Dresser-Rand Co. v. PDVSA Petróleo, S.A.

Dresser-Rand Co. v. PDVSA Petróleo, S.A.

Opinion

SUMMARY ORDER

UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment entered on May 29, 2020 is AFFIRMED.

The Dresser-Rand Company ("Dresser-Rand") sues for the balance owed plus interest due under a Note issued by Petróleos de Venezuela, S.A. ("PDVSA") and guaranteed by PDVSA Petróleo, S.A. ("Petróleo") pursuant to a Note Agreement. In this appeal, brought pursuant to a Federal Rule of Civil Procedure 54(b) certification, Defendant-Appellant Petróleo seeks reversal of the District Court's grant of partial final judgment against it and in favor of Plaintiff-Appellee Dresser-Rand in the amount of approximately $150 million. Dresser-Rand Co. v. Petróleos de Venezuela, S.A., 439 F. Supp. 3d 270 (S.D.N.Y. 2020). ] We review de novo the District Court's partial summary judgment decision, SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009), and apply New York law, as the Note Agreement [*2]  provides. On such review, we conclude that Petróleo unconditionally waived in the Note Agreement any impossibility defense to the action for payment; we also conclude that Petróleo failed to timely raise — and thus forfeited — its argument that its breach of the Note Agreement is excused for reasons of public policy and the potential illegality of making payments under the Note Agreement. The District Court therefore did not err in entering judgment against Petróleo.

In the discussion below, we assume the parties' familiarity with the underlying facts, procedural history, and arguments on appeal, and refer to them only as necessary to explain our decision to affirm.

1. The guarantee and broad waiver of defenses. Article VI of the Note Agreement governs the Guarantee undertaken by Petróleo. In Section 6.01 of the Note Agreement, Petróleo agrees "that it is jointly and severally liable" for payment and "absolutely, irrevocably and unconditionally guarantee[d]" to the noteholder and related obligees "prompt payment when due." Joint App'x 53. Section 6.02 emphasizes that Petróleo guarantees payment rather than collection of any amount owed. Section 6.03(a) underscores that "the obligations [*3]  of the Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason" except indefeasible cash payment in full. Id. Section 6.03(b) reiterates that "[t]he obligations of Guarantor [Petróleo] hereunder are not subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations or otherwise . . . ." Id. And Section 6.03(c) states that Petróleo's obligations under the Note Agreement "are not discharged or impaired or otherwise affected by . . . any [ ] circumstance, act, omission or delay that might in any manner or to any extent vary the risk of [Petróleo] or that would otherwise operate as a discharge of [Petróleo] as a matter of law or equity." Id. at 54.

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