Title/Rights
In my opinion, three questions must be definitively answered and made available in a generally accessible manner before the speculation regarding this play will begin to subside. First, who holds legal title to the property? Second, were any of the rights which may have flowed from that title legally relinquished. Third, were any of the rights which may have flowed from that title legally extinguished. (In the final analysis, who holds title may not be a primary concern of any of the parties to this dispute. The rights to exploit the gold are, of course, the most significant issue.) To this point, through the three CSJ rulings, it seems to me that only one of these questions has been partially answered at best.
The first CSJ ruling followed consideration of arguments with respect to a few very specific points of law. The most significant argument insofar as the decision favouring Mael is concerned was that advanced on behalf of MEM. It was MEM's contention that the assignor and assignee had not satisfied the legal requirement of Article 15 of the Mining Law to notify MEM of the transfer. Hence, the transfer was not gazetted and, consequently, not valid. The Court determined, however, that the duly receipted notice of the transaction forwarded to MEM by the Court of First Instance on Civil Matters had the effect of satisfying the intent of Article 15. With respect to this specific point of law, then, the CSJ ruled and ordered that the transfer was valid and should be gazetted.
[It should be noted that the CSJ made no pronouncements on the legality of the transaction which took place within the purview of the Court of First Instance. The actual process whereby title moved from Lemon (via Schmidt and Morales) to Torres and then to Mael was not under consideration. Moreover, there was no pronouncement with respect to rights.]
The second CSJ ruling dealt exclusively with some legal (and by extension, administrative) consequences which followed from the first ruling. The scope of the Court's consideration did not extend beyond those legal consequences of the prior ruling regarding the specific points of law previously considered.
[Here it is worth noting that the Court considered and dismissed a request by Mael's (at that point, former) attorney to waive the previous ruling. Within the context of that previous ruling, the Court determined that this request had no legal merit. There was no discussion of what motivated that request, nor any indication that the basis of the denied request would be equally without merit in any other legal action.]
The third CSJ ruling was again in reference to the legal consequences of the first ruling. Inasmuch as MEM had not complied with the order to gazette the transfer, the CSJ, in effect, gazetted the transfer itself.
Accepting the foregoing and based solely on the points of law considered by the CSJ, I think one would be hard-pressed to mount a credible argument to the effect that Mael/Crystallex had no claim to LC 4&6 at this point. Many nagging concerns remain, however.
The considerations presently before the Court in the pending fourth ruling are clearly broader in scope than those encompassed in the first three rulings. The consensus seems to be that, at the very least, the Court is considering whether certain resolutions of MEM which extinguished specific rights to LC 4&6 were legal. Even if that is the full extent of what is before the Court, I am extremely doubtful that these considerations are simply a rubber-stamping of a decision favouring Mael/Crystallex as some would have it. I lend more credence to a recent comment by one of the Justices (Gomez, I believe) in El Nacional to the effect that this is a complex case. Anyone claiming to be able to foretell the outcome should be able to demonstrate a capacity for legal reasoning as well as a comprehensive knowledge of Venezuelan law, in general, and the existing arcane and convoluted Mining Law, in particular. Many here may meet the first criterion but the second is quite another matter.
If the question of whether MEM's resolutions extinguishing certain rights is, in fact, the only consideration before the Court; and if the ruling does favour Mael/Crystallex; it is by no means clear that this would entirely end the matter. A ruling exclusively with respect to the extinction of rights would leave open the question of whether Mael relinquished any rights. I believe Asensio has claimed, among other things, that Mael did relinquish those rights. Certainly, the dismissed request by Mael's former attorney in the second CSJ ruling raises some questions in this regard.
Further, there are some questions surrounding the sequence of events through which Mael acquired title in the first place. These range from the claim that Lemon had revoked the POA prior to the transaction, to the claim that the transfer was subsequently over-turned. It may well be that such claims and concerns are entirely without merit. Whatever the case, I think it is reasonable to assume that all parties will exhaust all available legal avenues to secure the rights to LC 4&6. I am sure Crystallex shareholders expect no less of their management and it would be insupportable to suggest otherwise in the case of Placer Dome.
If this was a weather forecast, it would simply read: Unsettled. Regards. |
