Soured Contract Nets $1 for Foreign Entrepreneur

     (CN) – A Lebanese businessman deserves a single dollar in damages from the International Finance Corp. over a breached contract, a federal judge ruled.
     The United States is one of the 184 governments that own International Finance, a division of the World Bank Group that encourages private ventures in developing countries.
     Salah Osseiran, a Lebanese entrepreneur who “specialize[s] in acquiring distressed companies and turning them into profitable ones,” had sued over a failed attempt to buy the D.C.-based institution’s 11 percent interest in a Beirut bank called Middle East Capital Group in 2005.
     Although Osseiran stressed his wish to keep his offer for IFC’s shares confidential, the firm disclosed its negotiations with to its representative on the bank’s board of directors, Daoud Khairallah.
     Khairallah resigned from the board upon learning that IFC was accepting Osseiran’s offer, and Osseiran confirmed the impending sale at a Middle East Capital Group board meeting.
     The IFC suspended the deal several weeks later.
     Though the D.C. Circuit upheld Osseiran’s breach of contract claim in 2009, U.S. District Judge Richard Roberts awarded him only $1 in damages Monday.
     “Osseiran demonstrated by a preponderance of the evidence that a valid contract existed,” Roberts found. “The parties agreed on the material terms and their actions reflected an intent to be bound.”
     Though the IFC violated its promise of confidentiality, “Osseiran has not shown how any damages, based on either increased share price or lost share sale profits were caused by [Jan] van Bilsen disclosing negotiations to Khairallah rather than Osseiran’s own disclosure to the MECG board,” according to the 23-page opinion. “Osseiran’s own breach in December would seem at least to weaken his claim for damages arising from IFC’s breach in October.”
     Ultimately, “Osseiran failed to carry his burden of proof that IFC’s breach of the confidentiality agreement caused damages,” Roberts added. “However, Osseiran’s proof that IFC committed a breach entitles him to nominal damages of one dollar.”

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