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WALPEX TRADING CO. v. YACIMIENTOS PETROLIFEROS FIS

April 21, 1992

WALPEX TRADING CO., Plaintiff, against YACIMIENTOS PETROLIFEROS FISCALES BOLIVIANOS, Defendant.

Leisure


The opinion of the court was delivered by: PETER K. LEISURE

OPINION AND ORDER

LEISURE, District Judge,

 This is a breach of contract action brought by Walpex Trading Company ("Walpex"), a New York corporation engaged in international exports, against Yacimientos Petroliferos Fiscales Bolivianos ("YPFB"), an instrumentality of the Bolivian government which purchases supplies for that country's national oil program, with jurisdiction founded on section 1605(a)(2) of the Foreign Sovereign Immunities Act ("FSIA" or "Act"), 28 U.S.C. §§ 1602-1611, and 28 U.S.C. § 1330(a). Currently before the Court are the parties' cross-motions for summary judgment, argued under controlling principles of Bolivian law. For the following reasons, plaintiff's motion for summary judgment on the breach of contract theory of the case is denied, and defendant's cross-motion for summary judgment on this theory of the case is granted. The cross-motions for summary judgment on the bad faith/equitable estoppel theory of the case are denied.

 I. BACKGROUND

 A. Procedural History

 As this Court has previously observed, this action, which has been pending for the better part of a decade, has "consumed more legal, financial and judicial resources in the litigation of essentially threshold issues than scores of cases that have been filed, resolved and forgotten in this Court during the same time period." Walpex Trading Co. v. Yacimientos Petroliferos Fiscales Bolivianos, 712 F. Supp. 383, 385 (S.D.N.Y. 1989) ("Walpex II"). For example, earlier Opinions and Orders have denied plaintiff's motion for a default judgment, see Walpex Trading Co. v. Yacimientos Petroliferos Fiscales Bolivianos, 109 F.R.D. 692 (S.D.N.Y. 1986) ("Walpex I") ; denied defendant's motion to dismiss for lack of subject matter jurisdiction, lack of personal jurisdiction and forum non conveniens, see Walpex II; and denied defendant's summary judgment motion, which argued that this action could only be maintained in Bolivia, see Walpex Trading Co. v. Yacimientos Petroliferos Fiscales Bolivianos, 756 F. Supp. 136 (S.D.N.Y. 1991) ("Walpex III").1

 Nevertheless, although these threshold motions have all been denied, progress clearly has been made in this action to date. Thus, for example, thorny issues relating to the scope of jurisdiction under the FSIA have been resolved in favor of the exercise of jurisdiction over YPFB. See Walpex II, 712 F. Supp. at 388-92. In addition, Walpex III held that Bolivian substantive law governs this action. See 756 F. Supp. at 139-42. At the same time, however, it is clear that much of the work in this case is still before the parties. For example, defendant claims that "Walpex has thus far refused to comply with YPFB's document requests and has refused to make its witnesses available for depositions." See Defendant's Memorandum in Opposition to Plaintiff's Motion for Summary Judgment and in Support of defendant's Motion for Summary Judgment ("Defendant's Response"), at 10. In fact, by Order dated July 29, 1991, Magistrate Judge Roberts noted that "defendant reserves the right to conduct discovery if the court determines that plaintiff may proceed in this court and has stated a cause of action under Bolivian law."

 B. Factual Background

 With this procedural background in mind, the Court turns to the factual underpinnings of this dispute, which are essentially undisputed. In February 1982, defendant publicly invited bids for the supply of 88,500 feet of three and one-half inch seamless steel tubing and accessories to be used by the Bolivian oil industry. The invitation appeared in Spanish in various Bolivian newspapers. As translated into English, it provided as follows:

 INVITATION

 PUBLIC BID NO. 120-81

 SUPPLY OF: PRODUCTION PIPING

 Interested firms hereby are invited to present bids for the supply of:

 PRODUCTION PIPING

 The List of Specifications may be obtained from the Technical Consulting office of the Materials Department, located at the YPFB building. 4th Floor, 185 Bueno Street.

 Bids with the formal requirements set forth in the List of Specifications will be received in the Technical Consulting office until 5:00 p.m., March 2, 1982.

 Walpex II, 712 F. Supp. at 387 n.2.

 The Specifications referred to in the Invitation provided in pertinent part:

 Paragraph 1.0:

 The bidding is ruled by the Regulations for Acquisitions and Contracts of YPFB, approved by Decree Law 16857 of July 20, 1979 ("Regulations") and by related norms in force in the Country.

 Paragraph 2.3.3:

 The presentation of a bid implies the bidder's submission to the legal system cited in paragraph 1.0 and to all laws in force in the country, as well as to all ...


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