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Adani Exports Ltd. v. AMCI Export Corp.

December 4, 2007

ADANI EXPORTS LIMITED, PLAINTIFF,
v.
AMCI EXPORT CORPORATION, AMERICAN METALS & COAL INTERNATIONAL, INC., K-M INVESTMENT CORPORATION, FRITZ R. KUNDREN, HANS J. MENDE, ERNIE THRASHER, XCOAL ENERGY & RESOURCES AND XCOAL ENERGY & RESOURCES, LLC, DEFENDANTS.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM OPINION AND ORDER OF COURT

Before the Court for disposition are PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (Document No. 128), Plaintiff's Brief in Support of Motion for Summary Judgment (Document No. 130), DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (Document No. 131), Defendant's Memorandum of Law in Support of Motion for Summary Judgment (Document No. 132), Defendant's Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment (Document No. 135), PLAINTIFF'S MOTION TO STRIKE THE AFFIDAVIT OF COLIN GUBBINS (Document No. 137), Plaintiff's Brief in Support of Motion to Strike the Affidavit of Colin Gubbins (Document No. 138), PLAINTIFF'S MOTION TO STRIKE OPINION TESTIMONY OF SYED KAZIM (Document No. 139), Plaintiff's Brief in Support of Motion to Strike Opinion Testimony of Syed Kazim (Document No. 140), Plaintiff's Brief in Opposition to Defendant's Motion for Summary Judgment (Document No. 141), Plaintiff's Reply Brief in Support of Motion for Summary Judgment (Document No. 146), Defendant's Reply Brief in Support of Motion for Summary Judgment (Document No. 147), Defendant's Response in Opposition to Plaintiff's Motion to Strike Opinion Testimony of Syed Kazim (Document No. 150), Defendant's Response in Opposition to Plaintiff's Motion to Strike the Affidavit of Colin Gubbins (Document No. 151), PLAINTIFF'S MOTION TO STRIKE DEFENDANT'S SUPPLEMENTAL CONCISE STATEMENT OF MATERIAL FACTS (Document No. 152), Plaintiff's Reply Brief in Support of Motion to Strike Opinion Testimony of Syed Kazim (Document No. 153), Plaintiff's Reply Brief in Support of Motion to Strike the Affidavit of Colin Gubbins (Document No. 154), and Defendant's Response in Opposition to Plaintiff's Motion to Strike Defendant's Supplemental Concise Statement of Material Facts (Document No. 155). For the reasons that follow, all five pending motions will be denied. The motions for summary judgment will be denied because a genuine issue of material fact exists as to whether a contract was formed, the motion to strike the opinion testimony of Syed Kazim will be denied because it is without merit, and the motions to strike the affidavit of Colin Gubbins and the supplemental concise statement of material facts will be denied because they are moot.

Background

Plaintiff Adani Exports Limited ("Adani") is a public limited company incorporated under the laws of the Republic of India. Doc. Nos. 129 & 136, ¶ 1. Adani's shares are traded on the Mumbai Exchange, the Ahmedabad Exchange and the National Stock Exchange of India.

Id., ¶ 2. Adani maintains its headquarters in Ahmedabad, India. Id., ¶ 3. It also has offices in Mumbai and New Delhi, both of which are in India. Id. Adani is a global trader of commodities. Id., ¶ 4. As a result of a name change, Adani is formally known as Adani Enterprises Limited.

Id., ¶ 5.

Adani's Energy and Mineral Division imports coal into India for the purpose of selling it to a variety of Indian customers. Id., ¶ 6. Pradeep Mittal ("Mittal") became the President of Adani's Energy and Mineral Division in 1998. Id., ¶ 7. He became the Chief Executive Officer ("CEO") in 2003. Id. As both the President and the CEO of the Energy and Mineral Division, Mittal is responsible for its day-to-day management and oversight. Id., ¶ 8. Vinay Prakash Goel ("Goel") became a Senior Manager of the Energy and Mineral Division in 2001. Id., ¶ 9. Although he has since become a General Manager, his duties have remained essentially the same. Id., ¶ 10. His responsibilities include arranging operations and logistics for coal contracts and assisting Mittal in both the sourcing and marketing of coal. Id., ¶ 11. Goel has negotiated contracts on behalf of Adani. Id., ¶ 12.

Adani Global FZE is a limited liability company registered under the Jebel Ali Free Zone under the laws of Dubai. Id., ¶ 13. Dubai is one of the United Arab Emirates. Id. Adani Global FZE is a wholly owned subsidiary of Adani Global Limited, Mauritius, which is itself a wholly owned subsidiary of Adani. Id., ¶ 14. Adani Global PTE is a limited liability company organized under the laws of Singapore. Id., ¶ 16. It is also a wholly owned subsidiary of Adani Global Limited. Id., ¶ 17. Defendant AMCI Export Corporation ("AMCI Export") is a global trader of coal. Id., ¶ 20. AMCI Export maintains its headquarters in Latrobe, Pennsylvania. Id. Ernie Thrasher ("Thrasher") has served as the President of AMCI Export since 1997. Id., ¶ 25.

Syed Kazim ("Kazim") is a citizen of India. Id., ¶ 26. In 1988, he graduated from Loyola College in Chennai, India. Id., ¶ 27. He later earned a Masters in Business Administration ("MBA") in International Management from Aligarh University in Aligarh, India, and a Masters in Business Economics ("MBE") from King Fahd University of Petroleum and Minerals Dhahran. Id. In 1994, Kazim began trading coal for the Emirates Trading Agency ("ETA") in Dubai. Id., ¶ 28. He left the ETA to trade coal for Masefield, a trading firm, from a base in Singapore. Id., ¶ 29.

Thrasher and Kazim met in Hong Kong during the latter part of 1999. Id., ¶ 30. Kazim was apparently designated to be AMCI Export's agent in India. Id., ¶ 31. After the meeting, Kazim formed an Indian company named AMCI India Pvt. ("AMCI India"). Id., ¶ 32. On February 1, 2000, AMCI Export and AMCI India executed an agreement known as the "Agency Agreement." Id., ¶ 33. AMCI Export's business in India was conducted through AMCI India. Id., ¶ 35. AMCI India was apparently paid around $20,000.00 per month by AMCI Export for its services. Id., ¶ 36. Throughout the course of the agency, Kazim made sales calls and offers to sell coal only in consultation with AMCI Export. Id., ¶ 37. Kazim never made an offer for the sale of coal on behalf of AMCI Export without first obtaining AMCI Export's authorization. Id., ¶ 38. Thrasher is not aware of any instances in which AMCI India offered to sell coal on behalf of AMCI Export in the absence of AMCI Export's prior approval. Id., ¶ 39. Syed Matheen ("Matheen") participated in some of the operational aspects of AMCI India's business, including the coordination of vessels and letters of credit and the documentation of coal shipments. Id., ¶ 40.

On December 5, 2003, Goel sent Kazim an email requesting a "formal offer" for the supply of coal. Id., ¶ 41. Kazim responded via email on December 10, 2003, purporting to submit an "offer" for Adani's "kind acceptance." Doc. No. 129-2, p. 10. The coal being offered to Adani by AMCI Export was apparently being offered so that Adani could resell it to Maharashtra State Electricity Board ("MSEB") and/or Gujuarat Narmada Valley Fertilizer Company Ltd. ("GNFC"). Doc. Nos. 129 & 136, ¶ 42. Thrasher was aware of, and authorized, AMCI India's communication with Adani. Id., ¶ 45. The communication proposed AMCI Export's sale of 65,000 metric ton shipments of steam coal spread evenly between the months of January 2004 and June 2004. Doc. No. 129-2, p. 16. Two optional shipments were also included. Id. A memorandum from Kazim to Mittal stated, in pertinent part, as follows:

We have offered coal of both Chinese and Australian origins. AMCI would back the offered tonnage ex-Australia for its reliable supply & superior quality. However if the MSEB and/or GNFC business is awarded to Adani Exports Ltd (AEL), a portion or all the tonnage could be substituted from China, in AMCI's discretion, subject to the coal with right quality & at right price being available.

If the switchover to China is successful, then the CFR price differential between China & Australia will be split equally between AMCI & AEL.

***

AMCI reserves the exclusive option/right to supply steam coal of either Australian or Chinese origin. Ocean freight will be worked by both AMCI & AEL. The cheaper offer will be taken into consideration for each shipment.

***

All other terms shall be mutually agreed. We look forward to your valuable association for this business & thank your good self for the opportunity. Kindly acknowledge receipt of our offer.

Id., pp. 16-18. The memorandum further stated that it was valid until December 20, 2003. Id., p.

18. A copy was sent to Thrasher. Id., p. 16.

Goel responded to Kazim's email on December 10, 2003. Id., p. 13. He indicated that he needed a support letter for GNFC. Id. Kazim forwarded Goel's response to Matheen the next day, accompanied by the notation, "Pls arrange for the supporting letter on priority." Id. A Namoi Mining Pty. Ltd. support letter dated December 10, 2003, and signed by Darlene Miller ("Miller"), was provided. Id., p. 20.

Mittal and Kazim apparently discussed the possibility that the validity of the offer could be extended until January 11, 2004. In an email to Kazim dated December 14, 2003, Goel stated:

This has reference to the discussion you had with Mr. Pradeep Mittal. As discussed the validity of your offer is till 11th January 2004.

Id., p. 23. That same day, Kazim responded via an email to Goel, stating:

We confirm the extension. However, it is mutually understood & agreed by Mr. Mittal that Adani Exports will stand by AMCI prices & all commercial terms, through the offer & delivery period.

Id. Kazim confirmed the extension in a handwritten notation dated December 16, 2003, which was written at the bottom of the original communication proposing the sale. Id., p. 18.

Goel emailed Kazim on January 6, 2004, seeking a further extension of the offer until January 31, 2004. Id., p. 22. The reason given for this request was that MSEB and GNFC were taking more time to finalize their orders. Id. One day later, Kazim responded by informing Goel and Mittal that the validity of the offer could not be extended further without a revision of the price. Id. Kazim and Mittal apparently had a meeting at an AMCI India office on January 9, 2004. On January 10, 2004, Kazim sent a memorandum to Mittal. Id., p. 26. A copy of the memorandum went to Thrasher. Id. It stated as follows:

Subject-Supply of steam coal to MSEB/GNFC

We refer to our offer dated December 10, 2003 & your subsequent visit to our office yesterday. Further with reference to our telecon of this morning & at your request, we acknowledge in writing your confirmation of purchase as per all the terms/conditions stated in our offer of December 10, 2003.

The following must be kindly noted, in line with our offer:

1. AMCI retains the right to supply coal of either Chinese or Australian origins

2. AMCI will approach the freight market to assess the freights between China & India versus Australia & India, in order to estimate the freight differential.

Id. Mittal responded with a memorandum to Kazim dated January 11, 2004, in which he stated:

This has reference to your fax message dated 10th January 2004.

We also hereby confirm 4 vessels of 65,000 MT 10% each towards your offer dated 10th December 2003.

As regard to freight, the same can be finalised latest by Wednesday, 14th January 2004.

Id., p. 28.

Mittal and Kazim apparently spoke on January 13, 2004. Id., p. 30. The next day, Mittal sent Kazim an email stating, in pertinent part, "As discussed, please confirm that your offer stands valid till 31st January, 2004." Id., p. 30. On January 16, 2004, Kazim sent Goel an email stating that freight would be fixed on a "shipment to shipment" basis, since both companies could save "substantial monies" if Chinese coal were to become available. Id., p. 33.

Kazim sent an email to Mittal dated January 17, 2004, which stated as follows: We agree to the extension. However, as discussed all terms & conditions from our offer of December 10, 2003 remain strictly unchanged.

Id., p. 30. Goel sent Kazim an email on January 20, 2004, in which he stated:

Thanks for extension of your offer extension till 31.01.2004.

We agree with you that supply of Chinese coal by you can give us also a savings but please be informed that option of supplying coal from either China or Australia is with U only. In finalizing freight on vessel to vessel, we may lend up loosing if U opt to give us all Australian vessel as we are finding difference of more than 3-4 USD PMT between COA and spot vessels and also it will disturb our delivery schedules.

Also we need to have clarity to plan our discharge port laycan to inform to our customers in advance.

So in any case, we need to firm up before 31.01.2004 that how many vessels are going to be from Australia and how many from China and at what rates.

Id., p. 32. Kazim responded the next day with an email informing Goel that AMCI Export could not give up its right to supply coal from either origin on a "shipment to shipment" basis. Id.

On January 29, 2004, Mittal sent the following letter to Kazim: This has reference to your offer dated 10th December 2003, which was further extended to 31st January 2004, your confirmation dated 10th January 2004, our confirmation dtd. 11th January 2004 and subsequent e-mail message dated 16th January 2004. We once again confirm to purchase four (4) firm & two (2) optional vessels between February-July 2004 as per your offer.

We also confirm to finalise the freight on shipment to shipment basis as suggested by you vide your e-mail message dated 16/1/2004, though it will be a costly affair for us.

We have already nominated vessel MV FILLIP LEMBO OR SUB on yesterday AM for which we request you to kindly send us your confirmation on immediate basis.

Id., p. 43. Kazim forwarded Mittal's letter to Thrasher, with handwritten notations reading "Pls refer our email exchange of today" and "2 optional cargoes in AMCI's discretion, which we cancelled." Id.

While all of this was going on, the parties were engaged in discussions about freight. On January 22, 2004, Kazim sent the following email message to Thrasher:

Mr. Mittal & Mr. Rajesh Adani have confirmed offtake of 4 cargoes & are seeking to conclude a COA with a vessel owner.

I have asked them to follow the offer strictly wherein we retain the right nominate "origin on a shipment to shipment"basis--this has become a major irritant for them, in a rising freight market.

Id., p. 36. On January 28, 2004, Goel sent Kazim a letter purporting to nominate a vessel "for performance ...


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