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Sinopec Says U.S. Court Can’t Judge Imprisonment Claims

China Petroleum & Chemical Corp. (Sinopec) signage is displayed on one of the company's storage tanks in the Tsing Yi area of Hong Kong. Photographer: Jerome Favre/Bloomberg
China Petroleum & Chemical Corp. (Sinopec) signage is displayed on one of the company's storage tanks in the Tsing Yi area of Hong Kong. Photographer: Jerome Favre/Bloomberg

Oct. 30 (Bloomberg) -- China Petroleum & Chemical Corp. said a U.S. court can’t judge claims by a Hong Kong businessman that company executives plotted with Chinese officials to have him imprisoned for five years on trumped-up charges.

Sinopec, as China Petroleum is more commonly known, filed a request to dismiss Tiangang Sun’s lawsuit Oct. 28 in federal court in Los Angeles. The company said all of Sun’s claims are barred under the “Act of State Doctrine,” under which a U.S. court can’t “second-guess” the official acts of a foreign government in its own country.

“It has been clear for more than a century that U.S. courts must not sit in judgment on the acts of the government of another, done within its own territory,” lawyers for Sinopec said, citing an 1897 legal precedent.

Sun sued Sinopec in July, seeking $5.17 billion in damages for claims that officials of Sinopec and the Chinese government had him arrested in 2005 after he sued the oil company in Beijing for breaching a contract with his company related to a pipeline to the Tahe oilfield in Xinjiang.

Sinopec, based in Beijing, first took over his previous partner in the pipeline venture and terminated its collaboration in the project, and then built a competing pipeline, Sun said.

Two Trials

The original oil transportation agreement was the result of “collusion and bribery” and was deemed void, Sinopec said in yesterday’s filing. Sun was arrested in 2005 and twice indicted. After two criminal trials led to no conviction, he was released on bail in 2010.

“These arguments were anticipated and we’re going to be prepared to address them in our own filing,” Michael Zweiback, a lawyer for Sun, said in a phone interview.

Sun’s lawsuit is focused on the actions of Sinopec employees rather than those of Chinese government officials and as such the Act of State Doctrine would not bar his claims, Zweiback said.

Sinopec’s request to dismiss the case is scheduled to be argued in February.

The case is Tiangang Sun v. China Petroleum & Chemical Corp., 13-05355, U.S. District Court, Central District of California (Los Angeles).

To contact the reporter on this story: Edvard Pettersson in federal court in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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