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Exxon Mobil Corp. v. Saudi Basic Indus. Corp.

United States District Court, D. New Jersey

September 30, 2005

EXXON MOBIL CORPORATION, Individually and on behalf of AL-JUBAIL PETROCHEMICAL COMPANY, Plaintiff,
v.
SAUDI BASIC INDUSTRIES CORPORATION, Defendant

Page 514

Elizabeth J. Sher, PITNEY HARDIN LLP, Morristown, NJ; James W. Quinn, David Lender, WEIL, GOTSHAL & MANGES LLP, New York, NY; Andrew S. Pollis, David J. Michalski, HAHN LOESER PARKS, Cleveland, OH; Kenneth C. Johnson, EXXON MOBIL CORPORATION, Houston, TX, for Plaintiff Exxon Mobil Corporation.

John E. Flaherty, Thomas J. Goodwin, McCARTER & ENGLISH, LLP, Newark, NJ; Peter J. Boyer, McCARTER & ENGLISH, LLP, Philadelphia, PA; A. Stephen Hut, Jr., Thomas F. Connell, Kelli C. McTaggart, WILMER CUTLER PICKERING HALE AND DORR, LLP, Washington, DC, for Defendant Saudi Basic Industries Corporation.

OPINION

Page 515

OPINION

WALLS, District Judge.

Saudi Basic Industries Corporation (" SABIC" ) moves to compel Exxon Mobil Corporation (" ExxonMobil" ) to arbitrate this dispute and seeks a stay of litigation in this Court until such arbitration is complete. As a corollary, SABIC appeals the entry of a pretrial scheduling order by the Magistrate Judge assigned to the case. For the reasons set forth below, the motion to compel arbitration and stay the litigation is denied and the Magistrate Judge's pretrial scheduling order is modified.

FACTS AND PROCEDURAL BACKGROUND

Plaintiff ExxonMobil filed a complaint, individually and on behalf of Al-Jubail Petrochemical Co. (" KEMYA" ), against defendant SABIC on October 7, 2004. KEMYA is a 50/50 joint venture between SABIC and Exxon Chemical Arabia, Inc. (" ECAI" ), an indirect subsidiary of ExxonMobil. ExxonMobil's complaint alleges: (1) breach of contract; (2) breach of covenant of good faith and fair dealing; (3) fraud in the inducement; (4) negligent misrepresentation; (5) unjust enrichment; and (6) promissory estoppel, each in conjunction with SABIC's alleged violations of the March 10, 2000 stipulation agreement made between SABIC and ExxonMobil before this Court (the " Stipulation" ). The Stipulation provides that ExxonMobil drop the fourth count of its amended counterclaim against SABIC in Civil Action No. 98-4897 (the " NJ-I" action) and that SABIC and its affiliates (other than KEMYA) refrain from using certain technologies (the " SCM-T Information" ) until ownership rights in the technologies are established. The fourth count of the amended counterclaim alleged that SABIC had breached its fiduciary duties to KEMYA by assisting other SABIC affiliates in their use of SCM-T Information. [1]

Although nearly identical, there are two arbitration provisions at issue in this case. The first provision is found in the 1980 Joint Venture Agreement (" JVA" ) between SABIC and ECAI; the second in the 1980 Service Agreement (" SA" ) between KEMYA and Exxon Chemical Company (" ECC" ), an unincorporated subsidiary of ExxonMobil. The JVA reads in pertinent part:

Page 516

Article 17

Settlement of Dispute:

17.1 Subject to Article 16 of this Joint Venture Agreement if at any time any question, dispute, difference or controversy shall arise between the Partners relating to the design, construction, start-up, maintenance and subsequent operation of the Petrochemical Plant (including the provision of technical information and services) or as a result of or in connection with the provisions of this Joint Venture Agreement and the applicable annexes either Partner within (60) days following a notice to the other partners of the existence of a dispute may request that such matter be made the subject of a non-binding recommendation by 3 arbitrators appointed in accordance with the Rules of Conciliation and ...

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