Norton Rose Fulbright Faces $1.2M Asset Seizure in Venezuelan Dispute

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Photo: Ivan Maslarov[/caption] Venezuela's highest court last week delivered welcome news to a U.S.-based attorney who has spent years battling Norton Rose Fulbright and its predecessor law firm in the South American country.The Social Chamber of the Venezuelan Supreme Tribunal on June 21 ordered the preventative seizure of nearly $1.2 million in assets from Norton Rose Fulbright—the latest ruling in an employment dispute with attorney Omar Garcia Bolivar that has been tied up in the courts for nearly two decades. The court had already ruled on the question of seizing the international law firm's assets three times before. But this time, it converted the sum in question from Venezuelan bolivars to U.S. dollars. That is a significant finding in a country where inflation has been estimated at nearly 25,000 percent. Garcia Bolivar—currently the Northern Virginia-based president of BG Consulting, which advises governments on growing private-sector investment—is still waiting on a final resolution to his litigation against the firm. He claims he is still owed social benefits after being fired from Macleod Dixon, which was absorbed by Norton Rose in 2012. Garcia Bolivar joined the firm when it opened its doors in Caracas in 1997 with a focus on oil and gas work. "It's probably one of the longest trials in the history of Venezuela," Garcia Bolivar said. Garcia Bolivar took Macleod Dixon to court in Venezuela for the nonpayment of social benefits in 2000, as did his brother, Emilio Garcia Bolivar, who also joined the firm in 1997 and resigned in 2000. But both cases crawled forward. A 2015 ruling from the United Nations Human Rights Committee, in a case brought by Emilio Garcia Bolivar, detailed the explanation for the delays, at least from the brothers' perspective: According to the facts as submitted by Emilio, there were multiple overlapping connections between the law firm, the court and the Venezuelan government. In 2015, the U.N. tribunal ruled in Emilio Garcia Bolivar's favor, concluding that the proceedings in the case were "unduly delayed" and that the court was obligated to deliver a swift ruling. According to Omar Garcia Bolivar, following that ruling, the proceedings in his brother's case in Venezuela began to accelerate, but neither one has reached a resolution. Omar Garcia Bolivar has asked the Inter-American Commission on Human Rights to find that he has been the victim of delayed justice, and says a ruling in that case could come down at any moment. Meanwhile, although the Supreme Tribunal has yet to touch the merits of Garcia Bolivar's case, it has been acting on his efforts to seize Norton Rose Fulbright's assets in the event of a possible judgment. The first ruling, from 2012, and subsequent ones, most recently last August, denominated the obligation in bolivars. Last week's ruling, in dollars, references Garcia Bolivar's initial demand of $454,000, doubled, with the addition of nearly $300,000 (or 30 percent) in fees. That's the statutory maximum for preventive measures under Venezuelan law. "In principle, it’s supposed to cover for the capital plus the interest plus any legal expenses," Garcia Bolivar said, noting that the figure he is entitled to at this point would likely exceed $1.2 million. Garcia Bolivar added that in response to the previous orders, Norton Rose Fulbright has provided a bank guarantee to ward off a potential seizure, but the firm has not yet done so in U.S. dollars for the latest ruling. He said that as a result, he has petitioned for the seizure of firm assets both inside and outside of Venezuela. Also a possibility, if the case is not resolved, is a move for sanctions against Venezuelan officials under the executive order of the U.S. government initially ordered by the Obama administration and advanced under the Trump administration. "Here we have tangible evidence that there was a violation of human rights by Venezuela," he said. But Garcia Bolivar said that he hoped his underlying case was in its last stages, explaining that some final witness testimony was expected in the next couple of weeks and that a decision could come down in the next several months. A spokesman for Norton Rose Fulbright did not respond to multiple requests for comment. The case represents just one strand of a complex web of relations that the firm has in Venezuela. Canadian senior partner James Coleman is the executive director and chair of mining company Gold Reserve Inc., which invested millions of dollars in a gold and copper project in the country’s southeast. After the Venezuelan government, under previous president Hugo Chavez, revoked the company’s authorization in 2008, the company took the country to the International Centre for Settlement of Investment Disputes and secured a $740 million arbitration award. In June 2017, Gold Reserve and Venezuela settled the matter for a total of $1.03 billion, which included the award, interest and the sale of the company’s mining data. But Gold Reserve says that after paying $187.5 million into a trust account, the country missed required payments for December 2017 and January through May 2018, totaling approximately $177 million. Norton Rose Fulbright has also represented ConocoPhillips and other energy companies in a number of big-ticket international arbitrations involving the Venezuelan government and state-owned enterprises. The firm, which lists 27 attorneys in Caracas on its website, is one of a small number of international players remaining in the country, amid political turbulence and economic calamity. President Nicolás Maduro recently claimed a second term in an election that the opposition viewed as rigged. Meanwhile, the country’s economy is in shambles, with sky-high inflation, and migrants streaming across the borders to Colombia and Brazil. Hogan Lovells earlier this year shuttered its office in Caracas, and in 2016 DLA Piperabandoned its Venezuela presence, ending a five-year-old formal alliance with Venezuelan firm InterJuris Abogados.