FOLLOW US

Air Canada is urging a federal judge in Washington, D.C., to allow its lawsuit against Venezuela to proceed, as the airline seeks to enforce an international arbitration award totaling more than $25 million.

In a filing submitted this week, the Canadian carrier asked the court to reject Venezuela’s bid to dismiss the case, arguing that the country’s objections to the arbitration process lack legal merit. The dispute centers on whether Venezuela was properly represented during the arbitration proceedings related to Air Canada’s former operations in Caracas.

According to Air Canada, an international arbitration tribunal correctly declined to replace Venezuela’s legal counsel with representatives tied to the country’s 2015 National Assembly. The airline said the tribunal acted within its authority and that Venezuela was afforded full due process throughout the proceedings.

Air Canada also argued that Venezuela’s claim that enforcing the award would violate U.S. public policy does not meet the narrow legal standard required under the New York Convention, which governs the enforcement of international arbitration awards. The airline maintained that U.S. foreign policy positions do not override treaty obligations unless enforcement would violate fundamental principles of justice.

Members of Venezuela’s U.S.-recognized National Assembly previously asked the court to block enforcement of the award, contending that arbitrators improperly allowed representatives of President Nicolás Maduro’s government to defend the case. They argued that the Maduro administration lacked legitimate authority and that any resulting award should be deemed invalid.

Air Canada counters that the arbitration panel had jurisdiction to resolve questions about representation and that Venezuela’s participation in the proceedings was consistent with international arbitration rules. The airline noted that Venezuela unsuccessfully attempted to overturn the award in French courts after the tribunal issued its decision.

The arbitration stems from Venezuela’s alleged breach of a bilateral investment treaty with Canada. Air Canada began operating flights between Toronto and Caracas in 2004 but suspended service in 2014 after Venezuelan authorities failed to process currency exchange payments, leaving the airline unable to repatriate tens of millions of dollars.

The tribunal ultimately awarded Air Canada approximately $20.8 million in damages, with additional costs and interest bringing the total claim to about $25.6 million. The airline says Venezuela has made no payments toward the award.

The case remains pending before the U.S. District Court for the District of Columbia.