Keppel Offshore & Marine Ltd. Wins Summary Judgment Dismissing Fraud Claims
March 21, 2024
On March 20, 2024, the U.S. District Court for the Southern District of New York granted summary judgment in favor of Cravath client Keppel Offshore & Marine Ltd. (“KOM”), dismissing an action alleging claims for fraud, aiding and abetting fraud and conspiracy. Plaintiffs, a set of energy and investment funds managed by EIG Management Company, LLC (collectively, “EIG”) claimed that KOM failed to disclose that it was engaged in a bribery scheme with Petróleo Brasileiro S.A. (“Petrobras”), the Brazilian oil company, and with a company under Petrobras’s control, Sete Brasil Participações, S.A. (“Sete”). According to EIG, this failure to disclose caused EIG to invest over $220 million in Sete, defrauding EIG.
The Court agreed with KOM that summary judgment was warranted on two independent bases. First, it held that there was no evidence that KOM had actual knowledge that Petrobras and Sete were defrauding EIG or concealing any corruption from EIG. Second, the Court held there was no evidence that KOM substantially assisted any fraud perpetrated on EIG. In so doing, the Court considered and rejected EIG’s arguments that KOM made fraudulent misstatements, that KOM should be held liable based on the purportedly interdependent nature of the larger bribery schemes and that particular actions taken by KOM, such as tours of its shipyards and formation of consulting agreements, constituted concealment. The court concluded no reasonable juror could find that KOM’s acts evidenced knowledge or substantial assistance of Petrobras and Sete’s scheme to defraud EIG and entered judgment in favor of KOM.
The Cravath team included partners Peter T. Barbur and Rachel G. Skaistis and associate Gaia L. Mattiace.
The case is EIG Energy Fund XIV, L.P. et al. v. Keppel Offshore & Marine, No. 18‑cv‑1047 (S.D.N.Y).
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J.D., 1987, New York University School of LawOrder of the Coif, Root-Tilden Scholar, cum laude
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