Grupo Evya and IECESA Victorious in Global Explorer Lawsuit

Wed, 01/25/2012 - 13:43

Grupo Evya and IECESA hired the vessel Global Explorer DP, owned by Global Enterprises, in August 2005 for maintenance work on subsea pipelines in the Campeche basin. However, after beginning operations in October, the project faced challenging weather conditions. The situation continued for nine months until, in May 2006, the captain of the Global Explorer ordered the ship back to port. According to Javier Camargo Salinas, Director General of Grupo Evya, once back in Veracruz, workers on board were ordered to disembark, whereupon the ship set sail at once for Port Arthur, Texas. Consequently, Grupo Evya and IECESA were unable to meet their contractual obligations to Pemex.

In January 2009, Grupo Evya and IECESA filed a lawsuit in Seattle, Washington against Global Enterprises for breach of contract, unlawful theft of equipment and contractual claims. After a year of litigation, the court ruled in favour of the plaintiffs. It was also revealed during court proceedings that the Global Explorer had been built from the hulks of two ships that in the 1980s had been destined to be sold as scrap; as a result, the vessel’s owner claimed that the Global Explorer was not fit to cope with the harsh weather conditions of the Campeche basin. In January 2010 the final ruling came down. The court, in addition to finding Global Enterprises guilty, decreed that the firm had taken advantage of the situation by expecting the Mexican companies would be unable to effectively take an American corporation to court.

“In the end, the legal system of the United States has a different basis and works very different than the Mexican system. If a small company from the United States had taken someone to court here in Mexico, they wouldn’t have won. Maybe we didn’t gain any money, because we were only able to recover part of the money we lost by breaking our contract with Pemex, but it really was an experience in terms of legal matters for me. Our American counterparts thought that no Mexican company would dare to fight them, but we did it because we knew we were right,” says Juan Carlos del Río González, Director General of IECESA. “I think it’s necessary to enter into a joint venture with a partner in which both parties win and lose equally. Nevertheless, in the end we decided that it’s better to buy the vessel instead of renting it. We prefer to take the risk of making a major investment than facing the risk of losing the vessel.”