Litigants Discuss Partial Post-Sale Price Adjustment, Date of Sale in AD Case Following CAFC Opinion

The Court of International Trade should sustain the Commerce Department's reversion to its initial decision to adjust a Turkish pipe exporter's post-sale price by only one-third of a late delivery penalty in an antidumping duty investigation, both the plaintiff, Borusan Mannemsann, and the antidumping petitioners said. However, the sides were divided over what to do about Commerce's failure to address Borusan's date of sale, with Borusan simply calling for CIT to sustain the results and the petitioners calling for another remand to address the sale date issue (Borusan Mannesmann Boru Sanayi ve Ticaret A.S. v. U.S., CIT Consol. #19-00056).

The case stems from an antidumping duty investigation into large diameter welded pipe from Turkey. Prior to the investigation, Borusan entered into a joint venture with two other Turkish manufacturers that won a bid for a gas pipeline project. In the joint venture agreement, each company agreed to reimburse the others for any damages resulting from a failure to fulfill contractual obligations. After adjustments were made to the sales contract, the mutual obligation clause of the JVA came into effect since the customer said it wanted to collect late delivery penalties.

When the antidumping investigation began, Borusan argued for a post-sale price adjustment for the entire value of the penalty even though it had yet to make any penalty payments at the time. Subsequently, the JVA members negotiated the amount of the penalties and agreed to distribute the cost proportionately, with Borusan paying the largest share.

Commerce then rejected Borusan's request for a post-sale adjustment amounting to the entirety of the penalty paid. Instead, the agency adjusted the post-sale price by only one-third of the penalty costs, finding that the client only knew of the JVA members' intent to use a one-third split of the penalty costs. Further, Commerce said that the JVA members didn't begin to negotiate the final penalty allocation until after the date of the sale.

Following initial litigation at CIT, the trade court said that the terms of the JVA were incorporated into the sales contract, meaning the customer should be considered aware of the terms of splitting up any penalties. The court also said it's only necessary that the terms of such a penalty be expressed and not the actual amount paid for the customer to be aware of the terms. CIT upheld a full post-sale price adjustment.

The Federal Circuit then reversed CIT's decision, holding that Commerce correctly determined that the final allocation method was not established work known to the client since the parties negotiated their shares of the fee after it was imposed (see 2107200038). CIT then remanded this case to Commerce to comply with this decision, also instructing Commerce to come to a conclusion on when Borusan's date of sale was (see 2108270051). In its remand, the agency reverted to the one-third price adjustment but did not make a decision on the date of the sale since the resulting dumping rate was zero percent, making the date of the sale irrelevant.

While Borusan addressed this deficiency in Commerce's remand, it still called for the court to sustain the remand results. The comments submitted by the American Line Pipe Producers Association, on the other hand, are seeking another remand to address the date of sale issue. "For critical reasons of efficiency and fairness, the domestic industry requests a determination by the agency on the remanded date of sale issue as well, so that both issues may be considered expeditiously, and any issues requiring further appeal may be handled simultaneously," the comments said.

ALPPA also took exception with Commerce's decision to drop a particular market situation adjustment from the sales-below-cost test -- a ruling CIT has made plenty of times before. The industry group reiterated arguments made in several other cases about how this adjustment should be allowed, and indicated its willingness to appeal this ruling.