After four years of litigation, global law firm K&L Gates LLP obtained for its Netherlands-based client Astra Oil Trading NV a payment of $820.5 million from the North American arm of Brazil’s national oil company, Petrobras Brasiliero S.A. – Petrobras (“Petrobras”). The payment brought to an end a series of disputes arising out of an Astra-Petrobras joint venture involving a Pasadena, Texas, refinery.
The $820.5 million was part of a settlement finalized last Friday that satisfied judgments in excess of $748 million already obtained by Astra. The balance of the payment was to resolve additional Astra claims against Petrobras and its subsidiaries which had not yet gone to trial.
These disputes began in 2008, when Astra exercised its right to “put” its 50% interest in the refinery to Petrobras. Petrobras refused to accept the exercise of the puts, challenged the amount due for Astra’s 50% interest, and disputed whether it was obligated to indemnify Astra for a $156 million payment it had made on behalf of a related trading partnership. After an eight-day arbitration hearing, an Award was made upholding all of Astra’s claims and rejecting various damage claims made by Petrobras. Petrobras refused to honor the Award or to make any of the payments that it required, and sought instead to have the Award vacated and its damage claims against Astra reinstated. In December 2010, a Texas State court confirmed the Award and rejected all of Petrobras’ claims. Petrobras appealed, and in March 2012, the Texas Court of Appeals affirmed the judgment confirming the Award, setting the stage for the settlement reached last Friday.
A collaboration between K&L Gates’ New York and Dallas offices, the team was led by New York commercial disputes partner Gerald A. Novack, who worked closely with Dallas commercial disputes partner Beth B. Petronio. Dallas partner Andrew B. Russell and associate Stephen M. Dacus also played a major role in the cases, as did New York partner David S. Versfelt and associate Samantha J. Katze.
