIFICATE OF COMPLIANCE

The foregoing Response complies with the word limit of Fed. R. App. P.
27(d)(2)(A) and Fed. R. App. P. 32(g)(1) because, excluding the parts of the
document exempted by Fed. R. App. P. 32(f), the Response contains 1013 words.

CERTIFICATE OF SERVICE

I hereby certify that on February 22, 2019, I electronically filed the
foregoing document with the United States Court of Appeals for the District of
Columbia Circuit by using the appellate CM/ECF system. I certify that all
participants in the case are registered CM/ECF users and that service will be
accomplished by the appellate CM/ECF system.