CRYSTALLEX’S OPPOSITION TO VENEZUELA’S EMERGENCY MOTION TO ADJOURN ORAL ARGUMENT AND TO HOLD CASE IN ABEYANCE PENDING SETTLEMENT

Less than a week before this Court has scheduled oral argument—for the second time—in this long-pending appeal, Appellant the Bolivarian Republic of Venezuela (“Venezuela”) has filed a purported “emergency” motion seeking to delay oral argument and hold this appeal in abeyance indefinitely. This gambit is the latest in a clear pattern of attempts by Venezuela to avoid prosecuting its appeal, and this Court previously warned Venezuela and its counsel that such attempts will not be tolerated. See, e.g., Order 1 (June 12, 2018), ECF No. 1735531 (warning Venezuela that failure to retain substitute counsel “will result in dismissal of the appeal for lack of prosecution”); Order 1 (Aug. 24, 2018), ECF No. 1747363 (granting request by Venezuela’s substitute counsel to extend time to file response to motion to govern future proceedings, and warning that “[n]o further extensions will be granted by the Court”). Venezuela’s latest motion is beyond frivolous; it is an indefensible attempt to mislead this Court about the basis for Venezuela’s requested relief. Appellee Crystallex International Corporation (“Crystallex”) strongly opposes Venezuela’s motion.

As its sole purported ground for seeking a further delay of oral argument, Venezuela claims that the parties have “reached a settlement” pursuant to which Crystallex supposedly  asked  Venezuela  to  “stay this appeal.” Mot. 2, 3. But Venezuela and its counsel ascribe a position to Crystallex that they know to be false. Because Venezuela has stoutly refused to pay the judgment under review voluntarily, Crystallex has been forced to expend time and resources in enforcement actions seeking to seize Venezuela’s assets. In one of those actions in the District of Delaware, Crystallex succeeded in obtaining attachment of common-stock shares held in the name of Venezuela’s wholly owned oil company—and alter ego— Petróleos  de  Venezuela,  S.A.  (“PDVSA”). As Venezuela’s motion suggests, Crystallex’s victory in that enforcement action produced a settlement agreement pursuant to which Venezuela made an initial payment of less than one third of the $1.4 billion it owes under the judgment. Under the agreement, Venezuela was to stay its appeal of the Delaware judgment and prepare collateral sufficient to fully cover the unpaid portion of the judgment by January 10, 2019.

Venezuela instead decided to continue litigating, and Crystallex declared Venezuela in breach of the agreement almost a month ago. Indeed, Venezuela fails to disclose that the parties’ “settlement agreement” recently was the subject of contested motions practice before the Third Circuit in the appeal filed by PDVSA. There, subsequent to the early-December statement that Venezuela quotes in its motion, see Mot. 3 & Ex. 2, Crystallex sought to expedite the hearing of the Third Circuit appeal on the basis of Venezuela’s breach of the parties’ settlement agreement. Specifically, in public filings that Venezuela fails to describe, Crystallex expressly declared Venezuela to be in breach of the settlement agreement for failing to cause PDVSA to seek a stay of the Third Circuit appeal while Venezuela prepared the required collateral. Venezuela’s lack of candor in describing Crystallex’s position is inexcusable given that the principal exhibit to its motion is a document pulled directly from the Third Circuit’s docket. See Mot. Ex. 1. In light of this clear record, it is difficult to understand how Venezuela’s counsel could represent to this Court that Crystallex has requested this stay.

Even before the recent motion practice in the Third Circuit, Crystallex’s position that Venezuela breached the settlement agreement had, of course, been communicated to Venezuela and had been widely reported in the press. See, e.g., Andrew Scurria, “Bankers Hired for Citgo Auction Following Scrapped Deal With Venezuela,” WALL ST. J. (Dec. 12, 2018), available at https://on.wsj.com/2SLgaxB.

This position was also confirmed to Venezuela when its counsel later sought Crystallex’s consent to its motion. There is no conceivable possibility that Venezuela or its counsel could be unaware of Crystallex’s position. It is therefore indefensible that they now represent to this Court that Venezuela is filing its motion “in accordance with the settlement agreement and the request of Crystallex.” Mot. 4.

In the wake of Venezuela’s breach, Crystallex has made clear to Venezuela’s counsel that Crystallex opposes any further effort to stay this appeal while Venezuela remains in breach of the settlement agreement. Any further delay of this appeal— while PDVSA’s Third Circuit appeal proceeds—would cause severe prejudice to Crystallex. Venezuela should not be permitted to breach the settlement agreement in the Third Circuit while pretending to honor that agreement in this Court.

In short, there is no basis for Venezuela’s motion. Venezuela and its counsel know this, which is why they resort to misrepresenting Crystallex’s position in an apparent effort to mislead this Court on the eve of oral argument. If Venezuela and its counsel wish to avoid oral argument, they can dismiss this appeal. See Fed. R. App. P. 42(b). And, absent an appropriate explanation and apology from Venezuela’s counsel for this lack of candor, so can this Court.  See, e.g., Chambers v. NASCO, Inc., 501 U.S. 32, 45 (1991) (“[O]utright dismissal of a lawsuit . . . is a particularly severe sanction, yet is within the court’s discretion.”); see also D.C. Cir. Rule 38 (authorizing sanctions for any “motion that is frivolous or interposed for an improper purpose,” as well as “dismissal for failure to prosecute”).

CONCLUSION

For the foregoing reasons, Crystallex respectfully requests that Venezuela’s January 8, 2019 Motion be denied.