Pemex loses appeal in bribe suit against Siemens, SK Engineering
Thursday, July 17, 2014 at 10:18AM
Richard L. Cassin in Korea, Mexico, Pemex, Peter Paul Muller, SK Engineering, Siemens AG, Top Ten

A federal appeals court Wednesday upheld the dismissal of a lawsuit by Mexico's state-owned oil company that accused Siemens and SK Engineering & Construction of bribing its officials to win refinery refurbishing work.

The Second Circuit Court of Appeals in New York said the claims by Petroleos Mexicanos (Pemex) didn't allege enough U.S. contacts or activities to bring a civil lawsuit in U.S. courts.

Pemex had sought at least $500 million in damages from Siemens and South Korea's SK Engineering.

"The activities involved in the alleged scheme–falsifying the invoices, the bribes, the approval of the false invoices–took place outside of the United States," the three-judge panel wrote.

Pemex had alleged that Siemens and SK Engineering submitted a low-ball bid in 1996 to win a public contract for modernizing a Pemex refinery in Cadereyta, Mexico.

Siemens then bribed Pemex officials to recover cost overruns, the suit alleged.

Pemex said Peter Paul Muller, Siemens Mexico's former general counsel, confirmed the corrupt payments.

In 2008, Siemens resolved global corruption allegations in an FCPA settlement with the U.S. DOJ and SEC.The  $800 million resolution is still the biggest FCPA case of all time.

SK Engineering serves the energy, housing, architectural, infrastructure, and telecommunications sectors.

Several of its officers went to prison in South Korea in 2003 for various crimes, including corruption, according to an earlier release from Pemex.


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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