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Salah N. Osseiran v. International Finance Corporation

July 31, 2012

SALAH N. OSSEIRAN, PLAINTIFF,
v.
INTERNATIONAL FINANCE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Richard W. Roberts United States District Judge

UNSEALED

MEMORANDUM OPINION AND ORDER

Plaintiff Salah Osseiran brings claims for promissory estoppel and breach of a confidentiality agreement against the International Finance Corporation ("IFC"), alleging that IFC failed to sell to Osseiran its shares of the Middle East Capital Group ("MECG") after representing that it would do so, and that IFC divulged Osseiran's potential share purchase to an unauthorized party.*fn1 IFC has moved for summary judgment on both claims. Because Osseiran has not shown that genuine issues of material fact exist regarding the elements essential to his claim for promissory estoppel and because IFC is entitled to judgment, IFC's motion will be granted as to that claim. However, because Osseiran has presented evidence that the parties entered into an enforceable confidentiality agreement, and whether a breach of that agreement occurred remains in dispute, IFC's motion will be denied as to the claim for breach of that agreement.

BACKGROUND*fn2

Osseiran is a shareholder in the Middle East Capital Group ("MECG"). In the summer of 2005, he sought to gain a controlling stake in MECG by purchasing the shares held by IFC, an international organization and private arm of the World Bank, and by Barclays Capital, among other shareholders. Osseiran v. Int'l Fin. Corp., 498 F. Supp. 2d 139, 142 (D.D.C. 2007). IFC, acting on behalf of itself and Barclays Capital, and Osseiran negotiated for IFC to sell Osseiran its MECG shares, but IFC ultimately sold its shares to a third party. Id.

The summary judgment filings set forth the following facts that are material to Osseiran's claims arising from those negotiations and as to which there is no genuine dispute. On September 5, 2005, Osseiran called Jan van Bilsen, an IFC investment manager, and expressed interest in buying IFC's and Barclay's shares in MECG. Osseiran asked van Bilsen to keep their negotiations confidential, and van Bilsen verbally agreed.

(Def.'s Mot., Ex. 1, van Bilsen Decl. ¶¶ 1, 3; Ex. 5, van Bilsen Dep. 21:12-14, 23:21-24:2.) Van Bilsen stated that he agreed to keep the negotiations confidential because "that's what we always do with our clients." (Id. 24:4-5.) After the phone call, van Bilsen sent an e-mail to a colleague at IFC, relating the conversation and explaining that "[Osseiran] approaches us first and said it must be treated very confidentially." (Pl.'s Opp'n, Ex. 12.) Later in the e-mail, he reiterated that "Osseiran stressed confidentiality and I told him we will treat it accordingly . . . ," and he concluded the e-mail with a short section entitled "Next Steps" that stated "[w]e should look into this seriously and ensure there are no reputation/corp governance issues with us selling to Osseiran quietly. Please handle and discuss. . . . Keep it confidential." (Id.)

On October 3, 2005, Osseiran sent an e-mail to van Bilsen formally presenting to IFC Osseiran's offer to purchase all of IFC's MECG shares. (Def.'s Mot. Summ. J. ("Def.'s Mot."), Ex. 19; id., Ex. 8, Osseiran Dep. 124:17-126:2.) The e-mail had two parts, the first setting forth the "Conditions" of the offer, and the second setting forth the "Terms." "Ultimate confidentiality of this offer" appeared under the "Conditions" heading. (Def.'s Mot., Ex. 19.) The "Terms" heading included the proposed purchase price of the shares and the terms of payment. (Id.)*fn3

The parties agreed on the terms of the purchase and Osseiran sent an e-mail to van Bilsen on November 18, 2005 purporting to "confirm" the agreement. (Def.'s Mot., Ex. 12.) Van Bilsen responded the same day asking Osseiran to "confirm" that Osseiran "accept[ed] that [IFC's] acceptance is subject to documentation -- meaning separate sales agreements," along with additional bank guarantees. (Id.; Def.'s Mot., Def.'s Stmt. of Material Facts Not in Dispute ("Def.'s Stmt.") ¶ 18.) Van Bilsen's e-mail also asked for confirmation of Osseiran's understanding that the "sales agreements come into force and affect" only after execution of the agreements and receipt of the guarantees. (Def.'s Mot., Ex. 12.) IFC's investment managers lack authority to finalize transactions with third parties to buy or sell investments without executed documentation. (Def.'s Stmt. ¶ 8.) In a November 19, 2005 response to van Bilsen, Osseiran expressly accepted these conditions. (Id. ¶ 18; Osseiran Dep. 152:20-153:6.)

Van Bilsen forwarded a draft sales agreement to Osseiran on November 26, 2005 that stated on its face that the parties did not intend to be bound until the execution of a final contract. The draft provided: [t]his draft document is not a contract or an offer to enter into a contract. Only the document as executed by IFC and Mr. Osseiran will contain the terms that bind them. Until the document is executed by IFC and Mr. Osseiran, neither IFC nor Mr. Osseiran intends to be bound. (Def.'s Mot., Ex. 13.) IFC officials informed Osseiran via a telephone call on December 19, 2005 that IFC had decided to suspend its sale of IFC shares to Osseiran. (Def.'s Stmt. ¶ 22.) Osseiran stated that during the call, an IFC representative "informed [him] that because of the complaints of other MECG shareholders IFC had decided to suspend, place on hold or delay the closing of the transaction by which IFC was to sell its MECG shares to [him]." (Pl.'s Opp'n to Def.'s Mot. Summ. J. ("Pl.'s Opp'n"), Decl. of Salah N. Osseiran ("Osseiran Decl.") ¶ 1.) Osseiran stated that, both in that conversation and afterwards, IFC representatives "repeatedly assured [him] that IFC still intended to sell its MECG shares to [him] and was not soliciting other buyers, but that, for political reasons, [IFC] needed to first confirm that it did not need the approval of the other MECG shareholders to sell its shares." (Id. ¶ 2.) In his deposition, Osseiran stated that the day after receiving notice that IFC was suspending the sale, Barclays contacted him in order to "pursue the deal that IFC broke." (Osseiran Dep. 43:20-44:6.) In an e-mail he sent to van Bilsen on December 22, 2005, Osseiran "invite[d] [van Bilsen] to sign immediately the 'Share sale agreement' that has been negotiated, proposed, and drafted by IFC" and "urge[d] [him] to conclude the agreement[.]" (Def.'s Mot., Ex. 15.)

Thereafter, Osseiran entered agreements to purchase MECG shares from other shareholders. Later in December, he agreed upon language for a formal stock purchase agreement with Barclays and concluded the agreement on January 9, 2006. (Osseiran Dep. 42:12-43:1.) He entered into an agreement to purchase shares from Financial Investment Luxembourg on December 31, and made additional agreements with other shareholders over the following months. (Id.; Def.'s Mot., Ex. 17, Pl.'s Supp. Resps. to Def.'s First Set of Interrogatories at 3 (listing date, seller, share amount, and price for Osseiran's purchases of MECG shares).) Osseiran and IFC never finalized or executed a sales agreement and IFC never sent Osseiran a signed stock transfer form, which was necessary to complete a sale of IFC's MECG shares. (Def.'s Stmt. ¶ 20.) Osseiran eventually sold the other MECG shares he purchased at higher prices than those he paid to obtain them. (Id. ¶ 37.)

Osseiran's amended complaint alleges that IFC committed a breach of the confidentiality agreement by telling the MECG chair in December of 2005 that Osseiran was buying MECG shares from IFC and Barclays (Am. Compl. ¶¶ 27, 48), and IFC's answer denies the allegation (Ans. ¶¶ 27, 48). The parties have neither discussed nor resolved this dispute in their briefs.

DISCUSSION

Summary judgment is warranted upon a showing that "there is no genuine dispute as to any material facts and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). A dispute is "genuine" if a reasonable jury considering the evidence could return a verdict in favor of the nonmoving party. Holcomb, 433 F.3d at 895. A fact is "material" where "a dispute over it might affect the outcome of a suit under the governing law." Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). In considering a motion for summary judgment, a court should draw all "justifiable inferences" in favor of the non-movant, Liberty Lobby, 477 U.S. at 255, and "eschew making credibility determinations or weighing the evidence," Czekalski v. Peters, 475 F.3d 360, 363 (D.C. Cir. 2007). However, "[t]he nonmoving party cannot defeat summary judgment by 'simply show[ing] that there is some metaphysical doubt as to the material facts.'" Moore v. Hartman, 571 F.3d 62, 66 (D.C. Cir. 2009) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). The nonmoving party must demonstrate that there is sufficient evidence ...


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