The Paris Appeal Court has found in favour of Air Canada (AC, Montréal Trudeau) in its long-standing dispute with Venezuela over the payment of about USD21 million in compensation for airline ticket revenues withheld by the South American country.

In the September 26, 2023, judgment, the Appeal Court also ordered Venezuela to pay Air Canada another EUR100,000 euros (USD106,0000) in costs.

The Bolivian Republic of Venezuela, on November 29, 2021, had appealed to the Paris court to annul the compensation awarded to Air Canada by the United Nations' International Centre for Settlement of Investment Disputes (ICSID) on September 13, 2021, with minor amendments on October 27, 2021. By this, Venezuela was ordered to pay Air Canada USD20,790,574 with interest backdated to May 26, 2014, at a rate reflecting the cost of the debt from that date.

The case goes back to a dispute lodged by Air Canada against Venezuela with the ICSID in 2017 (case no. ARB(AF)/17/1). It relates to the country's failure to repatriate about USD50 million in revenue from tickets sold by Air Canada in Venezuela between September 2012 and January 2014. The airline accused the country of not having responded to its requests for the repatriation of its funds, in violation of an agreement between the two states known as the "BIT" treaty.

In 2003, Venezuela implemented an exchange control regime (Comisión de Administración de Divisas - CADIVI) applicable to the distribution, purchase, and sale of foreign currencies, considering the availability of foreign currencies and the directives of the Central Bank of Venezuela. Through November 2012, Air Canada submitted 91 authorizations for currency acquisition (Autorización de Adquisición de Divisas - AAD) requests totalling USD91 million, which the CADIVI approved.

In January 2014, the CADIVI issued an administrative order that Venezuela would thereafter process foreign airlines' AADs at a different exchange rate of about VES11 bolivars for one US dollar. Air Canada responded by suspending first sales and then flights to Caracas Simón Bolivar, citing civil unrest and challenges of conducting business in Venezuela, including the issue of repatriating its funds.

In late March 2014, Venezuela announced it would allow foreign airlines to repatriate their revenues, but this never transpired. Despite efforts to resolve the situation, including from the International Air Transport Association (IATA), Air Canada, on June 15, 2016, filed an official dispute against Venezuela, which it took to the ICSID in 2017.

Amongst others, Venezuela argued that its failure to repatriate the airline's funds was due to a lack of sufficient US dollar reserves, administrative shortcomings on the airline's side, and the country's sovereign prerogative to reject the requests.

ch-aviation has approached Air Canada for comment.