October 30, 2026
On October 27, 2026, a unanimous panel of the United States Court of Appeals for the Second Circuit affirmed a September 2025 summary judgment opinion in favor of CSV’s clients, MUFG Union Bank, N.A. and GLAS Americas LLC, on behalf of holders of PDVSA 2020 bonds. The decision upholds the validity of over $2 billion in bonds issued by Venezuelan state-owned oil company Petróleos de Venezuela, S.A. and the related pledge of a majority stake in Citgo.
The appeal stems from the default by the PDVSA on more than $2 billion of bonds. In 2016, PDVSA offered bondholders the chance to exchange bonds maturing in 2017 for bonds maturing in 2020. PDVSA defaulted on the bonds in 2019. PDVSA then filed an action against CSV’s clients in the United States District Court for the Southern District of New York, seeking a declaration that the agreements governing the 2020 bonds were invalid. PDVSA also sought injunctive relief to prevent CSV’s clients from enforcing the governing agreements.
In 2020, U.S. District Judge Katherine Failla ruled in favor of CSV’s clients on summary judgment, determining that New York law governed the validity of the bonds and the act-of-state doctrine did not bar the Court’s resolution of the case. PDVSA appealed to the Second Circuit, which certified questions to the New York Court of Appeals concerning choice of law. The Second Circuit ultimately vacated and remanded the case to the district court.
Judge Failla again ruled in CSV’s clients’ favor in September 2025, determining that summary judgment was warranted when applying Venezuelan law to the question of the bonds’ validity. PDVSA appealed again to the Second Circuit, and a panel consisting of U.S. Circuit Judges Nardini, Lee, and Robinson heard oral argument on the appeal on May 14, 2026.
In a 60-page opinion, the Second Circuit affirmed the district court’s decision, holding that the bonds were valid under Venezuelan law and that the act-of-state doctrine did not apply.
CSV attorneys Chris Clark, Brian Burns, and Andrew Rodgers represented MUFG Union Bank, N.A. and GLAS Americas LLC in the district court and in the Second Circuit.
Our prior post about the District Court’s 2025 ruling is here.