WILMINGTON, Del. — Perrysburg-based Owens-Illinois is suing Venezuela and a string of companies it controls in federal court to enforce an international arbitration award tied to the country’s seizure and nationalization of two O-I plants.
The suit, filed Monday in the U.S. District Court of Delaware by Owens-Illinois subsidiary O-I European Group, claims Petróleos de Venezuela, PDV Holding, CITGO Holding, CITGO Petroleum Corporation, and GLAS Americas are simply instruments of the Venezuelan government, and are thus liable for a roughly $500 million award issued in 2015 by the World Bank's International Centre for Settlement of Investment Disputes.
Owens-Illinois has long acknowledged that enforcement of its claims would be extremely difficult. The latest attempt to enforce the arbitration award, however, comes as Venezuelan opposition leader Juan Guaido, head of the National Assembly, has declared himself president — sparking a showdown with President Nicolas Maduro.
The United States, along with a number of South American and European countries, has recognized Mr. Guaido as the rightful president of Venezuela, as opposed to Mr. Maduro, who succeeded late socialist leader Hugo Chavez after his death in 2013. However, the country’s military has maintained its support of Mr. Maduro, under whose leadership the country has fallen into economic crisis.
Owens-Illinois’ dispute with Venezuela stems from 2010 when the company spent $603 million on controlling interests in two glass plants. A month later, Venezuela, under Mr. Chavez’s leadership, seized the plants and nationalized their operations. According to Owens-Illinois’ suit, the country sent armed guards to take the plants.
The company filed its World Bank claim in 2011. Venezuela, the suit alleges, consistently tried to delay proceedings, including in a 2015 attempt to annul the award. Owens-Illinois filed a claim in 2016 with the U.S. District Court of the District of Columbia, but the court stayed those proceedings in 2017 while the International Centre for Settlement of Investment Disputes proceedings continued.
In December, the annulment request was rejected, and on Dec. 18 the D.C. court lifted its stay, clearing the way for Owens-Illinois to attempt to enforce its claim.
In its lawsuit, Owens-Illinois argues the defendant companies, while listed as U.S.-based corporations, are really arms of the Venezuelan government that have used a series of financial maneuvers to shift assets out of the United States to shield them from claims by companies such as O-I.
A message left Wednesday with an Owens-Illinois representative was not immediately returned.
First Published February 13, 2019, 10:01 p.m.
