Autoridad de Energia Electrica v. Vitol, Inc.

The Autoridad de Energia Electrica de Puerto Rico (PREPA) executed six contracts for the delivery of fuel oil. Vitol, Inc. was a party or assignee to the six contracts, each of which included a choice of law and forum selection clause stating that disputes concerning the contract shall be litigated in Puerto Rico state courts. After PREPA learned that Vitol, S.A. had pled guilty to first degree grand larceny it filed a complaint in a Puerto Rico Court against Vitol, Inc. and Vitol, S.A. alleging that two oil supply contracts it held with Vitol, Inc. were null due to Law No. 458 of December 29, 2000 and the Puerto Rico Civil Code. Invoking diversity jurisdiction, Defendants removed the claim to federal court. PREPA then filed a second complaint in a Commonwealth court regarding four additional oil supply contracts. The two cases were consolidated in federal court. The district court remanded the case to the Commonwealth court, concluding that the forum selection clauses applied to the dispute and, therefore, that the unanimity requirement of 28 U.S.C. 1446(b)(2)(A) could not be satisfied. The First Circuit affirmed, holding that remand was proper because the forum selection clauses were enforceable, and therefore, the unanimity requirement could not be met. View "Autoridad de Energia Electrica v. Vitol, Inc." on Justia Law