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Signed on 20-02-2025, by
Gabriela de Fátima Marques, Judge Judge
Signed on 20-02-2025, by Teresa
Pardal, Judge Judge
Signed on 20-02-2025, by
Nuno Gonçalves, Judge of the Court of Appeal
Lisbon - Court of Appeal
6th Section
Rua do Arsenal - Letra G
1100-038 Lisbon
Telef: 213222900 Fax: 213222992 [email protected]
Revision/Confirmation of a Foreign Judgement
Case No. 108/24.7YRLSB (review of a foreign arbitral award)
*
Rapporteur: Judge Gabriela de Fátima Marques Adjuncts: Judge Teresa
Pardal
Judge Nuno Gonçalves
*
Summary:
I. The recognition of a foreign arbitral award is regulated in our common law by the Voluntary
Arbitration Act (LAV), but with the express exception of the mandatory provisions of the New York
Convention (CNI), and in addition to the grounds for refusal set out in article 56 of the LAV and in the
Convention, it is important to add non-conformity with public international law, European Union law
and the Constitution.
II. It has been understood that the grounds for recognising a foreign arbitral award are if it
protects the trust placed in defining the disputed relationship through arbitration, if it is important for
the development of international trade, and finally if it respects the self-determination of the parties.
III. The Defendant, as a Sovereign State, cannot invoke immunity from jurisdiction if it is
only seeking recognition of the Arbitral Award, and also because the Defendant, through the
arbitration agreement, waived it, and also because the Defendant, through an express reference to the
CNI, consented to the exercise of jurisdiction by the courts to which the application requesting
recognition of the Arbitral Award was made.
IV. The negative wording contained in Article 5(2)(b) of the CNI has been interpreted
restrictively, referring only to international public order relevant to private international law, so that
the mere violation of any rule of immediate or necessary application in force in the legal order of the
forum state cannot be invoked to trigger the action of the international public order reservation.
(Summary drawn up by the rapporteur)
*
The Judges of the 6th Civil Chamber of the Lisbon Court of Appeal agree:
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I. REPORT:
GOLD RESERVE INC, originally incorporated under the laws of the Territory of Yukon,
Canada, and now incorporated under the laws of Alberta, Canada, with its registered office at 999
West Riverside Ave, Suite 401, Spokane, Washington, 99201, United States of America, hereby,
pursuant to and for the purposes of Articles I, III and IV of the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958, and Articles 55 et seq.
of the Arbitration Act, declares that it is in compliance with the provisions of the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards.In accordance with Articles 55 et seq. of the
Voluntary Arbitration Law, bring against the BOLIVARIAN REPUBLIC OF VENEZUELA this
special action for recognition of a foreign arbitral award, application requesting recognition of the
Arbitral Award rendered unanimously in Paris, France, on 22 September 2014, by the Arbitral
Tribunal constituted under the ICSID Additional Facility Rules, composed of the Arbitrators Professor
Pierre-Marie Dupuy, Professor David A.R Williams QC and Professor Piero Bernardini, seated in
Paris, France, under ICSID Case No. ARB(AF)/09/1.
It claims, in summary, that under the terms of the aforementioned Arbitral Award, the
Defendant was ordered to pay the Claimant $740,331,576.00 (seven hundred and forty million, three
hundred and thirty-one thousand, five hundred and seventy-six US dollars), plus interest thereon. To
date, the Defendant has not paid that amount in full.
Serving the defendant, it argued immunity from jurisdiction, violation of the public policy of
the Portuguese State and abuse of rights, concluding that the application should be dismissed, saying:"
In these terms, and for all the above reasons, the application for recognition of the judgement
requested in these proceedings cannot proceed, if it is found that the necessary requirements for its
confirmation are not met, under the terms and for the purposes of article 980, paragraph f) of the Code
of Civil Procedure" and also "(...)be rejected, because:a) The Defendant, as a Sovereign State, has
jurisdictional immunity, including immunity from execution; and, in the alternative,
b) the requirements on which the law makes such review and confirmation dependent have not
been met."
A. replied, arguing, in short, that the Defendant is not immune from the jurisdiction of the
Portuguese courts to decide the present action, either because it is only a matter of
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recognition of the Arbitral Award, both because the Defendant, by means of the arbitration agreement
it signed with the Claimant, waived its immunity from jurisdiction, as results, in particular, from
Article 17(c) of the United Nations Convention on the Jurisdictional Immunities of States and Their
Property. It further argued that the Defendant, by expressly referring to the CNI, consented to the
exercise of jurisdiction by the courts from which recognition of the Arbitral Award was applied for,
which fulfils the assumptions of the legal hypothesis of Article 7(1)(a) of the UNCITRAL. It also
argued to the contrary that the recognition comes from the CNI and the LAV, and none of the
exhaustive grounds set out in Article V of the CNI and Article 56 of the LAV that allow for refusal
can be found, nor can the defendant dispute the decision on the merits adopted by the Court in the
recognition action. As for the alleged violation of the international public policy of the Portuguese
State, not only is this manifestly unfounded, but in fact the Arbitral Award is fully compatible with the
international public policy of the Portuguese State, since our legal system is governed by rules and
principles similar to those applied by the Arbitral Tribunal, hence the compatibility of the solution
reached in the Arbitral Award with the Portuguese legal system. It concludes as it did in the initial
petition.
Having complied with the provisions of article 982 of the Code of Civil Procedure, the parties
maintained and reiterated, in their pleadings, the positions they had already taken.
The Honourable The Deputy Attorney General argued that there was no legal obstacle to the
intended review and confirmation, stating in particular that in the case in question, having regard to the
subject matter of the case and the nature of the agreement subject to the court's scrutiny, the arbitral
award did not lead to a result that was manifestly incompatible with the international public order of
the Portuguese State, further maintaining that "(...) it is clear from the arbitral award that it settled a
dispute relating to a set of mining rights concessions in Venezuela and investments made by the
Plaintiff within the scope of that concession in the territory of Venezuela.) it is clear from the arbitral
award that it settled a dispute relating to a set of mining rights concessions in Venezuela and the
investments made by the Claimant under that concession in the Defendant's territory under an
Agreement between the Government of Canada and the Government of the Republic of Venezuela for
the Promotion and Protection of Investments. The arbitral tribunal ordered the Defendant to pay
compensation that does not appear to be disproportionate, given the nature of the agreements and the
large investments made in them.
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require. Nor does the decision appear arbitrary, since it is clear from the documentary evidence that the
arbitral tribunal had regard to the circumstances of the specific case. And both parties have consented
to the jurisdiction of an arbitral tribunal."
Having seen all the evidence, a decision must be taken.
*
Question to be decided:
The subject matter of the appeal is defined by the appellant's conclusions (Articles 5, 635(3) and
639(1) and (3) of the CPC), beyond what is known off the record, and because appeals are not
intended to create decisions on new matters, it is delimited by the content of the contested decision.
Thus, it is important to know if, in this case, the foreign arbitral award should be recognised,
which ordered the Bolivarian Republic of Venezuela to pay the Claimant $740,331,576.00 (seven
hundred and forty million, three hundred and thirty-one thousand, five hundred and seventy-six US
dollars), plus interest thereon.
*
II. RATIONALE:
The content of the documents enclosed and the confession prove the following facts:
1. The Claimant is a company originally incorporated under the laws of the Territory of Yukon,
Canada, and currently incorporated under the rules of Alberta, Canada, which has as its object mining
activity, specifically the acquisition, exploration and development of projects in this industry (a fact
proven by Doc. no. 1 attached to the Statement of Claim).
2. On 22 September 2014, the Arbitral Tribunal constituted under the ICSID Additional Facility
Rules, composed of Arbitrators Professor Pierre-Marie Dupuy, Professor David A.R Williams QC and
Professor Piero Bernardini, seated in Paris, France, unanimously rendered an award in ICSID case no.
ARB(AF)/09/1, which is attached to the case file and whose content is reproduced, under which the
defendant was condemned in the following terms:
(i) to pay the Claimant compensation in the amount of USD 713,032,000.00, plus interest accrued
from 14 April 2008 until the date of the Arbitral Award, calculated at the interest rate for United States
Government Treasury Bills,
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compounded annually, which corresponded to USD 22,299,576.00 on the date of the Arbitral Award,
totalling USD 735,331,576.00;
(ii) to pay the Claimant the interest due on the total amount referred to in (i), at the LIBOR rate plus
2%, compounded annually, from the date of delivery of the Arbitral Award until full payment; and
(iii) to reimburse the Claimant the amount of USD 5,000,000.00, as compensation for the costs and
expenses incurred by the Claimant in connection with the arbitration (see Doc. no. 2 attached to the
Statement of Claim, the content of which is reproduced herein);
3. Of the amount of the arbitration award, the Defendant paid the Claimant the sum of USD
13,811,558.00, of which USD 5,000,000 was charged to the payment of the costs and expenses
specified in the Arbitration Award and the remaining USD 8,811,558 charged to the payment of
accrued interest on the amount of the award (confession of the Defendant);
4. The arbitration award was rendered under the "Agreement between the Government of Canada and
the Government of the Republic of Venezuela for the Promotion and Protection of Investments" of 1
July 1996, attached as doc. 3, the content of which is reproduced;
5. This agreement, signed on 1 July 1996 between the governments of Canada and the Republic of
Venezuela, took effect on 1 January 1998, and was aimed at guaranteeing the protection of
investments by investors from the Defendant States in the territory of the other State Party, thereby
promoting economic initiative and the development of economic cooperation between the two
countries (see the preamble to the agreement in Doc. 3).
6. In that Treaty, the Defendant consented to settle disputes arising from it by arbitration by issuing, in
Article XII, a unilateral offer to arbitrate to any "Investor" within the meaning of that Treaty:
"Settlement of disputes between an investor and the Host Contracting Party [...] 2. If a dispute has not
been settled amicably within six months from the date on which it was initiated, it may be submitted
by the investor to arbitration in accordance with paragraph 4. [...]".
7. The dispute may, by the investor concerned, be submitted to arbitration under the following terms:
[...]
(b) the ICSID Additional Facility Rules, provided that the Contracting Party to the dispute or the
investor's Contracting Party, but not both, is a party to the ICSID Convention [...]
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Each Contracting Party gives its unconditional consent to the submission of a dispute to international
arbitration in accordance with the provisions of this Article." (fact proven by Doc. no. 3 attached to the
Statement of Claim);
8. Article XII(6)(a)(ii) of the Canada-Venezuela Treaty reaffirms the existence of a written arbitration
agreement between the Claimant and the Defendant by providing that: "6. (a) The consent given under
paragraph 5, together with the consent given under paragraph 3, or the consents given under paragraph
12, shall satisfy the requirements as to: [...] (ii) the existence of a 'written agreement' for the purposes
of Article II of the United Nations Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, York")."(fact proven by Doc. no. 3 attached to the Initial Application).
9. On 21.10.2009, the Claimant, as an Investor within the meaning of the Venezuela-Canada Treaty,
accepted the Defendant's proposal to arbitrate the dispute arising from the "Brisas Project", by
submitting the Request for Arbitration which culminated in the delivery of the Arbitral Award (fact
proven by Doc. no. 6 attached to the Statement of Claim).
10. The dispute decided by the Arbitral Award concerns the "Brisas Project", a set of mining
concessions held by the Claimant, the Arbitral Tribunal concluded that these concessions were
illegitimately terminated by the Defendant, in violation of the obligation of "fair and equitable
treatment" of the Claimant's investment, under Article II, paragraph 2, of the Venezuela-Canada
Treaty (fact proven by Doc. no. 2 attached to the Statement of Claim, cf. items 564 to 615).
11. On 17.07.2016, after the Arbitral Award was issued and notified to the parties, the Claimant and
the Defendant entered into a Settlement Agreement, which was modified three times (a fact proven by
Doc. no. 3 attached to the Reply to the Opposition, the content of which is reproduced).
12. The Settlement Agreement and the three subsequent amendments state that:
- The Defendant confessed to being fully liable for the amount it was ordered to pay in the Arbitral
Award and agreed with the Claimant the terms under which it would pay that amount (see Clause 2.2
(a) of the Settlement Agreement, Doc. no. 3 attached to the Reply to the Opposition);
- The Defendant has expressly waived immunity from the jurisdiction of a) the arbitral tribunals
constituted to settle disputes arising from the Settlement Agreement and b) the courts
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from which enforcement of decisions rendered by such arbitral tribunals is requested (see Clause 7 of
the Settlement Agreement, Doc. No. 3 attached to the Reply to the Opposition).
13. After the award was rendered, both Parties requested that the arbitral award be corrected, which
was rejected by the Arbitral Tribunal in a decision dated 15 December 2014 (see Doc. 4 attached,
which corresponds to the Decision rendered by the Arbitral Tribunal on 15 December 2014 on the
Parties' applications requesting corrections).
14. The Arbitral Award was the subject of an application for annulment by the Defendant, filed before
the French Courts, the jurisdiction where the Arbitral Award was rendered, which has already been
definitively judged unfounded by the Paris Court of Appeal on 7/02/2017 (see Doc. 5, which
constitutes the decision of the Court of Appeal).
*
III. THE RIGHT:
The object of this action is the recognition of a foreign arbitral award, which is regulated in
our common law by the Voluntary Arbitration Act (LAV), approved by Law 63/2011 of 14 December
(Chapter X), but with the express proviso in Article 55(1), of the 1958 New York Convention.
Therefore, article 55 of the LAV states, under the heading "need for recognition", that without
prejudice to the mandatory provisions of the 1958 New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, as well as other treaties or conventions binding the
Portuguese state, awards rendered in arbitrations located abroad will only have effect in Portugal,
whatever the nationality of the parties, if they are recognised by the competent Portuguese state court,
in accordance with the provisions of this chapter of this law.
In turn, Article 56 of the LAV sets out the grounds for refusing recognition and enforcement,
stating that:
1 - Recognition and enforcement of an arbitral award rendered in an arbitration located abroad
may only be refused:
a) At the application requesting the party against whom the judgement is invoked, if that party
provides the competent court before which recognition or enforcement is sought with proof that:
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i) one of the parties to the arbitration agreement was incapacitated, or the arbitration
agreement is not valid under the law to which the parties subjected it or, in the absence of any
indication in this regard, under the law of the country in which the award was rendered; or
ii) The party against whom the award is invoked was not duly informed of the appointment of
an arbitrator or of the arbitral proceedings, or was otherwise not given an opportunity to assert his or
her rights; or
iii) The award deals with a dispute not covered by the arbitration agreement or contains
decisions that go beyond the terms of the arbitration agreement; however, if the provisions of the
award relating to matters submitted to arbitration can be separated from those that have not been
submitted to arbitration, only the former can be recognised and enforced; or
iv) The constitution of the tribunal or the arbitral proceedings were not in accordance with the
agreement of the parties or, in the absence of such an agreement, with the law of the country where the
arbitration has taken place; or
v) the judgement has not yet become binding on the parties or has been set aside or suspended
by a court of the country in which, or under the law of which, the judgement was ; or
b) If the court finds that:
i) The subject matter of the dispute cannot be decided by arbitration under Portuguese law; or
ii) The recognition or execution of the judgement leads to a result that is manifestly
incompatible with the international public order of the Portuguese state.
To these grounds, or to clarify them, it is important to add the lack of conformity with Public
International Law, with European Union Law and with the Constitution (in this sense Luís Lima
Pinheiro, in Direito Internacional Privado vol. III, tomo II- Reconhecimento de decisões estrangeiras
pág. 287).
With regard to the New York Convention, Portugal acceded to it by depositing its instrument
on 18 October 1994, following its approval for ratification by Assembly of the Republic Resolution
No. 37/94, and subsequent ratification by Chairperson's Decree No. 52/94 of 8 July, which
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entered force on 16 January 1995 (see Ministry of Foreign Affairs Notice 142/95 of 21 June).
Therefore, it is clear that the rules contained in the New York Convention (CNI) are in force in
the domestic legal system, as they are rules of international law with primacy and preferential
application over domestic law, under the terms of Article 8(2) of the Constitution of the Portuguese
Republic. If Article I(1) of the CNI states that this convention "shall apply to the recognition and
enforcement of arbitral awards rendered in the territory of a State other than that in which the
recognition and enforcement of the awards are sought". Under the terms of paragraph 3 of the same
article, "any State may, on the basis of reciprocity, declare that it will apply the Convention to the
recognition and enforcement only of awards rendered in the territory of another Contracting State."
The Portuguese State, using the prerogative granted by that provision, made the reservation
that "within the scope of the principle of reciprocity, Portugal will only apply the Convention if the
arbitral awards have been rendered in the territory of States bound by it." (cf. article 2 of Assembly of
the Republic Resolution 37/94).
This primacy of international rules has been affirmed by doctrine and case law, an example of
which is the STJ ruling of 23/10/2014 ( Case no. 1036/12.4YRLSB.S1, available at www.dgsi.pt. ), the
summary of which reads: "I - This international treaty applies primarily to the review of an arbitral
award rendered by an arbitral tribunal seated in a State that has signed the New York Convention on
the Recognition and Enforcement of Foreign Arbitral Awards of 1958, and the Portuguese state court,
to which application requesting its recognition is made, is bound to refuse it if it finds of its own
motion that the result reached in that decision is contrary to the international public policy of the
Portuguese State".
This is why the provisions of Chapter X of the LAV, on the recognition and enforcement of
foreign arbitral awards, have a residual scope of application, essentially applying to arbitral awards
from states that have not ratified the New York Convention and with which Portugal has not signed
any other international conventions in this area.
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The arbitral award whose recognition the Claimant seeks in this action was rendered by an
Arbitral Tribunal constituted under the ICSID Additional Facility Rules, with its seat in Paris, France.
Moreover, the French State is also a party to the CNI, by virtue of ratification on 26 June 1959 (see
information available on the website https://newyorkconvention1958.org/ - Date of signature 25-11-
1958; Date of ratification 26-06-1959; Date of entry into force 24-09-1959). The French national
legislation on arbitration was amended in 2011 by "Décret no. 2011-48 du 13 janvier 2011 portant
réforme de l'arbitrage", which can be consulted at https://www.legifrance.gouv.fr.
It should also be considered that the same award has become final, since it is true that after the
award was handed down, both parties requested that the arbitral award be corrected, but this was
rejected by the Arbitral Tribunal in a decision dated 15 December 2014. On the other hand, the
Arbitral Award was also the subject of an application for annulment by the Defendant, filed before the
French Courts, the jurisdiction where the Arbitral Award was rendered, which has already been
definitively dismissed by the Paris Court of Appeal on 7/02/2017.
With regard to the grounds for recognising a "foreign" arbitral award, Luís de Lima Pinheiro
(ob. cit., p. 280) states that they lie in the protection of the trust_placed in definition of the disputed
relationship by arbitration, the importance for the development of international trade, "if it combined
with the practical effectiveness of court decisions, preventing enforcement from being impeded by the
location of assets outside the state of the 'nationality' of the decision". But also respect for the self-
determination of the parties, given that such arbitration has a contractual basis and must be based on a
valid arbitration agreement. Given these foundations, the conditions are inherent in them or derive
from the aims pursued by private international law. Thus, the parties' self-determination must be
conditioned on "the arbitrability of the dispute under the law of the State of recognition, as well as the
compatibility of the recognition of the decision with international public order". Alongside these, a
minimum standard of substantive and procedural justice must also be considered. Finally, "the system
of recognition has to be concatenated with state regulation and control of arbitration by
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States that have a particularly significant connection with the arbitration, especially the State of the
seat of the arbitration".
Recognition will thus have to be assessed, bearing in mind that the provisions of the New
York Convention will have to be applied, as well as, residually, the provisions of the LAV and the
compatible common rules.
Before discussing this system, it is important to have in mind that Portuguese law, after the
current wording of the LAV, adopted the system of assimilation, i.e. the system established for the
recognition of foreign judicial decisions was applicable, with the necessary adaptations, to the
recognition of foreign arbitral decisions. Currently, under the LAV, a foreign arbitral award is not
treated in the same way as a "national" award and is subject to a recognition process, but the grounds
for refusal are those set out in the New York Convention, and the refusal to recognise contained in
article 56 of the LAV are based on the UNCITRAL (United Nations Commission on International
Trade Law) Model Law and correspond substantially to those established by the New York
Convention.
Article 1 (I) of the CNI states that: "This Convention shall apply to the recognition and
enforcement of arbitral awards rendered in the territory of a State other than that in which the
recognition and enforcement of the awards are sought and arising out of disputes between natural or
legal persons. It shall also apply to arbitral awards which are not considered national awards in the
State in which their recognition and enforcement are sought."
According to paragraph 2, "arbitral awards" means not only awards rendered by arbitrators
appointed for specific cases, but also those rendered by permanent arbitration bodies to which the
parties have submitted themselves."
In the case in point, there is no doubt that these rules have been laid down, so the case should
be assessed in the light of the regime laid down in the CNI, without prejudice to the fact that many of
the solutions enshrined in the LAV follow the regime laid down in that Convention
We must also consider Articles IV(4) and V (5) of the New York Convention Article, which
states that: Article 5
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1 - In order to obtain the recognition and enforcement referred to in the previous article, the
Party wishing to apply for recognition and enforcement must attach the following to its application:
a) The duly authenticated original of the judgement, or a copy thereof, provided the
conditions required for its authenticity are met;
b) The original of the agreement referred to in Article II, or a copy thereof, provided the
conditions required for its authenticity are met.
2 - If the said judgement or convention is not written in an official language of the country in
which the judgement is invoked, the Party requesting recognition and enforcement shall have to
submit a translation of the said documents into that language. The translation must be certified by an
official translator or by a diplomatic or consular agent."
And in Article 4:
1 - Recognition and enforcement of the judgment shall be refused, at the request of the Party
against whom it is invoked, only if that Party furnishes the competent authority of the country in which
recognition and enforcement are sought with proof of: (a) that the Parties to the agreement referred to
in Article II are incapacitated under the law applicable to them, or that the said agreement is invalid
under the law to which the Parties have subjected it or, in the case of an omission, as to the law
applicable under the law of the country in which the award is rendered; or (b) that the Party against
whom the award is invoked has not been duly informed either of the appointment of the arbitrator or of
the arbitration proceedings, or that it has been otherwise unable to present its defence; or c) that the
award relates to a dispute which was not the subject of either the written agreement or the arbitration
clause, or contains decisions which go beyond the terms of the written agreement or the arbitration
clause; however, if the content of the award relating to matters submitted to arbitration can be
separated from that relating to matters not submitted to arbitration, the former may be recognised and
enforced; or d) that the constitution of the arbitral tribunal or the arbitration procedure was not in
accordance with the agreement of the Parties or, in the absence of such an agreement, that it was not in
accordance with the law of the country where the arbitration has taken place; or e) that the award has
not yet become binding on the Parties, has been set aside
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or suspended by a competent authority of the country in which, or under the law of which, the
judgement was rendered.
2 - Recognition and enforcement of an arbitral award may also be refused if the competent
authority of the country in which recognition and enforcement have been applied for finds: (a) that
under the law of that country the subject-matter of the dispute is not capable of settlement by
arbitration; or (b) that recognition or enforcement of the award would be contrary to public policy in
that country."
It should also be borne in mind that "there are formal requirements that, while not expressly
mentioned in Article IV(1)(a), the arbitral award must fulfil, as they logically derive from the purposes
of the recognition action" (cf. António Sampaio Caramelo, O Reconhecimento e Execução de
Sentenças Arbitrais Estrangeiras, Almedina, 2016, p. 114).
Therefore, there is no doubt that recognition is being requested in Portugal and the Arbitral
Award was rendered in France, and the Claimant has attached a certified copy of the Arbitral Award
and a copy of the arbitration agreement, as well as the respective translations, so the formal
requirements have been verified, as is the case under the terms of article 980(1)(a) and (b), and there is
no violation of the provisions of the CNI and the LAV in its formal and authenticity aspects.
Furthermore, as provided for in Articles 3 and 5 of the CNI, "Contracting States are under an
obligation to recognise and enforce arbitral awards rendered in other States, which shall only be
waived if one of the grounds for refusal of recognition set out in the exhaustive list contained in
Article V is proven". Thus, the CNI exclusively and exhaustively establishes all the grounds that can
be invoked in refusing recognition, which is why it contains a favourable predisposition towards the
recognition of arbitral awards. In fact, according to article 56 of the LAV or article 5 of the CNI, the
international public order of the Portuguese state only acts as a ground for refusing recognition when
this leads to a result that is manifestly incompatible with it. To explain, Luís Lima Pinheiro (in ob. cit.
p. 287) states that the CNI precept should be interpreted "as referring to the international public order
of the State of recognition, and in the sense that only the manifest incompatibility of the result of the
recognition with the international public order of the State of recognition should be interpreted as
referring to the international public order of the State of recognition, and in the sense that only the
manifest incompatibility of the result of the recognition with the international public order of the State
of recognition".
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the refusal of recognition". It should also be borne in mind that the recognition sought is only for the
effects of the award as a judicial act, since the constitutive, modifying or extinguishing effect of legal
situations that the arbitral award may produce as a legal act depends on the law applicable to the
situations in question.
Having assessed the applicable rules and regulations, let's look at the grounds put forward by
the defendant to prevent such recognition.
The defendant maintains that it has immunity from jurisdiction, as a sovereign state,
under the terms of Article 5 of the United Nations Convention on the Jurisdictional Immunities of
States and Their Property, and that there is no doubt that this action for recognition of a foreign
judgement is a case brought against a sovereign state that has jurisdictional immunity from the courts
of the Portuguese state. It also argues that there is no commercial transaction at issue between the
Republic of Venezuela and the Claimant, and that the exceptions provided for in Articles 11, 12, 14,
15 and 17 of the United Nations Convention do not therefore have any application, citing, in relation
to the latter provision, that there would always be jurisdictional immunity in relation to enforcement
measures. It also invoked the inapplicability, in relation to execution, of articles 19 and 20 of the same
convention.
Firstly, as the Claimant rightly explains, she is clearly not right for three reasons:
a) Because the present action is only for recognition of the Arbitral Award, it is not
appropriate at this stage to invoke (or verify) the immunity of the State of Venezuela the enforcement
of that Award;
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b) Because the Defendant, by means of the arbitration agreement it signed with the Claimant,
waived its immunity from jurisdiction, as results, inter alia, from Article 17(c) of the United Nations
Convention on the Jurisdictional Immunities of States and Their Property (hereinafter "UNCITRAL"):
in other words, it is one of the cases of exception to immunity from jurisdiction; and furthermore
c) Because the Defendant, by expressly referring to the CNI, consented to the exercise of
jurisdiction by the courts to which recognition of the Arbitral Award was applied for, which fulfils the
assumptions of the legal hypothesis of Article 7(1)(a) of the CNUIJ.
In addition to all of the above, the following grounds, in conjunction with the applicable
regime, do not exist: none of the exhaustive grounds set out in Article 5 (V) of the CNI and Article 56
of the LAV that allow for the refusal to recognise the arbitral award. Furthermore, the defendant
recognised and accepted the decision because, on 17 July 2016, after the Arbitral Award had been
rendered, it entered into a Settlement Agreement with the Claimant, in which it confessed the debt and
agreed with the Claimant the terms under which it would pay that amount. This situation requires
consideration of both the invocation of immunity in order to rule it out, as well as the abuse of rights
that will be mentioned following.
In Portugal, the United Nations Convention on Jurisdictional Immunities of States and Their
Property (ICJEB) was signed by Assembly Resolution 46/2006 of 2006.04.20, published on
2006.06.20 and ratified by the Chairperson of Republic by Decree-Law 57/2006.
The Convention affirms the principle of the immunity of states, except in situations where it
has expressly or implicitly waived immunity and in situations where immunity is refused in the case of
commercial transactions, labour agreements, damage to persons and property, ownership, possession
and use of property.
However, in view of the provisions of Article 30 of the Convention, its entry into force was
dependent on the deposit of the 30th instrument of ratification, acceptance, approval or accession with
the Secretary-General of the United Nations. So far, however, only thus
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Twenty-one signatory states have ratified the Convention, which means that, although it has already
been ratified by Portugal, it cannot yet be considered to be in force.
Nevertheless, as Jónatas E. Machado states (in "Direito Internacional", Coimbra Editora, 4th
ed., p. 242), even before the entry into force of the United Nations Convention on Jurisdictional
Immunities of States and Their Property, and even with regard to non-adhering states, it can be said
that it expresses, in its essential features, the customary law in force in this field. Jurisdictional
immunity of foreign states is therefore a rule of international law according to which a sovereign state
cannot be sued in the courts of another state.
The doctrine of immunity from the jurisdiction of the state and its property has as its basis: 1)
deference to the prerogatives of sovereignty of the defendant state; 2) the practical impossibility, in
many cases, of enforcing a judgement rendered against it by the forum state; 3) the notion that, in a
conflict between sovereign states, the courts of one of them, in their capacity as sovereign bodies, do
not offer guarantees of independent and partial justice ( Claimant in ob. Cit. Page 239 ).
Now that the principle of Immunity from Jurisdiction has been abandoned in absolute terms -
in which immunity covered all acts of the state whenever it was sued or prosecuted by a court in
another state - this principle is now based on the distinction between acts of empire (acta ius imperii)
and acts of management (acta jure gestationem). The former are those performed by the state in the
exercise of its sovereign power, and the latter are those performed by the state on equal terms with
private individuals, i.e. acts of law and private interests (cf. Juliana de Souza Guimarães, "A
Imunidade de Jurisdição do Estado seu Cenário Contemporâneo e na Jurisprudência Brasileira
Trabalhista", in RIDB, Ano 2 (2013), nº 14, p. 16991, available on the net at www.cidp.pt).
According to José Lebre de Freitas, the current trend, which has into account developments in
more recent international legislation, although not binding on the Portuguese state, is to restrict
immunity to acta iure imperii (in "Código de Processo Civil Anotado", Vol. 1, Articles 1 to 361, 3rd
edition, Coimbra Editora 2014, p. 125).
[Page 17]
Thus, in the consolidation of the relative theory of the state's immunity from jurisdiction, acts
of management (concerning private acts and agreements) are currently excluded from it, and only acts
carried out under the name of acts of empire are considered to be immune from the jurisdiction of
states.
Thus, Article 5 of the ICJEB enshrines the general principle of the immunity of states, and this
immunity from the jurisdiction of the state constitutes a guarantee that the state enjoys in relation to
itself and its property and which prevents other states from exercising jurisdiction over the acts it
carries out in the exercise of its sovereign power.
However, adhering to the theory of relative immunity from jurisdiction, Part III of the ICJEB
provides that in certain judicial proceedings the state may not invoke immunity by refusing it when
commercial transactions, labour agreements, damage to persons and property, ownership, possession
and use of property, intellectual or industrial property, participation in a company or other legal
persons and ships owned or operated by a state are at issue.
As alluded to in the STJ judgement of 7.12.2006 (in.www.dgsi.pt): "(Immunity) has its basis
in deference to the defendant state's prerogative of sovereignty; the practical impossibility, in many
cases, of enforcing a judgement rendered against it by the forum state and the notion that in a conflict
between sovereign states, the courts of one of them, in their capacity as sovereign bodies, do not offer
the guarantees of independent and impartial justice.
From the outset, the sovereign immunity of states includes "procedural immunity", under
which a state, including any of its constituent units, organs, entities exercising prerogatives of
sovereignty or representatives, cannot be submitted to the internal jurisdiction of another state without
its consent, and domestic legal systems must ensure the existence of a procedural exception of lack of
jurisdiction.
The increase in state activity led to a distinction between acts of government (jus imperii) and
acts of a commercial nature (jure gestiones), denying immunity from jurisdiction in the latter case -
this is the doctrine of restrictive or relative immunity.
[Page 18]
Thus, it has been understood that the guarantee of immunity can be absolute - when a state
simply refuses to submit any act of another state to its jurisdiction - or relative - when the recognition
of immunity is based on distinctions, such as those that distinguish between acts iure imperurim and
acts iure gestiones, based on the nature and purpose of the act, subjecting only the latter acts to the
jurisdiction of another state.
Hence the importance of the distinction between acts of sovereign authority or empire, in
which the state behaves as a sovereign entity, and acts of private law, in which the foreign state carries
out acts as a legal person, which are not proper to its quality as a sovereign entity.
Therefore, only if a state acts without the jus imperium is it understood that that state can be
held responsible in another state and be subject to its jurisdiction."
It is also important to have in mind that immunity from jurisdiction and immunity from
execution are different institutes. The former establishes the impossibility of a sovereign state being a
party to an action in the court of another sovereign state; the latter determines the impossibility of
certain assets of a sovereign state being the object of enforcement measures in another sovereign state.
The first is determined according to the quality of the person, by reference to the entity that benefits
from it; the second is determined in relation to the nature of the assets, the purpose for which the assets
are used ( if Jónatas E. M. Machado, in ob. Cit. p. 242 ).
action.
Therefore, the defendant's call for enforcement is irrelevant, as it is not the subject of this
Furthermore, the defendant cannot also invoke the prerogative relating to immunity from
jurisdiction, since a sovereign country can waive or renounce such immunity, as provided for by
Article 8 of the ICJEB. Moreover, in addition to such a waiver under the aegis of the ICJEB, the
Washington Convention should also be mentioned, which was approved for ratification by Portuguese
Government Decree no. 15/84 of 3 April, namely in the part relating to such a waiver in the light of
article 54 of the same Convention, even if it is applicable in terms of enforcement, although this is not
known in this decision, nor is it useful in the application for recognition.
However, in the specific case, it is more evident if such an invocation by the sovereign state is
non-existent or ineffective, given the agreement or treaty established between the parties, by the
[Page 19]
that the Defendant cannot invoke immunity from the jurisdiction of the Portuguese courts in the
present action because the conditions of the legal hypothesis in Article 7(1)(a) of the UNCITRAL are
fulfilled, that is to say, the Defendant has consented to the exercise of jurisdiction. Article 7 of the
UNCITRAL provides that: A State may not invoke immunity from legal proceedings in a court of
another State in respect of a matter or dispute if it has expressly consented to the exercise of
jurisdiction by that court in respect of that matter or dispute: a) By international agreement.
In fact, it is undeniable that the arbitral award was rendered under the "Agreement between the
Government of Canada and the Government of the Republic of Venezuela for the Promotion and
Protection of Investments" of 1 July 1996, attached hereto as doc. no. 3, the content of which is
reproduced. This agreement, signed on 1 July 1996 between the Governments of Canada and the
Republic of Venezuela, took effect on 1 January 1998, and aimed to guarantee the protection of
investments by investors from the States Parties in the territory of the other State, thereby promoting
economic initiative and the development economic cooperation between the two countries (see the
preamble to the Agreement, attached as Doc. 3). In that Treaty, the Defendant consented to settle
disputes arising from it by arbitration by issuing, in Article XII, a unilateral offer to arbitrate to any
"Investor" within the meaning of that Treaty: "Settlement of disputes between an investor and the Host
Contracting Party [...] 2. If a dispute has not been settled amicably within six months from the date on
which it was initiated, it may be submitted by the investor to arbitration in accordance with paragraph
4 [...]". It is further stipulated that the dispute may be submitted to arbitration by the investor
concerned under the terms of: [...] (b) of the ICSID Additional Facility Rules, provided that the
Contracting Party to the dispute or the investor's Contracting Party, but not both, is a party to the
ICSID Convention [...]. "Each Contracting Party gives its unconditional consent to the submission of a
dispute to international arbitration in accordance with the provisions of this Article." (fact proven by
Doc. No. 3 attached the Statement of Claim); It should also be emphasised that Article XII(6)(a)(ii) of
the Canada-Venezuela Treaty reaffirms the existence of a written arbitration agreement between the
Claimant and the Defendant, by providing that: "6. (a) The consent given under paragraph 5, together
with the consent given under paragraph 3, or the consents given under paragraph 12,
[Page 20]
(ii) the existence of a "written agreement" for the purposes of Article II of the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, York")." (fact proved by
Doc. no. 3 attached to the Statement of).
As we have mentioned, in addition to this treaty, which notoriously removes the defendant's
desire to invoke immunity by waiving it, on 17 July 2016, after the Arbitral Award was issued and
notified to the parties, the Claimant and the Defendant entered into a Settlement Agreement, which
was amended three times. The Settlement Agreement and the three subsequent amendments state that:
- The Defendant confessed to being fully liable for the amount it was ordered to pay in the
Arbitral Award and agreed with the Claimant the terms under which it would pay that amount (see
Clause 2.2 (a) of the Settlement Agreement, Doc. no. 3 attached to the Reply to the Opposition);
- The Defendant expressly waived immunity from the jurisdiction of a) the arbitral tribunals
constituted to settle disputes arising from the Settlement Agreement and b) the courts from which
enforcement of decisions rendered by such arbitral tribunals is application requested (cf. Clause 7 of
the Settlement Agreement, Doc. no. 3 attached to the Reply to the Opposition).
, the objection in question is unfounded.
In its defence to the refusal of recognition, the defendant points out that it has been
unanimously understood that if a judgment, in the light of the Portuguese legal system, is perceived as
unfair or inadequate, or if it imposes disproportionate or irrelevant obligations on the Portuguese state,
it can be refused. Or if it offends against fundamental principles of the Portuguese legal order.
It claims that the judgement in question, in condemning Venezuela for violating the obligation
to grant the Claimant fair and equitable treatment under Article II(2) of the BIT, made certain
"opinions" and value judgements about the decision adopted by the Venezuelan administration which,
in the Defendant's view, are a manifest attack the fundamental principles and rights of a democratic
state governed by the rule of law, incurs: a violation of the Portuguese legal order as a rule of
constitutional principles; secondly, a violation of the Portuguese legal order as a rule of constitutional
principles; and thirdly, a violation of the Portuguese legal order as a rule of law.
[Page 21]
thirdly, the violation of the Portuguese legal order as a rule of manifest violation of the principle of
non-interference and, thirdly, the violation of the Portuguese legal order as a rule of manifest violation
of the principle of proportionality.
To this end, it relies on decisions that state that the judgement is incompatible with the
principles of international public order of the Portuguese State - Article 980(f) of the Code of Civil
Procedure. Arguing that this is because the decision of the judgement violates the principle of the
superior interest of the State, in the primacy of collective interests and state sovereignty over
individual or private interests. It also states that in this context there is a violation of the principle of
proportionality and weighting, both in the grounds and in the calculation made, which, in the
defendant's view, is based precisely on the dichotomy: on the one hand, the protection of Venezuela's
internal laws, its obligations towards the environment, and the protection of indigenous peoples, and
on the other hand, the economic interests of Gold Reserve in maintaining the Brisas Concession. In
conclusion, if the latter were to prevail, this would jeopardise public order.
On the other hand, it also claims that recognition would violate the principle of non-
interference, as it believes that this determines interference in the defendant's internal affairs, which is
one of the pillars of international law and peaceful coexistence between states, without there being any
connection with the Portuguese legal order.
There is clearly no violation of the State's principles of international public order, or even a
violation of constitutional or European Union rules. In fact, similarly to the interpretation of Article
980(f) of the CPC, i.e. the requirement that the judgement does not contain a decision whose
recognition leads to a result that is manifestly incompatible with the principles of international public
order of the Portuguese state, Ferrer Correia (Lições de Direito Internacional Privado I, Almedina,
2000, p. 406) states that each state has its own fundamental legal values, which it believes it should not
give up, and interests of all kinds, which it considers essential and which it must protect in any case.
This implies that the application of foreign law will be refused "to the extent that such application
would jeopardise some basic principle or value of the national legal system, which is held to be
irrevocable, or some interest of primary importance to the local community". So, to repeat the quote
from Ferrer Correia (above-mentioned work, p. 483), "it is not, therefore, the
[Page 22]
The decision itself counts, but the result that its recognition would lead to. The decision can be based
on a rule which, considered in the abstract, would be said to be contrary to the international public
order of the Portuguese state, but whose concrete application is not."
Furthermore, the introduction of the adverb "manifestly" is intended to emphasise the
exceptional nature of public order intervention.
In the words of the Supreme Court of Justice, "the exception of international public policy or
reservation of public policy provided for in Article 1096(f) only has a place when the application of
cogent foreign law results in flagrant contradiction with and gross violation or intolerable offence of
the fundamental principles that shape the national legal order and thus the conception of justice of
substantive law, as understood by the State. Confirmation of foreign judgements should only be denied
if they contain in themselves, and not in their grounds, decisions contrary to the international public
order of the Portuguese state - a more limited nucleus than that corresponding to the so-called internal
public order, which is historically defined according to the economic, social and political values that
society cannot do without, but which operates in each specific case to avoid the shocking results that
may arise from the application of foreign law. The reservation is therefore only appropriate if the
result of the application of foreign law contradicts or undermines the fundamental principles of the
domestic legal order, jeopardising interests of the utmost dignity and transcendence, and is therefore
"such as to shock the conscience and provoke an exclamation" (judgement of 21 February 2006,
www.dgsi.pt, case 05B4168).
In this case, we must refer to the CNI and the aforementioned, in the sense that under the terms
of Articles III and V of the CNI, "the Contracting States are under an obligation to recognise and
enforce arbitral awards rendered in other States, which only ceases if one of the grounds for refusal of
recognition set out in the exhaustive list contained Article V is proven" (António Sampaio Caramelo,
in "O reconhecimento e execução de sentenças arbitrais estrangeiras perante a Convenção de Nova
Iorque e Lei de Arbitragem Voluntária, Coimbra, Almedina, 2016, p. 127). 127 ).
Thus, as national and international doctrine and jurisprudence peacefully understand, this
Convention contains a predisposition in favour of the recognition of
[Page 23]
arbitral awards. It is true that one of the grounds that can lead to the refusal to recognise and enforce
foreign arbitral awards is that "the recognition or enforcement of the award is contrary to the public
policy of that country" (cf. Article V/2/b) of the CNI), which, under the terms of Article 56.71/b/ii) of
the LAV, is concretised as follows: "the recognition or enforcement of the award leads to a result that
is manifestly incompatible with the international public policy of the Portuguese State".
The recent STJ ruling of 22/06/2023 (case no. 991/20.5YRLSB.S1, in www.dgsi.pt) reaffirms
this principle, ruling that:" With regard to the ground for refusing to recognise and enforce foreign
arbitral awards, which is contrary to international public policy, our domestic law (Article 56(1)(b)(ii)
of the LAV) provides for a more favourable regime for such recognition than that provided for in the
CNI (Article V(2)(b)).Therefore, with regard to this specific ground for refusing to recognise and
enforce foreign arbitral awards, in accordance with Article 7(1) of this Convention, our domestic law
is applicable."
It should be noted that the "international public order of the Portuguese state" is not to be
confused with its internal public order: while the concept of material or internal public order
corresponds to the fundamental principles and rules of each legal order, which pursue fundamental
public interests, determining the nullity of facts or situations that are contrary to them and limiting
private autonomy, the concept in question here is the one used in private international law, also known
as the reservation or exception of international public order, which is a means of control and a basis
for refusing to apply foreign law and/or recognise and enforce foreign judgements. In terms of content,
material or internal public policy and the reservation of international public policy partially coincide,
the former being more comprehensive and including the latter, which is a more restricted nucleus (cf.
António Sampaio Caramelo, in ob. cit. p. 117 et seq.).
As stated in the Court's judgement of 19/11/2019, "international public order is restricted to
the essential values of the Portuguese State. Only when our higher interests are jeopardised is it not
possible to tolerate the declaration of law made by a foreign legal system."
[Page 24]
But the offence to the public order of the State in which the award is being applied for has to
result directly from this and not from the content of the award to be recognised, as was decided in the
STJ decision of 21/03/2023, even though it referred to an arbitral award: "The state court does not
retry the dispute decided by the arbitral tribunal in order to verify if it would reach the same result as
that reached by the arbitral tribunal, it only has to verify if the award, by the result to which it leads,
offends any principle considered essential by the legal order, hence the contravention of the
international public order of the Portuguese State (...) presupposes that the decision leads to a result
that is intolerable and unassimilable by our community, as it constitutes an effective gross violation of
the dominant ethical-legal sentiment and interests of our community.... presupposes that that decision
leads to a result which is intolerable and unacceptable to our community, as it constitutes an effective
gross violation of the prevailing ethical-legal sentiment and of major interests or structuring principles
of our legal order." (Case No 2863/21.7YRLSB.S1, available at www.dgsi.pt.).
The negative wording contained in Article 5(V)(2)(b) of the CNI has been interpreted
restrictively, referring only to international public order relevant to private international law, so it
cannot be invoked in the simple violation of any rule of immediate or necessary application in force in
the legal order of the forum state to trigger the action of the reservation of international public order.
As Luís Lima Pinheiro points out (in ob. cit. p. 324) the violation of a rule of immediate or necessary
application will only be relevant for this purpose when, at the same time, this rule constitutes a
fundamental principle structuring the Portuguese legal order (which includes fundamental principles of
international legal order and the legal order of the European Union). The same author specifically
states that "deciding the merits of the case on the basis of extra-state rules or principles (namely lex
mercatoria or public international law) does not, as such, constitute a violation of public international
order; it is the solution given to the case and not the source of the decision-making criteria" (p. 325).
The decision rendered does not violate the international public order of the Portuguese State,
since our legal system applies rules and principles similar to those applied by the Arbitral Tribunal,
such as the promotion and protection of investments, and private autonomy, but also the rules relating
to the calculation of compensation.
As the Claimant rightly points out, and we support her view, in the case in point, the balance
between the principle of pursuing the public interest and fundamental rights must be weighed up.
[Page 25]
or private interests of investors, protected by an international convention to which the Venezuelan
State is a party-Contracting Party, was assessed by the Arbitral Tribunal in the Arbitral Award.
Therefore, the result reached is not manifestly incompatible with the principle of pursuing the public
interest, nor with the principle of proportionality that is applied when weighing up the two conflicting
principles and/or rights in question. We also believe that the defendant is mistaken, because with
specific regard to the "principle of the superior interest of the State", what needs to be ascertained is if
recognising the Arbitral Award violates the fundamental values of the Portuguese legal system and not
the superior interest of the State of Venezuela.
The international public order of the Portuguese state is not to be confused with its internal
public order: if the latter refers to the set of imperative rules of our legal system, constituting a limit to
private autonomy and contractual freedom, the international public order is restricted to the essential
values of the Portuguese state. Only when our higher interests are jeopardised by the recognition of a
foreign judgement, considering its outcome, is it not possible to tolerate the declaration of law made
by a foreign legal system. So it is only if the outcome of that judgment flagrantly clashes with the first-
rate interests protected by our legal system that the foreign judgment should not be recognised.
The STJ ruling of 26 September 2017, rendered in case no. 1008/14, which can be accessed at
www.dgsi.pt, stating the following: "In any case, there is a broad consensus that the content of this
clause is shaped by the structuring principles of the legal order, such as those that, due to their
relevance, are part of the constitution in the material sense, since it is constitutional rules and
principles, especially those that protect fundamental rights, that not only inform but also shape the
international public order: the Constitution reflects the most significant values that shape the structural
plan or the fundamental legal order of a national community, so it is on the rules of constitutional
hierarchy that the state's international public order rests, as we noted above.
The same is true of the fundamental principles of European Union law. They are also referred
to as part of the international public order of each country.
[Page 26]
These include fundamental principles such as good faith, good customs, the prohibition of abuse of
rights, proportionality, the prohibition of discriminatory or exploitative measures, the prohibition of
punitive damages in civil matters and the basic principles and rules of competition law, both from EU
and national sources. However, since they have a broad or indeterminate normative content - albeit
more so in some cases than others - invoking their violation as grounds for annulling an arbitration
award will have to be subject to sharp restrictions. And this is the interpretative direction that, in one
way or another, has been pointed out by case law and doctrine in general. (...) As has been said, it is
not a question here of speculating on a hypothetical divergence between the rules of law used in the
arbitration award and those that would be applied by the state courts, or of assessing the adequacy of
the grounds of fact or law used by the state courts in realising the statutory consequences of the
(declared) breach (...). It doesn't matter which law is applied to the merits of the case in the judgement
in question, as it is only a question of if the result of the judgement, by its content, violates structural
principles of our legal system, to the item where the latter cannot tolerate it as a valid and binding
solution to the dispute it deals with.
And, for the same reasons, the merits of the assessment made by the majority of the arbitrators
as to the balance of the interests at stake (...) do not fall within the scope of this enquiry either."
In fact, given all of the above, there is an even more relevant factor in not considering this
ground of opposition, since it is not the object of the recognition to re-examine the merits of the
decision adopted in the Arbitral Award, beyond the assessment of the alleged manifest incompatibility
of the recognition of the Arbitral Award in Portugal with the international public order of the
Portuguese State, what needs to be determined in these proceedings is not if the weighting made in the
Arbitral Award between the environmental interests of the Venezuelan State and the economic
interests of Gold Reserve offends the superior interests of the Venezuelan State, since such a
judgement would naturally imply a re-examination of the merits of that decision and would correspond
to an appeal of the decision on the merits itself, and not to a control according to the international
public order of the Portuguese State.
There has also been no violation of the principle of non-interference in the internal affairs of
other states, in particular the State of Venezuela, laid down in Article 7(1) of the Charter of
Fundamental Rights of the European Union.
[Page 27]
Constitution of the Portuguese Republic. This presupposes the presumption of international validity of
arbitral awards rendered in the territory of other states and the obligation to recognise and enforce
them in their territories, which constitutes the fulfilment of an international obligation assumed by the
Portuguese state vis-à-vis the Venezuelan state as a party to the CNI.
Finally, the invocation of a violation of the principle of proportionality is irrelevant, since the
calculation contained in the award cannot be analysed by this Court, and it should not be forgotten that
Gold Reserve and the Venezuelan State signed a Settlement Agreement in which the Venezuelan State
acknowledged that it owed the amount of compensation that it was ordered to pay through the Arbitral
Award, which was the subject of three amendments in which the Venezuelan State again
acknowledged that it owed that amount.
The result is that the opposition's argument is unfounded.
For all the above reasons, it is not substantiated, nor if the requirements of abuse of rights are
verified, nor is such an invocation contained in the possibility allowed by the CNI.
In fact, it is clear from the arbitration award that it settled a dispute related to a set of mining
rights concessions in Venezuela and the investments made by the Claimant under that concession in
the Defendant's territory under an Agreement between the Government of Canada and the Government
of the Republic of Venezuela for the Promotion and Protection of Investments. The arbitral tribunal
ordered the Defendant to pay compensation that does not appear to be disproportionate, given the
nature of the agreements and the large investments they require. Nor does the decision appear
arbitrary, since it is clear from the documentary evidence that the arbitral tribunal has taken into
consideration the
[Page 28]
circumstances of the specific case. And both parties have consented to the jurisdiction of an arbitral
tribunal.
In conclusion, this ground for refusing to recognise the arbitral award that is the subject of this
action does not exist either, nor does any other, and therefore recognition in the terms sought by the
Claimant is required.
The defendant will also be responsible for paying the costs of the action - cf. article 527 of the
Code of Civil Procedure.
*
IV. DECISION:
For all the above reasons, it is agreed to uphold the present action and, consequently, the
Arbitral Award rendered unanimously in Paris, France, on 22 September 2014, by the Arbitral
Tribunal constituted under the ICSID Additional Facility Rules, composed of Arbitrators Professor
Pierre- Marie Dupuy, Professor David A.R Williams QC and Professor Piero Bernardini, seated in
Paris, France, under ICSID Case No. ARB(AF)/09/1, in which the defendant was ordered to pay the
claimant:
i) compensation in the amount of USD 713,032,000.00, plus interest accrued from 14 April
2008 until the date of the Arbitral Award, calculated at the interest rate for US Government Treasury
Bills, compounded annually, which corresponded to USD 22,299,576.00 on the date of the Arbitral
Award, making a total of USD 735,331,576.00;
(ii) interest accruing on the total amount referred to in (i), at LIBOR plus 2 per cent,
compounded annually, from the date of delivery of the Arbitral Award until payment in full; and
(iii) to reimburse the Claimant the amount of USD 5,000,000.00, as compensation for the
costs and expenses incurred by the Claimant in connection with the arbitration.
Value of the claim:€
30,000.01. Costs for the
defendant.
Register and notify.
Lisbon, 20th February 2025
[Page 29]
Gabriela de Fátima Marques Teresa
Pardal
Nuno Gonçalves