Gulf Oil, tripped by law conflict, petitions Canadian Court
Ottawa — A major US oil copany is about to find out what happens when a corporation has to violate the laws of one country to obey the laws of another. Gulf Oil Corporation is seeking a way to compel its subsidiary in Canada to turn over documents deemed confidential by the Canadian government.
Saying Gulf is "caught between the devil and the deep blue sea," company lawyer Robert Hill recently told the Supreme Court of Canada that the corporation has been ordered to produce the documents by a United Staes court hearing a damage suit arising from uranium price-fixing activities in the early 1970s.
Gulf's request that the court provide directions on how the documents can be dislodged will be considered Feb. 19.
The action by the US corporation stems from a prolonged controverst over an alleged international uranium cartel that has embarrassed two different Canadian governments and demonstrated the limited reach of US anti-trust enforcement.
In 1972, in response to a US boycott of foreign uranium, Canada, Australia, Britain, France, and South Africa entered into a price-support agreement on uramium. Following a sixfold rise in prices in a few years, this agreement came under intense scrutiny, including a US government anti-trust investigation.
Because Gulf Minerals Canada Ltd. was said to be a cartel participant, its US parent is one of 29 corporations being sued by Westinghouse Electric Corporation. It is seeking possibly up to $6 billion in damages in total. It charges that the cartel, by illegally driving up prices, left Westinghouse open to suits for non-performance of contract from US utility companies with whom Westinghouse had agreed to supply uranium at low prices. Out-of-court settlements have so far cost Westinghouse $650 million.
The Chicago court hearing the suit against Gulf and other corporatins has ordered defendants to produce pertinent documents, but compliance has been held up by laws passed in Britain, Canada, and Australia to forbid disclosure of the information.
The Canadian law, passed in 1977 in the midst of a US Justice Department probe of the price-fixing agreements, was brough in by the Liberal government of then-Prime Minister Pierre Trudeau. The Progressive Conservative Party. Then in opposition, scoffed at the Liberals' explanation that confidentiallity was in the public interest.
This raised speculation that the Conservative government of Prime Minister Joe Clark, elected in May 1979, might release the information. But in December the Clark government quietly wrote to the affected companies saying the no- disclosure rule would stand.
Mr. Hill, Gulf's lawyer, termed the request to the Supreme Court a desperation move. He explained that the corporation had gone directly to the court in hope of avoiding time-consuming trial actions and appeal procedurs in the provinces of Ontario and Saskatchewan.
The company said quick action by the court could postpone the $900 million default Gulf has already incurred in the Chicago court action because the corporation was unable to provide documents required by the court.