Reversed and Rendered and Opinion filed September 9, 2003
Motion for Rehearing
Overruled; Opinion of September 9, 2003, Withdrawn; Reversed and Rendered; and Substituted
Opinion filed December 4, 2003.
In The
Fourteenth Court of Appeals
____________
NO. 14-02-01078-CV
MONI PULO LIMITED, Appellant
V.
TRUTEC OIL AND GAS, INC., d/b/a MARTINDALE ASSOCIATES LIMITED, AND
TRUTEC INVESTMENT SERVICES COMPANY LIMITED, Appellees
On Appeal from 152nd District Court
Harris County, Texas
Trial Court Cause No. 00-16476
S U B S T I
T U T E D O P I N I O N ON R
E H E A R I N G
Trutec
Investment Services Company Limited (a Nigerian corporation) sued
Moni Pulo Limited (another
Nigerian corporation) based on an agreement between the parties related to
development of an oil field (at least partly Nigerian). Moni Pulo brings this interlocutory appeal from the denial of
its special appearance. On rehearing, we
withdraw our opinion of September 9,
2003, deny the motion for rehearing, and issue this substituted
opinion. Finding insufficient grounds
for personal jurisdiction, we reverse and render judgment dismissing the claims
against Moni Pulo.
The following facts are not
contested in the parties’ briefs. All
minerals in the country of Nigeria are owned by the government, which leases prospects
for development to third parties, retaining a share for itself. The Nigerian government awarded an oil
prospecting license and subsequently a lease (OPL-230) to Moni
Pulo covering land offshore the Bakassi
peninsula in 1992. Under Nigerian law,
the government must approve any assignment by Moni Pulo of any interest in the lease.
In 1994, Moni
Pulo retained Trutec to provide
a $1 million “signature bonus” payable to the government and to help find a
“technical partner” to oversee development.
Their agreement originally provided that Trutec
would receive a 10 percent interest in OPL-230,
but a second agreement signed in London in 1996 reduced Trutec’s
interest to 6 percent. Three months after
the latter, Brass Exploration (a Nigerian subsidiary of Western Atlas, Inc., another
defendant) agreed to act as Moni Pulo’s
technical partner and received a 40 percent interest in OPL-230. The Nigerian government approved the
assignment to Brass, but has not approved any assignment to Trutec.
Drilling operations in OPL-230
resulted in substantial production and revenues. In May 1998, Trutec
sued Moni Pulo in Nigeria
for a 10 percent interest in these revenues, claiming the agreement reducing
its interest to 6 percent was the result of coercion. When the case came to trial, Trutec’s representative, Chief Wole
Ariyo, left the stand during cross-examination, and
the country. When he refused to return
after several continuances, the trial court dismissed the suit. Trutec’s appeal is
still pending.
Two other suits complicate matters. First, a suit is currently pending in the
Federal High Court of Justice in Abuja, Nigeria
in which Seagull Oil Ltd. alleges that it, rather than Moni
Pulo, is the rightful owner of OPL-230. Second, after the trial court denied Moni Pulo’s special appearance, the
International Court of Justice ruled that part of the oil field that includes OPL-230
belongs not to Nigeria
but to Cameroon. Nigerian authorities have indicated they will
ignore the
International Court’s
ruling; there is no indication what Cameroon
may do.
Trutec
subsequently sued Moni Pulo,
Brass, JP Morgan Chase Bank, and others in Harris County, alleging breach of contract,
conversion, breach of fiduciary duty, tortious
interference, and conspiracy, and seeking an accounting, a constructive trust,
and a declaratory judgment. Moni Pulo filed a special
appearance, and tendered an affidavit by its chairman, Chief O. B. Lulu-Briggs,
that it has no directors, officers, employees, registered agents, telephone
numbers, or mailing addresses in Texas, advertises and conducts no business in
Texas, owns or leases no property and pays no taxes in Texas, and has never
sued or been sued in Texas except for the present action. The trial court denied the special appearance
based expressly on a finding of general jurisdiction; from that order Moni Pulo appeals. The applicable standards have been so often
and recently repeated we do not do so again here.
We begin by disposing briefly of Trutec’s argument that specific jurisdiction attaches to its
claims. Trutec’s
claims seek part of the revenues passing through bank accounts in Texas, but they
do not arise from that occurrence. While
those funds might satisfy Trutec’s claims, the claims
themselves arise from the agreements negotiated and signed in Nigeria and
London. We hold Trutec’s claims do not arise from or sufficiently relate to Texas to support
specific jurisdiction. Accordingly, we turn to the
trial court’s finding and Trutec’s primary
allegation—that Moni Pulo
has sufficient contacts to support general jurisdiction.
1. Venturing with Brass
Trutec begins
by pointing to Moni Pulo’s
contract with Brass, its joint venturer. Brass, like Moni Pulo, is a Nigerian entity.
But Trutec relies on evidence that Brass’s
parent (Western Atlas)
was headquartered in Houston, and that some negotiations
and the eventual execution of the joint venture agreement took place there.
For several reasons this evidence is legally insufficient
to support general jurisdiction. First,
Brass was not a Texas resident, so Moni Pulo was not contracting
with a Texas resident. Second, the residence of Brass’s parent corporation
is irrelevant absent evidence of alter ego (of which there is none here).
Third, it was Trutec
rather than Moni Pulo that
initiated contact with Brass. Fourth, negotiating and signing a contract in
Texas is insufficient if performance takes place elsewhere.
It is true that membership in a joint venture between
nonresidents may establish minimum contacts if the business focuses on Texas, but
the venture here focused on another continent.
In the latter context, the acts of one venturer do not create
jurisdiction (as opposed to liability) for another—that is, there are no
imputed minimum contacts. In its brief, Trutec
repeatedly asserts that Moni Pulo
“through its agent” made various contacts, but almost invariably the record reflects
an employee of some other company did the deed, with no evidence of direction
or control by Moni Pulo.
Trutec also relies on several provisions
in the agreements between the two Nigerian entities. First, an agenda written well before
the parties signed their venture agreement indicates they originally planned to
establish an office in Houston. But the record establishes they later changed
those plans. Generally, personal jurisdiction
requires proof that a party purposefully availed itself of the jurisdiction,
not that it planned to do so. If wishes were minimum contacts, we would be
exercising jurisdiction of plans rather than jurisdiction of persons.
Additionally, the operating agreement
between the Nigerian companies for a period of 18 months listed a Houston
address for notices to Brass and contained a Texas
choice-of-law provision. But again, there is no evidence either provision
was ever followed. During that 18-month
period, all notices were actually sent to Brass in Nigeria, and there were no
disputes regarding the operating agreement that required invocation of Texas
law. Moreover, as the agreement also designated
arbitration in London as the
exclusive means for settling disputes, it appears the parties intended to
borrow our state’s well-developed oil-and-gas law without availing themselves
of any protection from our courts. We hold Moni Pulo’s contacts with Brass are legally insufficient to
establish general jurisdiction of Moni Pulo in Texas.
2. Banking with Chase
Due process limits jurisdiction to
nonresidents who purposefully avail themselves of the privilege of conducting activities in
Texas; a party cannot be
required to appear and litigate in Texas based on choices
made by others. Our
sister court has refused to find general jurisdiction over a nonresident corporation
that deposited funds in its subsidiaries’ Texas bank accounts when the choice
to locate those accounts in Texas was made by the subsidiaries alone. Accordingly, we do not find that Moni Pulo’s Texas bank accounts
indicate that it purposefully aimed and conducted continuous and substantial
activity in this state.
3. Contracting with Drillers
Among the many development contracts
signed by Moni Pulo were a
handful with Nigerian subsidiaries of Houston-based drilling companies. Three were signed by Moni
Pulo (a Nigerian entity), Brass (a Nigerian entity),
Triton Drilling Services Nigeria, Ltd. (a Nigerian entity), and Triton
International, Inc. (a Delaware
company located in Houston). One was signed by Noble International Limited
(a Cayman Islands entity), Noble Drilling (Nigeria) Ltd. (a Nigerian entity),
and Noble Drilling International, Inc. (a Delaware corporation with a Houston
address). Each of these contracts
designated Houston as the exclusive forum for disputes, and
each chose Texas law as a primary or secondary source. No such disputes ever occurred, and the contracts
themselves are unrelated to this litigation.
Drilling contracts are performed
almost entirely where the drilling takes place. Generally,
a contract calling for performance outside Texas does not subject a party to
jurisdiction here. Many drilling companies have offices in
Texas, and many use form contracts choosing Texas law and courts for resolution
of disputes. Following Trutec’s argument to its logical conclusion, anyone that
ever hires one of these companies or signs one of their form contracts thereby
submits itself to suit in Texas by all claimants for all purposes (that is,
general jurisdiction), even suits having nothing to do with either drilling or
Texas. The constitution does not allow
Texas courts to reach that far.
4. Buying, Selling, and Coming to Texas
Trutec broadly
alleges that Moni Pulo “acquired,
either directly or indirectly, every type of good or service necessary to
explore and produce hydrocarbons from OPL-230 from vendors in Houston,
Texas.” But the evidence supporting this
claim is lacking. Trutec
cites invoice statements listing vendors and a list of recommended contractors,
but none of these indicate where the vendors or contractors were located. There was evidence that Moni
Pulo bought software from a Texas
vendor, but this single purchase is hardly enough to support general
jurisdiction.
Trutec points
to invoices for sales of oil from OPL-230 that Brass sent to Houston
addresses and directed payment to a Houston bank account. But it is undisputed the sales occurred
outside Texas, and there is no evidence indicating any purchaser’s home office
or state of incorporation. As noted
above, it was Brass rather than Moni Pulo that issued all invoices, the
purchasers rather than Moni Pulo
who chose where the invoices would be sent, and Chase rather than Moni Pulo that required payment into
the Texas account. The sale of Nigerian oil outside Texas
by Nigerian entities does not establish jurisdiction because of the choices of
these purchasers or Chase.
Trutec
also points to approximately fifteen visits to Texas by Moni
Pulo representatives between 1995 and 2001. There is little in the record regarding the
details of these visits, but it is difficult to say that two or three visits a
year are continuous and systematic. It does appear all were related to the joint
venture with Brass or the banking arrangements with Chase, and thus focused on Moni Pulo’s business in Africa
rather than any project in Texas. These occasional and isolated visits to Texas
are insufficient to establish general jurisdiction.
Finally, Trutec
argues that even if none of these contacts rise to the “minimum” level required
by due process, we should nevertheless find general jurisdiction based on the
sum of them. But it is the quality of
the evidence rather than the quantity we must consider. Applying
that standard, we find the evidence insufficient to support a conclusion that Moni Pulo purposefully directed substantial,
continuous, and systematic contacts toward Texas. To the contrary, the contacts have been
fortuitous, attenuated, for limited purposes, and at the insistence of third
parties. Accordingly, the trial court erred in finding
general jurisdiction over Moni Pulo.
Fair Play &
Substantial Justice
Even
were the contacts noted above sufficient to establish general jurisdiction,
exercising jurisdiction over this dispute would offend traditional notions of
fair play and substantial justice. Considering the unique burdens placed on a
defendant required to defend itself in a foreign legal system, the policies of
other nations whose interests may be affected, and the potential impact on
foreign relations,
we find there are compelling reasons for Texas
courts not to involve themselves in this dispute.
First, Moni
Pulo is wholly a product of Nigeria—created
under the laws of Nigeria,
owned by Nigerians, based in Nigeria,
and whose sole purpose is production of oil and gas in Nigeria. Its chairman is in his seventies and suffers
from Parkinson’s Disease. There was
evidence his absence for an extended period of time would put production at
risk due to instability and unrest in Nigeria.
Second, Texas has no interest in
this dispute among Nigerian entities regarding Nigerian mineral interests. The Nigerian government’s ownership ab initio of all
minerals in the country and retention of the power to grant leases and approve
all assignments suggests it takes a close interest in these matters, and would hardly
view Trutec’s claim as a private matter between
private parties. Generally, Texas has no
interest in adjudicating a case between nonresidents concerning occurrences
that took place outside of Texas.
Third, Trutec’s
behavior also establishes that exercising jurisdiction over Moni
Pulo would offend traditional notions of fair play. Trutec originally
filed suit against Moni Pulo
in Nigeria,
then abandoned the action in the middle of trial and in apparent contempt of
court. Having fled the jurisdiction most
closely connected to the litigation and the parties, Trutec
would now have Texas courts reach
within that jurisdiction to impose an opposite result. This is reaching too far.
All of which pales in comparison with
the uncertainty whether Moni Pulo
or even Nigeria
have any claim to OPL-230.
Texas courts have
substantial experience and expertise in oil–and–gas matters, but none in
Nigerian ministerial affairs or the effect of colonial treaties on African
boundary disputes. Asking Texas
jurors to decide such matters places them in an untenable position.
It is not unusual that development
of petroleum resources in far–off corners of the world will show some
connections with Texas entities
and individuals. But our courts are not
international courts of justice, and can only exercise jurisdiction over those
within our jurisdictional power. Here,
all operations were conducted through Nigerian entities and concern what all at
least thought was Nigerian territory.
Given the history of this litigation and the complexities that have
arisen, it is unreasonable for us to settle them here:
The procedural and
substantive interests of other nations in a state court’s assertion of
jurisdiction over an alien defendant will differ from case to case. In every
case, however, those interests, as well as the Federal Government’s interest in
its foreign relations policies, will be best served by a careful inquiry into
the reasonableness of the assertion of jurisdiction in the particular case, and
an unwillingness to find the serious burdens on an alien defendant outweighed
by minimal interests on the part of the plaintiff or the forum State.
Accordingly, the trial court’s order
denying Moni Pulo’s special
appearance is reversed and the claims against Moni Pulo are dismissed for want of personal jurisdiction.
/s/ Wanda
McKee Fowler
Justice
Judgment
rendered and Substituted Opinion On Rehearing filed December 4, 2003.
Panel
consists of Justice Fowler and Senior Chief Justice Murphy. Former Chief Justice Scott
Brister not participating.