AUTORIDAD DE ENERGÍA ELÉCTRICA DE PUERTO RICO, Plaintiff, Appellee,
VITOL S.A.; VITOL, INC., Defendants, Appellants, FIDELITY AND DEPOSIT CO. OF MARYLAND; FULANO DE TAL; FIADORAS A, B AND C; ASEGURADORAS X, Y AND Z; CARLOS M. BENÍTEZ, INC., Defendants.
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
PUERTO RICO [Hon. Steven J. McAuliffe, [*] U.S. Senior District Judge]
Gregory G. Garre, with whom Alexandra Shechtel, Latham &
Watkins, LLP, Neal S. Manne, Alexander L. Kaplan, Weston L.
O'Black, Michael C. Kelso, Susman Godfrey L.L.P., Eduardo
A. Zayas-Marxuach, Francisco G. Bruno-Rovira, McConnell
Valdés LLC, Andrés W. López and The Law
Offices of Andrés W. López, P.S.C., were on
brief, for appellants.
Eduardo J. Corretjer-Reyes, with whom Corretjer, L.L.C. was
on brief, for appellee.
Torruella, Kayatta, and Barron, Circuit Judges.
TORRUELLA, Circuit Judge.
district court remanded this case to the Commonwealth of
Puerto Rico Court of First Instance, San Juan Part, because
it determined that the forum selection clauses at issue were
enforceable, and that the unanimity requirement of 28 U.S.C.
§ 1446(b)(2)(A) therefore could not be satisfied. We
August 2005 and December 2008, the Autoridad de
Energía Eléctrica de Puerto Rico (the Puerto
Rico Electric Power Authority or "PREPA") executed
six contracts for the delivery of fuel oil with entities
whose names all began with "Vitol" -- and we shall
refer to them as such here. For present purposes, it suffices
that at least one of the entities before us -- namely Vitol,
Inc., a Delaware corporation headquartered in Houston, Texas
-- admits that it is a party or assignee to the six contracts
before us. PREPA is a public corporation and governmental
instrumentality of the Commonwealth of Puerto Rico. P.R. Laws
Ann. tit. 22, § 193.
PREPA learned that Vitol, S.A. -- following a United Nations
investigation that concluded that Vitol, S.A. had paid, or
had caused illegal surcharges to be paid, to Iraqi public
officials -- had pled guilty to first degree grand larceny in
New York state court, PREPA filed suit under, inter
alia, Puerto Rico Law No. 458 of December 29, 2000, P.R.
Laws Ann. tit. 3, §§ 928-928i ("Law
458"). This law prohibits government instrumentalities
and public corporations, such as PREPA, from awarding bids or
contracts to persons (including juridical persons) who have
been convicted of "crimes that constitute fraud,
embezzlement or misappropriation of public funds listed in
§ 928b of this title." P.R. Laws Ann. tit. 3,
§ 928. "Undue intervention in the processes of
awarding bids or in government operations, "
"[b]ribery, in all its modalities, " and
"[o]ffer[s] to bribe" are among the crimes listed
in section 928b. Id. § 928b.
the contracts at issue in this case included a substantively
identical choice of law and forum selection clause:
The Contract shall be governed by, and construed in
accordance with the laws of the Commonwealth of Puerto Rico.
Also, the contracting parties expressly agree that only the
state courts of Puerto Rico will be the courts of competent
and exclusive jurisdiction to decide over the judicial
controversies that the appearing parties may have among them
regarding the terms and conditions of this Contract.
the first contract also included a "Sworn
Statement" clause which read as follows:
Previous to the signing of this Contract, the Seller will
have to submit a sworn statement that neither [the] Seller
nor any of its partners have been convicted, nor have they
plead [sic] guilty of any felony or misdemeanor involving
fraud, misuse or illegal appropriation of public funds as
enumerated in Article 3 of Public Law number 428 of September
22, 2004, as amended.
that, although the "Sworn Statement" clauses only
speak to convictions and guilty pleas, in the actual sworn
statements, the seller also stated -- as Law 458 required --
that it had "no knowledge of being under judicial,
legislative or administrative investigation in Puerto Rico,
the United States, or in any other country."
See P.R. Laws Ann. tit. 3, § 928f.
contract also included a "Contingent Fees" clause,
which provided, inter alia:
The Seller represents and warrants that it is authorized to
enter into, and to perform its obligations under this
Contract and that it is not prohibited from doing business in
Puerto Rico or barred from contracting with agencies ...