The case of the day is CBF Indústria de Gusa S/A v. AMCI Holdings, Inc. (2d Cir. 2017). CBF and several other plaintiffs were Brazilian companies in the business of producing and supplying pig iron. They sold the iron to Primetrade AG, a Swiss company, which then supplied it to Primetrade USA. In 2004, one of Primetrade AG’s ships exploded off the coast of Colombia, and the master and five of his crew died in the accident. In 2005, because of the bad publicity that followed the accident, Primetrade AG transferred it assets, including its contracts with CBF, to Steel Base Trade AG, another Swiss company, which had the same officers and directors as Primetrade and the same offices. In 2007, AMCI International GmbH, a company controlled by Hans Mende and Fritz Kundrun, purchased SBT and its US subsidiary, still named Primetrade USA. In 2008, CBF and SBT entered into contracts for the purchase and sale of 103,500 metric tons of pig iron for more than $76 million. The contracts called for delivery of the pig iron in the United States between April and December 2008. They contained an agreement to arbitrate all disputes under the ICC Rules in Paris. As commodity prices fell in 2008, SBT defaulted on the contracts—it purchased only 33,056 metric tons in all. Its representative told CBF that “it is not our style to walk away from obligations,” and “we are not walking away!!!” CBF later claimed these were false representations made to give Mende and Kundrun time to fraudulently convey SBT’s assets to another company they owned, Prime Carbon, which had begun making large purchases of pig iron and which had the same officers and directors as SBT and the same address as SBT’s parent, AMCI. After SBT transferred its assets to Prime Carbon, it declared bankruptcy in the Cantonal Court of Zug, Switzerland.
The case of the day is Enron Nigeria Power Holding, Ltd. v. Federal Republic of Nigeria (D.C. Cir. 2016). Nigeria was party to a contract for construction of electrical facilities with ENPH. The contract was made in 1999, but almost immediately thereafter Nigeria suspended implementation, after it received a letter from the World Bank criticizing the economics of the contract. Soon thereafter, the Nigerian attorney general opined that the contract was invalid under Nigerian law. Although Enron sought Chapter 11 bankruptcy protection in 2011, ENPH informed Nigeria at the time of the bankruptcy that it was able to perform its obligations under the contract. After years of trying to renegotiate, ENPH demanded an arbitration by the ICC’s International Court of Arbitration, in London. The ICC entered an award in favor of ENPH, and ENPH sought confirmation in Washington. The district court confirmed the award, and Nigeria appealed.
Continue reading Case of the Day: Enron Nigeria Power Holding v. Nigeria
The case of the day is Albaniabeg Ambient Sh.p.k. v. Enel S.p.A. (S.D.N.Y. 2016). BEG S.p.A., an Italian company, contracted with the government of Albania to build and operate a hydroelectric plant. BEG also had a contract with Enel S.p.A., another Italian firm, to study the feasibility of the project. Later, BEG had a similar contract with Enelpower S.p.A., an Enel subsidiary. The Enelpower contract had an agreement to arbitrate.
A dispute arose. BEG commenced an arbitration against Enelpower for breach of contract. The tribunal, seated in Rome, found that Enelpower was not liable to BEG. The Italian courts refused to vacate the award despite a claim that one of the arbitrators had a conflict of interest.
Later, Albaniabeg, a subsidiary of BEG, brought an action against Enel and Enelpower in the Albanian court. The claims were tort claims arising out of the hydroelectric project. The Albanian court entered a judgment for more than € 25 million against Enel and Enelpower, which was affirmed on appeal. The European Court of Human Rights rejected Enel and Enelpower’s challenge to the judgment.
Albaniabeg brought an action in the New York Supreme Court for recognition of the Albanian judgment. Continue reading Case of the Day: Albaniabeg Ambient v. Enel