National Iranian Oil v. Mapco International Inc.

825 F. Supp. 77, 1993 U.S. Dist. LEXIS 8822, 1993 WL 233524
CourtDistrict Court, D. Delaware
DecidedJune 16, 1993
DocketCiv. A. No. 91-269-RRM
StatusPublished
Cited by3 cases

This text of 825 F. Supp. 77 (National Iranian Oil v. Mapco International Inc.) 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
National Iranian Oil v. Mapco International Inc., 825 F. Supp. 77, 1993 U.S. Dist. LEXIS 8822, 1993 WL 233524 (D. Del. 1993).

Opinion

MEMORANDUM OPINION

McKELYIE, District Judge.

. This is a contracts case. The plaintiff, National Iranian Oil Company (“NIOC”), produces and sells petroleum and related products. The defendants, Mapco International and its parent, Mapco Inc. (collectively “Mapco”), refine and sell crude oil. Mapco refused to pay for'Crude oil it received from NIOC delivered pursuant to an April, 1979, agreement between the parties. Following unsuccessful attempts by the parties to, settle the ensuing dispute, NIOC filed this action for goods sold and delivered, breach of contract, and unjust enrichment. The defendants have moved for summary judgment on the ground that this action is barred by the statute of limitations. For the reasons set out below, the Court will grant the defendants’ motion for summary judgment. FACTS

On April 23, 1979, Mapco and NIOC entered into a “Crude Oil Sale/Purchase Contract,” pursuant to which NIOC agreed to deliver to Mapco at Kharg Island, Iran, quantities of light and heavy crude oil. Delivery was to be accomplished in shipments made between May 1, 1979, and December 31, 1979. The agreement further specified that NIOC would receive payment for the deliveries by drawing from letters of credit opened by Mapco at an American bank. NIOC would have sixty days from the date of the Bill of Lading of a particular shipment to draw upon a letter of credit. Additionally, in order to draw upon a letter, NIOC was required to present: (1) a seller’s invoice; (2) an original and original duplicate and triplicate Bills of Lading made out to the order of the seller, blank endorsed and signed by the Master of the vessel; and, (3) a certificate of Quantity/Quality.

On October 13, 1979, NIOC made the first of two deliveries of crude oil. Prior to delivery, on September 26,1979, Mapco ordered a bank to open a letter of credit in favor of NIOC to cover Mapco’s purchase of approximately 183,000 barrels of crude oil. The [78]*78second' delivery, accomplished November 6, 1979, followed Mapco’s October 22, 1979, order of a second letter of credit to cover a shipment of 186,000 barrels of crude oil. NIOC sent invoices with each shipment: the first for $4,258,092; the second for $5,875,-443.18 (including interest through November 10, 1981).

On November 4, 1979, just prior to the' second delivery of crude oil, Iranian students seized the United States Embassy in Tehran, Iran, in the process taking as hostages approximately sixty Americans.

On November 5, 1979, NIOC attempted to collect payment for the first shipment of oil by drawing upon the first letter of credit opened by Mapco. As NIOC failed to produce proper documentation to draw upon the letter as specified in the April, 1979, contract, the bank refused payment to NIOC. The discrepancies ostensibly included: 1) the Bill of Lading was not issued to the Order of the seller and blank endorsed; 2) unexplained differences in the unit prices of the oil; and, 8) sample receipts had not been provided. NIOC did not present any documents, sufficient or otherwise, to collect payment for the second shipment.

On November 14, 1979, in response to the hostage crisis and pursuant to the International Emergency Economic Powers Act, President Jimmy Carter issued an Executive Order freezing all Iranian assets subject to the control of the United States. NIOC claims that its invoices remained unpaid as result of President Carter’s actions; however, NIOC does not appear to contest that it failed to provide proper documentation during its attempt to collect payment on November 5, 1979.

On January 19, 1981, the United States and Iran came to an agreement, embodied in the Algiers Declarations, which provided for the release of all hostages. The parties subsequently engaged in settlement negotiations regarding payment for the shipments but failed to reach any agreement.

In late June, 1984, NIOC notified Mapco of its intention to submit the matter to arbitration in Iran. On October 4, 1984, Mapco cabled to NIOC its refusal to arbitrate in Iran.

On May 7, 1986, counsel for NIOC wrote to Mapco’s General Counsel, Randolph Jones, Jr., Esq., to inform Mapco that NIOC considered Mapco liable for interest on the amount owed under the contract at the rate charged by the Federal Reserve Board for extended credit to depository institutions. On May 27, 1986, Jones responded on behalf of Mapco by letter (“Jones letter”) indicating that Mapco would not pay the interest claimed by NIOC. The letter also stated the following:

There is an underlying intent and obligation that the notification necessary to start the process has to be made timely. This is not the case in the instant matter as NIOC has waited almost six years to send any notification. The reason for the delay is obvious. NIOC recognizes that the only reason payment was not effected within 60 days was due to NIOC’s failure to comply with Contract No. 129 and the letters of credit opened pursuant thereto.
More importantly, the whole subjéct of interest is moot. MAPCO International does not owe any interest. As NIOC has been advised on numerous occasions, MAPCO International remains prepared to pay the principal amount for each cargo upon NIOC’s submitting all conforming documents, without exceptions, errors or omissions, required under Contract No. 129.... To this date NIOC has failed to do so. Since timely payment has always been dependent solely on the actions of NIOC, no interest is due when the reason for nonpayment rests with the actions and subsequent inaction of NIOC. Interest would only be due if NIOC has fully complied without exception to all the document and other contractual requirements and MAPCO International failed to pay thereafter (assuming, of course, that MAPCO International did not have any contractual claims of its own against NIOC). Such an event has not yet occurred.

Docket Item (“D.I.”) 23, Exhibit K. Settlement discussions subsequently continued, but the parties were unable to reach an agreement.

[79]*79On November 20, 1990, NIOC filed in this Court a petition to compel arbitration. On May 7, 1991, NIOC filed the instant suit.

On June 28, 1991, the Court ordered a stay in the proceedings, pending resolution of the .petition to compel arbitration. On November 12, 1991, the Court dismissed NIOC’s petition to compel arbitration; on December 28, 1992, the United States Court of Appeals for the Third Circuit affirmed the decision. National Iranian Oil Company v. Mapco International, Inc., 983 F.2d 485 (3d. Cir.1992).

In the interim, on March 9, 1992, Mapco International filed for bankruptcy under Chapter 11 of the United States Bankruptcy Court in the Northern District of Oklahoma. The Oklahoma Bankruptcy Court subsequently granted Mapco International’s motion to lift the automatic stay of § 362 of the Bankruptcy Code in order to proceed to bring the instant case to a speedy resolution. In re Mapco International Inc., No. 92-00766-C (Bankr.N.D. Okla. June 4, 1992).

The Court ultimately lifted the stay on January 5, 1993, and shortly thereafter the defendants moved for summary judgment asserting that the plaintiffs claims are barred by the applicable statute of limitations.

DISCUSSION

Summary judgment under Federal Rule of Civil Procedure

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Bluebook (online)
825 F. Supp. 77, 1993 U.S. Dist. LEXIS 8822, 1993 WL 233524, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-iranian-oil-v-mapco-international-inc-ded-1993.