Waleed Al-Qarqani, et al. v. Chevron Corporation and Chevron U.S.A., Inc.

At a glance

Parties

Waleed Al-Qarqani and other heirs of Sheikh Abdullah Al-Solaiman Al-Hamdan and Sheikh Khalid Abu Al-Waleed Al-Oarqani (petitioners) v. Chevron Corporation and Chevron U.S.A., Inc. (respondents)

Case no.

No. C 18-03297 JSW

Court

U.S. District Court, Northern District of California

Forum and rules

Petition to confirm a foreign award under the New York Convention and Chapter Two of the Federal Arbitration Act (9 U.S.C. §§ 201-208)

Underlying award(s)

Award of 3 June 2015, issued under the International Arbitration Center (IAC), Cairo, Egypt

Treaty

Arbitration clause in Article 31 of the 1933 Concession Agreement between Saudi Arabia and Standard Oil Company of California

Tribunal

Judge Jeffrey S. White

Sector

Oil concession; land rights

Outcome

Chevron's motion to dismiss granted; the petition to confirm was dismissed (24 September 2019).

Amount

The award was for approximately USD 18 billion. Confirmation was refused.

The dispute

The petitioners are more than 60 heirs of two Saudi sheikhs who say they are beneficiaries and titleholders of land in Saudi Arabia. They obtained an award of about USD 18 billion on 3 June 2015 against several Chevron entities and Aramco. The award was rendered under the International Arbitration Center (IAC) in Cairo, and it ordered payment of rent for Aramco's use of the land from 2005 to 2015 and compensation for the land's value under a 1949 Deed. The petitioners relied on the arbitration clause in the 1933 Concession Agreement between Saudi Arabia and Standard Oil Company of California. They argued that the 1949 Deed incorporated that clause by reference, and they asked the court to confirm the award under the New York Convention. Chevron answered that the proceedings were a sham. In its view there was no agreement to arbitrate, the claims fell outside the clause, the arbitrators were not appointed as the clause required, and the award carried false authentication stamps.

Key holdings

1. No jurisdiction. There was no written agreement to arbitrate between the parties under Article II of the Convention. The only arbitration clause in the record is Article 31 of the 1933 Concession Agreement, which binds only Saudi Arabia and Standard Oil Company of California. The 1949 Deed refers only to Article 25 of that agreement, which is not a clear and unequivocal incorporation of the clause in Article 31. pp. 5-7
2. Chevron U.S.A., Inc. was dismissed on this basis alone, because it was not named as a party in the arbitration. p. 5 n. 1
3. The petitioners did not meet Article IV(1). They filed neither the original English version of the 1933 Agreement, which prevails under its Article 35, nor a duly certified copy of the award. Several versions of the award were in the record, with and without suspect stamps. Because these requirements are mandatory, the court had no power to confirm the award. pp. 7-9
4. Confirmation would in any case be refused under Article V(1)(d). Article 31 provided for ad hoc arbitration with The Hague as the default seat, but the petitioners went to the IAC with Cairo as the seat. The procedure for appointing arbitrators and an umpire was not followed. Chevron's nomination of an arbitrator under protest was not consent. pp. 9-10
5. On 18 May 2015 the presiding arbitrator found that the tribunal lacked jurisdiction, which exhausted the tribunal's authority. A newly constituted tribunal with two new arbitrators issued the award sixteen days later, so the award was outside the submission. The land-rent claims also fell outside the 1933 clause, which concerned hydrocarbon rights. pp. 10-11

Procedural history

1. 3 June 2015The IAC tribunal in Cairo issued an award of about USD 18 billion in favour of the heirs.
2. 1 June 2018The petition to confirm the award was filed in the Northern District of California.
3. 5 August 2018Chevron filed its motion to dismiss and its opposition to the petition.
4. 2 August 2019The Southern District of Texas dismissed a related petition to confirm the same award against Aramco Services Company.
5. 24 September 2019The court granted Chevron's motion and dismissed the petition.

Tribunal, counsel and experts

Decided by

• Jeffrey S. White Judge, U.S. District Court, Northern District of California

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Keywords

• New York Convention
• recognition and enforcement
• Article II agreement in writing
• incorporation by reference
• non-signatory
• Article IV certified copy
• Article V(1)(d)
• composition of arbitral tribunal
• 1933 Concession Agreement
• Saudi Arabia
• Aramco
• Standard Oil Company of California
• International Arbitration Center Cairo
• functus officio
• scope of arbitration agreement
• sham arbitration
• Chevron

Summary generated with AI from the published documents — refer to the award for the authoritative text.