Sue you later: Jack the Suit returns to the fray

The US courts have been good to Jack Grynberg, netting him hundreds of millions of dollars in disputes going back to 1984 with some of the world’s largest oil and gas producers.

Despite that fortune, the 83-year-old oilman says he’s fed up with America’s legal system and has taken his biggest suit yet – a battle over profits from Kazakhstan’s most valuable oilfields – to Switzerland.

Mr Grynberg is suing a consortium led by BP, saying the oil giant backtracked on a 1991 deal promising him 20 per cent of the profits from Kazakh fields he helped find. He says in the lawsuit that BP cut him out and struck deals directly with the Kazakh government, greased with bribes paid by a CIA agent who was arrested in 2003.

The lawsuits are a legal last stand for the maverick prospector, who has been a persistent thorn in the collective side of “big oil” for more than three decades. Mr Grynberg claims to have won over three quarters of a billion dollars in awards and settlements from cases against oil and gas companies.

There are more than $900bn (£580bn) of profits at stake in the latest case, based on the price of oil and the estimated 66 billion barrels of crude in the Kazakh fields, according to his Swiss lawyer, Adrian Bürgi – although his client isn’t yet seeking a specific amount.

Mr Grynberg is suing BP and the other members of the group – Exxon Mobil, Royal Dutch Shell, Statoil and Phillips 66 – in Zurich and nearby Zug, where the companies have subsidiaries. He has paid more than Sfr2m (£1.3m) in court deposits and his lawyer says the first court hearings could take place as soon as next month.

He claims some of the bribes were paid into Swiss bank accounts, giving him the right to sue under Switzerland’s Unfair Competition Act, which covers corporate theft.

They “took the plaintiff’s confidential and proprietary information, that was the result of his work, without his consent and acquired Kazakh government licences through bribes,” Mr Bürgi said in the complaint. “The consortium used the work of the plaintiff without compensating him as agreed.”

The oil companies reject the allegations, painting the octogenarian as a serial litigator.

“We are aware of Mr Grynberg’s claims, which are very similar to those he has brought on other occasions in different jurisdictions and lost,” Shell said. “We are confident these claims will be dismissed.”

Spokesmen for Norway’s Statoil and the Houston-based Phillips 66 declined to comment. Exxon Mobil said “the case is frivolous”, while BP said it denied the allegations and would be “vigorously” defending itself.

Mr Grynberg’s reputation for litigiousness is well known in the energy industry, and he acknowledges his feistiness. He said that the Swiss lawsuits send the message that “Jack is fighting you and is fighting you all over the world”.

Mr Grynberg was born in Poland and was a child when the Germans invaded in 1939. He joined the resistance and fought the Nazis at the age of 12 in the forests of Belarus.

After the war, he moved to the US to study at the Colorado School of Mines. Upon graduating, he helped develop a gas field from an abandoned well in Wyoming – work that he also wound up suing over.

“Mr Grynberg has been involved in lots of litigation in the US, and he has often been successful,” said John Lowe, a professor of energy law at the Southern Methodist University in Dallas.

By his count, he has won more than $800m in settlements and court rulings. Confidentiality clauses prevent verification of the total, but some awards are documented. For example, the energy company Kinder Morgan said in a 2002 filing that it paid him $16.8m in a settlement. BP agreed to settle a US claim with him in 2009 for $200m, according to a person familiar with the firm’s legal strategy.

Mr Grynberg says he began talking to BP and other oil companies, as well as the Kazakh authorities, about how to tap the riches beneath the Caspian Sea in 1990 – a year before the country declared independence. He had connections in the government and knowledge of seismological data for the region, making him valuable to both sides, and the following year they signed the deal giving him 20 per cent of any profits.

By the mid-1990s, soon after the consortium was founded, Mr Grynberg said he realised he had been shut out of the Kazakh profits. In 1996, he began legal proceedings against the oil companies in the US and UK, embarking on a two-decade battle.

He has faced setbacks in the Kazakh disputes. He lost an “unjust enrichment” suit against the Italian oil group Eni, which has been part of the consortium.

A recent decision in the US compounded his frustration, prompting him to take the legal fight to Switzerland. Last year the New York judge Cynthia Kern disqualified an arbitrator who had been presiding over a 17-year-old dispute with BP, ruling that he showed evidence of bias against Mr Grynberg when he refused to accept a decision by an appeals court.

“Switzerland is a very honest legal system, and the American system is unfortunately influenced by politics,” Mr Grynberg said. “Big oil companies are preferentially treated by the US justice system.”

While arbitrations can drag on for years, he said he hoped the Swiss case could go to trial. And if he doesn’t live to see the end, he said his three grandchildren – “MBAs and engineers”, as he puts it – were willing to continue the fight.

“When someone has stolen from you, you try to get it back, and you don’t give up,” Mr Grynberg said.

© Bloomberg News