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The tribunal harshly criticized Venezuela, saying it engaged in “arbitrary conduct” and “frustrated Crystallex’s legitimate expectations.” Crystallex was seeking US$3.8 billion in the arbitration.

The decision provides little solace for Crystallex’s former shareholders, as the company filed for creditor protection in late 2011 and was delisted from the Toronto Stock Exchange. But it does create an opportunity for creditors to realize value.

Crystallex is the second Canadian miner to win an arbitration case against Venezuela in the last seven months. In September, Gold Reserve Inc. won an award worth more than US$740 million after Venezuela expropriated the company’s Brisas gold project, which lies next to Las Cristinas.

But Gold Reserve reached a preliminary settlement with Venezuela in February. The company and the government said they formed a potential joint venture to develop both Brisas and Las Cristinas as one giant gold mine.

That pushed Crystallex out of the picture at Las Cristinas, and could make it harder for the company to reach its own settlement with Venezuela. However, it can still try to claim its monetary award.

While international arbitration rulings are binding and enforceable, Canadian miners have struggled to collect on them. Stans Energy Corp. won a US$118-million arbitration decision against Kyrgyzstan in 2014. Moscow courts annulled it the following year. Khan Resources Inc. won a US$70-million award from Mongolia early last year. The Mongolian government refused to pay for months before finally relenting in March. Khan expects to receive the money by mid-May.

If governments refuse to pay arbitration awards, companies can try to seize state-owned assets outside the country. However, this is a complicated and time-consuming process, and settlements are often reached instead.

pkoven@nationalpost.com

Twitter.com/peterkoven