Appeal from the 215th District Court Harris County, Texas
Trial Court Cause No. 2016-68885
consists of Justices Boyce, Jamison, and Brown.
W. Brown Justice.
Black Iron, Inc. (TBI), and Arawak Energy International Ltd.
entered into a purchase order for certain oil and gas
drilling equipment. Arawak prepaid TBI for the entire
purchase order. TBI failed to deliver certain equipment and
paid Arawak a partial refund. Arawak returned some of the
delivered equipment and sought a refund under the buy-back
provision of the purchase order. TBI refused. Arawak filed
claims against TBI for breach of contract and suit on sworn
account. Arawak also applied for a temporary injunction.
After a hearing, the trial court granted Arawak a temporary
injunction precluding TBI from altering, pledging, or
reselling any of the equipment that Arawak had returned to
TBI and from frustrating Arawak's attempts to sell the
returned equipment. We affirm the temporary injunction.
a Texas corporation that distributes oil and gas drilling
equipment. Arawak is a United Arab Emirates limited company
that provides oil and gas exploration and development
services. On February 22, 2016, TBI and Arawak executed a
purchase order. Under the purchase order, TBI agreed to
supply Arawak with various sizes and quantities of casing and
pup joints at set prices. The purchase order included this
BUY-BACK CONDITION. 75% OF PURCHASE VALUE AFTER DELIVERY OF
RETURNED CASING TO VENDOR'S UMM AL QUWAIN YARD AND
INSPECTION AT BUYER'S COST.
prepaid TBI the total amount of just over $2.8 million for
the equipment. TBI did not deliver the 13-5/8″ casing
and pup joints, for which Arawak had paid TBI over $1.1
million. TBI refunded Arawak $400, 000 for the 13-5/8″
equipment. Arawak further sought a refund from TBI for $768,
304 under the buy-back provision for all of the 26″
casing, a portion of the 20″ casing, and one 20″
casing pup joint. TBI did not refund any of this amount.
October 2016, Arawak filed suit against TBI for breach of
contract and suit on sworn account. Arawak alleged that TBI
owed $1, 481, 047 for its breach of the purchase order and on
the sworn account. Arawak also requested that the trial court
issue a temporary restraining order (TRO) and a temporary
injunction. TBI brought counterclaims against Arawak,
alleging breach of contract, fraud, fraudulent inducement,
and violations of the Texas Deceptive Trade Practices Act.
The trial court entered a TRO that enjoined TBI from
altering, pledging, or reselling the returned equipment.
trial court held a hearing on Arawak's application for
temporary injunction. Jon Nelson testified for Arawak.
According to Nelson, Steve Yamin, president of TBI, told
Nelson that TBI could not pay Arawak the 75-percent buy-back
price because "the industry was in a serious downturn
and that the pipe itself was essentially, basically
marketable at ten cents on the dollar and he did not have the
money to pay [Arawak] back." Nelson did not believe
Yamin intended to honor the buy-back provision because:
• "[h]e did not believe he had an obligation to
honor the 75 percent commitment";
• "he did not have the funds to pay"; and
• "there's no money and there's no intent
and the fact that the purchase price for that property, that
asset had fallen so significantly in these hard times, he
wasn't going to do that."
also told Nelson that business was "as bad as he could
remember." Nelson stated he was concerned that without
an injunction Yamin could sell the returned equipment and the
funds could be "converted because there are still funds
owed to us." Nelson also stated he was concerned that
TBI's assets could become "tied up in
bankruptcy" because of two monetary judgments against
TBI. Nelson believed that the returned equipment was "an
asset and it's ours and we should be able to mitigate our
damages" "by sale to a third party."
testified for TBI. According to Yamin, the lawsuit was about
the contract and "money." Yamin stated that TBI had
rights to the returned equipment and would not protect it
while the underlying dispute was being resolved.
trial court signed an order granting temporary injunction.
The trial court found that "good cause exists for the
issuance of a Temporary Injunction." The trial court
stated: "It appears to the Court that harm is imminent
to Arawak, and if the Court does not issue the temporary
injunction, Arawak will be irreparably injured because [TBI]
may alter, destroy, or resell the drilling equipment that is
at issue in this dispute, which would interfere with
Arawak's attempt to mitigate its damages." The trial
court further stated:
The potential injury to Arawak is irreparable if TBI is not
enjoined from altering, pledging, or reselling any of the
equipment that Arawak has returned to TBI because Arawak will
lose its ability to recover any damages in the event [TBI]
becomes insolvent or is otherwise unable to satisfy any
judgment issued as a result of Arawak's claims against
1. TBI and/or any of its officers, agents, servants,
employees, attorneys, representatives, or any person in
active concert or participation with them are ENJOINED from
altering, pledging, or reselling any of ...