## Facts

- YPF S.A., an Argentine company, sold about 4,000 metric tons of cyclohexane to Tricon Energy, Ltd.
- The YPF–Tricon contract required shipment to Houston, Texas by March 15, 2005, on **CFR (Cost and Freight)** terms under Incoterms: YPF was to arrange and pay for carriage to the named destination, while risk of loss generally shifts to the buyer once the goods are loaded on the vessel.
- Tricon then sold the cyclohexane to CITGO Petroleum Corporation for delivery in Freeport, Texas by April 20, 2005, with carriage contemplated on the M/T **BOW FIGHTER**.
- The BOW FIGHTER arrived late to load in Argentina and, during the voyage, experienced serious engine problems that substantially delayed arrival in Texas.
- The cargo ultimately arrived almost two months late, after market prices for cyclohexane had fallen significantly; Tricon claimed it lost about $450,000 from the price drop during the delay.
- Citgo sued on its own behalf and also asserted claims as Tricon’s subrogee, seeking damages tied to late delivery and alleged failures in arranging or providing seaworthy carriage.
- Among other theories, Citgo alleged YPF breached duties under the **United Nations Convention on Contracts for the International Sale of Goods (CISG)**, including CISG **Article 32**, by failing to arrange transportation on usual terms and in a manner suitable to the circumstances.
- YPF moved for summary judgment, arguing that under CFR terms and the CISG’s risk-of-loss framework, its duty ended when conforming goods were loaded on the BOW FIGHTER and any later transport problems were the buyer’s risk.
- Citgo sought additional time to conduct discovery related to YPF’s summary-judgment arguments and moved for sanctions based on claimed discovery problems; YPF sought leave to file a surreply.

## Issues

1. Whether YPF was entitled to summary judgment on Citgo’s CISG-based claims on the ground that, under a CFR sale, YPF’s obligations ended once the cyclohexane was loaded and risk shifted to the buyer.
2. Whether Citgo was entitled to additional time to obtain discovery to respond to YPF’s summary-judgment motion.
3. Whether sanctions were warranted based on YPF’s conduct in discovery, and if so, what sanction was proper.
4. Whether YPF should be allowed to file a surreply on summary judgment.

## Decision

- Denied YPF’s motion for summary judgment.
- Granted Citgo’s request for additional time for discovery related to the summary-judgment motion.
- Granted in part and denied in part Citgo’s motion for sanctions, awarding limited relief rather than the most severe remedies sought.
- Granted YPF leave to file a surreply.

## Legal Principles

- Summary judgment is improper where the record shows genuine disputes of material fact or where the nonmovant shows it needs additional discovery to respond to the motion.
- Under the CISG, a CFR arrangement may shift risk after loading, but the seller can still have duties under **CISG Article 32** to make necessary carriage contracts on usual terms and in a manner suited to the transaction’s circumstances.
- A buyer (or subrogee) can resist summary judgment by pointing to evidence that the seller’s actions in selecting or arranging the carrier and voyage may have fallen short of Article 32’s requirements, creating fact questions on breach and causation.
- Federal Rule of Civil Procedure 56(d) permits a court to postpone or deny summary judgment and allow discovery when the nonmovant shows it cannot yet present facts needed to oppose the motion.
- Discovery sanctions must be tailored to the conduct and the harm shown; courts may order limited cost-shifting or remedial measures rather than terminating sanctions.
- A district court has discretion to allow a surreply when needed to address new points raised in briefing or related motion practice.

## Conclusion

The court refused to end the case against YPF at the summary-judgment stage because the record left fact questions about whether YPF, despite a CFR sale, satisfied its CISG Article 32 duty to arrange carriage on usual terms and in a manner suited to the situation, given the vessel’s delay and mechanical problems. The court also allowed Citgo additional discovery time, imposed limited sanctions tied to discovery issues, and permitted YPF to file a surreply, leaving Citgo’s claims for further development on a fuller record.


Citgo Petroleum Corp. v. Odfjell Seachem, 2013 WL 2289951 (2013)