Bridas Corp. v. Unocal Corp.

16 S.W.3d 893, 145 Oil & Gas Rep. 516, 2000 Tex. App. LEXIS 2744, 2000 WL 489607
Court of Appeals of Texas·Decided April 27, 2000·No. 14-99-00196-CV·Published·Cited by 8 cases

Opinion

OPINION

DON WITTIG, Justice.

The principle issue presented is choice of law. The trial court found that Turkmenistan and Afghanistan law applied to the tortious interference claims. Based upon the application of those foreign laws, the trial court also granted summary judgment because no such interference claims exist in situs of the alleged injuries. We affirm.

Bridas Corporation (“Bridas”) appeals from a summary judgment granted in favor of Unocal Corporation, Delta Oil Company Ltd., Delta International, and Deltoil Corporation (collectively as “Unocal”). Bridas brought this action against Unocal, alleging civil conspiracy and tortious interference with existing and prospective contractual relationships between Bridas and the governments of Turkmenistan and Afghanistan. Unocal moved for summary judgment on the grounds that (1) the laws of Turkmenistan and Afghanistan applied and that the laws of those nations did not recognize the causes of action alleged by Bridas, and (2) under Texas law, all of the claims alleged by Bridas failed as a matter of law. Judge Brady Elliott conducted an *895 extensive and exhaustive eight-day eviden-tiary hearing consisting primarily of expert testimony on the choice of law issue. The trial court then granted a summary judgment in favor of Unocal. It found that the laws of Turkmenistan and Afghanistan applied to this matter and could be readily determined. The trial court also found that the laws of those nations did not recognize a cause of action for tortious interference or civil conspiracy. On appeal, Bridas presents three issues for appellate review, oppugning whether (1) the trial court erred in determining that foreign law rather than Texas law applied, (2) the trial court erred in determining that the laws of Turkmenistan and Afghanistan could be determined with certainty and predictability, and (3) the court was legally correct that Turkmen and Afghan law did not recognize the causes of action alleged by Bridas.

Background

Turkmenistan became an independent nation upon the collapse of the Soviet Union in late 1991. It is located north of Afghanistan and northeast of Iran; its western border abuts the Caspian Sea. Turkmenistan is a nation that possesses vast hydrocarbon reserves. It began entertaining offers to develop its natural resources in late 1991. Subsequently, Bridas entered into agreements to develop hydrocarbons located in the regions of Turkmenistan known as the Yashlar Field and the Keimir Field. Exploratory drilling by Bri-das in the Yashlar Field resulted in the discovery of a natural gas reserve containing an estimated 27 trillion cubic feet of gas, for which Turkmenistan had no domestic need. However, Pakistan did have a domestic need for the gas and executed an agreement with the government of Turkmenistan to purchase gas for a period of thirty years. To deliver the gas, Bridas intended to construct and operate a pipeline from Turkmenistan to Pakistan. To reach Pakistan, it would have been necessary for the proposed pipeline to travel through central Afghanistan.

Bridas contacted Unocal in 1995 to determine whether Unocal would be interested in participating in the development of hydrocarbon projects in Turkmenistan. Indeed, Bridas extended an invitation to Unocal to join its proposed project of constructing and operating the pipeline from Turkmenistan to Pakistan. However, no agreements were made between Bridas and Unocal.

Later in 1995, Turkmen officials traveled to Houston and made a presentation at a meeting hosted by the Greater Houston Partnership. Their presentation concerned petroleum opportunities in Turkmenistan and the need for export pipelines, specifically referencing the development of a gas pipeline from Turkmenistan to Pakistan. Following the meeting, Turkmen officials held private meetings with many companies, including Bridas and Unocal.

During the Summer of 1995, Bridas and Unocal, separately attempted to obtain a contract with the government of Turkmenistan to construct the pipeline. Several proposals offered by Bridas to build the pipeline were rejected by Turkmenistan. However, in the Fall of 1995, Unocal was successful in obtaining an agreement with the Turkmenistan government to construct the gas pipeline. The agreement provided that Unocal would construct the pipeline, that it would purchase gas from Turkmenistan at the Afghan border, and that Turkmenistan would retain the right to select gas reserves to dedicate to the project.

Bridas then attempted to obtain an exclusive agreement with Afghan officials to allow Bridas to construct all pipelines on Afghan territory. Afghanistan’s recent political history shows that the country has experienced much instability. After the Soviet Union withdrew its military presence in 1989, a civil war erupted in Afghanistan. The country became divided and controlled by various factions. One faction was controlled by Barhanuddin Rabbani, who controlled less than half the *896 country. In early 1996, Bridas payed Rab-bani $1 million in exchange for an agreement which purported to confer upon Bri-das all rights to construct pipelines on Afghan territory. Thereafter, another faction forced Rabbani out of the Afghan capital city of Kabul and into the northeastern corner of the country.

Unocal made several attempts with various other Afghan factional leaders to reach an agreement for the construction of a pipeline through Afghanistan. However, Unocal was unable to obtain the right-of-ways it needed. In January 1999, Unocal announced it was withdrawing from the Pakistan pipeline project.

During the respective efforts by Bridas and Unocal to gain the needed right-of-ways in Afghanistan, the government of Turkmenistan unilaterally terminated its agreements with Bridas, which had allowed Bridas to develop and market hydrocarbons in the Yashlar Field and Keimir Field. The government of Turkmenistan sought to renegotiate its agreements with Bridas to gain more favorable terms. Bridas responded by filing an arbitration proceeding in Turkmenistan against the government of Turkmenistan.

Bridas then filed this lawsuit against Unocal, alleging that Unocal tortiously interfered with an existing and prospective contractual relationship between Bridas and the governments of Turkmenistan and Afghanistan; Bridas also alleged civil conspiracy against Unocal. Bridas sought to recover approximately $15 billion from Unocal. The trial court granted Unocal’s motion for summary judgment based upon its choice of law findings. Specifically, it found that the laws of Turkmenistan and Afghanistan applied in this case and that the laws of those countries did not recognize the causes of action alleged by Bridas.

Standard of Review

Summary judgment is proper when a movant establishes that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

See American Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex.1997); Ahumada v. Dow Chemical Co., 992 S.W.2d 555, 558 (Tex.App.-Houston [14 th Dist.] 1999, pet. filed).

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Bridas Corp. v. Unocal Corp., 16 S.W.3d 893, 145 Oil & Gas Rep. 516, 2000 Tex. App. LEXIS 2744, 2000 WL 489607 (Tex. Ct. App. 2000).

16 S.W.3d 893 (Bridas Corp. v. Unocal Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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