UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
DRESSER-RAND COMPANY,
Plaintiff,
–against–
PETRÓLEOS DE VENEZUELA, S.A.,
Defendant.
19 Civ. 2689 (LLS)
OPINION AND JUDGMENT
INTRODUCTION
In January 2017, Plaintiff Dresser Rand Company ("D-R") and Defendant Petroleos de Venezuela, S.A. ("PDVSA") entered into a Note and Note Agreement documenting PDVSA's borrowings of approximately $120 million from D-R, and PDVSA's duty to make installment payments of principal and interest until the debt was repaid in January 2020 (the "repayment period").
On October 20, 2017, PDVSA did not make the scheduled third interest payment. Nor did it make any of the succeeding payments required by the Note Agreement.
This case presents the sole question of whether the doctrine of impossibility discharged PDVSA from performing those contractual obligations.
For the reasons that follow, after a three-day bench trial it...
1) Dresser-Rand Company v. Petroleos De Venezuela, S.A.was not a litigation involving OFAC, but the district court’s dispositive opinion is notable as the case turned on the precise meaning of an OFAC-issued FAQ.
As relayed in the opinion, the case deals primarily with the meaning of the term “new debt,” as that term appears in section 1(a)(i) of EO 13808 in the context of a prohibition against dealings in “new debt” of PDVSA, and OFAC’s FAQ # 553, which provides as follows:
OFAC does not consider debt that was created prior to August 25, 2017 to be "new debt" for purposes of E.O. 13808 so long as the terms of the debt instrument (including, for example, the length of the repayment period or any interest rate applied) agreed to by the parties do not change on or after...