English Court Sets Aside Order Freezing Venezuela Assets

MILBANK, TWEED, HADLEY & MCCLOY LLP March 2008 Milbank Client Alert

BEIJING FRANKFURT HONG KONG LONDON LOS ANGELES MUNICH NEW YORK SINGAPORE TOKYO WASHINGTON, D.C. ForFor a copy of anandd ffurtherurther infinformationormation about this Client AlertAlert,, ppleaselease contact: English Court Sets Aside Order Michael Nolan, Partner, Litigation Group Freezing Venezuela Assets (202) 835-7524 [email protected]

A London judge on Commerce. ExxonMobil assets, businesses or bank Tuesday discharged a court argued to the English court that accounts in England or Wales. order that froze more than the freezing order was necessary The judge also concluded that $12 billion in worldwide assets for it to be paid for the loss of there was no suggestion of any of Venezuela’s state-owned oil the projects and the future international fraud, which the company, Petroleos de revenues should an international judge said could, even without Venezuela SA, or PDVSA. The tribunal rule in its favor. The assets, accounts or other judge made his decision and freezing injunction issued connections to England, allow provided his reasoning in a required PDVSA (i) to keep for a worldwide asset freezing written statement at the end of assets of at least US$12 billion order by an English court. a 6-day hearing which began on in England and Wales and The English judge also February 28, 2008 and was (ii) not to dispose of, deal in or ordered ExxonMobil to pay This Client Alert is a partly held in private. The diminish the value of any of its PDVSA’s legal costs in source of general order of discharge was entered assets, whether within or connection with the application information for clients on March 20, 2008. outside England and Wales, up to discharge the freezing order. and friends of Milbank. ExxonMobil initially secured to the same value. It also ExxonMobil has reportedly Its content should not be on January 25, 2008 the English required PDVSA to disclose the indicated that it does not intend construed as legal advice, freezing order on the basis of location and value of its to appeal the judge’s ruling. and readers should not act representations that it was worldwide assets to ExxonMobil also had upon the information in necessary to ensure it would be ExxonMobil. obtained court orders in New this Client Alert without compensated for the In ruling this week that the York, the Netherlands and the consulting counsel. Venezuelan government’s freezing order should be Netherlands Antilles freezing © 2008, Milbank, Tweed, nationalization of key oil ﬁ elds discharged, the English judge Venezuelan assets in those Hadley & McCloy LLP. in the Orinoco basin, which said that ExxonMobil has “no jurisdictions. Those orders All rights reserved. included two ExxonMobil good arguable case that PDV’s currently remain in place. Attorney Advertising. operations. ExxonMobil had conduct in relation to its assets PDVSA’s lawyers have Prior results do not instituted arbitration is unjustiﬁ ed.” The dispute’s reportedly indicated that guarantee a similar proceedings with the World lack of connection to England PDVSA may try soon to outcome. Bank’s International Centre for was a critical part of the judge’s overturn the orders in those Settlement of Investment reasoning. He referred in his courts,1 and Venezuela has Disputes and before the reasoning to the absence of been reported to be considering International Chamber of evidence that PDVSA had counter-suing ExxonMobil.2

1 Exxon Loses U.K. Ruling In Fight With Venezuela, The Wall Street Journal, Mar. 19, 2008.

2 Venezuela praises British judge’s ruling against asset freeze, Associated Press, Mar. 18, 2008. www.milbank.com

Please feel free to discuss any aspect of this Client Alert with your regular Milbank contacts or with any partners whose names and contact information are provided below.

Beijing Units 05-06, 15th Floor, Tower 2 China Central Place 79 Jianguo Road, Chaoyang District Beijing 100025, China +86-10-5969-2700 Edward Sun Global Securities +8610-5969-2772 [email protected] Frankfurt Taunusanlage 15 60325 Frankfurt am Main, Germany +49-69-71914-3400 Hong Kong 3007 Alexandra House 18 Chater Road Central, Hong Kong +852-2971-4888 Anthony Root Global Securities +852-2971-4842 [email protected]

London 10 Gresham Street London EC2V 7JD, England +44-20-7615-3000 Phillip Fletcher Global Project Finance +44-20-7615-3002 pﬂ [email protected] David Perkins Litigation and Arbitration +44-20-7615-3003 [email protected] Los Angeles 601 South Figueroa Street Los Angeles, CA 90017 +1-213-892-4000 Ed Feo Global Project Finance +1-213-892-4417 [email protected] David Lamb Global Corporate +1-213-892-4434 [email protected] Allan Marks Global Project Finance +1-213-892-4376 [email protected] Munich Maximilianstrasse 15 (Maximilianhoefe) 80539 Munich, Germany +49-89-25559-3600 Norbert Rieger Global Corporate +49-89-25559-3620 [email protected] New York One Chase Manhattan Plaza New York, NY 10005 +1-212-530-5000 Dan Bartfeld Global Project Finance +1-212-530-5185 [email protected] Richard Brach Global Project Finance +1-212-530-5350 [email protected] Eric Silverman Global Project Finance +1-212-530-5648 [email protected] Singapore 30 Rafﬂ es Place, #14-00 Chevron House Singapore 048622 +65-6428-2400 David Zemans Global Project Finance +65-6428-2555 [email protected] Tokyo 21F Midtown Tower 9-7-1 Akasaka Minato-ku, Tokyo 107-6221 +813-5410-2801 Darrel Holstein Global Corporate +813-5410-2841 [email protected] Gary Wigmore Global Project Finance +813-5410-2840 [email protected]

Washington, D.C. International Square Building 1850 K Street, NW Washington, DC 20006 +1-202-835-7500 Jonathan Maizel Global Project Finance +1-202-835-7565 [email protected] Michael Nolan Litigation and Arbitration +1-202-835-7524 [email protected]