The Venezuelan government has petitioned a French Court of Appeals to set aside or annul a $740 million award granted to Gold Reserve Inc., the Spokane-based mine exploration company, in compensation for the loss of the company’s primary mining property in that South American country. 

Doug Belanger, company president, contends the appeal is without merit, and predicts it will be rejected. He calls the petition a delay tactic since an award can be set aside only in limited circumstances. 

“It is intended primarily for cases in which the international arbitration panel who ruled on the case exceeded its powers, or denied the parties due process in the arbitration,” Belanger says. “There can be no appeal on the merits of the decision, in other words. They can’t question judgment.”

Venezuela had not set its ground for seeking annulment, according to a company press release. 

Gold Reserve, in turn, has filed a petition before the French court to obtain an order for the recognition and enforcement of the judgment. That hearing is scheduled for Nov. 27 in Paris. 

The award came in late September, six years after Gold Reserve filed a $2.3 billion claim against the Venezuela government for seizing its mining property, called the Brisas Project, in 2008. 

A three-member international tribunal, called the International Center for Settlement of Investment Disputes, handed down the decision on Sept. 22, after hearing the case in accordance with provisions of the Canada-Venezuela Bilateral Investment Treaty. Gold Reserve is incorporated in Canada, but has its executive offices in downtown Spokane. 

Belanger says the company is firmly committed to the enforcement and collection of the award, including the collection of accrued interest in full, and says it will vigorously pursue available remedies. The award accrues interest at the rate of Libor, a benchmark rate that some of the world’s leading banks charge each other for short-term loans, plus 2 percent per annum during the court proceedings. 

Belanger hasn’t decided yet whether he will attend the hearing in Paris, but he says he will attend if the company’s attorneys say it’s necessary.

He says the Venezuelan government can attempt to have the hearing postponed, but once the court clarifies the annulment, the country will have no further legal maneuvers to appeal the award. 

Gold Reserve has said it may seek recognition and enforcement of the award in other jurisdictions as well, although Belanger declines to disclose specific plans the company may have in that regard. 

“We’ve been at this for six years, so another six months doesn’t really bother us,” he says. “At this point, it’s up to the courts.”

Belanger says the award would compensate Gold Reserve for the original $300 million it spent developing the Brisas project to the construction stage before its seizure by Venezuela. The company has spent more than $22 million in legal fees alone to argue the case, he says. 

Gold Reserve’s common shares trade in the U.S. through an over-the-counter exchange, OTCQB, under the symbol GDRZ, as well as under the symbol GRV on the TSX Venture Exchange, a Canadian stock exchange for emerging companies.