Citgo wins $55M in Lloyd’s litigation related to tanker seized in Venezuela
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Citgo Petroleum Corp. won $55 million before interest following a jury trial in federal district court in New York on Monday in coverage litigation against Lloyd’s syndicates in connection with an oil tanker that was seized during political unrest in Venezuela in 2020.
In early 2019, Houston-based Citgo Petroleum Corp., a U.S. subsidiary of the Venezuelan state-owned company Petróleos de Venezuela S.A., attempted to sail almost one million barrels of crude oil out of Venezuela to Aruba on the M/T Gerd Knutsen, according to court papers in Citgo Petroleum Corp. V. Ascot Underwriting Ltd. et al.
U.S. sanctions, however, triggered a dispute over the cargo, which was removed from the Gerd and given to the state oil company.
Citgo’s marine cargo reinsurance policy excluded under its “Institute Cargo Clauses” coverage from certain risks including capture, seizure arrest, restraint or detainment, piracy excepted.
But the policy then added back in under the clauses losses arising from capture, seizure arrest, restraint or detainment arising from war, civil war, revolution rebellion, insurrection or civil strife.
Underwriters denied Citgo’s claim, specifically denying that the unrest in Venezuela constituted an “insurrection” within the policy’s meaning, and the company sued its underwriters.
Monday’s jury verdict was reached after a trial that began Dec. 12.
Attorneys in the case had no comment or did not respond to requests for comment.
