U.K. Court Rebuffs Exxon Mobil, Won't Freeze Venezuelan Oil Firm's $12 Billion Assets

March 18, 2008 8:04 p.m. EST

London, U.K. (AHN) - A British judge on Tuesday suspended a court order obtained by U.S. oil giant Exxon Mobil Corp. that freezes $12 billion worth of international assets of Venezuela's state oil company.

Judge Paul Walker of London's Royal Courts of Justice ruled that Petroleos de Venezuela SA (PDVSA) has not committed any fraud and has no assets in the U.K. to justify the order issued on Jan. 24, 2008 on behalf of ExxonMobil. The judge added that London has no jurisdiction on the case.

Last year, Venezuelan President Hugo Chavez nationalized a PDVSA oil project to which ExxonMobil was a contracting party since the 1990s. ExxonMobil decided to sue PDVSA in an international arbitration court for redress and sought the freezing of the firm's global assets in courts in New York, London, the Netherlands and the Netherlands Antilles. The asset freeze orders, which ExxonMobil obtained, will facilitate compensation in the event the U.S. firm won its case against PDVSA.

The Texas-based company's arbitration cases are with the International Center for Settlement of Investment Disputes and the International Chamber of Commerce. It is trying to negotiate with PDVSA for a solution at the same time.

Meanwhile, PDVSA is planning to sue ExxonMobil for damages caused to the company by the asset freeze orders.