HOUSTON – A Japanese investor’s efforts to “turn back the clock” on a space tourism venture were recently rejected by the justices seated on the Fourteenth Court of Appeals.
Takafumi Horie, who resides in Japan and is the billionaire founder of Internet service provider LDH, filed suit against Houston attorney Arthur Dula, who practices space law, in Harris County District Court.
In 2005, Horie and Dula met with Russian officials to discuss a “space tourism” business. The space-tourism business was to be conducted through Excalibur Almaz, which was formed under the laws of the Isle of Man, court records show.
Dula was Excalibur’s chief executive officer.
Horie, through his company Space Dream, agreed to purchase 75 percent of Excalibur’s shares for $49 million and became Excalibur’s majority shareholder before the end of 2005.
Before Horie’s second payment was due in January 2006, he was arrested in Japan for securities fraud. A side agreement was formed and Horie’s shares interest was reduced to 34 percent and placed under the control of a third-party trustee.
Following litigation between several parties, which included Horie, LDH and Excalibur, a settlement agreement was reached in 2010, referred to as the “deed,” court papers sate.
After the deed was performed, Horie sued Dula for breach of trust and fraud, alleging Dula was his attorney and that Dula used the funds Horie invested in Excalibur to purchase four Almaz spacecraft capsules and two space stations without disclosing that the purchase contract prohibited any modification of the hardware.
As a result, the spacecraft could not be modified to be returned to flight. Horie sought to recover his $49 million investment, plus punitive damages and attorney’s fees.
Dula moved to dismiss based on a forum-selection clause in the deed, which states “the Courts of the Isle of Man shall have exclusive jurisdiction.”
The trial court initially denied the motion to dismiss, but Dula came back with a motion for summary judgment, which was granted, leading to Horie’s appeal, court records show.
On Sept. 18, justices found Horie’s arguments to avoid enforcement of the deed’s forum-selection clause to be without merit, affirming the trial court’s judgment dismissing his claims without prejudice.
“Horie’s claims in this case are efforts to turn back the clock and receive his original investment back, and, as such, his claims are, as a matter of law, “in connection with” the subject-matter of the Deed,” the opinion states.
“Regardless of whether Dula ever performed any legal work for Horie, it is undisputed that he did not do so in connection with the Deed.”
Horie is represented in part by Sugar Land attorney James Pierce.
Dula is represented by Eric Kristiansen and Joshua Thomas, attorneys for the Houston law firm Baker Hostetler.
Appeals case No. 14-17-00171