Clark Smith Villazor LLP Delivers $2 Billion Decision for 2020 PDVSA Bondholders

On September 18, 2025, Clark Smith Villazor LLP and co-counsel Paul Weiss Rifkind Wharton & Garrison LLP won a motion for summary judgment before Southern District of New York Judge Katherine Polk Failla upholding the validity of the 2020 PDVSA bonds and the pledge of a majority interest in PDVSA subsidiary CITGO.  Chris Clark of Clark Smith Villazor LLP argued the Venezuelan law issues that form the basis for the court’s opinion.

The court rejected arguments from PDVSA and friend-of-the-court the 2015 Venezuelan National Assembly that the bonds were void from inception because they had not been approved by the Venezuelan National Assembly. The judge concluded that, as argued by the bondholders and supported by Venezuelan law experts, only contracts signed directly by the Republic of Venezuela itself—not by state-owned companies like PDVSA—require National Assembly approval under the Venezuelan Constitution. Since the Republic was not a party to these contracts, National Assembly approval was unnecessary and the 2020 PDVSA bonds were validly issued.

The court also adopted the bondholders’ view that the “act of state” doctrine does not block enforcement of the bonds. Although Venezuela’s contemporary National Assembly passed resolutions criticizing or rejecting the bond deal, the court found these resolutions did not invalidate the contracts. Even if they had, however, the court noted that because the payments and collateral (CITGO shares) are located in the U.S. (i.e., outside Venezuela’s reach), U.S. courts are not bound to honor those resolutions.

As a result, the court granted the bondholders’ request for summary judgment in part and denied PDVSA’s request for summary judgment in its entirety. Next steps in the case will focus on the bondholders’ remaining counterclaims against PDVSA.

For media inquiries, please contact Christopher J. Clark at clark@csvllp.com, Virginia Tent at virginia.tent@csvllp.com, Andrew Rogers at andrew.rogers@csvllp.com, and Brian Burns at brian.burns@csvllp.com of Clark Smith Villazor LLP.