Overview
First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement. This month we provide updates on the Crystallex sales process, Helms-Burton litigation, and developments in various cases of interest.
Crystallex
As we have previously discussed (here, here, here, and here), the United States District Court for the District of Delaware is presently holding a judicial sale of shares of Citgo’s parent company, in order to satisfy tens of billions of dollars in debts owed to creditors by Venezuela and its state-owned oil company.
After holding a week of hearings in September, which we summarized in our October FTU (here), the parties conducted post-trial briefing and Judge Stark held another two days of hearings on October 20 and 21. These hearings concerned motions filed by Gold Reserve and Venezuela to disqualify the Special Master overseeing the sale process and the Special Master seeking approval of the Amber Energy bid for the PDVH shares (the entity which owns CITGO). No decision has been made by the court, which accepted post-trial briefs on October 28.
Previously, Judge Stark terminated the Gold Reserve SPA and permitted the Special Master to execute the Amber Energy SPA. However, Amber Energy's financing is only committed until December 1, 2025. Amber Energy’s bid for Citgo has a total value of approximately $8.5 billion, with approximately $5.859 billion going to Venezuelan creditors, $500 million in additional consideration for creditors, and $2.125 billion in cash to settle bondholder claims against its parent company, PDVSA. (This represents a discount from the $2.8 billion judgment those bondholders recently received from the Southern District of New York; the bondholders have the right to terminate the settlement on December 1 if a sale order has not been signed.)
At the hearing, Gold Reserve argued that OFAC sanctions prevented the 2020 bondholders from taking any actions that would interfere with the merger that would be required for Gold Reserve’s financing to close. Gold Reserve also argued that the court should favor price over certainty, and that the Special Master had failed to generate adequate competitive tension.
Venezuela impugned the Special Master's motives in its disqualification materials and leaned heavily on many of those same argument in its merits arguments, as well as emphasizing its previous arguments about the valuation and the price of the Amber bid. Accordingly, Venezuela argued that the proper valuation is $18.6 billion and any sale needs to be for at least 50% of that (and therefore the Amber bid is too low), and the Special Master should have done a host of things differently with respect to the sale to increase the competitive tension.
The parties who support the Amber bid, including the Special Master, Crystallex, ConocoPhillips, OIEG, Red Tree, and more, attacked Venezuela’s valuation as significantly too high (relying on testimony from Venezuela’s expert at the sale hearing that it was a theoretical valuation that didn’t discount the litigation risk from the 2020 bonds). They also challenged Venezuela’s position on the 50% rule and explained that they had found competitive tension in the sale process, which they believed was fair and in compliance with Delaware law. Many creditors challenged Gold Reserve for ignoring the fact that Judge Failla had not only found the 2020s to be valid but issued a $2.8 billion judgment, and also pointed out that because Gold Reserve lost its committed financing, it no longer has a conforming bid.
It is anticipated that a decision from Judge Stark will come out this month, in advance of the December 1, 2025 date when Amber's settlement agreement with the 2020 bondholders will terminate if a sale order has not been entered. Another issue looming over the proceedings is the necessity of obtaining a license from OFAC to allow the transaction to close.
Another Helms-Burton Case Reaches the Supreme Court
Last month, we reported on the Supreme Court’s historic decision to grant certiorari in Exxon Mobil Corp. and Havana Docks—marking the first time the court has agreed to weigh in on the scope of the Helms-Burton Act (HBA). As those petitions were under consideration, a third certiorari petition concerning HBA was filed in Seaboard Marine Ltd. v. de Fernandez (No. 25-283).
The respondent-plaintiff in Seaboard, Odette Blanco de Fernandez, claims to be the surviving shareholder of two Cuban corporations that owned land and port development rights in Mariel Bay, Cuba. She alleges that a portion of the land formerly owned by one of the companies is now occupied by Cuba’s principal container terminal. The defendant, Seaboard Marine, is an international shipping company that delivers goods to the terminal. De Fernandez filed suit in the Southern District of Florida, asserting that Seaboard’s use of the port constitutes "trafficking" under the HBA. The district court granted summary judgment in Seaboard's favor, but the Eleventh Circuit reversed in part, allowing certain claims to proceed. Seaboard’s certiorari petition raises three key issues with the Eleventh Circuit's decision, which we lay out below.
Shareholder Standing to Sue for Corporate Property
Seaboard argues that the Eleventh Circuit erred in allowing de Fernandez to sue under the HBA based on her status as a shareholder. The Eleventh Circuit reasoned that the statute’s reference to plaintiffs who "own a claim" reflects Congress’s intent to expand the pool of eligible claimants beyond titleholders. Seaboard contends that this interpretation is overly broad, violates traditional principles of corporate separateness, and risks opening the floodgates to duplicative or competing claims from multiple shareholders of confiscated corporations.
This issue will undoubtedly be significant for future HBA cases. We expect—especially in view of the claims filed to the Foreign Claims Settlement Commission—that a great number of the most valuable claims to property in Cuba are owned by corporations.
Breadth of the Definition of "Trafficking"
The Eleventh Circuit interpreted “trafficking” under the HBA to include any commercial activity that “benefits from” confiscated property, even indirectly. Seaboard challenges this interpretation, arguing that the Act requires a more direct connection between the alleged trafficking and the property. Below, the district court found no evidence that Seaboard’s freight was loaded, offloaded, or transported over the specific parcel of confiscated land. Nonetheless, the Eleventh Circuit held that Seaboard benefited from the land because the terminal’s overall functionality depended on it. Seaboard argues that this reading is overly expansive and that “benefits from” should be limited to investment-like exploitation rather than routine commercial use.
Narrow Construction of the "Lawful Travel" Exception
Seaboard also argues that its shipments of agricultural goods to Cuba fall within the HBA’s “lawful travel” exception, which exempts from liability transactions incident to lawful travel. Seaboard operated under federal regulations that authorize such exports, including humanitarian shipments. However, the Eleventh Circuit narrowly construed "travel" to mean only the movement of people, excluding trade-related activities. Seaboard contends that this interpretation conflicts with federal law and regulations, which explicitly link lawful travel to authorized trade.
De Fernandez initially waived her response to Seaboard's petition. However, following its November 7, 2025 conference, the Supreme Court ordered a response, which is due by December 1, 2025. We will continue to monitor developments in de Fernandez closely. Alongside Havana Docks, the Eleventh Circuit’s decision in de Fernandez is among the first appellate rulings to meaningfully address the scope and application of the HBA. Unless the Supreme Court intervenes, the Eleventh Circuit's interpretation will remain a significant precedent for HBA litigants.
Other Important Developments
A variety of interesting cases in the cross-border/judgment enforcement/arbitration-adjacent areas are winding their way through the courts. Next month, we will report on a few of these in greater detail, but here are some highlights.
Petersen v. Argentina
The long-running dispute (commenced in 2015) over the Petersen plaintiffs' multibillion-dollar claim against Argentina arising out of the partial renationalization of YPF (the Argentine oil and gas company) moved into the Court of Appeals. Last week, the parties argued Argentina's appeal of a judgment entered against it by the New York federal district court. The three-judge panel was comprised of Judges Chin, Cabranes and Robinson of the US Circuit Court of Appeal for the Second Circuit. The issues on appeal include forum non conveniens, comity, whether Argentine law was properly applied, and damages methodology. Argentina’s sovereign-immunity defense was rejected by the Second Circuit in 2018.
Litigation Against Spain and India
High profile sovereign litigation against Spain and India continues to proceed in US courts. Spain is seeking certiorari to the US Supreme Court over a DC Circuit decision allowing a path to enforce arbitral awards against it in favor of NextEra Energy, Inc. of approximately $386 million. Spain contends that it did not agree to arbitrate, while the claimants have prevailed on their argument that the ICSID Convention makes clear that the question of whether Spain agreed to arbitrate falls to the arbitral tribunal. Last month, the Supreme Court sought the position of the Solicitor General on the question presented.
As to India, Antrix Corp. Ltd., a state-owned commercial division of India's space agency, is urging the Ninth Circuit to once again refuse to enforce a decade-old $1.3 billion arbitral award issued to satellite communications company Devas Multimedia Pvt. Ltd, arguing that the award has been set aside in India and that, in any case, jurisdictional obstacles stand in the litigation's way. You may recall we reported on this case previously at the Supreme Court last term, when the court reversed the Ninth Circuit's decision that the FSIA required personal jurisdiction to be established over the sovereign in enforcing an arbitral award. See FTU here.
Is there a time Limit to Vacate a Void Judgment?
Today, the Supreme Court will hear challenges to President Trump's tariffs, but there is also another case being argued: whether there's a time limit for filing motions to vacate allegedly void judgments based on claims that the issuing court lacked personal jurisdiction over a party.
Coney Island Auto Parts Unlimited, Inc., has asked the justices to overrule a Sixth Circuit panel's refusal to vacate a 2015 default judgment against it. Coney Island Auto Parts claims the judgment was void when issued and is unenforceable now. Coney Island Auto Parts Unlimited Inc. v. Burton, case number 24-808.
The Sixth Circuit (a 2-1 panel decision) held that Coney Island Auto Parts' motion under Federal Rule of Civil Procedure 60(b)(4), which allows motions to vacate void judgments, was untimely because it had failed to file the motion within a "reasonable time," as required by Rule 60(c)(1).
Coney Island Auto Parts claims the Sixth Circuit's reading of Rule 60(c)(1) cannot be reconciled with its plain text and history or the practicality of void judgments. While the rule establishes a one-year deadline for motions to vacate based on mistakes, new evidence or fraud, it only states that motions based on other reasons should be filed in an undefined "reasonable time." Since void judgments are invalid from the very beginning and cannot become valid over time, the company argues they can be challenged at any time.
