Petroleos Mexicanos, Mexico’s state- owned oil company, filed a $1.5 billion lawsuit against Siemens AG (SIE) and South Korea-based SK Engineering & Construction Co., claiming the companies bribed Pemex officials to win and keep refinery construction projects.
Siemens, which in 2008 paid $1.6 billion to settle a bribery investigation by the U.S. Securities and Exchange Commission, conspired with SK Engineering and a joint venture partner to bribe Pemex officials while bidding on a refinery modernization project in Mexico’s Cadereyta region, the oil company alleged in a complaint filed yesterday in Manhattan federal court.
The contract was awarded to the joint venture in 1997, according to the complaint. The defendants later bribed Pemex officials to keep the contract, when the project was plagued by cost overruns and disputes over the work, according to Pemex.
“Plaintiffs suffered millions of dollars of harm from the selection of an inadequate contractor, the acceptance of harmful contractual terms, and the acceptance of significant cost overruns,” Pemex said in the complaint.
The suit seeks $500 million in damages, which may be tripled under the U.S. Racketeer Influenced and Corrupt Organizations Act.
Representatives of Munich-based Siemens and Seoul-based SK Engineering couldn’t immediately be reached yesterday for comment on the complaint.
According to the complaint, the case is related to another suit in Manhattan federal court that was filed by the joint venture, Conproca S.A. de C.V., which sought to collect $530 million awarded by an arbitrator for payment of cost overruns on the project. Pemex claimed in yesterday’s complaint that the arbitration award was based in part on documents executed by bribed officials certifying that the cost overruns had been approved.
Conproca was set up as a joint venture among Siemens, SK Engineering and Grupo Tribasa, according to the complaint. SK Engineering later acquired Grupo Tribasa’s interest, Pemex said. Grupo Tribasa paid the original bribes, and SK Engineering paid later bribes to maintain the contract, according to Pemex. The bribes were paid with the knowledge of all the companies that formed the Conproca joint venture, the oil company claimed.
Pemex filed the suit to protect its racketeering claims from a possible defense that they were filed too late, the company said in the complaint. Pemex plans to ask the judge to delay the case while the related suit by Conproca is decided, Pemex said.
The case is Petroleos Mexicanos v. Conproca SA de CV, 12- cv-9070, U.S. District Court, Southern District of New York (Manhattan).
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