Justia Energy, Oil & Gas Law Opinion Summaries

Minority shareholders of an Argentine oil and gas company, previously privatized in 1993, became involved in litigation after the Argentine government expropriated a majority stake in the company in 2012. The government’s acquisition of shares was conducted without making a public tender offer to minority shareholders, a process that was explicitly required by the company’s bylaws to protect such shareholders in the event of a takeover. The plaintiffs, consisting of Spanish entities and a New York hedge fund, had acquired significant stakes in the company, and after the expropriation, they claimed that they suffered substantial financial losses due to the government’s failure to comply with the tender offer requirement.The plaintiffs sued in the United States District Court for the Southern District of New York, asserting breach of contract and promissory estoppel claims under Argentine law against both the Argentine Republic and the company. After extensive litigation, the district court found in favor of the plaintiffs on their breach of contract claims against the Argentine Republic, awarding over $16 billion in damages, but granted summary judgment to the company, finding it had no obligation to enforce the tender offer provision. The court also dismissed the promissory estoppel claims.On appeal, the United States Court of Appeals for the Second Circuit held that the plaintiffs' breach of contract damages claims against the Argentine Republic and the company were not cognizable under Argentine law, reasoning that the bylaws did not create enforceable bilateral obligations between shareholders and that Argentine public law governing expropriation precluded such claims. The court affirmed the dismissal of the promissory estoppel claims and judgment in favor of the company, but reversed the judgment against the Argentine Republic, remanding for further proceedings consistent with its opinion. View "Petersen Energía v. Argentine Republic" on Justia Law

A businessman from Kazakhstan alleged that he was wrongfully detained and psychologically coerced by the country’s National Security Committee into signing unfavorable business agreements, including waivers of legal claims and a forced transfer of valuable company shares. The business at issue, CAPEC, operated in Kazakhstan’s energy sector and held significant assets, some of which were allegedly misappropriated by fellow shareholders and transferred through U.S. financial institutions. The plaintiff claimed these actions harmed him economically, including the loss of potential U.S.-based legal claims.Following unsuccessful litigation in Kazakhstan, the plaintiff initiated suit in the United States District Court for the Eastern District of New York, seeking to invalidate the coerced agreements and recover damages under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Alien Tort Statute, and other state and federal laws. The district court dismissed the complaint for lack of subject-matter jurisdiction, finding that the plaintiff, as a permanent resident alien, could not establish diversity jurisdiction against foreign defendants, that the alleged torts occurred outside the U.S., and that the plaintiff failed to allege a domestic injury required for civil RICO claims. The court denied leave to amend, determining that any amendment would be futile.The United States Court of Appeals for the Second Circuit reviewed the matter de novo, affirming the district court’s judgment. The Second Circuit held that claims against the National Security Committee were barred by the Foreign Sovereign Immunities Act, as its conduct was sovereign rather than commercial. For the individual defendants, the court found that the plaintiff failed to allege a domestic injury under RICO, as the harm and racketeering activity occurred primarily in Kazakhstan. The court further concluded that amendment of the complaint would have been futile. The judgment was affirmed. View "Yerkyn v. Yakovlevich" on Justia Law

Defendants, the Donziger Firm and others, appealed the district court's grant of certain relief against them in favor of Chevron, in connection with an $8.646 billion judgment obtained against Chevron in Ecuador by the Lago Agrio Plaintiffs represented by the Donziger Firm. The judgment award was for environmental damage in connection with the Texaco oil exploration activities in Ecuador from the 1960s-1990s. On appeal, defendants challenge the district court's judgment, arguing principally that the action should have been dismissed on the ground that Chevron lacks Article III standing, and/or that the judgment should be reversed on the grounds, inter alia, that it violates principles of international comity and judicial estoppel, exceeds any legal authorization for equitable relief, and was entered without personal jurisdiction over defendants other than Donziger and his Firm. The court found no basis for dismissal or reversal in the absence of challenges to the district court's factual findings; considering the express disclaimers by the Ecuadorian appellate courts of their own jurisdiction to "hear and resolve" the above charges of corruption, "preserving the parties' rights" to pursue those charges in actions in the United States; and considering the district court's confinement of its injunction to a grant of in personam relief against the three defendants-appellants without disturbing the Ecuadorian judgment. Accordingly, the court affirmed the judgment. View "Chevron Corp. v. Donziger" on Justia Law

Hapag‐Lloyd filed an Interpleader Complaint and moved ex parte for an anti‐suit injunction under 28 U.S.C. 2361. The district court granted the motion and enjoined named defendants. The court concluded that adjudication of Hapag‐Lloyd’s obligation to pay for the fuel bunkers at issue involves inextricably intertwined claims, and interpleader jurisdiction is proper under the broad and remedial nature of 28 U.S.C. 1335. The court also concluded that by initiating an interpleader concerning certain in rem claims and posting adequate security for those claims, Hapag‐Lloyd consented to the district court’s jurisdiction over its interests, which is sufficient to confer jurisdiction. However, the court remanded to the district court with instructions to enter an order that eliminates or retains the foreign scope of the injunction, with specific determinations applying the test in China Trade & Dev. Corp. v. M.V. Choong Yong. View "Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC" on Justia Law