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ExxonMobil Corp. received the good news after four hours of jury deliberations. A jury found for the oil giant on every count in its breach-of-contract suit and awarded ExxonMobil $416.8 million in damages. It’s the largest verdict in the United States so far this year. The verdict was handed down on March 21, following a two-week trial in Delaware’s Superior Court. The defendant in the case was a Saudi Arabian company, Saudi Basic Industries Corp. (Sabic). The judge applied Saudi law in the case because the two contracts between Sabic and ExxonMobil specified that Saudi law governed these agreements. Sabic will challenge the verdict through post-trial motions and, if necessary, an appeal to the Delaware Supreme Court, company spokesman Mohammad Al-Motawa said. Sabic, which is 70 percent owned by the Saudi government, is the biggest petrochemical producer in the Middle East. ExxonMobil, based in Irving, Texas, is the world’s largest publicly traded oil company. The lawsuit concerned the technology used in two ExxonMobil-Sabic joint ventures that make petrochemical products used in antifreeze, textile fibers and plastics. Sabic had purchased this technology from Union Carbide and licensed it to the joint ventures. ExxonMobil alleged that Sabic padded its license fees for this technology. This overcharging had gone on for approximately 20 years, according to ExxonMobil’s co-lead attorney in the suit, James Quinn, who chairs New York-based Weil, Gotshal & Manges’ litigation practice. INTERPRETING AGREEMENTS The trial centered on the interpretation of the two joint venture agreements. A clause in the contracts, according to ExxonMobil, prevented Sabic from making any profits from licensing third-party technology to the joint venture. Sabic claimed that this provision was irrelevant. “Our position was that another provision of the joint venture agreements and the technology licenses controlled,” said Sabic’s lead attorney, Kenneth Adamo, a partner at Jones Day. The main witnesses in the case were the people who had originally put the deals together back in 1980. They testified as to the parties’ intent on what Sabic could charge the joint venture. “Because the agreements were made in 1980, a lot of the key witnesses on both sides had retired,” said David Lender, a partner at Weil Gotshal who was the other lead attorney for ExxonMobil. “Most of the witnesses were in their 70s, a few were in their 80s — the youngest was 58.” Despite the passage of more than two decades, the witnesses had little trouble remembering the facts concerning the deals, according to Lender. “This was their life,” he said. “They spent seven to eight years putting these deals together. They all remembered the basic principles of putting this deal together. And some of the guys who retired in more recent years, their memories were really crisp.” In the end, the trial probably came down to which set of witnesses the jurors found more credible, the lawyers said. And they apparently found ExxonMobil’s witnesses to be more believable than Sabic’s. The jury found Sabic had overcharged the joint ventures by $184 million. Since ExxonMobil owned only half of the joint ventures, it was entitled to only half of these damages, $92 million, under a breach-of-contract claim. The remainder of the award, $324.8 million, was based on a claim of usurpation (or wrongful taking). Under Saudi law, Sabic was required to pay this amount under a disgorgement theory — “based on their getting our money and investing it into their business,” said Quinn. The court took precautions to ensure that the jury wasn’t influenced by anti-Arab bias. “We had the most detailed voir dire in my career,” said Quinn. “Each side had 15 pre-empts, which is unheard of. The judge took a lot of time to make sure that issues like [discrimination] were weeded out.” Sabic’s lead attorney, Adamo, declined to comment on whether the jury was influenced by anti-Arab sentiment. The trial was complicated by the need to apply foreign law. It took several days of hearings and four experts in Saudi law in order to determine which Saudi laws applied, according to Quinn. In addition to hearing the litigants’ experts, Judge Jan Jurden took the unusual step of appointing her own expert on Saudi law.

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