Mota-Engil Signals Confidence a US Court Will Dismiss Muddy Waters' Defamation Suit on Jurisdiction
Portugal's largest builder is increasingly confident a Texas court will throw out the defamation suit brought by short-seller Muddy Waters — potentially on jurisdictional grounds, according to ECO reporting.
Mota-Engil, Portugal's largest construction group, is growing increasingly confident that a US court will throw out the defamation lawsuit brought against it by the American short-seller Muddy Waters — potentially on the technical ground that the Texas court lacks jurisdiction to hear the case at all.
The suit, filed in a Texas court, targets both the company and its chief executive, Carlos Mota Santos. Muddy Waters Capital alleges that Mota Santos defamed the fund in a December 2024 interview with the weekly Expresso, in which he characterised the short positions the fund had built against Mota-Engil's shares. The company and its CEO have filed motions seeking summary dismissal.
The background
Muddy Waters, a fund that profits when a target's share price falls, went public in early 2026 with a series of attacks on Mota-Engil. Beyond the defamation dispute, it has questioned the group's accounting and alleged that the controlling family improperly extracts value from the company to the detriment of minority shareholders — claims the company rejects, insisting on its "scrupulous respect for all legal and good-governance requirements."
Mota-Engil's chief financial officer, José Carlos Nogueira, has said the group follows normal legal procedure and is "convinced and confident" it will be vindicated. According to reporting by the economic daily ECO, the latest procedural turn points towards the American action being rendered largely ineffective on jurisdictional grounds — a development that, if confirmed by the court, would remove one of the most visible clouds over the stock.
Why it matters
Mota-Engil is not just another listed company. It is Portugal's construction champion, with heavy exposure in Africa and Latin America — from a railway serving the mining region of the Democratic Republic of Congo to a study of Saudi Arabia's high-speed rail ambitions. Its shares are a fixture of the PSI index, and earlier this year they jumped several percentage points after Muddy Waters trimmed its short position. A clean dismissal of the defamation claim would reinforce management's narrative that the short-seller's campaign lacks substance.
What this means for residents and investors
- Market sentiment: For anyone holding PSI-linked funds or Mota-Engil shares directly, the litigation has been a source of volatility; a favourable ruling would reduce that overhang.
- Governance scrutiny: The Muddy Waters allegations have put family-controlled listed companies — common in Portugal — back under the spotlight on minority-shareholder protections.
- No verdict yet: A jurisdictional dismissal would end the case on procedure, not on the merits of who was right about the underlying claims.
The Texas court has still to rule. But the direction of travel, as the company tells it, is towards closing a chapter that has dogged one of Portugal's most internationally exposed businesses for much of the year.
