E.I. duPont de Nemours & Co. v. Rhodia Fiber & Resin Intermediates

197 F.R.D. 112, 2000 U.S. Dist. LEXIS 13793, 2000 WL 1364210
CourtDistrict Court, D. Delaware
DecidedSeptember 18, 2000
DocketNo. Civ.A. 99-874-RRM
StatusPublished
Cited by15 cases

This text of 197 F.R.D. 112 (E.I. duPont de Nemours & Co. v. Rhodia Fiber & Resin Intermediates) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E.I. duPont de Nemours & Co. v. Rhodia Fiber & Resin Intermediates, 197 F.R.D. 112, 2000 U.S. Dist. LEXIS 13793, 2000 WL 1364210 (D. Del. 2000).

Opinion

OPINION

McKELVIE, District Judge.

This is a contract case. The plaintiff E.I. duPont de Nemours and Company (“DuPont”) is a Delaware Corporation with its principal place of business in Wilmington, Delaware. Defendant Rhodia is a French corporation with is principal place of business in Boulogne-Billaneourt, France. Defendant Rhodia Fiber and Resin Intermediates (“Rhodia Fiber”) is a French corporation and has its principal place of business in Courbeovoie, France. Rhodia Fiber is wholly owned by Rhodianyl SNC, which in turn is wholly owned by Rhodia.

On December 14, 1999, DuPont filed a complaint in this court alleging that it had suffered monetary damages as the result of the defendants’ breach of an oral contract and oral representations that the defendants would provide additional loan guarantees necessary to support a joint venture project. Additionally, DuPont claims that Rhodia and Rhodia Fiber fraudulently induced DuPont to provide additional financing for the joint venture project and that Rhodia and Rhodia Fiber negligently misrepresented their true intent to support the project.

On March 22, 1999, Rhodia and Rhodia Fiber moved to dismiss the claims for lack of personal jurisdiction, failure to join an indispensable party, insufficiency of service of process, and forum non conveniens. Rhodia and Rhodia Fiber have also moved to dismiss the claim and compel arbitration or alternatively to stay the proceedings pending the outcome of an ongoing arbitration in Singapore. These issues have been fully briefed by the parties.

On August 2, 2000, the court held oral arguments on the motions. This is the Court’s decision on these motions.

I. Factual and Procedural Background

The court draws the following facts from the affidavits, documents, and deposition transcripts submitted by the parties.

A. The Parties and the Joint Venture

DuPont, the ultimate parent of DuPont China, is incorporated and has its principal place of business in Delaware. DuPont China was incorporated in 1992 under the applicable laws of China as an investment company.

Rhodia is a French corporation that manufactures and sells specialty chemicals. Rhodia, previously called Rhone Poulenc Fibres et Polymeres SA (“Rhone Poulenc EP”), changed its name on December 31, 1997, and reorganized its business holdings. In the reorganization Rhone Poulenc EP consolidat[116]*116ed some of its working groups, divested itself of some of its subsidiaries, and emerged as Rhodia. Rhodia now centers its business around five divisions: fine organics, consumer specialties, industrial specialties, polyamide, and services and specialties. Although Rhodia does not derive substantial revenue from Delaware nor hold any bank accounts in the state, it directly and wholly owns two subsidiaries that are Delaware corporations: Rhodia, Inc. and Danube Chemicals Acquisition Corporation. Rhodia, Inc. has several subsidiaries that are also Delaware corporations.

Rhodia Fiber, previously known as Rhone Poulenc Fiber and Resin Intermediates SAS (“Rhone Poulenc FRI”), is a French corporation in the business of producing and marketing polyamide intermediates. Rhone Poulenc created Rhone Poulenc FRI around 1995. In 1997, Rhone Poulenc FRI became Rhodia Fiber.1 In 1998, Rhodia interposed a layer of ownership between itself and Rhodia Fiber. Rhodia Fiber is wholly owned by SNC Rhodianyl, which is wholly owned by Rhodia. Rhodia Fiber does no business, holds no bank accounts, and derives no revenue from any activities in Delaware.

B. The Negotiations

In 1992, Sinopec Liaoyang Petro-Chemical Fiber Company (“LYPFC”), a state owned enterprise of the Peoples’ Republic of China, approached DuPont and Rhodia with a plan to expand existing nylon 6, 6 salt and nylon polymer flake production facilities in China through a joint venture. From December 1992 to March 1996, representatives of DuPont, Rhodia, and Rhodia Fiber discussed the possibility of creating a joint venture.

Throughout the negotiations, the parties met in various cities around the world including at least six times in Wilmington, Delaware. It is unclear now, as it was at the time of the meetings, whether the negotiating parties in these meetings actually represented the subsidiary companies — Rhodia Fiber and DuPont China — or represented the parent companies — Rhodia and DuPont. On each side, representatives from both the parent companies and the subsidiaries spoke to the other parties about the potential joint venture.

Some of the members of the negotiation team were clearly associated with Rhone Poulenc EP which became Rhodia, rather than in Rhone Poulenc FRI, which became Rhodia Fiber. Michel Maupu was such a member. Maupu, a signatory to early agreements, was a directeur general adjoint (the french equivalent of the Chief Executive Officer) of the Fibres et Polymeres sector, the predecessor to Rhone Poulenc EP.

Some members of the team were employed by both entities, like Pierre Levi and Bruno deSoyres. Pierre Levi served as the President (the French equivalent of the Chairman of the Board) of Rhodia Fiber and simultaneously served as Chief Operating Officer of Rhone Poulenc EP. Levi now serves as a director of Rhodia.

Bruno deSoyres, who often met with representatives from DuPont, states in his affidavit that from January 1, 1995 to January 31, 1999 he served as “president of the company Rhone-Poulenc Fibers and Resin Intermediates, which, on December 23, 1997 became the Company Rhodia Fiber and Resin Intermediates.” This clear job description, however, is contradicted by his deposition testimony. In his deposition, deSoyres testified that in 1995 he became the director general of IFIP, a management entity within the Rhone Poulenc organization. This entity was a portion of the fibers and polymers sector of Rhone Poulenc. deSoyres further stated that “there was no company bearing the name [Rhone-Poulenc Fiber and Resin Intermediates, SAS] when I was appointed at the beginning of 1995.” However, deSoyres stated he was not employed directly by Rhone Poulenc, SA and is not certain whether Rhone Poulenc Fibers et Polymeres, SA, which became Rhodia, even existed in 1995. In 1996, deSoyres was employed by Rhone Poulenc FRI, then in 1998 by Rhodianyl. Nonetheless, deSoyres was a party to the joint venture discussions from the outset and [117]*117became a member of the board of the joint venture company.

Similarly, from DuPont’s side, it is unclear which entity was negotiating. Although DuPont China had been in existence since 1989, DuPont, not DuPont China, participated in the early stages of negotiating the potential joint venture. In 1993, an agent of DuPont signed a cooperative agreement with Rhodia Fiber.

C. The Joint Venture Contract

On March 26, 1996, DuPont China, Rhodia Fiber, and LYPFC signed the Joint Venture Contract and established Sanlong Nylon Company Limited (“Sanlong”) under the Joint Venture Law, the Joint Venture Regulations, and other relevant Chinese laws. Sanlong was structured as a limited liability company owned 42% by DuPont China, 18% by Rhodia Fiber, and 40% by LYPFC. Neither DuPont nor Rhodia are signatories to the Sanlong Joint Venture Contract.

Under the terms of the Joint Venture Contract, the Sanlong board of directors had ten members.

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Cite This Page — Counsel Stack

Bluebook (online)
197 F.R.D. 112, 2000 U.S. Dist. LEXIS 13793, 2000 WL 1364210, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ei-dupont-de-nemours-co-v-rhodia-fiber-resin-intermediates-ded-2000.