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U.S.-recognized members of Venezuela’s National Assembly are urging a Washington, D.C., federal judge to derail Air Canada’s lawsuit seeking to enforce a $25 million arbitral award, arguing the entire process was tainted by the participation of President Nicolás Maduro’s administration—an entity the United States does not recognize as Venezuela's rightful government.

Lawmakers Claim Arbitration Was Built on Illegitimate Representation

In filings submitted Monday, the assembly members contend they were improperly locked out of the arbitration, despite repeatedly alerting the tribunal that Maduro’s government held no authority to represent the Republic of Venezuela or appoint counsel on its behalf.

They warned the court that allowing Air Canada’s award to stand would directly contradict U.S. foreign policy, which recognizes the 2015 National Assembly as Venezuela’s only legitimate governing authority.

According to their brief, any ruling defended by Maduro’s administration is inherently invalid.
They argued that, “Had the 2015 National Assembly been permitted to defend the Republic, the outcome may have been different. The Maduro regime defended the arbitration knowing full well the numerous allegations of corruption and fraud embedded in the very system under dispute.”

The lawmakers added that Maduro’s representation amounted to yet another attempt to “loot assets of the Republic for personal gain.”

Assembly Says This Case Differs From Prior Defeat

While the assembly previously raised similar objections in a separate enforcement fight—concerning a $618 million award issued to Spanish affiliates of Mexican food producer Gruma SAB de CV—the D.C. Circuit rejected those arguments in 2023.

This time, however, they say the jurisdictional ground is different.

Claim: Arbitrators Overstepped Their Authority

Their brief asserts that the tribunal had no authority to decide a “political and constitutional issue,” acknowledging this very limitation during proceedings.
Because the representation issue touched every part of the arbitration, they argue it violates the New York Convention’s limits on arbitral authority.

They maintain that the award cannot be salvaged, writing: “The breach cannot be cured through separation of the decision on legal representation, as the issue permeates every aspect of the case.”

Air Canada’s Long Path to a $25M Award

Air Canada launched its Toronto–Caracas route in July 2004, flying three times weekly with a 120-seat Airbus A319, according to its 2024 enforcement petition.

Under Venezuelan law, the airline was required to apply to CADIVI—the government’s currency administration commission—to convert bolivars generated from ticket sales into U.S. dollars to repatriate back to Canada.

From 2004 to 2012, Air Canada filed 91 currency exchange requests totaling roughly $91 million, all of which were approved.

Breakdown Begins in 2013

Trouble emerged when the airline submitted roughly $50 million in additional requests between September 2013 and January 2014. According to the petition, CADIVI simply went silent, offering no decision on exchanges related to tickets sold between October 2012 and December 2013.

Unable to recover its funds, Air Canada halted all Caracas flights in March 2014.
By December 2016, the airline initiated arbitration—and secured a $25 million victory in 2021.

Lawyers Remain Silent as Court Fight Escalates

Attorneys for both sides did not respond to requests for comment on Tuesday.

Air Canada is represented by Thomas C.C. Childs and Vivasvat Dadwal of King & Spalding LLP.
Venezuela is represented by Gregory A. Paw, Jennifer Arbittier Williams, Jennifer K. Welsh, and Sean L. Freeh of Freeh Sporkin & Sullivan LLP.