Gold Reserve Inc. (GDRZF)

[Enterprising Investor]

Gold Reserve Provides Update to Legal Proceedings Related to Collection of Arbitration Award (1/14/16)

SPOKANE, Wash.--(BUSINESS WIRE)--Gold Reserve Inc. (TSX.V:GRZ) (OTCQB:GDRZF) (“Gold Reserve” or the “Company”) reports on legal activities in relation to the various jurisdictions where is it attempting to collect on its $740 million ICSID (Additional Facility) arbitral award.

United States

As previously reported, the U.S. District Court in Washington, DC issued an order on November 20, 2015, confirming the Award and entering judgment in favor of the Company, which with interest accrued is now approximately $765 million. Venezuela has filed an appeal of the court’s order but it has not posted an appeal bond or sought a stay of enforcement of the judgment pending appeal. The U.S District Court of Appeals has not yet set a scheduling order but the Company expects one in the near future.

Under the Foreign Sovereign Immunities Act , no attachment or execution of Venezuela property in the U.S. is permitted without a court determination that (a) the property in question is used for a commercial activity in the United States and other criteria is satisfied and (b) a reasonable period of time has elapsed following the entry of judgment. Subsequent to the entry of judgment, the Company has filed a 1610(c) motion in the District Court for a determination that a reasonable period of time has elapsed. Venezuela has opposed that motion. The motion is fully briefed and the parties are waiting for a decision by the court.

In the District Court for the Southern District of Florida the Company has filed petitions relating to the Luxembourg proceedings as is allowed under U.S. law for discovery in aid of foreign proceedings. The banks covered by the Florida proceedings to date are Bank of New York Mellon Corporation, JP Morgan Chase NA, and Deutsche Bank Trust Company Americas. These institutions have produced varying amounts of documents and Gold Reserve has commenced the process of document review and appropriate depositions.

France

In October 2014 Venezuela applied for the annulment of the Award, and the Company applied for an exequatur or judgment declaring the Award to be recognized and enforceable in France. Venezuela responded to the Company’s request for exequatur by asking that the Company’s request be rejected and, in the alternative, that the provisional recognition and enforcement, which attaches to the exequatur pending a decision on annulment, be suspended. In January 2015 the Paris Court of Appeal fully upheld the Company’s position by granting the exequatur and rejecting Venezuela’s application for a suspension of the provisional effects of the exequatur. Venezuela’s application for annulment was subsequently scheduled to be heard in February 2016.

On January 6, 2016, the Paris Court of Appeal notified the Company that, as part of the general administration of its docket, it had postponed the February 2016 hearing related to Venezuela’s applications to October 13, 2016. On January 14, 2016, the Paris Court of Appeal advised the Company that a hearing date in March 2016 had recently become available, a date on which both parties must agree. It is unclear whether Venezuela will agree to the earlier date. The Company has been advised that the Court has accumulated a backlog of cases as a result of the president of the court being promoted to the Court of Cassation (French Supreme Court), without being replaced to date. A decision is expected within 90 days after the newly established hearing date. In the interim, the Company is not prevented from seizing assets and could have them liquidated, subject to the obligation to reimburse Venezuela if the Award is set aside.

United Kingdom

In May 2015 the Company filed an application to have the Award recognized and enforced in the United Kingdom. Such application was granted and the Company obtained an Order and Judgment in the terms of the Award on 20 May 2015. Venezuela has challenged the Order and Judgment, asserting service, jurisdictional, and merits issues. Certain of these arguments have been made in other jurisdictions. A hearing has been scheduled in London for the time period January 18th to the 20th.

Gold Reserve’s President Doug Belanger stated, “We continue to pursue all available avenues to achieve our objective to collect the Award by bringing this matter to its proper conclusion either through our continuing settlement discussions with Venezuela or the seizure of assets in execution of a judgment of a court.”

Further information regarding the Company can be located at www.goldreserveinc.com, www.sec.gov and www.sedar.com.

http://www.businesswire.com/news/home/20160114006442/en/Gold-Reserve-Update-Legal-Proceedings-Related-Collection