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Saudi Basic Industries Corp. v. Mobil Yanbu Petrochemical Co.1/14/2005
The trial judge ruled the release defense out of the case for three independent reasons. The first was that neither Exxon nor Mobil had signed the 1987 Letter Agreements; the second was that the plain language of those Agreements limited the scope of any release to technology-related claims and did not include payment related claims; and the third was that the only evidence on this issue from a Saudi law expert was the unrebutted testimony of Professor Hallaq, who opined that the 1987 Letter Agreements would not affect ExxonMobil's claims as a matter of law. We conclude that the trial court ruled correctly in all respects.
Articles 18.2 and 19.2 of the joint venture agreements expressly require that any "amendment, modification, or waiver of any provision" must be "in writing and signed by the Partners." The term "Partners" is defined to mean SABIC and Exxon (in the Kemya Agreement) and SABIC and Mobil (in the Yanpet Agreement). Because Exxon and Mobil did not sign, and were not parties to, the 1987 Letter Agreements, they cannot be found to have waived claims under the joint venture agreements. The express requirement of a signature by the "Partners" in the joint venture agreement provisions, and the absence of any actual signatures by Mobil or Exxon, disposes of SABIC's contention that "the Exxon and Mobil partners [Kemya and Yanpet] are deemed to have signed the agreements.because [they] were the joint venturers, and because they accepted the lucrative benefits of those agreements."
In addition, the scope of the release provisions in the 1987 Letter Agreements is clearly limited to "UCC LDPE Technology" and "UCC HDPE Technology." Both terms are limited in the sublicenses to "technical information and data." There is no evidence that the parties (SABIC, Kemya and Yanpet) intended a meaning different from that connoted by the agreement's plain language. Furthermore, Professor Hallaq testified that under Saudi law, a release regarding the "object of the contract" (here, technology) cannot be construed as a release of claims relating to payment. That testimony is unrebutted.
Finally, as the trial court pointed out, Professor Hallaq, who was the only Saudi law expert who offered an opinion on the purported release, testified that even if the release language could be construed to cover claims for payment, under Saudi law the representations of Kemya and Yanpet in the 1987 Letter Agreements "are not binding and do not in any way preclude ExxonMobil's payment claims in this case." The reason (Hallaq testified) was that SABIC never disclosed that its royalty payments to UCC were less than Kemya's and Yanpet's royalty payments to SABIC. As a result, SABIC's representations in the 1987 Letter Agreements were "not accurate or complete." That testimony also stands unrebutted.
We conclude, for these reasons, that the trial court committed no error in dismissing SABIC's release defense as a matter of law.
(4)THE RULINGS ON EXXONMOBIL'S BREACH OF CONTRACT CLAIMS
By its verdict the jury found SABIC liable to ExxonMobil for having breached Article 6.3 of the joint venture agreements.
Those provisions (the jury determined) were controlling and limited SABIC's royalty charges for providing Unipol(r) PE technology to the partnerships, to a "pass through" of SABIC's own cost of obtaining a license for that same technology from UCC. During the trial, SABIC moved for judgment as a matter of law on ExxonMobil's contract claim, and after the adverse jury verdict, SABIC moved (again) for judgment as a matter of law or, alternatively, for a new trial. The trial judge denied both motions and judgment was ultimately entered against SABIC on the contract
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