Jurisdictional immunity and Portuguese public policy arguments dismissed in recognition of arbitral award (Gold Reserve Inc v Venezuela)
Arbitration analysis: In a recent decision in a case between Gold Reserve Inc and Venezuela, the Portuguese Supreme Court of Justice (SCJ) provided a clear stance on sovereign immunity and public policy. The court decided that sovereign immunity from jurisdiction is waived when a state consents to being sued. This decision was based on the unilateral offer to arbitrate under the Venezuela-Canada BIT, the New York Convention (‘NYC’), and the settlement agreement between the parties. The court did not address immunity from execution. Regarding public policy, the SCJ applied the exception under the NYC very narrowly. The court dismissed arguments that recognising the arbitration award would violate Portuguese legal principles, including environmental and local population protection, non-interference, proportionality, and abuse of rights. The SCJ found no evidence of any specific abuse of rights under Portuguese law and rejected the argument that recognition was sought to pierce the corporate veil and reach assets of other Venezuelan entities. Written by Ana Coimbra Trigo, senior associate at PLMJ Law Firm, Lisbon, and Francisco Salvado Bastos, trainee lawyer at PLMJ Law Firm, Lisbon.