Full opinion text
AMENDED OPINION WALLS, District Judge. This is a complicated dispute concerning the alleged misuse of a patent and alleged overcharges of royalties to a partnership. In the first lawsuit, Civil Action No. 98-4897(WHW) (“NJ-I”), Plaintiff Saudi Basic Industries (“SABIC”) moves to clarify or reform a March 10, 2000 Stipulation where it agreed not to practice a technology that is the subject of a patent dispute. SABIC also moves pursuant to Rule 12(c) for partial judgment on the pleadings to strike Defendant ExxonMobil's (“Exxon”) defenses of unclean hands and setoff. Exxon cross-moves to dismiss the Complaint pursuant to Rule 19 for SABIC’s failure to join necessary and indispensable parties. The motion for clarification or reformation of the March 10 Stipulation is denied; the motion for partial judgment on the pleadings pursuant to Rule 12(c) is also denied. Exxon’s cross-motion to dismiss pursuant to Rule 19 is denied; SABIC is not required to join either ECAI or KEM-YA as an indispensable party. In the second lawsuit, Civil Action No. 00-384KWHW) (“NJ-II”), SABIC moves to dismiss the complaint of Exxon based on the Foreign Sovereign Immunities Act, as well as on other jurisdictional grounds. Exxon moves to consolidate the NJ-I and NJ-II actions into a single lawsuit. The motion to dismiss is denied; the motion to consolidate is granted. FACTS AND PROCEDURAL BACKGROUND The claims asserted in this action have their origin in the late 1970’s. Because of the number of parties, at the outset it is useful to list them and their relationships to each other: SABIC is a Saudi Arabian corporation, owned 70% by the Saudi government and 30% by private investors, with its principal place of business in Saudi Arabia. Exxon is a New Jersey corporation with its principal place of business in Texas. Exxon Chemical Arabia, Inc. (“ECAI”), a Delaware Corporation with its principal place of business in Texas, is a wholly-owned subsidiary of Exxon Overseas Corporation, which itself is a wholly-owned subsidiary of Exxon. KEMYA is a 50/50 limited liability partnership formed between SABIC and ECAI under Saudi Arabian law to manufacture polyethylene. Mobil-Yanbu (‘Yanbu”) is a Delaware corporation with its principal place of business in Delaware. In the 1970’s, SABIC approached a number of potential partners about the possibility of forming joint ventures in Saudi Arabia to manufacture polyethylene. The negotiations culminated in the formations of two joint ventures in 1980; one with Yanbu, the other with ECAI. Exxon is not a direct party to either of these agreements. The first joint venture was formed by SABIC and Yanbu on April 19, 1980, and created the Saudi-Yanbu Petrochemical Co. (“YANPET”). The second joint venture was entered into by SABIC and ECAI on April 26, 1980, and established the Al-Jubail Petrochemical Co. (“KEM-YA”). Both YANPET and KEMYA are limited liability partnerships existing under the laws of Saudi Arabia, and in the business of manufacturing polyethylene in Saudi Arabia. Exxon asserts that both joint venture agreements provide that the agreements, including their Annexes “when executed”, constitute the “ ‘whole agreement’ between the Partners ...” (Joint Venture Agreement, Art. 18.1 (emphasis added)) So, according to Exxon, the December 22, 1980 Service Agreement that is the subject of the NJ-I action, is expressly incorporated into the joint venture agreements, creating a “single package” of rights and obligations. This overall scheme required participation by Exxon and Mobil (not just ECAI and Yanbu), and Exxon argues that all parties understood that Exxon and Mobil (now “Exxon”) were intended to benefit from the joint venture agreements. SA-BIC strongly refutes this version of the facts and asserts that the Service Agreement and Joint Venture Agreements constitute separate agreements. NJ-I Action By its amended complaint, SABIC seeks a declaration that KEMYA has ownership rights in proprietary information, including trade secrets and U.S. Patent No. 5,352,-749, by virtue of a December 22, 1980 Service Agreement between KEMYA and Exxon. Pursuant to the Service Agreement, Exxon, acting through its unincorporated division Exxon Chemical Company (“ECC”), agreed to provide certain services to KEMYA from time to time, including engineering, administrative, and technical services related to construction of a petrochemical plant at Al-Jubail in Saudi Arabia. (Am.ComplJ 11.) Under the Agreement, processes or patents developed as a result of services provided under the agreement were deemed the property of KEMYA, subject to royalty-free licenses given to Exxon and its affiliates. The Agreement is governed by Saudi Arabian law. In 1991, in an attempt to expand the capacity of its Al-Jubail petrochemical facility in Saudi Arabia, KEMYA requested that Exxon conduct a study of the plant reactors’ ultimate capacity (“the URC study”). (Am.Compl.1ffl 19-21.) In connection with that request, Exxon was given access to proprietary information belonging to KEMYA. Id. ¶ 22. SABIC alleges that such access occurred “well prior to the filing of the last of the patent applications that led to the '749 patent.” The URC study was completed by July 1991. SABIC claims that Exxon has improperly withheld the results of the URC study, as well as other aspects of KEMYA’s operations, and violated the '749 patent. Further, SABIC alleges that in March 1992, Exxon filed an application for a patent concerning the subject matter of the URC study without authorization. In October 1994, the U.S. Patent and Trademark Office issued the '749 patent, entitled “Process for Polymerizing Monomers in Fluidized Beds,” to the holding company Exxon Chemical Patents, Inc. (“ECPI”) as assign-ee. That patent describes a method to increase polyethylene production through a process known as “Super Condensed Mode Technology” (“SCM-T”). SABIC charges that Exxon illegally licensed or otherwise conveyed rights in the '749 patent and other KEMYA trade secrets without permission. In the NJ-I action, SABIC brings suit on behalf of KEMYA for breach of the Service Agreement and implied covenants, specific performance (delivery of the '749 patent and related trade secrets), misappropriation of trade secrets, conversion, tortious interference with prospective economic advantage, unfair competition, and unjust enrichment. SABIC has not joined the other partner, ECAI, as a plaintiff because in its view, ECAI as a subsidiary of Exxon, would not sue its related corporation. SABIC claims that Exxon expressly acknowledged SABIC and KEMYA’s right to contest Exxon’s claim of ownership to the technology at issue here. (Am.Compl., Ex. A.) The NJ-I complaint alleges that SCM-T belongs to KEMYA, and that it was wrongfully misappropriated by Exxon. Exxon disputes this argument, and avers that it had a right to practice SCM-T. (Answer ¶ 10.) The NJ-II Action — Unipol License On or about September 28, 1980, SABIC entered into an agreement with Union Carbide Corp. (“UCC”), to have the exclusive sublicense for a gas-phase process to manufacture polyethylene in Saudi Arabia. This technology is referred to as Unipol® process. In exchange for its exclusive license, SABIC pays UCC, among other things, a running royalty. (Del.Compl., ¶10.) SABIC entered into two sublicense agreements with YANPET and KEMYA, effective October 15, 1980, which gave those partnerships the right to use Unipol process in their respective plants to manufacture polyethylene. Under the subli-cense agreements, both partnerships were required to pay SABIC a running royalty. In NJ-II, Plaintiffs Exxon, Yanbu and ECAI claim that SABIC overcharged the partnerships by collecting royalties at a higher rate than agreed upon (the “royalty overcharges”). The Delaware Action On July 24, 2000, SABIC filed a complaint against Yanbu and ECAI in the Superior Court of Delaware (Civil Action No. OOC-07-161-VAB) (“Delaware action”). SABIC’s complaint seeks declaratory relief against these defendants solely on the issue of whether the royalty charges were proper under the joint venture agreements. As said, in NJ-II, Yan-bu and ECAI have accused SABIC of “over-charging” both partnerships for royalties in violation of the joint venture agreements. DISCUSSION SABIC and Exxon sharply disagree as to the nature of their overall contractual arrangements. As mentioned, they entered into a joint venture agreement in April 1980. The parties agree on this basic point, but disagree on everything that follows. According to Exxon, the joint venture agreement served as an overall operating agreement for the parties, incorporating any future agreements or amendments. SABIC denies this and argues that the April 26, 1980 Joint Venture Agreement, the subject of NJ-II, and the December 22, 1980 Service Agreement, the subject of NJ-I, are separate and distinct and should not be joined in the same action. The Court now sets forth the most plausible nature of the parties contractual relationship, for that determination guides much of the analysis to follow. The April 1980 Joint Venture Agreement entered into by SABIC and ECAI described the parties’ multiple responsibilities for the partnership arrangement to manufacture polyethylene in Saudi Arabia. The Court agrees with Exxon and finds that the Joint Venture Agreement provided the overall contractual arrangement between the parties. This view is enforced by Article 18.1 of the Joint Venture Agreement, which clearly states that the Joint Venture Agreement includes “[ajnnexes hereto, when executed” which constitute the “whole agreement” between the parties. The Joint Venture Agreement supersedes any other agreement or correspondence between the parties. Because the December 22, 1980 Service Agreement is “Annex VI” to the April 26, 1980 Joint Venture Agreement, it becomes part of the whole agreement between the parties. (Dec. 22, 1980 Service Agreement ¶ 10.1.) With this in mind, the Court now analyzes each of the six motions brought by the parties in the NJ-I and NJ-II cases. 1. Motion to Clarify or Reform the March 10, 2000 Stipulation SABIC seeks to clarify, and if necessary, reform the March 10, 2000 Stipulation (“March Stipulation”) wherein it agreed not to practice SCM-T. SABIC seeks permission for its affiliated plants to operate at the lower range of the super-condensed mode, namely an allowable usage of up to 22 wt.% condensed phase when manufacturing polyethylene. The March 10, 2000 Stipulation The March Stipulation arose from SA-BIC’s motion to dismiss Count IV of Exxon’s Amended Counterclaims: Exxon accused SABIC of breaching its fiduciary duty to KEMYA by encouraging certain SABIC affiliates, including SHARQ, to use SCM-T. SABIC moved to dismiss, and contended that it had not conveyed SCM-T information to affiliates, and that none, including SHARQ, had any intention of using SCM-T without proper authorization. Exxon agreed to a dismissal of Count TV’s counterclaims based on SA-BIC’s representations in the March 10, 2000 Stipulation which was signed as an Order of this Court on April 3, 2000. Univation Agreements In April 1997, Exxon and UCC had formed a 50/50 joint venture, Univation, to commercialize, license and enforce SCM-T patents held by Exxon. The parties expressly agreed that SABIC could operate its recycle gas phase at or below 22 wt.%. (Agozzino Decl., Ex. A ¶ 12.02.) Schedule 12.02 identifies “SABIC” as the exempt licensee. {Id. at Schedule 12.02.) According to SABIC, its management was unaware of the Univation Agreements and the fact that SABIC and its affiliates had been formally granted the right to practice “up to” 22 wt.% condensed. (Dr. Al-Ubaid Decl., ¶¶ 12,13). SABIC contends that as a result of this agreement, Exxon and UCC had covenanted between themselves and for Univation, that a limited portion of SCM-T patent rights (up to 22 wt.% condensed) would not be enforced by Univation against SABIC and its affiliates. SABIC’s management later learned of the existence of these agreements. Exxon contends that the Univation Agreements are immaterial to the present dispute and were produced long before the March Stipulation. According to Exxon, SABIC knew of the Univation Agreements before the Stipulation, and cannot now claim ignorance. In addition, “before summer”, Dr. Al-Ubaid of SABIC knew of SHARQ’s plans to practice over 17.4 wt.%. (Exxon Mem. In Opp’n to Mot. to Clarify (“Exxon Br.”) at 8, citing 10/28/00 Al-Ubaid Dep. at 666.) However, SABIC did not notify Exxon or the Court of the breach of the March Stipulation. Exxon argues that the Univation Agreements, despite assertions by SABIC, do not permit SABIC or SHARQ to operate between 17.4 and 22 wt.% condensed. Exxon argues: (1) that Schedule 12.02 of the Univation Agreements does not make any reference to SABIC’s affiliates; (2) ¶ 12.02 of the Univation Agreements does not apply to SCM-T information at or below 22 wt.%; (3) nothing in the Univation Agreements (or in the law) supports SABIC’s interpretation that SABIC or SHARQ is a third-party beneficiary; (4) ¶ 12.02 of the Agreements is neither a license nor a covenant not to sue. According to Exxon, the Univation Agreements are agreements between Univation and UCC and provide that Univation will not enforce the SCM-T patents in certain situations. Permission to Use SCM-T up to 22 wt.% Despite this Court’s April 3, 2000 Order, SHARQ switched to higher condensed phase operations to cool its recycle gas. SHARQ decided to run plant tests up to 22 wt.% condensed as permitted by the Uni-vation Agreements (but forbidden by the April 3 Order). SABIC claims that it did not know of SHARQ’s plans until after the April 3 Order was executed. SABIC then sought permission from KEMYA for SHARQ to operate at 22 wt.% because of its concern that KEMYA might be declared the owner of SCM-T instead of Exxon. Mr. Alaudah, the president of KEMYA, gave such permission (in exchange for a royalty) pending the outcome of this case. {See Exxon’s Decl. of Elizabeth J. Sher (“Sher Deck”), Ex. P.) Based on that permission, on August 1, 2000, SHARQ began running tests at levels up to 22 wt.%. The tests were apparently successful, because SHARQ started operating regularly at these levels. (AI— Ubaid Decl. ¶ 20). SABIC argues that the sole purpose of the March Stipulation was to preclude any basis for an accusation that SABIC had made or was planning to make some unauthorized use of SCM-T information transferred improperly from KEMYA. SABIC argues that the phrase “until ownership rights thereto are established” was included because SABIC did not then envision any possibility of such authorization being obtained until the litigation was resolved. SABIC believes that it has fully complied with the March 10 Stipulation and this Court’s April 3 Order by obtaining contractual authority from everyone who could be an owner of the technology. SABIC states that no SCM-T information has been transferred to SHARQ. As a result, SABIC seeks to reform or clarify the Stipulation to reflect SHARQ’s right to practice SCM-T information up to 22 wt.% condensed. The March Stipulation and April 3 Order are silent about SHARQ’s right to practice up to 22 wt.% condensed. At that time, SHARQ had informed SABIC that it did not intend to practice over 17.4 wt.% condensed. SA-BIC now cites a “business need” to practice SCM-T up to 22 wt.% condensed, and seeks a clarification and reformation of the stipulation to reflect this. Exxon’s Argument Exxon argues that the March Stipulation should not be clarified or reformed for several reasons. First, Exxon says that SABIC was and is violating the March Stipulation by allowing its affiliate, SHARQ, to practice SCM-T information before ownership is determined. Exxon also argues that SABIC’s argument that the Univation Agreements allowed other parties to use the technology only matters if SABIC loses this case, because if KEM-YA owns SCM-T Information as SABIC contends in this lawsuit, then Univation or any other entity could not grant permission to use the technology. Exxon alleges that in seeking “permission” for SHARQ to operate up to 22 wt.% condensed, SABIC engaged in improper exparte contacts with Mr. Alaudah. This was the subject of a series of submissions and hearings in August and September 2000 before Special Master Weiss on the subject of breach of the parties’ agreement to avoid exparte contacts about the litigation with KEMYA employees. Exxon says that throughout these proceedings, SABIC failed to disclose its contacts with Mr. Alaudah and its imminent plans to practice SCM-T. SABIC has defended SHARQ’s secret contacts with Mr. Alaudah, claiming that such contacts were “not related to the litigation,” even though it now places these communications before the Court as evidence to justify the relief it seeks. 1. The March Stipulation Prohibits SHARQ’s Use of SCM-T Information and Is Enforceable. The March Stipulation is clear on its face as to the representations of SA-BIC: “... neither SABIC, SHARQ, YAN-PET, Petrokemya, nor any SABIC affiliate (other than KEMYA) will use or practice the SCM-T Information until the ownership rights thereto are established and the owner expressly authorizes such use.” (March 10, 2000 Stip., 2) This Court disagrees with SABIC’s assertion that the March Stipulation is ambiguous with regard to SHARQ’s right to practice SCM-T Information. SABIC’s arguments that the Univation Agreements create rights for SABIC and its affiliates with regard to the SCM-T information are problematic for several reasons. First, there is little reason to believe that the Univation Agreements were not available for review by SABIC before SABIC and Exxon entered into the March Stipulation. The documents were produced to SABIC four months before the March Stipulation. The Protective Order did not prevent a business designee from having access to these agreements. (See Sher Aff., Ex. E.) Therefore, this Court finds that SABIC’s proclaimed ignorance of the terms within the Univation Agreements is unreasonable and suspect. Also, it is unclear whether Schedule 12.02 of the Univation Agreements granted SHARQ rights to practice SCM-T information. Schedule 12.02 of the Agreement does not explicitly include SABIC’s affiliates and SABIC has not asserted a compelling reason to find that the contract should be interpreted to include its affiliates. Last, assuming that the Univation Agreements afforded rights to SHARQ to practice SCM-T information, Section 12.02 of these agreements was a statement of present intent between UCC and Exxon. There was nothing to preclude these two parties from amending the terms of the agreements so as to allow Univation to enforce the patents against SABIC. This Court does not find the March Stipulation to conflict with the terms of the Univation Agreements. By the March Stipulation, SABIC agreed that SABIC and its affiliates would not use or practice the SCM-T Information until ownership rights were established and the owner expressly authorized such use. Exxon and UCC’s earlier agreement not to enforce patent rights against SABIC does not relieve SABIC of its obligations under the March Stipulation. This Court finds that the March Stipulation is an unambiguous and enforceable agreement. 2. SABIC has failed to Demonstrate Permission. SABIC has also failed to demonstrate permission for use of the SCM-T information. KEMYA’s ownership is far from certain. It is unclear that the President of KEMYA, Mr. Alaudah’s, grant of permission to SHARQ for use of the SCM-T information was proper. Exxon argues that the documents governing KEMYA’s operations require Board approval for any offer to sell or dispose of property of the Partnership. Mr. Alaudah, president of KEMYA, did not disclose his discussions with SABIC to the other partner, and in doing so, failed to follow KEMYA’s approval processes. This Court finds that SHARQ did not receive proper permission to practice the SCM-T information. 3. No Justification to Clarify or Reform the Stipulation There is substantial reason to deny clarification or reformation of the stipulation: SABIC’s motion offers no legal basis to justify reformation. Contract law generally allows reformation only where necessary “to express the agreement [the parties intended.]” Restatement (Second) of Contracts § 155 (1979). While “mutual mistake” can justify reformation, unilateral mistake cannot. See In Re Resorts International, 181 F.3d 505, 512 (3d Cir.1999) (“ ‘unilateral mistake of a fact unknown to the other party is not ordinarily grounds for avoidance of a contract.’ ”); see also Coca-Cola Bottling Co. of Elizabethtown, Inc. v. Coca-Cola Co., 988 F.2d 386, 404 (3d Cir.1993), cert. denied, 510 U.S. 908, 114 S.Ct. 289, 126 L.Ed.2d 239 (1993) (same). SABIC has neither raised the issue of mutual mistake, nor pled any facts of mutual mistake about the meaning of the March 10, 2000 Stipulation. Although there is an exception to the general principle denying relief for unilateral mistake when the non-mistaken party “ ‘knows or has reason to know of the unilateral mistake’ ”, In re Allegheny International, Inc., 954 F.2d 167, 180 (3d Cir.1992) (citations omitted), here SABIC has not pled any facts of its “unilateral mistake”, much less Exxon’s knowledge of any unilateral mistake. Moreover, modification of a consent order “should not ordinarily be granted “where a party relies on events that actually were anticipated at the time it entered into a decree.’ ” Building & Constr. Trades Council of Philadelphia & Vicinity, AFL CIO v. NLRB, 64 F.3d 880, 886 (3d Cir.1995)(quoting Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 385, 112 S.Ct. 748, 760, 116 L.Ed.2d 867 (1992)). This Court denies SABIC’s motion to clarify or reform the March 2000 Stipulation because legal justification is absent. Unilateral mistake is not a basis for reformation of an Order. Since August 1, 2000, SABIC has been violating the April 3 Order by allowing SHARQ to practice SCM-T at levels of 22 wt.% condensed. A “business need” even if substantiated, is not a sufficient reason to ignore a Court Order. Because SABIC’s motion is denied, Exxon’s motion for expedited discovery on this issue is mooted. 2. SABIC’s Rule 12(c) Motions to Strike “Unclean Hands” and “Set Off” De-PENSES In the second of its NJ-I motions, SA-BIC moves to strike, pursuant to Fed. R. Civ. P 12(c), Exxon’s unclean hands and “set-off’ defenses because these defenses are allegedly based on a separate agreement. A. Standard of Review A motion for judgment on the pleadings under Rule 12(c) is appropriate when the moving party establishes on the face of the pleadings that it is entitled to judgment as a matter of law. Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290 (3d Cir.1988); Soc’y Hill Civic Ass’n v. Harris, 632 F.2d 1045, 1054 (3d Cir.1980). The motion must be denied “ ‘unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law.’ ” Ilan-Gat Eng’rs, Ltd. v. Shelter Sys. Corp., 879 F.Supp. 416, 419 (D.N.J.1994)(quoting Hayes v. Cmty. Gen’l Osteopathic Hosp., 940 F.2d 54, 56 (3d Cir.1991)). The mov-ant carries the heavy burden of establishing beyond doubt that “no relief can be granted under any set of facts that could be proved.” Taj Mahal Travel, Inc. v. Delta Airlines, 164 F.3d 186, 189 (3d Cir.1998); Inst. for Scientific Info., Inc. v. Gordon & Breach, Sci Publishers, Inc., 931 F.2d 1002, 1005 (3d Cir.1991) In reviewing a 12(c) motion, the court must accept the nonmovant’s allegations as true and view the facts and inferences in the light most favorable to the nonmoving party. Jablonski, 863 F.2d at 289-90; Ilan-Gat Eng’rs., 879 F.Supp. at 419. B. Arguments Exxon first argues that because SABIC is relying on matters outside the pleadings, the summary judgment standard should be applied. However, because in motions for judgment on the pleadings, the Court may consider the pleadings and any written instruments attached as exhibits, there is no need for conversion. Northern Indiana Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 452 (7th Cir.1998). The Court may also consider any documents referred to in the pleadings, including any undisputedly authentic documents that the claim or defense is based upon. Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993); In re Donald J. Trump Casino Sec. Litig., 7 F.3d 357, 368 n. 9 (3d Cir.1993). Because SABIC has relied on the contents of Exxon’s pleadings, together with the documents expressly referenced therein, these motions will be analyzed under Rule 12(c). 1. The Unclean Hands Defense Relates to the Joint Venture Agreement. Under general principles of equity, “ ‘[a party] who comes into equity must be with clean hands.” Heuer v. Heuer, 152 N.J. 226, 238, 704 A.2d 913 (1998). Where a party has unclean hands with regard to the transaction at issue, the party cannot invoke the equitable powers of the Court. See id. SABIC relies on the argument that Exxon’s “unclean hands” defense arises out of two separate agreements between different sets of parties, with the crux of the NJ-I lawsuit being Exxon’s alleged breach of the December 22, 1980 Service Agreement. In response, Exxon asserts that SABIC acted with “unclean hands” in allegedly overcharging KEMYA for royalty payments based on the October 15, 1980 agreement (“royalty overcharges”). SA-BIC says that Exxon cannot do this because the agreements described above are separate agreements. As discussed above, this Court has determined that the NJ-I and NJ-II actions arise from one overall agreement. From that, the Court agrees with Exxon that SABIC has not met the high burden of establishing that relief could not be granted under any set of facts. SABIC’s argument that the unclean hands defense should be stricken because it relates to a separate agreement is rejected. 2. Unclean Hands Defense Must Relate to Subject Matter of Complaint. The unclean hands defense must relate closely to the subject matter of the complaint. In re New Valley Corp., 181 F.3d 517, 525 (3d Cir.1999)(“the alleged inequitable conduct must be connected, i.e. have a relationship to the matters before the court for resolution”), cert. denied, 528 U.S. 1138, 120 S.Ct. 983, 145 L.Ed.2d 933 (2000). Properly viewed, the equitable maxim of unclean hands is a tool for the court, rather than a defense for the accused. Sears, Roebuck & Co. v. Sears plc, 744 F.Supp. 1297, 1309 (D.Del.1990) (“In actuality, a defendant’s claim of unclean hands ... is not a defense at all. When presented with a claim of unclean hands, the court is primarily concerned with protecting its own integrity ... ”) The doctrine only comes into play when it is evident from the pleadings that the allegedly improper conduct is directly related to the conduct about which plaintiff complains, because only in such circumstances is the Court’s equitable power implicated. New Valley, 181 F.3d at 525. SABIC asserts that the contractual provision upon which Exxon bases its defense is separate, distinct and independent of the breach of contract claim raised by SABIC. When a party’s equitable defense is not based upon a purported breach of a contractual provision at issue, such a defense may not serve to bar plaintiffs claims. See Laborers’ Int'l Union of North Am. v. Foster Wheeler Corp., 26 F.3d 375 (3d Cir.1994) (suit to compel arbitration under pre-hire agreement not barred by unclean hands because unclean hands premised on breach of different contractual provision). However, this Court finds that there is a close enough relationship between the inequitable conduct and the claims in the lawsuit to give Exxon the opportunity to assert the defense. SABIC has not met its heavy burden of establishing beyond doubt that, “no relief can be granted under any set of facts that could be proved.” Taj Mahal Travel, 164 F.3d at 189. The Court has already found that the Service Agreement and Unipol Agreement are part of the overall Joint Venture Agreement. The allegation by Exxon that SABIC has overcharged the joint venture in violation of the Joint Venture Agreement is conduct related to the breach of the same Joint Venture Agreement. SA-BIC’s alleged unclean hands in overcharging the joint venture in NJ-II are directly relevant to its effort in NJ-I to invoke this Court’s equitable powers and enforce obligations supposedly owed by Exxon. This alleged conduct by SABIC could be considered unconscionable conduct that permeates the transaction as a whole. See Shell Oil v. Marinello, 120 N.J.Super. 357, 392, 294 A.2d 253 (N.J.Super.L.1972) (“It is the effect of the inequitable conduct on the total transaction which is determinative whether the [unclean hands defense] shall or shall not be applied.”). 3. Unclean Hands Defense Must Relate to the Party Alleged to Have Committed Wrongdoing. SABIC’s additional argument as to why the unclean hands defense should be stricken is that KEMYA is the real party in interest and the unclean hands defense is against SABIC. Because the unclean hands defense must relate to the party seeking that equitable relief, SABIC alleges that the unclean hands defense is improper. Exxon argues that because SABIC is suing on behalf of KEMYA, there are no other partners against whom to assert the unclean hands defense. Even if KEMYA is innocent, SABIC’s unclean hands would prevent it from suing derivatively on KEMYA’s behalf. See Gaudiosi v. Mellon, 269 F.2d 873, 882 (3d Cir.1959); Recchion v. Kirby, 637 F.Supp. 1309, 1315-16 (W.D.Pa.1986) (holding that a shareholder with unclean hands cannot sue derivatively)- If SABIC as a derivative shareholder suing on behalf of KEMYA is found to have unclean hands, the Court finds that this wrongful conduct would bar SABIC from bringing the claims at issue. This view is well-established in case law. Rec-chion applied the doctrine of unclean hands to prevent plaintiff shareholder in a derivative action from complaining about the very conduct which he facilitated. The close connection between the plaintiffs own wrongful conduct and the wrongful conduct which was the basis of the derivative suit allowed the unclean hands defense to go forward. Id. at 1315-16. Similarly, in Gaudiosi, in a derivative action for equitable relief related to a disputed proxy contest, the wrongful conduct of one of the contestants in intimidating the other stockholders abstain from voting their shares allowed an unclean hands defense. Gaudiosi, 269 F.2d at 882. 4. Exxon’s Standing to Assert the Royalty Overcharge Claim as Its Unclean Hands Defense SABIC’s final argument in support of its motion to strike the unclean hands defense is that Exxon lacks standing to assert the royalty overcharge claim because it is neither a party nor a third-party beneficiary of the Joint Venture Agreement between SABIC and ECAI. The Court dismisses this argument for the reasons expressed in the following discussion of the setoff defense. C. Setoff Defense SABIC incorporates its previous New Valley argument that the lack of a close nexus between the defense and the complaint requires dismissal of the “setoff’ defense and offers other arguments. Setoff is a procedural device to allow a party to reduce the amount owed to an opposing party by the value of the opponent’s cross-obligations to that party. U.S. v. York, 909 F.Supp. 4, 9 (D.D.C. 1995). “[A] party can have ... setoff rights only against one asserting claims against himself.” Nashville Lodging Co. v. Resolution Trust Corp., 59 F.3d 236, 246 (D.C.Cir.1995). The common law right of setoff is permissive, not mandatory. See In re Monongahela Rye Liquors, 141 F.2d 864, 869 (3d Cir.1944). It cannot be invoked when the general principles of equity would not justify it. York, 909 F.Supp. at 8. The right to a setoff depends on the existence of mutual debts between the parties to the litigation. Id. at 9.; see also, In Matter of Bevill, Bresler & Schulman, 896 F.2d 54, 57-58 (3d Cir.1990) (“The right of setoff depends on the existence of mutual debts and claims between creditor and debtor.”). In other words, direct privity of contract is required before any setoff may be claimed. York, 909 F.Supp. at 9. 1. SABIC’s Arguments a. Privity Required for “Setoff’ Defense According to SABIC, Exxon lacks standing to assert a setoff for the alleged royalty overcharges, losses and damages suffered indirectly by ECAI, because Exxon was neither a party to the Univation Agreement, nor to the Joint Venture Agreement. The overcharges, even if proved, cannot create any obligation by SABIC to pay Exxon. In this situation, a setoff is barred. Capuano v. U.S., 955 F.2d 1427, 1430 (11th Cir.1992) (“It goes without saying that neither party may offset moneys in its hands belonging to some other party.”). b. Disagreement About Exxon’s Third Party Beneficiary Status SABIC also argues that Exxon lacks standing to assert “setoff’ because it was not an intended third-party beneficiary of the KEMYA joint venture. For Exxon to have standing, it must demonstrate that it was an intended third-party beneficiary of the KEMYA joint venture. Grant v. Coca-Cola Bottling Co., 780 F.Supp. 246, 248-49 (D.N.J.1991) (“[i]n order to qualify as a third-party beneficiary, the claimant must show that the contract was ‘made for the benefit of [that] party within the intent and contemplation of the contracting parties’ ”) (citations omitted). It must be more than “mere knowledge” that some third-party may incidentally benefit; rather, it must be a “motivating factor.” See Grant, 780 F.Supp. at 249. According to SABIC, not only has Exxon failed to plead the required facts, but has failed to demonstrate any basis for its standing to assert a setoff based on the alleged royalty overcharge, except to assert its corporate parent status of ECAI, the true party in interest. However, ECAI, says SABIC, is an independent corporation, created under Delaware law, and a wholly owned subsidiary of Exxon Overseas Corp., an independent corporation, which is in turn a subsidiary of ExxonMo-bil. Exxon disputes this, and claims that it owns 100% of both companies, and therefore is the true “party-in interest.” Although Exxon is a grandparent company of ECAI, the corporate relationship, in and of itself, is not enough to confer standing. As a matter of law, Exxon as a distant parent to ECAI cannot demonstrate that it is an intended beneficiary because any benefit it receives as a parent (such as profits earned by the subsidiary) is indirect and incidental. See Dow Corning v. Chem. Design, Inc., 3 F.Supp.2d 361, 365-66 (W.D.N.Y.1998). If Exxon cannot prosecute the royalty overcharge claim directly, it cannot do so indirectly by an affirmative defense or setoff. Consequently if SABIC has overcharged KEMYA, any refund is owed to KEMYA, not to Exxon, a non-party to the Unipol transaction upon which the royalty overcharge claims are based. Such are the arguments of SABIC. 2. Exxon’s Argument: SABIC has not met its burden Exxon counters that SABIC’s motion for partial judgment on the pleadings to dismiss Exxon’s setoff defense must be denied absent a showing that Exxon can prove no set of facts that would sustain the defense. Although Exxon asserts that it was an intended third-party beneficiary, it does not directly answer SABIC’s charge that a grandparent is not a third-party beneficiary per se. See In re Bacigalupi, Inc., 60 B.R. 442, 446 (9th Cir.BAP 1986) (stating that a setoff claim ‘cannot fail for lack of mutuality’ where complaint in other acts alleges third-party beneficiary status) Exxon avers that its allegations as a third-party beneficiary suffice for purposes of this motion. See Ilan-Gat Eng’rs, 879 F.Supp. at 419. Exxon has expressly pled its third-party status (NJ-II Compl. ¶ 28), and argues that this suffices for its designation as a third-party beneficiary. See Caldwell Trucking PRP Group v. Spaulding Composites Co., 890 F.Supp. 1247, 1252 (D.N.J.1995) (considering pleadings filed in other courts for purposes of 12(b)(6) motion). Exxon argues that even beyond the pleadings, the facts demonstrate that it is a third-party beneficiary because the agreement names Exxon, and operates to its benefit. See ESI, Inc. v. Coastal Corp., 61 F.Supp.2d 35, 73-74 (S.D.N.Y.1999) (holding that, although defendant was not a signatory to joint venture agreement, plaintiff could bring breach of contract claim against defendant where defendant participated in contract negotiations and drafting and had obligations related to joint venture). Finally, Exxon argues that any questions of fact as to Exxon’s third-party status cannot be resolved on a 12(c) motion, or a motion for summary judgment. See Pension Fund-Mid Jersey Trucking Indus.-Local 701 v. Omni Funding Group, 731 F.Supp. 161, 171 (D.N.J.1990) (denying motion for summary judgment in view of issues of fact of “whether parties were intended beneficiaries of contract”); see also Consolidated Rail Corp. v. Portlight, Inc., 188 F.3d 93, 98 (3d Cir.1999) (denying 12(c) motion where pleadings contained no information on the factual question, and the factual record was still undeveloped). 3. Conclusion The Court finds that for purposes of this motion, Exxon’s allegations of its third-party beneficiary status must be accepted and finds that Exxon has sufficiently pled its third-party status. This Court agrees with Exxon and finds that a question of fact as to Exxon’s third-party status cannot be resolved on a 12(c) motion for summary judgment. It is sufficient now for Exxon to have plead its third-party beneficiary status. The Court denies SA-BIC’s Rule 12(c) motion. 3. Exxon’s Motion to Dismiss Pursuant to Rule 19 In the third NJ-I motion, SABIC purports to bring derivative claims on behalf of KEMYA asserting that Exxon is obligated under contract and tort law to assign the rights of SCM-T information to KEMYA. Yet, SABIC has failed to name ECAI, the other partner in KEMYA, as a defendant. Exxon disputes SABIC’s right to sue derivatively on KEMYA’s behalf, and has preserved its defenses related to SABIC’s failure to name either KEMYA or ECAI as indispensable parties. Exxon now moves to dismiss SABIC’s derivative claims pursuant to Fed.R.Civ.P. 19 for failure to join a necessary and indispensable party. Alternatively, Exxon requests that this Court grant SABIC a 14-day leave to cure its defective pleading by adding ECAI as a defendant. Rule 19 sets out separate tests for determining whether a party is “necessary” and “indispensable.” If the court finds that a party is a “necessary one,” it should direct the plaintiff to amend its complaint to add the person. Failure to comply with such an order may result in dismissal of the plaintiffs action. See Window Glass Cutters League of Am., AFL/CIO v. Am. St. Gobain Corp., 428 F.2d 353, 354 (3d Cir.1970); Rainville Co. v. Consupak, Inc., 407 F.Supp. 221, 225 (D.N.J.1976). When joinder is not feasible, the action must be dismissed if the unnamed person is “indispensable.” Courts which analyze joinder fully consider each factor listed in Rules 19(a) and 19(b) to determine whether join-der or dismissal is required. See Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 118, 88 S.Ct. 733, 741, 19 L.Ed.2d 936 (1968). Exxon complains that SABIC has not named either ECAI or KEMYA as a defendant. SABIC responds that Exxon and ECAI are effectively the same entity because Exxon stands in ECAI’s shoes. SA-BIC alleges that its failure to add ECAI is justified by the futility of asking ECAI to “sue its parent or otherwise take action contrary to Exxon’s interests.” (First Am. Compl. ¶ 9). In derivative actions, a plaintiff should name the real party in interest to prevent the risk of dismissal. Cases have applied the same rule to partnerships and have dismissed derivative claims when the partnership was an absent party. See Bankston v. Burch, 27 F.3d 164, 167 (5th Cir.1994) (“the partnership is ... an indispensable party without whom the lawsuit should not go forward.”). In the Third Circuit, however, the rule has been modified such that “at least in certain cases, it is possible that a partnership’s interest can be effectively represented in litigation by participation of its partners.” HB General Corp. v. Manchester Partners, L.P., 95 F.3d 1185, 1193 (3d Cir.1996). In general, federal courts are extremely reluctant to grant motions to dismiss based on nonjoinder, and dismissal will be ordered only when the defect cannot be cured and serious prejudice or inefficiency will result. See Provident Tradesmens Bank & Trust, 390 U.S. at 118, 88 S.Ct. at 743 (“To say that a court ‘must’ dismiss in the absence of an indispensable party and that it ‘cannot proceed’ without him puts the matter the wrong way around: a court does not know whether a particular person is ‘indispensable’ until it had examined the situation to determine whether it can proceed without him.”). With that in mind, the Court will determine whether ECAI or KEMYA are necessary and indispensable parties. A. Is Either ECAI or KEMYA a “Necessary Party” under Rule 19(a)? SABIC argues that KEMYA is not a necessary party because it meets none of the criteria of Rule 19(a): first, Kemya is not a party in whose absence “complete relief cannot be accorded.” Fed.R.Civ.P. 19(a)(1). A decision in favor of SABIC (acting derivatively) for KEM-YA would restore the misappropriated asset to KEMYA, and end this dispute. Alternatively, a decision in favor of Exxon would end the dispute by binding SABIC, KEMYA, and ECAI. KEMYA cannot file another claim without SABIC’s express authorization, and a binding decision upon SABIC precludes this possibility. Also, ECAI is the only other partner, and it will not take action against its parent. Ono v. Itoyama, 884 F.Supp. 892, 899 (D.N.J.1995) (“The Court may presume a 50% shareholder would not agree to initiate litigation against himself.”). In SABIC’s view, there can be complete relief without naming ECAI or KEMYA as defendants. This Court agrees with SABIC’s argument. Next, SABIC argues that the absent party’s ability to protect its interest is not prejudiced. Federal Rule of Civil Procedure 19(a)(2) is intended to either allow an absent party to protect its interests in the event they differ from the parties already in the litigation, or to ensure that the existing parties adequately represent interests of the absent party. Also, joinder is not required when the party, even if joined, could not protect its own interests. Exxon’s control over ECAI, coupled with the absence of any other partner to act on KEMYA’s behalf, thwarts KEMYA’s ability to act independently, so KEMYA is not prejudiced by its absence. Rule 19(a)(2)(ii) provides that when non-joinder of the absent party could subject the other parties to “multiple, double, or otherwise inconsistent lawsuits”, joinder is necessary. Hagstrom v. Breutman, 572 F.Supp. 692, 701 (N.D.Ill.1983). It should be noted that Rule 19 protects only against inconsistent obligations, not inconsistent adjudications. See RPR & Assoc. v. O’Brien/Atkins Assoc., P.A., 921 F.Supp. 1457, 1464 (M.D.N.C.1995). The Third Circuit agrees that Rule 19 is not triggered merely by inconsistent adjudications. See Field v. Volkswagenwerk AG, 626 F.2d 293, 301-02 (3d Cir.1980). (The mere risk that a defendant who has successfully defended against a party may be found liable to another plaintiff in a subsequent action does not necessitate joinder of all of the parties in one action.) SABIC argues that there is no scenario under which ECAI could be exposed to inconsistent obligations: There are only two partners in KEMYA, ECAI (owned and controlled by Exxon) and SABIC. Because KEMYA cannot act without SA-BIC’s express authorization, there is no risk of multiple lawsuits or inconsistent obligations. Exxon counters that SABIC does not represent KEMYA’s interests. Exxon points to three instances when SABIC’s and KEMYA’s interests have conflicted. First, SABIC offers SCM-T as a major advance over Unipol® technology, and asserts that it would have the automatic right to freely use and sublicense SCM-T, if it is determined to be owned by KEM-YA. This conflicts with the spirit of the Unipol Agreement between SABIC and KEMYA, which allows KEMYA to license its major advances to SABIC and UCC, without allowing SABIC to sublicense them further. (SABIC/KEMYA UCC License XI.9, Sher Aff. Exh. C). SABIC is advancing a position that conflicts with KEMYA’s interests, says Exxon. Second, SABIC earlier conceded that SHARQ, its half-owned affiliate, and a direct competitor of KEMYA, is currently using SCM-T, in violation of the March Stipulation that “neither SABIC, SHARQ, YANPET, PetroKEMYA, nor any SABIC affiliate (other than KEMYA) will use or practice the SCM-T information until ownership rights are established.” According to Exxon, SABIC’s violation demonstrates that it has acted, and will continue to act against KEMYA’s interests. Third, SABIC’s alleged overcharging of the KEMYA partnership and efforts to prevent Exxon from litigating the overcharge claims represent another example that SABIC has compromised KEMYA’s interests. Exxon argues that KEMYA’s interests will not be adequately protected unless either ECAI or KEMYA is joined. The Court agrees with SABIC that complete relief could be accorded to the parties without KEMYA’s presence and that KEMYA lacks interests that would leave the parties subject to inconsistent obligations. But, this Court finds that KEM-YA does have independent interests with regard to its licensing relationships, as Exxon describes, that would make it a necessary party under Rule 19(a), “if feasible.” B. Under Rule 19(b), All Indispensable Parties Must be Joined SABIC does not agree that KEM-YA and ECAI are necessary parties, so in its view, no further inquiry under Rule 19(b) is necessary. See Janney Montgomery Scott v. Shepard Niles Inc., 11 F.3d 399, 405 (3d Cir.1998). (“A holding that joinder is compulsory under Rule 19(a) is a necessary predicate to a district court’s discretionary determination under Rule 19(b) that the party is indispensable.”). SABIC points out that even if ECAI is deemed “necessary,” not all necessary parties are indispensable. RPR & Assoc., 921 F.Supp. at 1463. The practical effect here is that if the Court finds ECAI or KEMYA to be indispensable, their addition would destroy diversity jurisdiction and require the dismissal of this case. When a necessary party who should be joined cannot be joined, the Court must analyze the factors in Rule 19(b) to determine whether to proceed without the absent party, or to dismiss the action. If the merits can be determined without prejudice to the rights of the necessary but absent parties, a court of equity will strain hard to reach that result. See Bourdieu v. Pacific Western Oil. Co., 299 U.S. 65, 70, 57 S.Ct. 51, 53, 81 L.Ed. 42 (1936) reh’g denied, 299 U.S. 622, 57 S.Ct. 228, 81 L.Ed. 458 (1936). “In determining whether a party is indispensable, the court must consider the practical potential for prejudice in the context of the particular factual setting.... ” RPR & Assoc., 921 F.Supp. at 1463, citing Provident Tradesmens Bank & Trust Co., 390 U.S. 102, 88 S.Ct. 733, 19 L.Ed.2d 936. SABIC suggests that the Rule 19(b) factors establish that KEMYA is not “indispensable.” First, a decision on SABIC’s derivative claim will not prejudice KEM-YA or expose Exxon to multiple claims. Second, even if there were some conceivable risk to Exxon, there are measures by which such perceived risk can be averted or lessened. Fed.R.Civ.P. 19, Advisory Comment at 121. As example, injunctive relief could fully protect Exxon against risk of a later suit by SABIC. Third, a judgment rendered in KEMYA’s absence would adequately resolve the dispute as to all parties, including KEMYA, on whose behalf the action was filed. Finally, neither SABIC nor KEMYA will have an adequate remedy if the action is dismissed for nonjoinder. H.B. General Corp., cited above, is instructive. That case addressed whether one partner in a limited partnership would be prejudiced by the absence of the partnership entity, because it could file its own identical claims against the defendant, thereby exposing it to multiple suits or inconsistent obligations. The Court initially determined that the partnership was a necessary party because of independent interests that it held. However, the Court, relying on pragmatic considerations, concluded that because there were only three partners, and there were no partners absent which might have an interest in suing the defendant, a decision against the plaintiffs fully protected the defendant, and no joinder was necessary. Here, SABIC is the only partner able to prosecute the partnership’s claims against Exxon. If SABIC loses on the merits, injunctive relief fully protects Exxon against further claims by SABIC on behalf of KEMYA. As SABIC argues, SABIC’s derivative claim will not be prejudicial to KEMYA’s interests or expose Exxon to multiple suits. Also, neither SABIC nor KEMYA has an adequate remedy if this action is dismissed for nonjoinder because of KEMYA Board deadlock. In light of these practical considerations, this Court finds that KEMYA is not an indispensable party in the context of Rule 19(b). C. Waiver of Any Contention that KEMYA is an Indispensable Party SABIC argues that Exxon has waived any contention that KEMYA is an indispensable party. SABIC interprets Exxon’s counsel’s representation in open court, “[w]e don’t take the position that KEMYA is an indispensable party,” as waiving the Rule 19 claim (Comprehensive Lorell Decl. Ex. N). Exxon denies that this one statement constitutes waiver. It admits that counsel made the statement only because SABIC treated Exxon and ECAI as the same party. After SABIC reversed itself, and asserted that Exxon cannot represent ECAI’s interests, it became clear that either ECAI or KEMYA must be joined. Even though Exxon’s counsel said what he said, the Federal Rules expressly declare that a party cannot waive the defense of failure to join an indispensable party. “[A]n objection based on the absence of an indispensable party can be raised at any time, even by an appellate court ...” Travelers Indem. Co. v. Household Int’l, Inc., 775 F.Supp. 518, 529 (D.Conn.1991). An Illinois case advanced by SABIC, National Acceptance Co. v. Wechsler, 489 F.Supp. 642, 645 (N.D.Ill.1980), is not helpful because the court held that the party seeking joinder had contractually waived its right to join myriad other parties. Id. at 645. Exxon has never contractually agreed to waive its right to bring this motion. There has been no waiver of Exxon’s joinder claim. D. Joinder and Diversity Jurisdiction The Court surmises that SABIC does not seek to join ECAI or KEMYA because such joinder would destroy diversity jurisdiction — KEMYA and Exxon are Texas residents. SABIC responds that even though both KEMYA and Exxon are Texas residents, courts have a duty in diversity cases to realign the parties according to their interests. See Develop. Finance Corp. v. Alpha Housing & Health Care, Inc., 54 F.3d 156, 159 (3d Cir.1995) (Describing a “fundamental principle of federal jurisdiction that ‘[i]n determining the alignment of parties for jurisdictional purposes, the courts have a ‘duty’ to look beyond the pleadings and arrange the parties according to their sides in the dispute.’ ”) (quoting Indianapolis v. Chase Nat’l Bank, 314 U.S. 63, 69, 62 S.Ct. 15, 17, 86 L.Ed. 47 (1941)). Because KEMYA’s interest is to seek enforcement of the Service Agreement— which SABIC contends on KEMYA’s behalf that Exxon has breached — KEMYA should be aligned with SABIC as a plaintiff. Exxon concedes that adding either ECAI or KEMYA will destroy diversity because a partnership is deemed a citizen of each state where its partners are individual citizens. Carden v. Arkoma Assocs., 494 U.S. 185, 195, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990); HB General, 95 F.3d at 1190 (“for diversity jurisdiction purposes, a limited partnership is considered a citizen of each state in which its partners ... are citizens”). KEMYA is a citizen of Saudi Arabia, where SABIC is incorporated, and of Texas, where ECAI has its principal place of business. Joinder of KEMYA would destroy diversity because both KEMYA and Exxon are citizens of Texas. See VMS/PCA LP v. PCA Partners LP, 727 F.Supp. 1167, 1169 (N.D.Ill.1989). When joinder of a partnership to a derivative suit is not feasible due to diversity requirements, the suit must be dismissed unless all partners are joined as parties to the suit. HB General, 95 F.3d at 1193. However, applying the Rule 19(b) factors here, the Court finds that neither KEMYA nor ECAI is an indispensable party because this Court in equity finds that any judgment rendered in the party’s absence will be adequate and not prejudicial to such absent parties since each is represented by 50% partners SABIC and Exxon (as grandparent to ECAI) in this lawsuit. Furthermore, SABIC will not have an adequate remedy if this action is dismissed for non-joinder. Neither ECAI or KEMYA will be considered and added as indispensable parties. Diversity jurisdiction remains. 4. SABIC’s Motion to Dismiss the NJ-II Complaint under the Foreign Sovereign Immunities Act (FSIA) In NJ-II, SABIC moves to dismiss the complaint claiming immunity as a foreign state under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1602 et seq., lack of personal jurisdiction and improper venue. Alternatively, SABIC argues that the court should abstain from exercising jurisdiction even if jurisdiction exists. Further, SABIC asks the Court to dismiss ExxonMobil as a third-party plaintiff because it lacks standing to assert the third-party beneficiary claims. In the event that the complaint survives, SABIC contends that the jury demand should be stricken. A. Standard of Review Unlike a motion to dismiss for failure to state a claim pursuant to Fed. R.Civ.P. 12(b)(6), in a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), no presumption of truthfulness attaches to the allegations in the complaint and the court may consider matters outside the pleadings such as affidavits and other material properly before the court. Mortensen v. First Federal Savings & Loan Ass’n, 549 F.2d 884, 891 (3d Cir.1977). In a Rule 12(b)(1) motion, “the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Mortensen, 549 F.2d at 891. “[T]he existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist.” Id at 891. The plaintiff must not only demonstrate that a controversy existed at the time it filed suit but that it continues to exist throughout the litigation. Spectronics Corp. v. H.B. Fuller Co., 940 F.2d 631, 635 (Fed.Cir.1991). A motion to dismiss for lack of subject matter jurisdiction predicated on the legal insufficiency of a claim may be granted if the claim “clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or ... is wholly insubstantial and frivolous.” Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1408-09 (3d Cir.), cert. denied, 501 U.S. 1222, 111 S.Ct. 2839, 115 L.Ed.2d 1007 (1991)(quoting Bell v. Hood, 327 U.S. 678, 683, 66 S.Ct. 773, 90 L.Ed. 939 (1946)). B. Subject Matter Jurisdiction SABIC contends that this court lacks subject matter jurisdiction under both of the grounds that Exxon asserts. SABIC argues that this Court lacks diversity jurisdiction under 28 U.S.C. § 1332 and original jurisdiction under 28 U.S.C. § 1330, the Foreign Sovereign Immunities Act. 1. Diversity Jurisdiction As SABIC argues, diversity jurisdiction does not exist in this case. Section 1332 confers diversity jurisdiction upon “a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States.” It is undisputed that SABIC, an entity of which approximately 70% is owned by the Kingdom of Saudi Arabia (Al-Ubaid Decl. ¶ 3), qualifies as a “foreign state” under the definition of 1603(a). However, because SA-BIC is not the party plaintiff, Section 1332 would not confer jurisdiction. (Compl.f 5). See Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 437 n. 5, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989) (1976 amendments to § 1332 eliminated diversity jurisdiction over “foreign state” defendants). As explained by the Supreme Court in Argentine Republic, “ ‘[sjince jurisdiction in actions against foreign states is comprehensively treated by the new section 1330, a similar jurisdictional basis under section 1332 becomes superfluous.’ ” Id. (citing H.R.Rep., at 14, S.Rep., at 13, U.S.Code Cong. & Admin. News 1976, p. 6613). 2. Original Jurisdiction Under the FSIA SABIC further argues that this Court lacks original jurisdiction over this matter because of immunities SABIC claims under the Foreign Sovereign Immunities Act of 1976 (“FSIA”), 28 U.S.C. 1602 et. seq. The FSIA “establishes a comprehensive framework for determining whether a court in this country, state or federal, may exercise jurisdiction over a foreign state.” Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 610, 112 S.Ct. 2160, 2164, 119 L.Ed.2d 394 (1992). The FSIA grants district courts subject matter jurisdiction over actions against “foreign states” pursuant to 28 U.S.C. § 1330(a), which provides that “district courts shall have original jurisdiction without regard to the amount in controversy of any nonjury civil action against a foreign state” as to any claim for which “the foreign state is not entitled to immunity under sections 1605-1607 of this title.... ” The FSIA provides the “sole basis” for obtaining jurisdiction over a foreign sovereign in U.S. state and federal courts. Id. Section 1604 of the FSIA provides that a foreign state shall be immune from the jurisdiction of U.S. federal and state courts, unless one of several statutory exceptions applies. 28 U.S.C. § 1604. When immunity under the FSIA is contested, the following burden-shifting analysis should be applied: [0]nce the defendant presents a prima facie case that it is a foreign sovereign, the plaintiff has the burden of going forward with showing that, under exceptions to the FSIA, immunity should not be granted, Baglab Ltd. v. Johnson Matthey Bankers Ltd., 665 F.Supp. 289, 293-A (S.D.N.Y.1987), although the ultimate burden of persuasion remains with the alleged foreign sovereign. Forsythe v. Saudi Arabian Airlines Corp., 885 F.2d 285, 289 n. 6 (5th Cir.1989). Drexel Burnham Lambert Group Inc. v. Committee of Receivers for A.W. Galadari, 12 F.3d 317 (2d Cir.1993) (quoting Cargill Int’l S.A. v. M/T PAVEL DYBENKO, 991 F.2d 1012, 1016 (2d Cir.1993)); see also Voest-Alpine Trading USA Corp. v. China New York Branch, 142 F.3d 887, 896 (5th Cir.1998). As stated, it is undisputed that SABIC is a “foreign state” as defined by the FSIA. 28 U.S.C. § 1603(a). This Court will examine the applicability of exceptions to jurisdictional immunity under the FSIA. 3. Exceptions to Immunity Section 1605 contains the disputed exceptions to sovereign immunity, commonly known as the “waiver” and the “commercial activities” exceptions: (a) A foreign state shall not be immune from the jurisdiction of the courts of the United States or of the States in any case— (1) in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver; (2) in which the action is based upon a commercial act