Lovati v. Bolivarian Republic of Venezuela

Background

Sergio Lovati, Rudi Lovati, Alessandra Sarago Lovati, and Alessandro Lucibello Piani sued the Bolivarian Republic of Venezuela over unpaid interest on bonds issued under fiscal agency agreements dated July 25, 2001, and September 3, 1997. The bonds required semiannual interest payments. The plaintiffs alleged that Venezuela had failed to make required coupon payments since 2017. Sergio Lovati and Alessandra Sarago Lovati were later dismissed from the actions after transferring their bond holdings to Rudi Lovati.

The two related actions concerned bonds maturing in 2023 and 2027. After discovery ended, the plaintiffs moved for summary judgment, asking the court to find Venezuela liable and award unpaid interest and prejudgment interest. Venezuela stated that it did not oppose summary judgment and that the parties had agreed on a damages calculation.

Liability

Summary judgment is appropriate when the evidence shows that no genuine dispute exists about a fact that could affect the outcome and that the moving party is entitled to judgment under the law. Although Venezuela did not oppose the motion, the court independently reviewed whether the plaintiffs were entitled to judgment.

The court applied New York contract law, under which a bond is a contract. The plaintiffs had to establish a contract, a breach, and resulting damages. The undisputed evidence showed that the plaintiffs held the bonds, that the bonds required coupon payments on fixed dates, that Venezuela had failed to make the required payments since 2017, and that the plaintiffs suffered damages. The court therefore found Venezuela liable for breach of contract and held that the plaintiffs were entitled to summary judgment.

Damages

The court awarded the plaintiffs $150,484,258.40 in damages, including prejudgment interest, calculated as of December 31, 2022. It also awarded $15,022.21 per day until final judgment was entered.

Other Requests and Procedure

Because the plaintiffs raised new requests for declaratory relief and attorney’s fees for the first time in their reply papers, the court did not address the merits of the request for declaratory relief at that stage and would not entertain the attorney’s-fee request at that time. The court stated that the plaintiffs could raise further issues within the scope of a proposed judgment through a new motion, if necessary.

The court granted Venezuela’s motion to file a sur-reply because the plaintiffs had raised new issues in their reply. The parties were permitted to submit a proposed judgment, with the plaintiffs’ filing due March 14, 2023. The court directed the clerk to docket the opinion and order in both related cases and terminate the identified pending motions.