Mr Justice Teare rejected an application by Venezuela to set aside an order made ex parte that granted leave to Gold Reserve Inc, a Canadian company (“GRI”), to enforce an ICSID arbitration award in the same manner as a judgment of the Court and that gave judgment in the terms of the award. The Court made three main findings.

First, that Venezuela had agreed in writing to arbitration and as such that it had lost its right to rely upon State immunity in these proceedings by operation of s. 9 of the State Immunity Act 1978. The Court found that an agreement in writing is formed when the unilateral offer by a State to arbitrate contained in a bilateral investment treaty (“BIT”) is accepted by the “investor” when s/he commences arbitration against the State. A key issue here was whether GRI is an “investor” – within the meaning of the Canada-Venezuela bilateral investment treaty (the “governing BIT”)) – to whom Venezuela had made an offer to arbitrate. The Court held that there is no presumption in favour of a wide construction of the term “investor” with a view to favouring the jurisdiction of the arbitral tribunal. While such a broad construction is appropriate when construing the scope of arbitration agreements between commercial entities, it is not however appropriate in the context of arbitration agreements between a State and an investor arising out of a BIT when deciding who qualifies as an investor entitled to accept the State’s unilateral offer to arbitrate. In the present case, since GRI had injected a significant amount of money into two mining concessions that it owned indirectly in Venezuela then the Court held that it is an “investor” under the terms of the governing BIT.

The second main finding by the Court is that s. 12(1) of the State Immunity Act 1978 – providing for diplomatic service by the Foreign and Commonwealth Office on a foreign State – does not require the service of the arbitration claim form on Venezuela in the manner there set out because Civil Procedure Rules Part 62.18 does not require the arbitration claim form to be served on a State as part of the enforcement of an arbitral award in England and Wales.

Third, the Court held that GRI in making an application ex parte had not complied with its duty to make full and frank disclosure to the Court of all relevant matters, namely, that Venezuela was likely to rely upon a sovereign immunity defence. Nonetheless, the Court refused in the exercise of its discretion to set aside the order obtained on an ex parte basis, since Venezuela’s jurisdictional objections had now been ventilated and the Court had determined that Venezuela had lost its right to rely upon sovereign immunity. The Court reflected GRI’s failure to give full and frank disclosure with an appropriate order as to costs.