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3D Illustration of Venezuela money Photo: Wael Khalill Alfuzai via Shutterstock

Parties that prevail in arbitration often face a winding road to obtain the money they are owed. This is especially true when the counterparty cannot, or will not, comply with the tribunal’s decision and satisfy the award. In these circumstances, judgment holders will frequently try to attach property owned by an alleged alter ego, but this strategy has its own challenges and uncertainties. What the judgment holder needs to prove, and how it must prove it, are opaque tasks without much judicial guidance. This is especially true when the judgment debtor is a foreign sovereign, implicating the Foreign Sovereign Immunities Act (FSIA).

However, the U.S. Court of Appeals for the Third Circuit’s 2019 decision in Crystallex International Corporation v. Bolivarian Republic of Venezuela provides some answers. This article briefly describes the facts of Crystallex and explores the practical impact of the Third Circuit decision and more recent decisions. Whether Crystallex will be applied by other circuits remains to be seen. It is surely not the last word on the subject, but it would be wise for any judgment creditor seeking to enforce an award against a sovereign’s alter ego to study it carefully.

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