Trial Victory for Oil Storage Terminal Operator over Petrochemical Giant

The firm achieved a victory for oil storage facility operator Limetree Bay Terminals in an arbitration against its anchor customer, Unipec America, Inc., a subsidiary of Chinese state-owned petrochemical conglomerate Sinopec, over Unipec’s withholding of millions of dollars of past-due amounts and Unipec’s attempt to terminate the parties’ long-term storage tank lease agreement with years remaining on the lease.

Quinn Emanuel filed for arbitration in September 2020 seeking recoupment of monthly storage fees withheld since October 2019. The stakes for the client increased substantially when Unipec counterclaimed in October 2020, seeking to terminate the parties’ contract, a ten-year agreement worth approximately $50 million per year, the most valuable contract to the company.

After an eight-day hearing in New York in March 2022, the arbitration tribunal issued its Final Award in September 2022. The tribunal agreed with Quinn Emanuel that Limetree Bay Terminals had not materially breached the parties’ agreement, and therefore Unipec could not terminate the agreement. The tribunal went further, however, also agreeing that under New York law, the “election of remedies” doctrine prevented Unipec from terminating the contract even if Limetree Bay Terminals had materially breached, because Unipec had accepted “the very substantial benefits” of Limetree Bay Terminals’ performance under the agreement by continuing to use the facility after the alleged breaches arose. Quinn Emanuel further succeeded in securing over $20 million in damages for the withheld storage fees the firm originally filed for arbitration to collect.