In a joint report, Rusoro Mining Ltd. and Gold Reserve Ltd. informed the Delaware Court overseeing the CITGO auction about their disagreement regarding the timing and appropriate forum for the claims presented by the latter (Gold Reserve) in a preliminary injunction motion at the Delaware Court of Chancery.
The report was submitted in the context of the case Crystallex International Corporation against the Bolivarian Republic of Venezuela, where the sale process of PDV Holding Inc.’s shares, owner of CITGO Petroleum Corporation, is taking place.
Rusoro argues that the federal court has jurisdiction over the matter as it relates to the ongoing sale process, suggesting that Gold Reserve should have filed its claim there. Conversely, Gold Reserve claims that the federal court lacks jurisdiction over the contractual dispute between the two foreign corporations and that the exclusive forum is the Court of Chancery.
The Joint Status Report
On November 19, 2025, Rusoro and Gold Reserve submitted a joint status report to Judge Leonard P. Stark of the United States District Court for the District of Delaware, referring to the ongoing conflict over a contractual lawsuit initiated by Gold Reserve, along with their differences regarding the appropriate judicial forum for resolving the claims.
The court ordered the report, which is part of the ongoing CITGO auction litigation, a process involving a prolonged asset sale supervised by that court.
Gold Reserve filed a preliminary injunction motion against Rusoro in the Delaware Court of Equity for a contractual breach. The parties have been unable to reach an agreement on the competent court or the deadlines for resolving Gold Reserve’s claims, leading to the filing of this joint report detailing their opposing positions.
Rusoro Mining Ltd.’s Position
Rusoro asserts that the Delaware District Court is the appropriate forum to adjudicate the dispute, basing its position on the following key arguments:
Jurisdiction and Authority of the Federal Court:
Direct link to the CITGO auction: Rusoro emphasizes that all of Gold Reserve’s allegations pertain expressly to actions taken in the context of the ongoing sale process managed by the federal court for several years.
Inherent authority: The court has the inherent authority to issue orders governing the actions of the parties involved in the sale, including prohibiting participation as pursued by Gold Reserve in its injunction.
Supplemental jurisdiction: Gold Reserve could have filed its claim as a counterclaim in the existing federal proceedings, which would be supported by supplemental jurisdiction under 28 U.S.C. 1367(a) since it arises from the same transaction and property as the original litigation.
Jurisdiction over its own orders: Based on case law, Rusoro argues that a federal court has authority to exercise jurisdiction over disputes related to its own prior orders, such as the order establishing the bidding and sale process.
Challenging Gold Reserve’s Arguments:
Lack of diversity jurisdiction: Rusoro disputes Gold Reserve’s assertion about the lack of diversity jurisdiction. It points out that recent value reports of Gold Reserve indicate that its main business center is situated in Spokane, Washington. This could establish its U.S. citizenship for diversity jurisdiction purposes.
Need for a new lawsuit: Rusoro contends that the only conceivable basis for Gold Reserve to initiate a new lawsuit is in pursuit of damages. However, they argue that the agreement “explicitly states that the parties have no right to damages in case of breach.”
Proposed Strategy and Actions:
Motion in the Court of Equity: Rusoro intends to request the Delaware Court of Equity to suspend or dismiss the action, arguing that it was improperly initiated.
Reservation of rights: Rusoro reserves the right to argue that Gold Reserve’s failure to present its allegations before the federal court constitutes a waiver of its claims or that they are barred by res judicata principles.
Request to the federal court: Currently, Rusoro is not seeking an injunction from the federal court since the Court of Equity has not expedited the case. However, it reserves the right to request a judicial order under the All Writs Act if the risk of interference arises. Its current request is for the court to provide guidance on the matter and schedule a conference.
Gold Reserve Ltd.’s Position
Gold Reserve firmly maintains that the District Court lacks jurisdiction over the subject matter and that the Delaware Court of Equity is the only competent forum. This is due to:
Lack of subject matter jurisdiction: The federal court cannot hear a contractual dispute between two foreign corporations.
Recognition by the Court of Equity: Gold Reserve highlights that, although the Delaware Court of Equity denied its request for expedited proceedings out of courtesy to the federal court, it “acknowledged that the Court of Equity is the exclusive forum for resolving disputes arising from the underlying contract.”
Absence of a valid “case or controversy”: Gold Reserve argues that Rusoro has not sought any specific relief from the federal court but merely requests that it “intervene.” This, according to Gold Reserve, does not constitute a “case or controversy” under Article III of the U.S. Constitution that would activate the court’s jurisdiction.
Gold Reserve’s conclusion is unequivocal: “there simply is nothing before this Court nor could there be properly before this Court arising from the ongoing contractual dispute in the Court of Equity.”
Key Aspect Rusoro Mining Ltd.’s Position Gold Reserve Ltd.’s Position Competent Forum U.S. District Court for the District of Delaware Delaware Court of Equity (Chancery Court) Alleged Jurisdictional Basis Supplemental and inherent jurisdiction intrinsically linked to the federal sale process Lacking federal jurisdiction over subject matter; contractual dispute between two foreign entities Main Argument Claims are directly related to a judicial process and prior orders of the federal court The case is an independent contractual dispute between foreign parties, outside the federal court’s reach. Key Precedents Cited Hertz Corp. v. Friend, Travelers Indemnity Co. v. Bailey, McWane Cast Iron Pipe Corp. v. McDowell-Wellman Group Dataflux v. Atlas Glob. Grp., Dar El-Bina Eng’ & Contracting Co. v. Republic of Iraq. Action Requested from Federal Court Provide guidance on the appropriate forum and timing, and schedule a conference Recognize its lack of jurisdiction and refrain from intervening in state proceedings.
Rusoro and Gold Reserve find themselves at an impasse, waiting for the U.S. District Court to determine whether the contractual dispute should be viewed as an extension of its oversight of the sale process or as an independent matter that falls exclusively under the jurisdiction of Delaware state courts.