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Enron Mail |
FYI. Jim
-----Original Message----- From: =09Browning, Mary Nell =20 Sent:=09Thursday, April 05, 2001 8:51 AM To:=09Derrick Jr., James Subject:=09RE: CATS litigation Jim, I cannot thank you enough for those incredibly kind words. It will t= ake a bit of time for my frustration to subside, but in the meantime we mus= t carry on. I am arranging a meeting with Jonathan to see if he can shed s= ome light on this strange opinion and on why we were denied our costs on th= e restitution point. He may not be available until after Easter. I have s= poken to Laurence who describes the opinion as pathetic. Perhaps even more= interesting and somewhat troubling is the fact that it was actually Pollac= k who said to Laurence that Enron had been "stitched up" by the Lords and t= hat the opinion was a joke. I do not want to sound like a sore loser, but = it does make one think this is a bit of a kangaroo court if the winning cou= nsel says the result is a joke. Anyway, it is not a very funny one. In al= l seriousness perhaps we should consider whether we ought to modify our pol= icy permitting submitting to the exclusive jurisdiction of the English cour= ts. I realize they have not historically honored the non-exclusive jurisdi= ction clauses, but at least it might give us a fighting chance to go to a m= ore neutral venue like Switzerland. Anyway, give it some thought. I will = let you know as soon as I have been able to speak with Jonathan. Again, ma= ny thanks for your wonderful support every step of the way. From:=09James Derrick/ENRON@enronXgate on 04/04/2001 17:16 CDT To:=09Mary Nell Browning/LON/ECT@ECT cc:=09=20 Subject:=09RE: CATS litigation Mary Nell, no one could have worked harder or better than you in the effort= to bring about a just decision in this matter. Thank you for your tireles= s efforts--I am proud to serve on the Enron team with you. All the best. Ji= m -----Original Message----- From: =09Browning, Mary Nell =20 Sent:=09Wednesday, April 04, 2001 1:59 PM To:=09Derrick Jr., James; Brown, Michael; Sherriff, John; Evans, Mark; Dyso= n, Fernley; Chivers, Paul; Frevert, Mark; Whalley, Greg; McConnell, Mike; G= entle, Jackie; Sanders, Richard; Wright, Claire; Patel - Tax, Raj; Rogers, = Rex Cc:=09Harper, Richard; Turner, Paul; Crilly, Peter Subject:=09CATS litigation Disappointingly, the House of Lords ruled 5 - 0 against Enron in the CATS l= itigation today. This will mean that we will repay to the CATS parties app= roximately $150 million plus interest and court costs, putting the final fi= gure at an estimated $155-160 million. We expect to be invoiced for the pr= incipal amount in the next week or so; sorting costs and interest may take = as long as 60 days. The written opinion reflects a determination on the pa= rt of the Lords to rule against us regardless of what the contract says. T= he opinion seeks to conclude "what rational businessmen could have intended= " rather than applying the provisions of the contract. =20 For example, Lord Hoffman (author of the primary opinion) makes it clear th= at the "retrospective consequences" of discovering a latent defect after p= ayments have been made (and would therefore need to be refunded) are unacce= ptable. His view seems to be that because we were not ready to flow J-Bloc= k gas during the period of the T-6 leak, we are not damaged and therefore n= ot entitled to relief under the contract. Furthermore, he says that the Co= mmencement Date notice sent by the CATS parties was in the nature of a decl= aration and as long as it is sent in good faith it is effective. As far as the price reduction formula in Clause 7.5, Lord Hoffman opines th= at the clause is not operative until TGTL had tied in the J-Block field. T= he contract makes no reference to this requirement. Hoffman's view is that= it is only upon tie-in that the CATS parties' obligation to provide the Tr= ansportation Service is triggered and therefore there can be no price reduc= tion for not providing the service unless tie-in is complete. This statemen= t is in stark contrast with Hoffman's earlier statement in the opinion that= upon the giving of the Commencement Date notice the CATS parties have an a= bsolute obligation to provide the Transportation Service. Equally disappointing and surprising is the fact that the Lords rejected ou= r submission for reimbursement of our costs incurred in connection with the= restitution issue. As you may recall, restitution was the primary issue u= pon which the CATS parties obtained leave to appeal, and they conceded the = point at the commencement of the hearing. Reimbursement of these costs sho= uld have been a given.=20 Although I have not yet been able to speak to our most senior barrister, ou= r other counsel have assessed the opinion as "appalling" and "pathetic," an= d describe the situation as one where Enron has been "stitched up". Unfort= unately, given that this is the court of last resort in this country (excep= t of course the Court of Human Rights), there is not an avenue for recourse= . In conclusion may I say that although we did not get the result we wanted o= r expected from the House of Lords, I very much appreciate all the support = from each of you for these past six years. The case has been a roller coas= ter ride; I hope our earlier victory in the Court of Appeal will evidence = in fact that some tribunals in this country recognize that we did get it ri= ght.=20 Please call me if you wish to discuss the case in any further detail, or if= you wish to have a copy of the opinion. My telephone number is 011 44 207= 783 6582. Many thanks.
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