Europe

Legal battle between David and Goliath energy firms heats up

TotalEnergies could be dragged to arbitration by the relative energy minnow, Trina Solar Ltd, in an ongoing row about a breach of contract.

The French oil giant instigated legal action against Trina earlier this summer, claiming Trina US had conspired to inflate the agreed price of its solar modules, costing the company more than $100 million in losses.

However, Trina has now hit back, insisting the matter belongs in arbitration while dismissing the oil giant’s claims as “fatally deficient” and “misleading”.

In court filings submitted in response to TotalEnergies’ pending legal action in the US, Trina says: “The Complaint was plainly cobbled together quickly in an effort to generate a quick headline and put undue pressure on Defendants.

“Its wild accusations and incendiary language (including accusations of ‘ransom’ demands and ‘extortion’) are of a piece with that strategy.

“Not surprisingly, in these circumstances, Plaintiffs’ claims against Trina China are fatally deficient and should be dismissed for multiple reasons.”

TotalEnergies accuses Trina of breaching a 2021 agreement relating to the sale of photovoltaic solar panels. An initial complaint was filed in July in a California state court before being moved in August to a California federal court.

However, Trina contends that due to the greater intricacies of the dispute, it belongs in London in arbitration with the International Chamber of Commerce.

In papers filed with the US federal court, Trina says the legal jurisdiction of the submitted complaint is too narrow for the broader scope of the disagreement and that TotalEnergies Renewables USA LLC is contractually bound to an arbitration clause through its agreement to buy solar modules from Trina — commitments that TotalEnergies “irrefutably made, but conspicuously avoided mentioning” in its complaint accusing Trina of fraud and breach of contract.

In the last amended complaint filed by TotalEnergies’ on September 13, the oil giant alleges that Trina China, through its subsidiary Trina US, had targeted it in a “multistage scheme” by offering competitive pricing for photovoltaic solar modules with promises to set aside manufacturing capacity for TotalEnergies’ order.

However, it is claimed, that after contracting Trina to supply solar modules for close to $300 million, Trina then demanded an extra $40 million for fewer modules that would fall behind schedule.

“Trina China knew that, at this point in the development and construction of Plaintiffs’ projects, Plaintiffs could not find, negotiate and contract with and schedule production by alternative suppliers without significant expense or damaging and potentially ruinous delay,” the amended complaint said.

However, in a pre-emptive strike a few weeks earlier in August, Trina filed a request for arbitration with the ICC, requesting that the tribunal find TotalEnergies liable for breach of contract and damages, including for breach of agreement to arbitrate.

As a result, counsel for both parties met on September 9 to discuss the composition of the arbitration tribunal, and Trina is now pushing for a stay of the judicial process in the US federal court until the ICC proceedings come to conclusion.

“Staying this action will eliminate the risk of inconsistent rulings, as well as the risk that parallel proceedings might undermine Trina US’s contractual right to resolve its dispute with the Total SPVs through arbitration,” Trina said.

“In contrast, Plaintiffs fail to identify any harm that they would suffer if they are required to arbitrate their claims before proceeding with this action.”

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