Triad Financial Establishment v. Tumpane Company

Triad Financial Establishment (Triad) (plaintiff) sued the Tumpane Company (Tumco) (defendant) for breach of a contract after Tumco refused to pay millions of dollars in commissions to Triad for marketing services. Triad, a Lichtenstein entity operated by a Saudi Arabian citizen, was a marketing company that helped its clients obtain international contracts, particularly in Saudi Arabia. Tumco, a New York corporation operating mainly from Washington, entered into two contracts with Triad for assistance in obtaining a subcontract to serve as the sole source for support services to a program intended to equip and modernize the Royal Saudi Air Force. The subcontract Tumco sought demanded that performance take place entirely in Saudi Arabia. When Tumco contracted with Triad, Tumco had two employees in New York, hundreds of employees in other states, and over 3,000 employees in Saudi Arabia. Triad’s business also largely extended from its influence in Saudi Arabia, and Triad marketed itself as a Saudi sales agent. Nonetheless, the contracts included forum-selection clauses that designated New York as the governing jurisdiction. Four years after Triad and Tumco entered their contracts, in an effort to curtail corruption in military contracting, the Kingdom of Saudi Arabia issued a decree that prohibited contractors from paying commissions to agents on contracts to provide arms or equipment. The decree also ordered a stop-payment for existing commissions agreements upon receipt of notice of the prohibition. In light of the decree, Tumco asserted that it owed no commission to Triad and counterclaimed to recover the commissions Tumco already paid. Triad and Tumco both moved for summary judgment.