Opinion ID: 215200
Heading Depth: 3
Heading Rank: 1

Heading: Parties and Contracts

Text: Plaintiff-appellee Validsa, Inc. (“Validsa”) is a Florida corporation that operates as an international food commodities trader. Defendant-appellant Bariven is a wholly-owned subsidiary of Petróleos de Venezuela, S.A. (“PDVSA”), Venezuela’s national oil company. Defendant-appellant PSI is a Delaware corporation that is a wholly-owned subsidiary of Bariven, and acts as Bariven’s purchasing agent.1 In response to Venezuela’s food shortage, in November 2007 PDVSA tasked Bariven with purchasing large amounts of foodstuffs on the international market. Bariven, in turn, had PSI perform many of the subsidiary tasks required in acquiring those large amounts of food. As part of this process, PSI accepted bids for delivery of certain foodstuffs. Validsa submitted the lowest bids for several of 1 PSI is a wholly-owned subsidiary of Bariven, which is in turn an agency and instrumentality of the Bolivarian Republic of Venezuela and is itself a wholly-owned subsidiary of PDVSA. 3 the purchases, and PSI, on behalf of Bariven, then submitted purchase orders to Validsa; those purchase orders became the basis for the contracts at issue here. In November 2007, PSI and Bariven awarded eight contracts worth a total of roughly $66 million to Validsa. Three of those November contracts, Nos. 326, for beef; 368, for chicken; and 405, for beef, were at issue in the district court. Like all of the contracts, these November 2007 contracts identified the purchasing party as: BARIVEN, S.A. c/o PDVSA Services, Inc. Purchasing Agent (BU00) 1293 Eldridge Parkway Houston, Texas 77077 United States of America Each of the contracts also directed Validsa to send invoices to “BARIVEN, S.A. c/o PDVSA Services, Inc.” Validsa submitted its invoices to “BARIVEN, S.A. c/o PDVSA Services, Inc.” Subsequently, in March 2008, PSI and Bariven awarded Validsa two more contracts: No. 632, which called for the delivery of 100,000 metric tons of sugar at $446.92 per ton, for a total price of $44,692,000, of which 30% ($13,407,600) was paid in advance by Bariven; and No. 757, which called for the delivery of 24,000 metric tons of beef at $4,329.58 per ton, for a total price of $103,929,920, of 4 which 30% ($31,172,976) Bariven also paid in advance. Thus, between these two March 2008 contracts, PSI and Bariven made approximately $44.580 million in advances to Validsa on total purchases of nearly $150 million. Validsa was obligated to have insurance companies issue performance bonds in favor of PSI to secure the advance payments in the event that Validsa breached contract 632 or 757. Under the contracts, the 30% advances were to be drawn down over time. Due to the size of the March 2008 contracts (632 and 757), the goods contemplated by the contracts were to be delivered in installments, and Bariven was to pay 70% of the price of the installment within a certain period after each delivery. The advances, therefore, constituted the other 30% of the payment for each installment. Thus, the advances would not be fully drawn down until the last installment was delivered and paid for. In general, Validsa and other suppliers would provide PSI with delivery schedules known as “cronogramas,” indicating when and how future deliveries would take place. The delivery schedules would occasionally change over time for reasons such as vessel availability, container availability, capacity at ports of call, production capacity, and inspections. To comply with its obligations under these contracts, Validsa entered into relationships with two suppliers. It agreed to pay Pacific Atlantic Trading 5 Company $29,500,000 for the purchase of 100,000 metric tons of sugar, and to pay Quatro Marcos Ltd. $87,600,000 for 24,000 metric tons of beef.