Aenergy, v. GE Capital EFS Fin.

1

AENERGY, S.A., and COMBINED CYCLE POWER PLANT SOYO, S.A., Plaintiffs, v. GE CAPITAL EFS FINANCING, INC., Defendant, and, GENERAL ELECTRIC INTERNATIONAL, INC., Defendant.

Nos. 3:22-cv-1054 (JAM), 3:22-cv-1055 (JAM)

United States District Court, D. Connecticut

July 21, 2023

ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS

Jeffrey Alker Meyer United States District Judge.

Plaintiffs Aenergy, S.A. (“AE”) and Combined Cycle Power Plant Soyo, S.A. (“CCPP”) have filed two related actions against defendants GE Capital EFS Financing, Inc. (“GE Capital”) and General Electric International, Inc. (“GE International”) alleging that the defendants' tortious conduct caused the plaintiffs to lose out on wind- and energy-related projects with the Angolan government to the tune of roughly $1.1 billion.

Both defendants have filed motions to dismiss. They principally argue that the plaintiffs' suits are precluded by a ruling of the Southern District of New York finding that an earlier incarnation of this lawsuit should be dismissed for forum non conveniens. In the alternative, the defendants argue that the case should be dismissed on grounds of forum non conveniens. Although I decline to find that the prior ruling has preclusive effect, I conclude that forum non conveniens requires dismissal of this lawsuit. I will conditionally grant the motions to dismiss subject to the filing of a stipulation by the defendants with respect to the litigation of this case in Angola.

Background

According to the complaints, AE is a shareholder-owned corporation constituted under the laws of the Republic of Angola and headquartered in Portugal.^[1] Ricardo Machado, a Portuguese citizen founded the company in 2012 and owns 99.9% of its stock. See Aenergy, S.A. v. Republic of Angola, 2021 WL 1998725, at *1 (S.D.N.Y. 2021). CCPP is a wholly owned subsidiary of AE, incorporated in Angola with its principal commercial activities undertaken in Angola.^[2]

In 2013 AE began contracting with corporate affiliates of General Electric Co. to purchase GE-made power products and services for energy projects commissioned by the Angolan Ministry of Energy and Water (“MINEA”).^[3] After a number of successful projects AE and GE began discussing a “mega” power deal to market to the Angolan government whereby AE would install and service a series of power-plant facilities in Angola using GE-manufactured technology.^[4] As part of the deal AE agreed to purchase fourteen TM2500s (a gas turbine GE describes as a “power plant on wheels”) from GE for anticipated deployment in Angola.^[5]

AE and GE knew that to finance these energy projects the Angolan government would have to secure an international source of funding.^[6] So in 2017 Jeff Immelt-then-CEO of GE Co.-travelled to Angola to meet with then-President Jose Eduardo Dos Santos of Angola.^[7] The two reached an agreement under which GE Capital would provide $1.1 billion to Angola's finance ministry (“MINFIN”), which Angola would draw up front to prepay AE for the agreed-to energy projects.^[8]

GE Capital and GE Co. approved the $1.1 billion credit facility in late June or early July 2017 based on their assumption that Angola had agreed to purchase at least twelve TM2500s paid for upfront.^[9] The President of Angola similarly approved the financing plan, and then at the end of July 2017 AE and MINEA executed a total of thirteen “On-Sale Contracts” (“OSCs”) in the amount of $1.148 billion.^[10] But the OSCs collectively called for only eight TM2500 turbines-six fewer than the total number AE had agreed to buy from GE and four fewer than GE had anticipated when it approved the financing deal.^[11]

AE promptly sent the signed OSCs to GE.^[12] Machado then explained to Wilson da Costa-who was employed by GE International but represented GE Capital in Angola-that the signed contracts covered only eight turbines.^[13] Unbeknownst to AE however, da Costa then informed his colleagues at GE Co. and GE Capital that the OSCs covered twelve TM2500s and that AE would use its margin on the OSCs to pay for two additional turbines bringing the total back up to the originally agreed-to fourteen turbines.^[14]

In August 2017 representatives from AE and GE Capital met to begin planning for the financing disbursement.^[15] The GE participants were surprised to learn that the existing OSCs called only for eight turbines, while AE was surprised to learn that GE expected to be paid for fourteen turbines.^[16] To resolve the discrepancy AE agreed to use its “best efforts” to amend its contracts with Angola to add six turbines to the existing OSCs without increasing the overall cost.^[17] When AE explained that Angola could only formally amend the OSCs via a presidential decree, GE responded that it could rely on “technical letters” to confirm the addition of the first four turbines as long as those letters met certain wording requirements.^[18]

AE subsequently asked MINEA to sign amendment letters adding two additional turbines to OSCs 7 and 11 using the language requested by GE.^[19] Angola responded, not with a firm commitment but with conditional intent letters stating their agencies would consider purchasing four additional turbines subject to technical analyses and legal review.^[20] The intent letters were provided to da Costa, who told Machado that he would transmit them to relevant individuals at GE.^[21]

Unbeknownst to AE, after receiving the documents from Angola, unspecified “GE employees” used Photoshop to edit the letters to reflect the language GE wanted.^[22] Then on the evening of October 12, “from the safety and secrecy of his home in Luanda,” da Costa took photos of the forged letters and emailed those photos to various GE employees, passing them off as the real documents.^[23] In his email attaching the forged letters, da Costa reported that “[w]e got the contract number 7 signed with the languages that we agreed on and countersigned by AE. We then . . . got contract number 11 amendment signed with the language approved by Brad [Galvin of GE Capital] and then counter signed by AE.”^[24] Leslie Nelson, da Costa's then-supervisor at GE International, also assured another GE executive a few days later that the critical amendments had been obtained from MINEA.^[25]

With all parties under the impression that the problem had been resolved, Angola finally drew its initial disbursement from the GE Credit Facility in December 2017.^[26] The request referenced specific AE invoices that MINEA was paying for with the disbursement and reflected that the money was going towards only eight TM2500s.^[27] Executives at GE Capital and GE Co. approved the payment.^[28] GE Capital then finalized GE's internal allocation of the disbursement, applying the money towards twelve of the fourteen turbines, as well as towards partial payment on turbines thirteen and fourteen, seemingly without reference to the invoices attached to the disbursement request.^[29] GE then shipped the rest of the turbines to Angola.^[30]

Work proceeded under the contracts.^[31] In December 2018, MINEA, MINFIN, AE, and da Costa met to discuss the possibility of Angola amending its OSCs to purchase four extra turbines (on top of the eight they thought they had already bought).^[32] Da Costa objected, stating that MINEA had already purchased twelve turbines when it made the initial withdrawal in December 2017, and AE was therefore trying to double charge Angola for the turbines.^[33] Da Costa then showed Angola's representatives digital copies of the forged October 12 letters, which showed that Angola had already committed to binding amendments to add four turbines to the existing OSCs.^[34] But MINEA confirmed against its own files that da Costa's version of the letters had been altered and demanded that AE and GE clarify their positions.^[35]

A few weeks later da Costa and his new supervisor Elisee Sezan met again with MINEA representatives, and they explained that according to GE's records Angola had already paid AE for twelve turbines.^[36] Representatives of GE Capital met separately with AE to explain that according to the documentation GE received, the disbursement in 2017 permitted funding for twelve turbines, not eight.^[37] When AE asked to see the documents in question, the GE participants declined to produce them.^[38]

Despite AE's attempts to clarify the situation, MINEA alerted AE that due to irregularities with the GE Capital financing line it intended to terminate the OSCs and transfer the contracts to GE.^[39] After confirming that GE could execute the work contemplated in the AE-MINEA contracts, MINEA formally terminated the OSCs with AE on September 2.^[40] It pointed to “purported but unspecified irregularities by AE related to the acquisition of 4 Turbines under the credit line made available by GE Capital.”^[41] MINEA also explained that it was seizing additional turbines AE had acquired from GE and which were still awaiting a project.^[42]

At around this time Angola also terminated another project it had awarded to CCPP at the Soyo II power plant in the Zaire province of Angola.^[43] The MINEA letter terminating the Soyo II concessions cited the same documentation irregularities the agency had invoked in support of its decision to terminate the OSCs.^[44]

On May 7, 2020, plaintiffs AE and CCPP filed an action in the Southern District of New York against GE Co., GE International, GE Capital, the Republic of Angola, MINEA, MINFIN, PRODEL, and ENDE (Angola's state-owned power companies). See Aenergy, 2021 WL 1998725, at *7. The complaint asserted four counts against the GE defendants for tortious interference with contract, tortious interference with prospective business relations, an accounting claim, and an aiding and abetting claim. Ibid.

Judge Cronan...