Mobil Tankers Company v. Mene Grande Oil Company

• Decision Date: 16 December 1964
• Docket Number: No. 1845.,1845.
• Citation: 236 F. Supp. 362
• Parties: MOBIL TANKERS COMPANY, S. A., a corporation of the Republic of Panama, Avenida Tivoli No. 14, Panama, R. P. bare boat chartered owner in possession and operator of the Panamanian FLAG VESSEL MOBIL ASTRAL, Libellant, v. MENE GRANDE OIL COMPANY, a Delaware corporation, Respondent.
• Court: U.S. District Court — District of Delaware

236 F. Supp. 362

MOBIL TANKERS COMPANY, S. A., a corporation of the Republic of Panama, Avenida Tivoli No. 14, Panama, R. P. bare boat chartered owner in possession and operator of the Panamanian FLAG VESSEL MOBIL ASTRAL, Libellant, v. MENE GRANDE OIL COMPANY, a Delaware corporation, Respondent.

No. 1845.

United States District Court D. Delaware.

November 12, 1964.

Supplemental Opinion December 16, 1964.

David Snellenburg, II, of Killoran & Van Brunt, Wilmington, Del., and John W. Knox, New York City, for libellant. John W. Knox, Peter H. Ghee, New York City, and David Snellenburg, II, Wilmington, Del., of counsel.

David B. Coxe, Jr., Coxe, Booker, Walls & Cobin, Wilmington, Del., and Burlingham, Underwood, Barron, Wright & White, Frederick L. Scofield, New York City, for respondent. Eugene Underwood, Frederick L. Scofield, and Joseph C. Smith, New York City, of counsel.

LAYTON, District Judge.

The question here presented arises from an exception by respondent to libellant's libel upon the ground that the familiar Admiralty principle of forum non conveniens requires that jurisdiction in this District should be declined and libellant relegated to the courts of Venezuela for relief.

FINDINGS OF FACT¹

(1) Libellant (Mobil Tankers) is a Panamanian corporation wholly owned and directed by Socony Mobil Oil Company, an American corporation.

(2) Libellant owns and operates a fleet of oil tankers under the Panamanian flag whose operations are worldwide including calls at United States ports.

(3) Among the tankers owned by libellant is the "Mobil Astral."

(4) Respondent (Mene Grande Oil Company) is a Delaware corporation whose voting stock is wholly owned by a subsidiary of Gulf Oil Corporation. The principal place of business of Gulf is in Pittsburgh, Pa.

(5) Respondent has several officers and directors in Pittsburgh whose principal duties are a determination of the amount of budgetry requirements and capital needs for its Venezuelan operations. The number of its officers and directors who are also officers or directors of Gulf Oil suggests that its affairs are substantially directed and controlled by Gulf Oil Corporation.

(6) Respondent, though nominally an American corporation by virtue of having been incorporated in Delaware, has a bona fide domicile in Venezuela. Its activities are principally the drilling of oil and gas wells in Venezuela and transportation of crude oils to Venezuelan deep sea ports by pipeline and the delivery of such oil by pumping same aboard customer's ships. These activities take place exclusively in Venezuela. It has a gross investment of a billion dollars in Venezuela and employs over 4300 persons in that country with an annual payroll of over 35 million dollars.

(7) Respondent has no officers, employees or business in Delaware. In this State and District it maintains only a resident agent for the service of process.

(8) At all material times, there existed a certain Terminalling Agreement between respondent and Mobil Oil Company de Venezuela (herein called Mobil Venezuela), also a Delaware corporation, and a wholly-owned subsidiary of Socony Mobil. This Agreement provided for the storage by respondent at its terminal in Puerto La Cruz, Venezuela, of crude oil owned by Mobil Venezuela and for respondent loading such crude oil on board tankers designated to receive same when sold by Mobil Venezuela. The Agreement provided that Mobil Venezuela, or its consignee, in advance of each such crude oil delivery, should notify Gulf Oil at Pittsburgh regarding name and capacity of each vessel to be loaded, date of expected arrival, and type and quantity of crude oil to be delivered. The Terminalling Agreement further provided that any arbitration thereunder should be conducted in New York under the Rules of the American Arbitration Association, and that any award rendered should be entered as a judgment in the Supreme Court of New York County; also, that all payments to be made to respondent should be made in United States dollars to its account at the First National City Bank of New York, in San Juan, Puerto Rico (United States). However, the Agreement does not state what law should govern.

(9) On March 25, 1960, the libellant's Mobil Astral was at respondent's terminal in Puerto La Cruz taking aboard petroleum during the course of which operation there was an explosion and fire on the Mobil Astral causing loss of life and substantial damage to the ship.

(10) Libellant has sued respondent in the United States District Court in Delaware for damages as a result of this occurrence by way of service upon respondent's resident agent in this State.

(11) This Court has jurisdiction of this suit. The Venezuelan courts also have jurisdiction.

(12) Libellants have nowhere denied respondent's assertion that the statute of limitations in Venezuela governing this case is ten years. In any event, respondent has offered not to raise any defense under that statute in any subsequent suit instituted by libellant on this cause of action in Venezuela for one full year after this Court's final determination that it will decline jurisdiction on the ground of forum non conveniens.

(13) The Venezuelan law (the Civil Code), and not the International Law of the Sea, will be the law of the case if tried in this District.

(14) In order to defend this action in Delaware, respondent would have to bring to this State and District about 18 employee witnesses including an expert on Venezuelan law. The overall cost of transporting to, and maintaining these witnesses in, Delaware will be about $15,000. The absence of so many of its personnel from the Puerto La Cruz terminal would handicap it to some extent² in its loading operations at that facility for a substantial period of time (about two weeks), and should an accident occur there while loading during such period, respondent might be open to a charge of negligence for operating with insufficient, or lack of, proper personnel.

(15) The costs of the entire trial including legal fees if held in the United States are not deductible taxwise by Mene Grande under Venezuelan law but would be if the case were tried in Venezuela.

(16) If the trial were held in the United States, libellant would employ approximately five or six United States witnesses, three or four of whom would be experts, including an expert in Venezuelan law, and some ten crew members of the Mobil Astral who are scattered on ships all over the world. Four of these are officers who are German and the balance, Indians. Since these ship witnesses would have to be brought from various parts of the world to testify, they could be taken to Venezuela about as cheaply as the United States for this purpose.

(17) If the trial were held in Venezuela, respondent would be put to little or no extra expense or inconvenience, because practically all its witnesses reside in Venezuela and, moreover, it could maintain the operation of its facilities at the Puerto La Cruz terminal much more easily. All the records pertaining to the trial would be there and it could obtain tax advantages not available if the case were tried in the United States.

(18) If the trial were held in Venezuela, libellant would be put to slightly greater expense and inconvenience. It might choose to take perhaps three or four American witnesses, mostly experts. It is the belief of this Court that the testimony of two American witnesses as to the repairs to the Mobil Astral could be stipulated into the record whether the trial is in Venezuela or Delaware.

(19) Expert Testimony, as we know it in this country, is furnished the Court in Venezuela through a Board or Panel of three experts. Each party has complete freedom in naming one member of the Board. The third is named by the judge if the two parties cannot agree. Therefore, both libellant and respondent could place at least one American expert familiar with tanker fire and/or explosion on the Board. Members of the Board express their opinions to the Court through written reports. The Board prepares a joint report for submission to the Court. A dissenting member may submit a minority report. The Court is not bound by the contents of the report or reports. The Board may hear the testimony of any number of experts but the testimony of such experts is limited to fact, not opinion, testimony. Libellant's fear that the language barrier may prevent an American from being an effective member of the Board is not persuasive.

(20) Libellant's contention that, if the case were tried in Venezuela, its ship witnesses would first have to be taken to New York and interviewed, and then flown to Venezuela for trial, is not acceptable. However, it is possible that it would be more convenient for libellant, after the trial, to fly the ship witnesses back to New York for reassignment to ships because libellant does not use Venezuelan ports as places to reassign crews.

(21) Roughly, the same number of witnesses would require interpreters no matter where the case is tried.

(22) Libellant would not be prejudiced by having to try this case under Venezuelan court practice. This practice does differ from the practice of the federal courts in this country in numerous respects. Discovery is more limited. Opinion, or expert testimony, is treated differently, although this court does not view the Venezuelan practice in that respect as being any less desirable than the practice in this country.³ A trial would not proceed as easily or rapidly but, libellant's case would be subject to the law of Venezuela in any event and the procedural difference between the court practice of Venezuela and the United States are not so drastically different as to affect libellant's chance of recovery.

(23) One of libellant's scarcely concealed, and very strong reasons, for seeking a trial on neutral ground in the United States is the fact that it fears that Mene Grande, being domiciled in Venezuela and having a large payroll in...