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Saudi Basic Industries Corp. v. Mobil Yanbu Petrochemical Co.1/14/2005
IC.
On appeal SABIC argues-as it did before the trial court and the jury-that the references to "ECAI and its affiliates" in Article 6.1 of the Kemya joint venture agreement, and to "MOBIL and/or MOBIL Affiliates" in Article 6.1 of the Yanpet joint venture agreement, must be construed to mean "a partner." Under that construction, SABIC would be an "affiliate" of Mobil or Exxon because those entities are partners in the two joint ventures.
That argument labors under multiple infirmities. Nothing in the joint venture agreements or in any case law cited by SABIC persuasively supports, let alone compels, that interpretation. To read "affiliates" as including all entities with which Mobil and Exxon have formal relationships as partners-a construction that SABIC insists the jury was required to accept as a matter of law-would be odd, to say the least. SABIC was not an "affiliate" of Mobil or Exxon as that term is commonly and ordinarily understood. To the contrary, SABIC was ExxonMobil's bargaining adversary, the party on the other side of the arm's-length negotiations that resulted in the joint venture agreements. Reuel Agarrado, SABIC's own witness, testified that Article 6.1 "does not apply to SABIC." There is no evidence that SABIC ever informed Exxon or Mobil that it was relying upon Article 6.1 when SABIC violated the pass-through terms of Article 6.3. Nor did SABIC ever allege in its original or amended complaint that it had relied upon Article 6.1.
Despite these infirmities, the trial court allowed SABIC to present its Article 6.1 argument to the jury, which ultimately rejected it. The jury's rejection of SABIC's argument has an ample and sufficient basis in the evidentiary record, as did the trial judge's post-trial ruling that the jury was justified in reaching that result:
The Court notes that at trial ExxonMobil introduced a copy of [SABIC's] Second Amended Complaint.and Article 6.1 of the Joint Venture Agreements is nowhere mentioned in that complaint. The Court also notes that SABIC witnesses admitted that they never advised anyone at Exxon or Mobil that SABIC believed Article 6.1(a) applied to the provision of Unipol(r) PE technology to the Joint Ventures. Given all of this, there is more than a sufficient basis from which a reasonable jury could conclude that SABIC's Article 6.1(a) argument was an afterthought, and an unavailing one at that. This Court seriously considered precluding SABIC from presenting [that] argument.because of the lack of evidentiary basis supporting such an argument, and because the argument was not asserted until very late in litigation.. After.characterizing SABIC's claim.as "hanging on by a thread," the Court nonetheless permitted SABIC to argue this to the jury over ExxonMobil's objection. Thus, SABIC had a full and fair opportunity to present this argument to the jury for its consideration. The jury rejected it.. here is no basis to overturn the jury's rejection of that argument.
We find that ruling to be free from error and correct.
(b) SABIC's Argument That The Sublicenses Supersede And Repeal Any Application of Article 6.3
Alternatively, SABIC contends that even if Article 6.3 does govern (thereby limiting SABIC's royalty charges to a pass through of its actual cost of obtaining the Unipol(r) PE technology), in this case Article 6.3 had no force or effect, because the SABIC/Kemya and SABIC/Yanpet sublicense agreements superseded and repealed any application of Article 6.3.
The trial court rejected this argument, holding that:
SABIC next argues that, under Saudi rules of contract interpretation, the Joint Venture polyethylene licenses which were entered in
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