Weidner Communications, Inc. v. H.R.H. Prince Bandar Al Faisal, 87-2645
Decision Date | 30 December 1988 |
Docket Number | No. 87-2645,87-2645 |
Citation | 859 F.2d 1302 |
Parties | , RICO Bus.Disp.Guide 7063 WEIDNER COMMUNICATIONS, INC., A Utah corporation, Plaintiff-Appellant, v. H.R.H. PRINCE BANDAR AL FAISAL, H.H. Princess Basma Bint Majid Bin Abdul Aziz, H.R.H. Prince Saud Abdullah Al Faisal, Ali Fissa Belkairous, the Saudi Group, an entity formed under the laws of Saudi Arabia, and Saudi Computer Aided Translation, Ltd., an entity formed under the laws of Saudi Arabia, Defendants- Appellees. |
Court | U.S. Court of Appeals — Seventh Circuit |
Harry P. Lamberson, Chapman & Cutler, Chicago, Ill., for plaintiff-appellant.
William E. Kelly, Pope Ballard Shepard & Fowe, Chicago, Ill., for defendants-appellees.
Before BAUER, Chief Judge, and COFFEY and MANION, Circuit Judges.
The plaintiff-appellant Weidner Communications, Inc., a Utah corporation with its principal place of business in Northbrook, Illinois (hereinafter WCC), 1 filed a complaint alleging breach of contract, RICO violations, common law fraud, restitution, tortious interference with contractual relations, breach of fiduciary duty, and conversion. The named defendants include three members of the royal family of Saudi Arabia (Prince Bandar, his wife, Princess Basma and Prince Saud); an Algerian national, Ali Fissa Belkairous; The Saudi Group, a venture capital entity; and Saudi Computer Aided Translation, Ltd., a company formed in Saudi Arabia as a joint venture of the Saudi Group and WCC to market computerized English to Arabic translation services in the Middle East. The district court dismissed the case, finding that Sec. 5 of the "Clarification Agreement" conferred exclusive jurisdiction on Saudi Arabian courts. Plaintiff appeals the district court's decision, we reverse and remand.
On about February 22, 1985, the Saudi Group and WCC entered into a Joint Venture Agreement that largely embodied the terms of a prior letter of intent between the parties. The Joint Venture Agreement stated that WCC would develop and provide a computer system to the Saudi Group to translate English into Arabic and provided for the formation of a company known as Saudi Computer Aided Translation, Ltd. (hereinafter SCAT). WCC was to receive monetary payment in two installments and was to become a 43 percent owner of SCAT, eventually sharing in the profits of what was expected to be a very profitable English to Arabic computer aided translation enterprise. The first installment of $100,000 was paid to WCC upon execution of the Joint Venture Agreement. The remaining installment of $2,400,000 was to be paid upon the delivery and installation of the system and SCAT's certificate of acceptable operation of the same.
In reliance on the Joint Venture Agreement, WCC incurred significant expenses and obviously devoted substantial effort developing the computer system and installing it in Saudi Arabia for SCAT. The district court determined that "WCC had complied with the terms of the Joint Venture ..." Agreement by September 5, 1985. The complaint alleges that about a week after WCC had completed its obligations under the Joint Venture Agreement (on about September 12, 1985):
2"
WCC asserts that the purpose of this action was to intimidate and force Garrett (as president of WCC) into accepting less consideration than called for in the Joint Venture Agreement. The complaint also alleges:
The district court stated "[k]nowing that WCC incurred substantial expenses for the services it performed to date, [the] defendants offered to pay the remainder due under the joint venture agreement if WCC would perform additional services not required under the Joint Venture Agreement...." 671 F.Supp. 531, 534. This offer resulted in the execution of a written "Clarification Agreement" on October 15, 1985, and it recites that $100,000 was paid to WCC on October 30, 1984, and an additional $700,000 was being paid to WCC upon the execution of the Clarification Agreement. The Clarification Agreement required WCC to perform certain services and provide additional equipment, including word processing equipment and the interfacing of that equipment with the system, not set forth in the Joint Venture Agreement and provided that the balance of defendants' payments to WCC would be secured by an irrevocable letter of credit. The defendants' payment under the Clarification Agreement was to be made in two installments. The first installment was to be paid to WCC upon their certification to the European American Bank (the holder of the letter of credit) that it had completed the work required by the Clarification Agreement. The second installment was to be paid to WCC upon SCAT's certification of the satisfactory operation of the computer system. The Clarification Agreement (Sec. 3) states that SCAT's final certification was to be tendered "[u]pon submission by Tom Cassell or the then acting President of the Company [SCAT] to the issuing bank of a statement certifying that delivery and installation to the Company of the interface ... is operating satisfactorily." Tom Cassell was employed by WCC in 1984 to assist in the planning and operation of SCAT and was the general manager of SCAT until he resigned in May 1986. WCC trained Cassell in the operation of the computer system.
Prince Saud, in reply to further communication from WCC referred WCC to his New York representative and, finally, on April 16, 1986, Prince Saud telexed a message that SCAT would not sign the confirmation until Ali Fissa Belkairous, an Algerian national trained by WCC to use the system and employed by SCAT, returned to Saudi Arabia and confirmed the satisfactory operation of the interface called for in the Clarification Agreement.
SCAT, for reasons unknown, never delivered the certification of the computer system's satisfactory performance to the bank. Thereafter, WCC petitioned the district court alleging breach of contract, RICO violations, common law fraud, restitution, tortious interference with contractual relations, breach of fiduciary duty, and conversion. SCAT filed a motion to dismiss and argued that because the equipment had not been certified, the final payment was not yet due, thus, the district court lacked jurisdiction under operation of the Clarification Agreement's forum selection clause (Sec. 5). 3 Section 5 entitled "jurisdiction," states in its entirety "The parties further covenant and agree that from and after the time that all payments due under this agreement have been paid to WCC in full, in any action or proceeding brought by SG or WCC or any party claiming through them, directly or indirectly, and whether or not brought under the Joint Venture Agreement, as well as the agreement of February 22, 1985, or the promissory note or in this agreement or any other agreements relating to the acquisition and installation of the English to Arabic source code, the parties shall and do hereby waive trial by jury and agree that the courts of Saudi Arabia shall have exclusive jurisdiction of any such action or proceeding and that Saudi Arabian law will apply in such action or proceedings."
(Emphasis added.) The defendants' motion to dismiss asserted that the district court lacked personal jurisdiction of the defendants because...
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