Air Canada has filed a lawsuit in a US court against Venezuela to enforce a USD20.8m arbitral award granted in 2021 by ICSID over ticket sales earnings that the state failed to convert from bolivars to US dollars for repatriation.
The airline seeks to enforce the award and interest for the cost of debt, along with legal costs incurred. Venezuela has 60 days to respond from the date of summons or face default judgment for breaching the Canada-Venezuela Bilateral Investment Treaty.
Air Canada began operating the Toronto-Caracas route in 2004 and regularly sought to exchange bolivar proceeds for US dollars. The dispute arose when Venezuela issued an order processing foreign airlines’ requests at a different exchange rate.
After suspending flights to Caracas in 2014 due to civil unrest and business problems, Air Canada registered a dispute with Venezuela in 2016, leading to arbitration proceedings and a ruling in its favor by the ICSID in September 2021.
