Law 360: Saudi Co. Wants 11th Circ. To Revive Oil Suit Against Siemens

Miami (April 1, 2025, 10:37 PM EDT) — A Saudi Arabian company on Tuesday urged the Eleventh Circuit to reverse the dismissal of its business interference complaint against Siemens Energy Inc., arguing a lower Florida federal court should allow the lawsuit to proceed and resolve the alleged factual claims.

Al Rushaid Petroleum Investment Co. and Al Rushaid Trading Co. told a three-judge panel during oral arguments in Miami that its tortious interference lawsuit should be reinstated because the lower court didn’t consider the facts surrounding Siemens’ acquisition of the Dresser-Rand Group and interference with a joint venture DRG had with Al Rushaid.

“The district court erred in dismissing plaintiffs’ tortious interference claims on the grounds that the defendant was not a stranger to the relevant agreements,” said Paul C. Kingsbery of Calcagni & Kanefsky LLP, representing Al Rushaid. “Under Florida law, an owner of a company may be a stranger to the contracts of its subsidiary when those contracts were entered into before an acquisition and here the district court held, as a matter of law, that the plaintiffs had failed to allege a tortious interference claim [on that basis].”

In December 2021, Al Rushaid filed suit in the Middle District of Florida alleging after Siemens acquired DRG, which manufacturers compressors and other equipment used to extract oil, it began interfering with a $55 billion joint venture between DRG and Al Rushaid and sidelined Al Rushaid.

The joint venture — to build a state-of-the-art facility to fulfill equipment purchase orders for Saudi Arabia’s state-owned oil company, Saudi Aramco — came as a result of long-term contract that “promised to yield hundreds of millions in equipment sales and even more in ongoing service and maintenance revenue.”

Al Rushaid helped forge that contract between DRG and Saudi Arabia’s state-owned oil company, Saudi Aramco, according to the suit. Saudi Aramco had insisted on the joint venture to help fulfill its contract with DRG, the suit said.

The lower court in September 2023 ultimately ruled to dismiss the first amended complaint against Siemens without prejudice and ordered the case be administratively closed.

U.S. Circuit Judge Kevin C. Newsom told Kingsbery on Tuesday that Florida state and federal laws say a parent company “typically is not a stranger to its subsidiary’s agreements.”

“Even minor, more minor ownership interests wouldn’t render someone a stranger, but your point is well, you were a stranger at the time the agreement was inked,” Judge Newsom said. “I don’t really think I understand why that would be the rule. That seems really weird to me.”

U.S. Circuit Judge Robin S. Rosenbaum asked Kingsbery, “What is it about this complaint that you think takes it out of the nonstranger category?”

Kingsbery referred to the 1998 Florida Supreme Court ruling in Gossard v. Adia Services Inc . regarding tortious interference claims against parent corporations. The ruling established there could be evidence of a tortious interference case against a parent company provided the existence of a business relationship is known by the defendant, which intentionally and unjustifiably interfered with the relationship, and caused damage as a result of the interference.

“There’s no way to square defendant’s argument that there’s a per se rule that a parent is privileged to interfere with its subsidiaries’ contracts with that case,” Kingsbery said, referring to the Gossard case as the “authoritative statement of Florida on tortious interference.”

Judge Newsom questioned Brendan D. Cook of Baker McKenzie, counsel for Siemens, on Siemens’ alleged misrepresentation to Saudi Aramco that Al Rushaid was still involved in the joint venture — when Al Rushaid claimed it was excluded by Siemens.

Cook said the claim is essentially a fraud claim, but he called the allegation vague because he said crucial elements are missing, such as when the misrepresentation occurred.

“I don’t think we can really tell who and I don’t think we can tell when, and I would submit to the court that even the what is vague, general and conclusory, if you will,” Cook said. “When is important because it begs the question then of what entity was involved.”

U.S. Circuit Judge Stanley Marcus asked Cook if the Al Rushaid entities are free to go back and replead the complaint.

“I would suggest that ship has sailed,” Cook said. “They’ve had that opportunity and at least from the current procedural standpoint, I would submit that the door has been shut, and they would not be free to replead it.”

U.S. Circuit Judges Robin S. Rosenbaum, Stanley Marcus and Kevin C. Newsom sat on the panel for the Eleventh Circuit.

Al Rushaid Petroleum Investment Co. and Al Rushaid Trading Co. are represented by Paul C. Kingsbery, Eric T. Kanefsky and Kevin Musiakiewicz of Calcagni & Kanefsky LLP, and Ronald D. Edwards Jr. of Lowndes.

Siemens is represented by Brendan D. Cook, Courtney Giles and Jodi A. Avila of Baker McKenzie.

The case is Al Rushaid Petroleum Investment Co. et al. v. Siemens Energy Inc., case number 23-13297, in the U.S. Court of Appeals for the Eleventh Circuit.

By David Minsky

–Additional reporting by Michelle Casady. Editing by Lakshna Mehta.

Article source here: Law 360