Embassy Law Web Log   
Washington, DC, USA      

Another Scalp on the Dotard's Belt: E.U. Mission

Just before Christmas, all research supported the status of the Delegation of the European Union to the United States in Washington as a diplomatic mission under international and American law. Deutsche Welle first reported on January 8, 2019 that its status has been changed. Voice of America confirms that the change is a downgrade. On its website, VOA states: VOA is part of the U.S. Agency for Global Media (USAGM), the government agency that oversees all non-military, U.S. international broadcasting. It is funded by the U.S. Congress. The tone of VOA's report indicates that the propaganda agency appears startled by the news.

That tone may reflect that perhaps Congress is as surprised as the Delegation and the international diplomatic community. The alleged dotard in the White House has completed another chaotic move.

The legal implications of the change--if it turns out to be permanent--are many. Will the Foreign Sovereign Immunities Act and the Vienna Convention on Diplomatic Relations continue to govern the Delegation's immunity? Or will the International Organizations Act apply? Is the Office of Foreign Mission the proper contact for administrative matters? Will the tax regime governing local hires change? From a legal perspective, the development is fascinating. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

ICSID Award: Recalcitrant Sovereign Defaults

In Tidewater Investment SRL v. Bolivarian Republic of Venezuela, the United States District Courtfor the District of Columbia analyzed jurisdictional, service of process and other procedural issues in order to grant the plaintiff a default judgment in its effort to collect on an arbitration award.

Its December 17, 2018 decision explains in great detail the enforce­ment mechanism under the International Convention on the Settlement of Investment Disputes of Mar. 18, 1965, 17 U.S.T. 1270, 330 U.N.T.S. 3, 1, and 2 U.S.C. § 1650a(a). Under the statute, the Federal Arbitration Act does not apply to the ICSID framework to which the United States is a signatory. Section 1650 provides exclusive jurisdiction to the federal district courts.

Among other issues, the court examined in detail the plaintiffs' efforts to serve process under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters of Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163, and the failure of the defendant's Central Authority to serve the summons, complaint, and accompanying initiating paper on Venezuela. Before reaching the substantive issues, the court also assured itself of personal and FSIA subject-matter jurisdiction. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

2018 U.S. District Court Cases with Foreign Nations

The following lists decisions in the United States District Court for the District of Columbia in Washington, DC, where the embassies of foreign sovereigns are located, from the first three quarters of 2018:

Roth v. Syrian Arab Republic Memorandum and Opinion
Wye Oak Technology, Inc. v. Republic of Iraq Memorandum Opinion
Akins v. Islamic Republic of Iran Memorandum Opinion
Estate of Yonadav Hirshfeld v. Islamic Republic of Iran Memorandum Opinion
D&S Consulting, Inc. v. Kingdom of Saudi Arabia Memorandum Opinion
Fritz v. Islamic Republic of Iran Memorandum Opinion
Strange v. Islamic Republic of Iran Memorandum Opinion
Burmaster v. Switzerland Order
Fritz v. Islamic Republic of Iran Memorandum Opinion
Fraenkel v. Islamic Republic of Iran Memorandum Opinion on Reconsideration
Dahman v. Embassy of the State of Qatar Memorandum Opinion
Hamen v. Islamic Republic of Iran Memorandum Opinion and Order
Fraenkel v. Islamic Republic of Iran Memorandum Opinion on Remand
Azadeh v. The Government of the Islamic Republic of Iran Public Memorandum and Opinion
Bathiard v. Islamic Republic of Iran Memorandum Opinion
Burmaster v. Switzerland Report and Recommendation
Boulos v. Islamic Republic Memorandum
Peterson v. Islamic Republic Memorandum
Asemani v. Islamic Republic of Iran Link
Kinyua v. Republic of the Sudan Memorandum Opinion
Ruther v. Canada Memorandum Opinion
Republic of Kazakhstan v. Stati Memorandum Opinion
Salazar v. Islamic Republic of Iran Memorandum Opinion
Maalouf v. Islamic Republic of Iran Memorandum Opinion
Chogo v. Republic of the Sudan Memorandum Opinion
Kinyua v. Republic of the Sudan Memorandum Opinion
Sheikh v. Republic of the Sudan Memorandum Opinion
Pao Tatneft v. Ukraine Memorandum Opinion
Barot v. Embassy of the Republic of Zambia Memorandum Opinion
Rusoro Mining Limited v. Bolivarian Republic of Venezuela Memorandum Opinion
Gaskin v. Embassy of Canada to the United States Memorandum Opinion
Berkowitz v. Republic of Costa Rica Memorandum Opinion

Foreign Police Brutality in U.S. Court

Numerous legal issues affecting the jurisdiction of U.S. courts in matters of alleged foreign victims of police brutality lead to an educational decision in the matter Doe v. Buratai. The United States District Court for the District of Columbia examined exemptions to the claims of immunity for foreign official acts and under the Foreign Sovereign Immunities Act. It explained also the bases of personal jurisdiction, including specific jurisdiction, and its constitutional limitations where there is no nexus to the United States. Without a nexus, the plaintiffs of an allegedly discriminated ethnic and religious group sought to establish jurisdiction under the Torture Victims Protection Act, among other bases, but could not carry their burden of showing that the court has subject-matter jurisdiction. The court in Washington, DC, closed on July 19, 2018 with this conclusion: This case presents appalling allegations, but the Court can only hear cases over which it has jurisdiction. Lacking personal and subject-matter jurisdiction, the Court must grant the defendants' Motions to Dismiss. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Complaint Against Russia and Trump Sycophants

The complaint against the Trump family and his sycophants as well as Russia in Democratic Na­ti­o­nal Committee v. Fede­ra­ti­on of Rus­si­a followed closely the revelation of the Comey memoranda on his disturbing meetings and calls with Trump. It was filed with the United States Court for the Sou­thern District of New York on April 19, 2018 and makes for interesting reading in the areas of computer law and sovereign immunity law. The plaintiff argues that Russia should not benefit from sovereign immunity under the Foreign Sovereign Immunities Act. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

FSIA Dispute Over 142-Year-Old Bonds

In a case whose main events dated as far back as 1875, the Court of Appeals for the Second Circuit dismissed a consultants’ suit against a foreign government for lack of subject-matter jurisdiction. The point-at-issue in MMA Consultants 1 Inc. v. Republic of Peru began when Peru signed and executed fourteen bonds and left them in MMA’s possession without payment. In 2015, 140 years after the fact, MMA sent three demand letters to the Peruvian embassy in Washington D.C. for payment on the Bonds, then sued to collect principal and interest. This was not, however, the first time legal issues related to these bonds had arisen, as one of the pieces of evidence the district court considered was an Arbitration Tribunal award from 1901.

Since Peru is a foreign state, the only method of judging whether or not the case was entitled to subject-matter jurisdiction in a United States district court arises under the Foreign Sovereign Immunities Act. The burden rested on the plaintiff to prove that this particular case should be permitted under an exception of the FSIA. MMA claimed the case fell under the FSIA's commercial activity exception: A foreign country may be entitled to jurisdiction if the action in question is based upon either a commercial activity carried on in the United States by the foreign state or an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere that causes a direct effect in the United States.

Since the act was Peru's failure to redeem the bonds, MMA had to prove that this failure either took place in the United States or caused a direct effect in the United States. According to case law, a foreign government’s decision not to redeem a bond is an act that occurs in the foreign country, not in the United States. Therefore, Peru’s failure to redeem the bonds did not take place in the United States and the first exception does not apply. Furthermore, simply because the plaintiff is an American corporation does not mean that direct effect was caused in the United States, thus the second exception does not apply. Accordingly, the case was correctly dismissed by the district court for lack of subject-matter jurisdiction, the appellate court in New York City determined on December 19, 2017. -- Madeline Henshaw-Greene, Legal Assistant, Berliner Corcoran & Rowe LLP , Washington, DC.

U.S. Federal Courts and Subject-Matter Jurisdiction

On November 30, 2017, the United States District Court for the District of Columbia dis­missed the case Jimenez v. Colombian State for lack of subject matter jurisdiction. The plaintiffs consist of three Ecuadorian citizens who filed a complaint against Co­lom­bia, accusing the government of Columbia of denying the fundamental human rights of Plaintiffs Prado Alava and Vera Calderón in violation of a peace deal between the government and the allgedly subversive group FARC-EP. The plaintiffs asked that the court study and evaluate this case.

United States federal courts have limited jurisdiction and are only able to hear cases based on whether or not the court has subject-matter jurisdiction. Therefore, the court was unable to review this case. The court does not have the ability to enforce the peace treaty that the plaintiffs referred to, and thus could not rule in either par­ty's favour. The only means by which subject-matter jurisdiction can arise is under the Foreign Sovereign Immunities Act. However, it noted, the plaintiffs have cited no applicable exception under the FSIA.

The court stated that the complaint was therefore patently insubstantial, presenting no federal question suitable for decision. The case was dismissed following precedent from Evans v. Suter, 2010 WL 1632902(D.C. Cir. 2010), which states that a district court may dismiss a complaint sua sponte prior to service on the defendants pur­su­ant to Fed. R. Civ. P. 12(h)(3) when, as here, it is evident that the court lacks sub­ject-matter jurisdiction. -- Madeline Henshaw-Greene, Legal Assistant, Berliner Corcoran & Rowe LLP, Washington, DC.

Free Speech Under the FSIA During Arbitration

On November 13, 2017, Judge James E. Boasberg of the U.S. District Court for the District of Columbia issued a memorandum opinion in Sharp Electronics Corporation v. Hisense USA Corporations and Hisense International (Hong Kong) America Investment Co. Ltd. In May 2017, the Japanese-owned Sharp Corporation moved to terminate a licensing agreement under which the Chinese-owned Hisense Corporation was to make and market television sets under the Sharp name becuase of regulatory concerns. Sharp took the case before the US DC District Court, challenging the enforcability of an injunctive request by the third-party arbitration center compelling Sharp to abide with the licensing agreement while the arbitration was pending, and preventing the company from violating the confidentiality agreement by making disparaging statements about Hisense or the dispute. Judge Boasberg dismissed Sharp's complaint on both substantive -- the absence of a First Amendment violation -- and procedural -- lack of personal jurisdiction -- grounds.

As a government-owned entity, Hisense also presented a defense under the Foreign Sovereign Immunities Act.

One of the procedural questions the Court considered was whether the two defendants in the case, Hisense Intl. and Hisense USA, are instrumentalities of a foreign government under the FSIA.

The FSIA generally states that a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States. It also, however, articulates specific conditions under which plaintiffs may sue foreign states and their instrumentalities in U.S. courts. One such condition concerns commercial activity. A foreign state or its instrumentality is not immune from the jurisdiction of U.S. courts in any case in which the action is based upon a commercial activity carried on in the United States by the foreign state. Selling the TV sets per the terms of the licensing agreement constitutes such commercial activity.

However, foreign states, like U.S. states, do not constitute persons under the Fifth Amendment's Due Process Clause. In First Nationall City Bank v. Banco Para El Comercio Exterior De Cuba, however, the Court determined that foreign state instrumentalities, unless they are primarily controlled by a foreign sovereign, such as through a principal-agent relationship, should be treated as distinct juridical entities from governments. Thus, just because foreign governments do not constitute persons for due process purposes, does not mean that foreign companies also do not. Foreign companies may in fact be persons in the U.S. for due process purposes, and those that qualify as persons may in fact raise a personal jurisdiction defense before a U.S. court.

In the end, the subject-matter inquiry under the FSIA was not determinative of the outcome, the court decided, but its discussion is nonetheless instructive. -- Zarine Kharazian, Legal Assistant, Berliner Corcoran & Rowe LLP, Washington, DC, and Assistant Editor of the International Enforcement Law Reporter.

How to Address the Ambassador? Protocol, not Law

Protocol lays down rules, as does the law, but they are not the same. A frequently asked question is how to address diplomats, from the ambassador down the ranks to junior attaches, and the most important persons who can decide over access and level of attention, the assistants and secretaries. Related is the issue of different sty­les for diplomats from different countries.

At the State Department and Foreign Offices abroad, these are no small matters. While diplomats appear to have a special gene that enables them to recall na­mes, titles and etiquette, even they look up guidance, such as internal memos on pro­to­col found in missions as well as in international organizations, or the State De­part­ment's online manual Protocol for the Modern Diplomat.

In a pinch, go with the the recommendation in the Wikipedia of His Excellency or Her Excellency.; and use Your Excellency in direct address. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Limited Review of NAFTA Arbitration Award

In Mesa Energy Group LLC v. Government of Canada, the United States District Court for the District of Columbia explored numerous challenges to an adverse arbitral award issued in Miami under NAFTA rules. The plaintiff had entered into an energy supply contract with Canada and assumed it had won a regional exclusivity. Canada supposedly breached the contract, and arbitration followed. The panel decided against the plaintiff, supported by its finding that the plaintiff misunderstood the contract and had been aware of other supply arrangements.

Canada argued unsuccessfully that the court in Washington, DC, should apply the precedent developed in the Eleventh Circuit where Miami is located. The district court analyzed the requirements of the Federal Arbitration Act as well as general procedural rules and precedent. On June 15, 2017, it found that while precedent in the Eleventh Circuit would be less favorable to the plaintiff than that in the D.C. Circuit, the outcome would be identical.

Bound by its limited powers of review, which the court discussed in detail, as well as its analysis of alleged errors, it determined that the arbitral award must stand. In addition to the type of mistakes and errors in arbitration, its opinion explores also the deference afforded governments in procurement matters and generally under NAFTA. The court granted Canada's counter-petition to affirm the award but did not grant Canada's request for an award of attorneys' fees because Mesa's arguments that these three grounds justify vacating the award are not meritorious, they are not so lacking in merit to be described as frivolous or as evidence of bad faith. Id. 22. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.