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United States Court of Appeals for the Fifth Circuit
April 23, 1984
Nos. 82-2308, 82-2471
[*1533] GOLDBERG, Circuit Judge:
This diversity action involves a contract dispute between the Nissho-Iwai Company, Ltd. ("Nissho") and Occidental Crude Sales, Inc. ("Occidental"). Occidental appeals from a jury verdict awarding Nissho contract damages and fraud damages arising from Occidental's failure to perform a crude oil agreement. We hold that there was no reversible error in the finding that Occidental was liable for breach of contract. We reverse the [**2] damage award, however, and remand for a new trial limited to determining contract damages. Finally, we reverse the fraud verdict.
Nissho is a Japanese corporation that distributes oil to Japanese buyers. Occidental is an American corporation that explores for and produces oil. In 1965, Occidental obtained a number of "oil concessions" from the High Petroleum Council and the Council of Ministers of Libya. The concessions permitted Occidental to drill for oil in two separate blocks of property ("Concession 102" and "Concession 103"). The producing wells were managed by the Libyan Government, and Occidental was responsible for pipelines that transported oil from the wells to an export terminal in Zueitina. Each concession agreement provided for a royalty payment of 12.5 percent and a tax payment of 50 percent to the Government on each barrel of oil.
On September 1, 1969, a Revolutionary Government under Colonel Moammar Khadafy deposed the King of Libya and assumed control. In January 1970, Colonel Khadafy formed a committee to negotiate higher prices with Libyan oil producers; but the companies were unwilling to comply. Khadafy imposed a series of production restrictions; [**3] and in August 1973, he nationalized 51 percent of Occidental's concessions.
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729 F.2d 1530 *; 1984 U.S. App. LEXIS 23246 **; 38 U.C.C. Rep. Serv. (Callaghan) 1237; 38 Fed. R. Serv. 2d (Callaghan) 1710
NISSHO-IWAI CO., LTD., Plaintiff-Appellee, v. OCCIDENTAL CRUDE SALES, INC., Defendant-Appellant
Subsequent History: [**1] As Amended.
Prior History: Appeals from the United States District Court for the Southern District of Texas.
Disposition: AFFIRMED IN PART. REVERSED IN PART. REVERSED AND REMANDED IN PART.
oil, damages, parties, waived, force majeure, breach of contract, costs, reasonable control, pipeline, punitive damages, profits, embargo, suspend, settlement, excusing, lifting, new trial, unilateral, witnesses, argues, sales, suspension period, underliftings, instructions, deposition, injuries, suspension, repairs, contract damages, first trial
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