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Citgo
Bloomberg

Supreme Court Dismisses Venezuela Appeal Over Citgo Stake

A case regarding the ownership of gas company Citgo has been at the center of Venezuelan news for some weeks. In the case of Bolivarian Republic of Venezuela v. Crystallex, 19-1049, a federal appeals court upheld a defunct Canadian gold mining company’s victory over Venezuela. Crystallex, the Canadian company, is seeking for Venezuela to sell off their shares of Citgo.

Venezuela moved to take over Crystallex’s mines in 2011, leading to the suit. During a 2016 arbitration hearing, the South American country was ordered to pay damages to the mining company. In 2019, a federal appeals court upheld a ruling that shares in Citgo’s parent company could satisfy the damages Crystallex is seeking.

Canadian Company Could Force the Sale of Citgo

Citgo, which is owned by Petroleos de Venezuela SA, is a major source of income for Venezuela. Since it is owned by the company’s public oil conglomerate, its profits directly flow into the Venezuelan government. At present, a massive power struggle between President Nicolas Maduro and opposition leader Juan Guaido is causing havoc in the country.

Guaido, undoubtedly, needs the money from the oil company to keep up his battle against the country’s government. The opposition leader wrested control of Citgo in part of the power struggle, and has been using its profits in the ongoing conflict. The Supreme Court’s refusal to hear the appeal effectively kills Guaido’s chances of maintaining lawful control of the business.

Supreme Court Won’t Hear Case

The Supreme Court, which is currently hearing cases over teleconference, dismissed the case without comment. This means that it’s impossible to know what their reasoning for dismissing the case was. Normally, however, this means that the court is either uninterested in hearing the case, thinks they have nothing to add to the judgement, or feels the matter was settled in a lower court.

This means that Crystallex can force the sale of Citgo by PDV Holdings. In turn, this case could result in Venezuela losing its most valuable asset during an historic power struggle. The South American nation owes some $1.4 billion to Crystallex for what was deemed an unlawful seizure of their gold mines.

Maduro was sworn in for another term in January of 2019. However, the Organization of American States, among other organizations, has condemned his presidency as illegitimate. Guaido has since attempted to wrest control of the nation from the Maduro administration. Maduro, for his own part, decries the situation as an attempted coup by the US, who he claims is backing Guaido and the opposition party.