Orbia Advance Corporation and its Vestolit GmbH affiliate have secured a major legal victory after the Amsterdam District Court dismissed two high-value lawsuits seeking more than €1 billion in damages in the Dutch Ethylene Damages Litigation.
The court rejected claims brought by a Dutch Stichting (foundation) representing three Spanish and Portuguese Repsol entities (Repsol) and by Shell Chemicals Europe (Shell), marking the first two dismissals among 13 lawsuits filed by major oil and petrochemical companies over alleged damages linked to a 2020 settlement with the European Union (EU) Commission.
In the Repsol case, the court ruled that it was not “plausible” that the conduct in question caused harm to Repsol. In the separate Shell case, the court found that Shell had failed to demonstrate it suffered any damage. Both lawsuits were dismissed.
Orbia said the rulings reinforce its position that the claims brought by some of the world’s largest chemical companies lack merit. The company highlighted the court’s finding that rising profitability among ethylene suppliers contradicted allegations of harm.
The court stated: “The significant increase in steam cracker margins also indicates that the (profit) margins of ethylene suppliers rose significantly during the period [at issue]. This also suggests that the [defendants’ conduct] had no effect...”
Sheldon Hirt, Orbia’s General Counsel, said the ruling supports the company’s long-standing argument that ethylene purchasers did not influence pricing or cause losses claimed by the plaintiffs.
“We have always maintained that the purchasers’ actions had no effect on the prices these companies were charging during a period in which they enjoyed rising profit margins, and that there was no actual harm suffered by Shell and other ethylene sellers,” Hirt stated.
He added: “Far from being harmed, we believe the claimants benefited from oligopoly pricing, earning excess returns on ethylene sales due to their market power.”
Hirt argued that the plaintiffs, many of whom are major ethylene producers and buyers themselves, have extensive market knowledge and multiple opportunities to benefit from industry cycles.
“The ethylene sellers claiming billions in damages have numerous ways to take advantage of their deep knowledge of and insights into the overall market and production cycles. Most of the sellers are, in fact, simultaneously significant purchasers of ethylene,” he said.
Hirt also questioned the basis of the claims, stating: “Beyond the economic analyses and legal arguments involved in yesterday’s ruling, it was always difficult to believe that a few small-scale ethylene purchasers could have manipulated the price of ethylene by up to 50%, amounting to hundreds of euros per ton each month.”
He said any future proceedings must examine how the ethylene market operates and why supplier profit margins increased during the period in which damages were allegedly suffered.
“This ruling is a victory not only for smaller purchasers like Vestolit, but also for consumers and the EU’s chemical industry,” Hirt said.
Orbia and Vestolit said they will continue to defend their position that the remaining claims are unfounded and should be dismissed.
