This article, “GE, Angola Won't Face Energy Co.'s $1B Forgery Suit In NY” by Melissa Angell, originally appeared in Law360 on May 19, 2021.
A New York federal judge on Wednesday granted bids from General Electric and the Republic of Angola to dismiss a $1.1 billion contract forgery suit, finding that a New York federal venue is not the proper forum for the proceedings and that Angola is an adequate alternative venue.
In a 43-page opinion, U.S. District Judge John P. Cronan ruled that when Angolan energy company Aenergy SA and its subsidiary conducted business in Angola and with the Angolan government, they decided to "subject themselves to Angolan law."
"Courts routinely have little sympathy for plaintiffs — even American plaintiffs — who conduct business in foreign lands and later try to cry foul here," the judge wrote in his opinion.
The suit dates to a relationship between Aenergy and the Angolan government that started in 2017, when the energy company was tapped to build and operate several state-owned power plants. The arrangement was financed through a $1.1 billion credit facility with a General Electric Corp. unit and called for Aenergy to purchase eight GE turbines for the plants. Angola canceled the contracts in 2019, saying Aenergy had tampered with the GE credit facility to buy four more turbines without approval.
In the suit filed last May, Aenergy accused GE of forging documents to smear Aenergy and take over its work. The company additionally accused the Angolan government of going along with the scheme so it could cancel those contracts before full payment and seize the four turbines for itself.
In September, the Angolan government urged the court to push Aenergy's suit to arbitration, arguing the company was bound to arbitration clauses.
Roughly two weeks ago, GE lodged claims via a letter penned by its counsel accusing Aenergy of forum shopping since the Angolan court purportedly has jurisdiction over all the defendants while the New York federal venue does not.
On Wednesday, Judge Cronan agreed that New York is not the right venue for the suit and directed the parties to submit an agreement within 30 days that they will litigate in Angola.
The judge took aim at the plaintiffs' argument that appeared to claim that Angolan courts are corrupt since the Angolan Supreme Court missed procedural deadlines and is "moving too slowly."
But the judge was quick to point out that before Aenergy appealed to the Angolan Supreme Court, its claims were rejected by other Angolan entities.
And because Aenergy did not find success in past Angolan proceedings, the judge indicated that the decision to file the current suit in New York "smacks of forum shopping rather than a genuine pursuit of convenience."
The judge also observed that the energy company filed a brief in the Supreme Court in Angola in March, further casting doubt on its argument that Angola "is an inconvenient forum."
"Why would plaintiffs bother to do any of this if they truly believed that in Angola 'there is no due process of law,'" the judge questioned. "Plaintiffs do not say."
The judge additionally underscored that the limited number of witnesses in New York and that a majority of relevant evidence is in Angola add weight against the energy company's forum choice.
Judge Cronan also considered the expenses at hand, noting that witnesses that don't speak English would require interpreters and translations, which "would be a costly, difficult endeavor."
"The fact that many relevant documents and potential witness testimony would be in Portuguese and thus would require translation weighs 'strongly in favor' of dismissal on forum non conveniens grounds," the judge concluded.
Michael Ehrenstein, an attorney representing the Angolan government, told Law360 on Wednesday that the court "correctly decided that this was an action that should never have been brought in New York."
Counsel for Aenergy and GE did not immediately respond to requests for comment Wednesday.
Aenergy is represented by Vincent Levy, Scott M. Danner, Gregory J. Dubinsky and Brian Goldman of Holwell Shuster & Goldberg LLP.
GE and its affiliates are represented by Orin Snyder, Samuel Liversidge, Anne Champion and Ilissa Samplin of Gibson Dunn & Crutcher LLP.
The Angolan government is represented by Michael Ehrenstein and Brett Sager of EhrensteinSager and Marc R. Rosen and Robert M. Tuchman of Kleinberg Kaplan Wolff & Cohen PC.
The case is Aenergy SA et al. v. Republic of Angola, case number 1:20-cv-03569, in the U.S. District Court for the Southern District of New York.
--Additional reporting by Diamond Naga Siu, Emma Whitford, Elise Hansen and Alyssa Aquino. Editing by Bruce Goldman.
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