Arabian Shield Development Co. v. Hunt

• Decision Date: 12 April 1991
• Docket Number: No. 05-89-00046-CV,05-89-00046-CV
• Citation: 808 S.W.2d 577
• Parties: ARABIAN SHIELD DEVELOPMENT COMPANY, Appellant, v. Ray HUNT, Hunt Oil Company, Yemen Hunt Oil Company, M.A.M. Exploration, Inc., M.A.M. Int'l S.A., a Panamanian Corporation, and Moujib Al-Malazi, Appellees.
• Court: Texas Court of Appeals

Page 577

808 S.W.2d 577

ARABIAN SHIELD DEVELOPMENT COMPANY, Appellant, v. Ray HUNT, Hunt Oil Company, Yemen Hunt Oil Company, M.A.M.

Exploration, Inc., M.A.M. Int'l S.A., a Panamanian

Corporation, and Moujib Al-Malazi, Appellees.

No. 05-89-00046-CV.

Court of Appeals of Texas,

Dallas.

April 12, 1991.

Rehearing Denied May 21, 1991.

H. Dee Johnson, Jr., Dallas, for appellant.

Frank Finn, David R. Noteware, Stephen C. Rasch, Dallas, for appellees.

Before ROWE, LAGARD and OVARD, JJ.

OPINION

OVARD, Justice.

This is a summary judgment case. The lawsuit arose from competition between two enterprises for petroleum exploration and production rights in the Safir Basin, in the nation of Yemen. In early 1981, representatives of Arabian Shield Development Company (Arabian Shield) and Dorchester International, Inc., entities related to Dorchester Gas Company, travelled to Yemen to negotiate an oil and gas concession with the Yemeni government and national oil company. At approximately the same time, the Hunt Oil Company (Hunt Oil) sought to acquire the same concession. The Yemeni government awarded the concession to Hunt Oil in August 1981. Arabian Shield and Dorchester International later began to suspect that Hunt Oil had used improper means to win the concession. They filed suit against Hunt Oil, Ray Hunt, and others on October 2, 1987, for tortious interference with an advantageous business relationship.

The trial court awarded Hunt Oil, Ray Hunt, and the other defendants summary judgment. The trial court did not disclose the basis for his ruling. As a result, we must uphold the summary judgment if any legally sufficient ground, pleaded by the defendants, supports it. Langston v. Eagle Publishing Co., 719 S.W.2d 612, 615 (Tex.App.--Waco 1986, writ ref'd n.r.e.). We hold that the trial court properly could have granted summary judgment based upon the running of the statute of limitations. Consequently, we affirm the summary judgment.

FACTS AND PROCEDURAL HISTORY

THE PRIZE

The Safir Basin is a geologic formation capped by a salt dome in the Ma'arib region of the Yemen Arab Republic (Y.A.R.) (now reunited with the People's Democratic Republic of Yemen). A few petroleum geologists did preliminary surveying work in the area during the late 1950s, but civil war and the area's primitive infrastructure prevented petroleum exploration. By 1980, the government of the Y.A.R. had pacified the region and had paved a road from Sana'a, the capital, to the city of Ma'arib. The government also had commissioned an aeromagnetic survey of the Ma'arib region. The survey suggested the existence of a thick layer of sedimentation beneath the Safir Basin. A thick sedimentary layer capped by a salt dome could contain commercial quantities of petroleum. The Yemeni government began searching for an oil exploration company to prospect in the region.

THE RACE

In 1980, Hunt Oil Company wanted to expand overseas operations. It contacted Moujib al-Malazi (al-Malazi) to help find prospects. In October 1980, al-Malazi traveled to Sana'a, on behalf of Hunt Oil, and met with the Prime Minister of the Y.A.R. and with officials of Yominco, the Yemeni national oil and mineral company. The Yemeni government showed al-Malazi the aeromagnetic survey and told him that the government sought a production sharing agreement with a suitable oil company. Al-Malazi met with chief corporate officers of Hunt Oil, including Ray Hunt, the President, in Dallas in December 1980. Hunt Oil decided to pursue a concession in the Y.A.R. In January 1981, a delegation from Hunt Oil visited the Y.A.R. They met with Ali Jabr Alawi (Alawi), the Director General of Yominco, and with Ali Abdul Rahman al-Bahr (al-Bahr), Minister of State. Alawi visited Dallas in February 1981, at the invitation of Hunt Oil. After Alawi returned to Sana'a, Hunt Oil sent a telex stating that it wished to pursue negotiations and would submit a proposal before April 1, 1981.

Arabian Shield also sought an exploration and production sharing agreement with the Yemeni government. Executives of Arabian Shield had long known of the existence of the Safir Basin. Jack Crichton, Chairman of the Board of Arabian Shield, had tried to negotiate exploration agreements in the Y.A.R. in the 1950s, before civil war made exploration impossible. The President of Arabian Shield, Hatem El-Khalidi, a geophysicist, performed survey work in the Safir Basin in 1956-57. Arabian Shield had experience extracting hard minerals, but it had never drilled for oil. However, Arabian Shield was a spin-off of Dorchester Gas Company (now Dorchester Master Limited Partnership), a large, public company with wide experience in oil and gas exploration. Dorchester International, a company closely associated with Dorchester Gas, formed a joint venture with Arabian Shield to procure the concession in the Safir Basin. The Arabian Shield/Dorchester group hired as business agent Shaher Abdulhak, a resident of Sana'a. The joint venture provided Abdulhak documents containing geological studies of the Safir Basin and asked him to begin preliminary negotiations.

On February 24, 1981, Dale Chase, President of Dorchester Gas, Crichton, of Arabian Shield, and Abdulhak met formally with Minister al-Bahr in Sana'a and presented their proposal. Two days later, Crichton, Chase, and Abdulhak met again with Minister al-Bahr and with Yominco's geological staff. Arabian Shield/Dorchester and the Yemeni officials reached broad agreement on terms of an exploration and production contract. The details remained to be worked out, and neither party had final authority to bind its side. Dorchester Gas Company's board of directors made changes to the proposal. The Arabian Shield/Dorchester group submitted its amended proposal on March 30, 1981. The following day, on March 31, Hunt Oil sent its proposed agreement. Hunt Oil learned of the Dorchester group's activities no later than March 19, 1981. Arabian Shield/Dorchester learned of Hunt Oil's presence sometime in June 1981.

Arabian Shield/Dorchester heard nothing from the Yemeni government for approximately three months. On June 25, 1981, Chase sent a telex asking about the status of the proposal to Minister al-Bahr. The minister replied that he had forwarded the proposal to a special committee for review. Al-Bahr sent Chase another telex on July 7, 1981, to tell him that the committee had not finished its review. On July 28, 1981, Abdulhak informed Chase of the contents of the Hunt Oil proposal. Chase discussed the Hunt Oil offer with Crichton. They decided to ask Hunt Oil to let them buy into the concession as twenty percent partners. Chase made the request on July 29. Hunt Oil told Chase that it had a firm deal with the Yemeni government and that it did not want a partner. The Council of Ministers approved the agreement with Hunt Oil on August 25, 1981. The Y.A.R. Constituent Assembly ratified the deal on January 16, 1982. On September 21, 1981, Crichton sent Ray Hunt a letter of congratulation. The letter made no mention of improper conduct by Hunt or Hunt Oil.

THE LAWSUIT

On July 4, 1984, Hunt Oil announced a major discovery in the Safir Basin. The news jogged Arabian Shield's memory about the events of 1981. El-Khalidi, the President of Arabian Shield, wrote to Ray Hunt on July 10, 1984. The letter recited that one year earlier El-Khalidi heard a rumor that Arabian Shield's trusted agent, Shaher Abdulhak, approached Hunt Oil in 1981 bearing Arabian Shield's proprietary geological data. El-Khalidi also wrote that just a few days earlier a reliable source repeated to him the same rumor. He asserted that, if the allegations were true, Arabian Shield was "entitled to an equitable part in [the Safir] concession." He asked for a response and received none.

El-Khalidi wrote to Hunt again on October 22, 1984. He stated that he wished to resolve the matter of the reliable information he had received that Arabian Shield's agent, Abdulhak, helped Hunt Oil secure the Safir concession. He indicated some doubt that the rumors were true: "However, if in fact Mr. Abdulhak is not your agent or acted on your behalf to help secure the concession for you, please let us know, and we will drop the matter forthwith." The Hunt Oil organization responded. On November 1, 1984, George Cunyus, Ray Hunt's lawyer, wrote to El-Khalidi: "I am pleased, but not surprised, to advise you that the investigation has revealed that there is no support whatever for the suspicions in question. Mr. Abdulhak never worked for us." Hunt wrote directly to Crichton on November 2, 1984. Hunt enclosed a copy of Cunyus's letter to El-Khalidi and affirmed its truth. Crichton replied on November 7, 1984. He thanked Hunt (whom he had long known) for investigating El-Khalidi's suspicions. Crichton wrote that he had assured El-Khalidi that he deemed Hunt trustworthy. Hunt again wrote to Crichton. He declared that the results of the investigation were as he thought. He said he expected no more letters from El-Khalidi.

El-Khalidi was not satisfied. He penned another letter on December 22, 1984. He explained that a friend from Yemen (El-Khalidi lives in Jeddah, Saudi Arabia) had recently returned to Sana'a to find a job with Hunt Oil. The friend received advice to contact Abdulhak, whom someone told him was Hunt Oil's representative. According to El-Khalidi, his Yemeni friend said that Abdulhak's affiliation with Hunt Oil had become common knowledge in Sana'a. El-Khalidi continued: "A very high personage in Yemen visited me very recently here and informed me that Mr. Shaker Abdulhak is the new hero of the day in Yemen as he has become known as the man who brought the company (Hunt Oil) which found oil in the Yemen after the majors had failed." El-Khalidi requested further comments from Cunyus.

El-Khalidi received no comment from Cunyus. He wrote again to Cunyus on January 19, 1985. El-Khalidi offered a chronology of events that he believed suggested...