Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CAREY v. NATIONAL OIL CORP.

June 16, 1978

EDWARD C. CAREY and NEW ENGLAND PETROLEUM CORPORATION, Plaintiffs, against NATIONAL OIL CORPORATION and LIBYAN ARAB REPUBLIC, Defendants.


The opinion of the court was delivered by: DUFFY

OPINION AND ORDER

KEVIN THOMAS DUFFY, D.J.

 This action to recover damages for breach of contract to supply petroleum products, and excess charges paid pursuant to contracts allegedly executed under duress, is before me on defendants' Motion To Dismiss on jurisdictional grounds.Because the defendants are protected by sovereign immunity, the Motion To Dismiss is granted.

 I

 FACTUAL BACKGROUND

 Plaintiff New England Petroleum Corporation ("Nepco") is a New York corporation which, at all relevant times, was engaged in marketing petroleum products to utilities on the East Coast. Two subsidiaries of Nepco, Grand Bahama Petroleum Co. ("Petco") and Antco Shipping Co. ("Antco")--both Bahamian corporations--played important roles in this drama. Plaintiff Edward C. Carey ("Carey") is allegedly Petco's and Antco's assignee.

 A. The Oil Contracts

 In 1968, Nepco's subsidiary Petco sought to secure a supply of the low-sulfur fuel it needed to satisfy Nepco's customers in New York and New Jersey. Libyan oil proved to be ideal for Petco's purposes; a complicated series of transactions ensued, whereby the oil pumped from a Lybyan concession jointly owned by California Asiatic Oil Co. ("Calasia")--a subsidiary of Standard Oil of California--and a Texaco subsidiary, would be sold first to Chevron Oil Trading Co. ("Cot"), Calasia's affiliate; then to Petco; and finally to Nepco and its customers.

 On September 1, 1973, the Socialist People's Lybyan Arab Jamahirya ("Libya") nationalized 51 per cent of a number of foreign-owned oil concessions, including Calasia's. *fn1" / Although the remaining 49 per cent was not nationalized until February of 1974, Cot acted immediately in 1973 to terminate its contractual obligations to Petco, invoking the "force majeure" clause of its contract.

 In March of 1970, Libya had created the National Oil Corporation ("NOC"), a corporation wholly owned by the Libyan government and empowered to engage in all facets of the petroleum business, including primarily the production and sale of crude oil. NOC--like foreign companies such as Calasia--owned concessions permitting the extraction of oil from a given region. The Calasia concessions nationalized in 1973 and 1974 were transferred by Libya to NOC.

 Anxious to safeguard its supply of Libyan oil, Petco entered into two contracts with NOC, on September 10 and 12, 1973, to replace its abrogated arrangements withCot. These called for a price of $4.90 and $5.20 per barrel, respectively, both prices being higher than the price under the Cot contract.

 The petroleum picture in the Middle East was, of course, tremendously complicated by the outbreak of the "Yom Kippur War" in October of 1973. Oil producing nations, including Libya, imposed an embargo on petroleum exports to the United States, the Netherlands and the Bahamas. Moreover, production was cut back, and all Libyan concessionaries--NOC as well as private owners--were ordered to conform to reduced schedules. As a result, the world price of oil climbed steeply while the supply available fell. In response to this altered situation, NOC invited all its potential customers to Tripoli to submit bids for new contracts to supersede any then in effect.

 Petco proposed to NOC a significant increase in its purchases, at a price of $14.14 per barrel. (The bid indicated that Petco would "meet the 'going-price.'") Negotiations continued until January 29, 1974, when a contract was executed calling for a price of $16.00 per barrel for the first quarter of 1974, to be adjusted subsequently.

 Plaintiffs allege that this contract was conditioned on performance of the September 1973 agreements, and that NOC never carried out this condition. In fact, oil was delivered to Petco throughout 1974 and 1975, under the 1974 contract, for refining in Italy (during the embargo) and the Bahamas. In December of 1975, Petco failed for the first time to pay on time for a previously delivered cargo of oil. Despite attempts to reach an accommodation concerning both past-due payments and future ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.