NISSHO-IWAI CO. V. OCCIDENTAL CRUDE SALES
729 F.2d 1530 (5th Cir. 1984)
NATURE OF THE CASE: This was a dispute over the delivery of oil.
FACTS: Occidental (D) was under contract to supply Nissho (P) with oil from wells in
Libya and particularly from Concession 102. Moammar Khadafy nationalized 51% of that
concession in 1973. Despite these problems with Libya, D, in October 4, 1973 renegotiated
its contract with P and D agreed to supply 750,000 barrels of oil per month through December
31, 1978. The contract had a force majeure clause and was to be governed by the laws of
California. Problems with the new contract developed in that P failed to take the shipments
on its required oil allotment. Further problems developed when Libya started to change
production quotas almost on a weekly basis. Eventually D refused to pay monies owed to Libya
and Libya placed an embargo on exports. D was unable to perform its contract that month. The
embargo order was lifted in December of 1975 and production was restored to 300,000 barrels
per day. Pipeline breakdowns interfered with the ability of D to deliver and the net result
was that P got no oil during the last four months of 1975 and the first four months of 1976.
The first trial resulted in a mistrial and a second trial was held. D appealed a verdict in
favor of P.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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