Autoridad De Energía Eléctrica De Puerto Rico v. Vitol S.A.
859 F.3d 140
| 1st Cir. | 2017Background
- PREPA signed six fuel-oil delivery contracts with Vitol entities Aug 2005–Dec 2008; Vitol, Inc. is one party to the contracts; PREPA is a Puerto Rico public corporation.
- Vitol S.A. pled guilty in NYS court for Oil-for-Food-related crimes; UN investigation found improper payments related to Vitol S.A.
- PREPA sued Vitol entities under Puerto Rico Law 458, seeking rescission and reimbursement of payments under the contracts.
- Each contract contained a mandatory forum-selection clause: exclusive jurisdiction in the state courts of Puerto Rico, with law to be governed by Puerto Rico.
- Most contracts included Sworn Statement clauses (per Law 458), Contingent Fees clauses, and de jure penalties under Law 458; some included a Code of Ethics clause.
- District court remanded to Puerto Rico court citing forum-selection clauses bound Vitol and thus unanimity requirement could not be satisfied; First Circuit affirms remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether forum-selection clauses are enforceable and exclusive. | PREPA argues clauses are mandatory and exclusive to Puerto Rico courts. | Vitol contends clauses may not be enforceable or applicable to all claims. | Clauses are enforceable and exclusive; remand proper. |
| Whether the claims fall within the forum-selection clauses (including statutory claims). | PREPA's claims relate to contract terms and invoked Law 458. | Vitol argues statutory claims may not be covered by contract terms. | Claims fall within the forum-selection clauses; covered even if statutory. |
Key Cases Cited
- Huffington v. T.C. Group, LLC, 637 F.3d 18 (1st Cir. 2011) (forum clauses construed broadly to cover related claims)
- Summit Packaging Sys., Inc. v. Kenyon & Kenyon, 273 F.3d 9 (1st Cir. 2001) (mandatory forum clauses indicate exclusive venue)
- Rivera v. Centro Médico de Turabo, Inc., 575 F.3d 10 (1st Cir. 2009) (clause scope determined by clause language)
- Claudio-De León v. Sistema Universitario Ana G. Méndez, 775 F.3d 41 (1st Cir. 2014) (distinguishes permissive vs mandatory clauses and scope)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (contract validity challenges must be decided by arbitrator; supports enforcing forum clauses when contract later found void)
- Esposito v. Home Depot U.S.A., Inc., 590 F.3d 72 (1st Cir. 2009) (remand review limitations when grounded on unanimity)