Susman Godfrey, McConnell Valdés and Andres W. Lopez advised Vitol. Proskauer Rose and O’Neill & Borges advised the Puerto Rico Electric Power Authority on the dispute.
Susman Godfrey, McConnell Valdés and Andres W. Lopez won a major victory for Vitol, when a federal court in San Juan, Puerto Rico rejected claims by the Puerto Rico Electric Power Authority (PREPA) to void six fuel-oil supply contracts and recover $3.89 billion. The court also ruled that Vitol was entitled to recover $28.4 million, plus interest, on its counterclaim.
This litigation began more than a decade ago, in 2009, when PREPA filed the first of two lawsuits against Vitol in Commonwealth Court in San Juan, with the second case filed in 2012. In the lawsuits, PREPA claimed that six fuel-oil supply contracts with Vitol, in effect between 2005 and 2009 and awarded through competitive bids, should be declared void, retroactively, based on alleged violations of Puerto Rico’s public-contracting law and alleged misrepresentations. PREPA sought to recover $3.89 billion from Vitol in the litigation, representing the full value of payments that PREPA made under the contracts.
In a 42-page opinion issued this week, after extensive briefing and oral argument, United States District Judge Laura Taylor Swain rejected PREPA’s claims against Vitol, citing “the absence of any legal basis for invalidating any of the contracts at issue.” The court held that PREPA failed to prove any of the alleged violations of Puerto Rico’s public contracting law or any of its alleged misrepresentations, and that PREPA’s claims were deficient both factually and legally. The court noted that Vitol “fully performed its delivery obligations under the contracts.”
In addition to rejecting PREPA’s affirmative claims against Vitol, the court ruled that Vitol was entitled to judgment on its counterclaim against PREPA for $28.4 million, plus interest, for fuel oil that PREPA failed to pay for shortly before it filed the litigation.
Susman Godfrey advised Vitol Inc. with a team including Neal Manne, Alexander Kaplan, Weston O’Black, Michael Kelso and Florence Chen.
In Puerto Rico, McConnell Valdés advised Vitol Inc. with Eduardo Zayas.
Andres W. Lopez also advised Vitol S.A. in Puerto Rico.
Proskauer Rose advised Puerto Rico Electric Power Authority (PREPA) and O’Neill & Borges advised PREPA in Puerto Rico.
Involved fees earner: Andres W. Lopez – Andres W. Lopez Law Office; Eduardo Zayas-Marxuach – McConnell Valdés; Florence Chen – Susman Godfrey LLP ; Alex Kaplan – Susman Godfrey LLP ; Michael Kelso – Susman Godfrey LLP ; Neal Manne – Susman Godfrey LLP ; Weston O’Black – Susman Godfrey LLP ;
Clients: Vitol Group;