08 / 2010

DEVELOPMENT OF THE LITIGATION

DEVELOPMENT OF THE LITIGATION BETWEEN SOME ENTITIES OF THE PETROBRAS AND TRANSCOR ASTRA GROUPS

In March 2010, the United States District Court for the Southern District of Texas (Houston Division) issued an order confirming the award issued in April 2009 by an Arbitration Panel ruling on the dispute between certain entities of the PETROBRAS Group and the TRANSCOR ASTRA Group in relation to the Pasadena refinery, and the related trading company. At the time, the court rejected the argument by PETROBRAS that the court did not have jurisdiction to decide this case.
On August 4, 2010, the Federal Court reconsidered its decision and issued an order stating that it did not have jurisdiction to decide the case due to the fact that the principal place of direction and coordination of the TRANSCOR ASTRA GROUP entities involved was in the United States and not outside this country. As a result of its decision that it had no jurisdiction, the district court vacated its earlier decision confirming the award.
The decision on reconsideration did not, however, address the reasoning or earlier conclusion that the award should be confirmed. As a consequence of this ruling, an order confirming the arbitration award on the merits will now have to be pursued in a Texas State Court where TRANSCOR ASTRA GROUP will present the same arguments for confirmation that previously prevailed in the federal court action.
This delay does not alter the opinion of the Group’s management team on the value of the amounts receivable from PETROBRAS and, consequently, should not have any impact on NPM/CNP’s consolidated accounts.