Law360, New York (June 12, 2017, 1:50 PM EDT) -- A D.C. federal judge on Friday granted a bid from mining company Crystallex to register in Delaware a $1.4 billion arbitral award against Venezuela, finding the country has failed to show that it was attempting to pay the award in his court. 
Canada-based Crystallex International Corp. had asked U.S. District Judge Rudolph Contreras to register in other courts his order confirming the award, claiming that Venezuela was attempting to evade payment by moving its assets out of the U.S. through Delaware subsidiaries of a state-owned company. In granting Crystallex's request on Friday, Judge Contreras had found that "a reasonable time" had elapsed since his March 25 decision to strike down the embattled Andean nation's effort to quash the International Centre for Settlement of Investment Disputes award.

Noting that the statute covering the attachment of a foreign country's property in the U.S. does not specify how long "a reasonable period of time" is, Judge Contreras said that even assuming the clock did not start ticking until the court clerk's April 7 entry of judgment, Venezuela still had a reasonable two months to pay the award.

"This conclusion is bolstered by respondent's failure to assert that it is attempting to pay the judgment or provide any evidence of such efforts," Judge Contreras said. "Several courts have noted that the absence of progress towards paying a judgment weighs against an extended pause prior to permitting attachment."

Judge Contreras said he was declining to rule on whether or not Venezuela's assets will ultimately be attachable, noting that such a determination is unnecessary at this stage in the litigation. However, in registering the judgment in Delaware in other courts, he cited Crystallex's contention that Venezuela has no assets in D.C.

The Canadian mining company in late April had argued that since arbitration has completed, Venezuela had the Delaware units of its state-owned oil company, Petróleos de Venezuela SA, borrow $2.8 billion and then transfer it out of the country.

But Venezuela hit back, calling the claim "erroneous" and arguing the companies in question, PDV Holding Inc. and Citgo Holding Inc., are indirectly held second- and third-tier subsidiaries whose actions are not attributable to PDVSA or the Venezuelan government.

However, Judge Contreras on Friday found that although Venezuela argued that it can't be tied to its corporate subsidiary's assets, the country does not dispute that it has no assets in D.C.

"Nor does respondent dispute the general contours of the assets that petitioner identifies, instead challenging only whether those assets would be subject to a judgment against respondent, given the legal status of the corporate subsidiaries," Judge Contreras said.

The underlying arbitration stems from the Venezuelan government's rescission of a contract with Crystallex for development of a Las Cristinas gold mine, believed to hold one of the world's largest undeveloped gold deposits.

The move was part of a wave of nationalizations of mining and energy assets under former Venezuelan President Hugo Chávez.

The district court in March struck down Venezuela’s efforts to have the award vacated on its claim that the World Bank arbitral panel exceeded its authority in ruling that the canceling of the contract violated a bilateral investment treaty between Venezuela and Canada. Venezuela’s appeal of that order is currently pending before the D.C. Circuit.

Counsel for the parties did not respond Monday to a request for comment.

Venezuela is represented by Lawrence H. Martin, Andrew B. Loewenstein, Peter R. Shults and Benjamin K. Guthrie of Foley Hoag LLP.

Crystallex is represented by Alex Yanos and Carlos Ramos-Mrosovsky of Hughes Hubbard & Reed LLP and by Elliot Friedman of Freshfields Bruckhaus Deringer LLP.

The case is Crystallex International Corp. v. Bolivarian Republic of Venezuela, case number 1:16-cv-00661, in the U.S. District Court for the District of Columbia.