10th October 2016 Southern District of NY Federal Judge Finds Venezuelan Iron Ore Company to be an Agency or Instrumentality of Venezuela in $350 Million Mining Dispute, says Diaz Reus

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PRESS RELEASE
Date: 10th
October 2016
Title: Southern District of NY Federal Judge Finds Venezuelan Iron Ore Company to be an
Agency or Instrumentality of Venezuela in $350 Million Mining Dispute, says Diaz Reus
United States District Judge Andrew Carter of the Southern District of New York
recently ruled that Venezuela’s iron ore company C.V.G. Ferrominera Orinoco, C.A.
(FMO) is an “agency or instrumentality” of the Bolivarian Republic of Venezuela. The
court’s determination could potentially derail a $350 million global arbitration and
litigation assault on FMO brought by the Plaintiff, Commodities & Minerals Enterprise,
Ltd. (CME), a British Virgin Islands company.
The ruling stems from a complaint initiated by CME earlier this year in which it sought
and obtained an ex parte order of maritime attachment for hundreds of millions of
dollars.
FMO’s attorneys, Diaz Reus partners Michael Diaz, Jr., Gary Davidson, and Brant
Hadaway, moved to dismiss the Complaint and vacate the Order of Attachment,
arguing that FMO is an “agency or instrumentality” of the Venezuelan government and,
as such, is immune from pre-judgment attachment under the Foreign Sovereign
Immunities Act (FSIA).
Judge Carter’s ruling means that FMO is presumptively immune from prejudgment
attachment under the FSIA. The Court has set a mid-October deadline for CME to brief
the Court to the extent it claims that an exception to the FSIA applies.
“We are pleased with the result that we achieved on behalf of FMO,” says Hadaway.
Davidson explains, “We were always confident in our position that FMO was an agency
of Venezuela, and we are gratified that Judge Carter has issued this decision now, as it
has far-reaching implications not only in the case before him, but in the arbitrations

2. pending in Switzerland, the UK, and the U.S.” Hadaway adds that “we will oppose any
argument presented that an exception to the FSIA applies. FMO is one significant step
closer to obtaining a dismissal of the proceeding in its entirety.”
Judge Carter’s ruling comes on the heels of another significant victory for FMO in the
New York litigation. On August 25, 2016, Judge Carter denied CME’s petition for an
anti-suit injunction seeking to enjoin FMO from proceeding with a declaratory action
filed by FMO in Venezuela. Judge Carter noted that FMO’s FSIA jurisdictional challenge
left it “doubtful the Court would have the necessary jurisdiction to issue an anti-suit
injunction.” The Court determined that even if it had jurisdiction, it would be improper for
the Court to issue the requested injunction, noting, among other things, that “principles
of comity” warranted denial of CME’s motion.
About Diaz, Reus & Targ, LLP
Diaz Reus offers a global law practice centered around national and transnational
parallel proceedings and transactions in sovereign, trade, commerce, finance, and
fraud; civil litigation and arbitration; asset identification, location, tracing and recovery;
white collar crime, regulatory, and criminal investigations and defense in matters of
corruption, bribery, money laundering, FCPA, OFAC, SDNs, and the Bank Secrecy Act;
and politically sensitive investigations including the recovery of U.S. immigration status
and visas. www.diazreus.com.
Media Contacts:
Gary Davidson gdavidson@diazreus.com
Brant Hadaway bhadaway@diazreus.com
305-375-9220
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