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Default Confirmation of Arbitral Award Against State

An ICC arbitral award against the Dominican Republic lies at the heart of an enforcement action in the United States District Court for the District of Columbia in its December 20, 2012 decision in the matter Concesionaria Dominicana de Autopistas y Carreteras, S.A. v. Dominican State. The Republic failed to appear, despite proper service of the action to confirm an arbitral award, the court holds.

The Foreign Sovereign Immunities Act confers subject matter jurisdiction for such a post-arbitration suit, 28 USC §1605(a)(6)(B). It also supports personal jurisdiction, given appropriately effected service, 28 USC §1608: More simply put, "under the FSIA, subject matter jurisdiction plus service of process equals personal jurisdiction." … Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1548 n.11 (D.C. Cir. 1987) id. at 6.

Without any defense undertaken by the foreign state, the court considers possible grounds for refusing to confirm the arbitral award, after determining that the petitioner presented satisfactory evidence to justify the default judgment. Finding no defenses available to the state, the court confirms the award. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe LLP, Washington, DC.

Corporate Standard for Foreign States

The statute of frauds requires a writing to memorialize the sale of real estate. In Republic of Benin v. Mezei, docket number 11-4423, parties to a real estate transaction with the Republic of Benin claimed an exception for acts of corporate officers under N.Y. Gen. Oblig. Law §5-703(2).

In New York City, the United States Court of Appeals for the Second Circuit explained that the corporate officers exception does not apply to foreign governments. They continue to benefit from the same protection as non-entities, the court noted on December 11, 2012. In the decided case, the other parties could have relied only on a written authorization of the real estate transaction. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe LLP, Washington, DC.

Arbitral Award Again Confirmed

The Republic of Peru lost a motion to vacate an ICSID arbitral award, see ICSID Award Against Peru Confirmed, on September 14, 2012. The republic then pursued a second motion to deny confirmation of interest on the award on grounds of ambiguity of the appropriate interest rate. In Duke Energy International Peru Investments No. 1 Ltd. V. Republic of Peru, docket number 11-1602, DEI argues again that the United States District Court for the District of Columbia should confirm its previous confirmation.

The court granted Peru an additional briefing, and Peru contended that the amended Article 38 of its Tax Code does not apply to the award, and the previously confirmed interest rate is invalid. On November 19, 2012, the court found the state's argument for the application of Peruvian tax law irrelevant and explained that a remand of the award would be warranted only in cases of ambiguity. Because Peru failed to prove any ambiguity, the court reaffirmed the previous award in favor of DEI. -- Caroline Covington, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington, DC.

State Sued Over Flight Stopover

Flying from New Jersey to Nigeria via Ethiopia, the plaintiff had funds confiscated in Addis Abbeba and was allegedly unlawfully detained there for 40 days. He sues Ethiopia, the Ethiopian airline and its insurer. Under the Foreign Sovereign Immunities Act, the court dismissed the complaint for lack of subject-matter jurisdiction.

On November 8, 2012, the United States Court of Appeals for the Second Circuit affirmed in the matter Edem v. Ethiopian Airlines Enterprise, docket number 11-3770. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe LLP, Washington, DC.

Suggestion of Immunity Binds Courts

The immunity of foreign states, their instrumentalities and officials is governed in the United States, in large part, by the Foreign Sovereign Immunities Act, 28 USC §1330. The Act establishes when United States court may exercise subject matter jurisdiction over claims of sovereign immunity.

A practical consideration is also the weight that the Executive in exercising its powers over foreign relations give to claims of immunity of foreign entities and persons. The State Department's practice of offering courts a "Suggestion of Immunity" to express its views came under review by the United States Court of Appeals for the Tenth Circuit in the matter Habyarimana v. Kagame, docket number 11-6315.

On October 10, 2012, the court confirmed the long-practiced tradition of such evaluations and the conclusive effect they may have, in a matter involving a suit under the Alien Torts Claims Act, 28 USC §1350, the Torture Act, 18 USC §2340A and the Racketeeer Influenced and Corrupt Organization Act, 18 USC §1962 filed by widows of two former presidents against the current president of Rwanda whom they consider responsible for their husbands' assassinations. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe LLP, Washington, DC.

Government-Owned Railroad and FSIA

If falling through platform cracks under a train is bad, and having both legs amputated as a result is inconceivably tragic, what is running into a court that cannot exercise its jurisdiction over the defendant railroad?

The plaintiff in Carol Sachs v. Republic Of Austria, docket number 11-15458, suffered her accident in Austria on a Eurail journey, filed suit in the United States and lost again on September 26, 2012 because the federal courts lack subject matter jurisdiction under the Foreign Sovereign Immunities Act, 28 USC § 1602, over the defendant railroad and the foreign nation that owns it.

The United States Court of Appeals for the Ninth Circuit explains in great detail and much clarity why the commercial exception claimed by the plaintiff does not apply, even considering the fact that the Eurail pass was purchased in the United States. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe LLP, Washington, DC.

State Foregoes Appearance, Wins

In Rahim v. Government of People's Republic of Bangladesh, docket number 11-3458, the foreign state made no appearance but won anyway, on September 21, 2012.

Both the United States District Court and the appellate court in New York City found the discrimination complaint so deficient that they (1) upheld Bangladesh's immunity under the Foreign Sovereign Immunities Act, and (2) would not permit the plaintiff who had been employed by Bangladesh to amend the complaint. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Victory in Fact Only

A victory in the United States District Court left Argentina with a loss of legal certainty. After winning against a party seeking to confirm an attachment into property of Argentina, Argentina removed the property from the country while the loser sought a reconsideration of the decision.

Both parties appealed. The United States Court of Appeals for the Second Circuit ordered the lower court to vacate the decision, thus leaving both parties without precedent for their respective claims.

The appellate review in the matter NML Capital, Ltd. v. Republic of Argentina, docket number 11-4248, resulted in a finding of mootness, and on September 20, 2012 the court fought off attempts by both parties to obtain a final decision on the merits with persuasive arguments. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

ICSID Award Against Peru Confirmed

The confirmation of an arbitral award against a state and allegations of ambiguity characterize the case of Duke Energy International Peru Investments No.1 Ltd. v. Republic of Peru, docket number 11-1602, before the United States District Court for the District of Columbia. Peru lost before International Centre for Settlement of Investment Disputes.

The winner seeks confirmation of the award. Peru has paid the principal award but disputes the interest sought in the confirmation proceeding. Among other things, the state argues that the interest determination in the award is ambiguous and that the case needs to be referred to the courts of Peru under the forum non conveniens doctrine.

On September 14, 2012, the court finds in favor of the winner and persuasively explains its rationale in a ten-page decision. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Domain "Embassy of …" no Trademark

Lawyers at embassies in the United States may be surprised to discover that non-embassies can legally own domains like EmbassyOf....com. Some nations flat out prohibit misleading designations, whether as companies names, domain names, trademarks or otherwise. Under United States law, such lawyers' attention would focus on federal trademark law, the Lanham Act, 15 USC §1125(a)(1)(A), (B), and the AntiCybersquatting Consumer Protection Act, 15 USC §1125(d).

In a dispute with the Libyan embassy in Washington, DC, however, the owner of such domains won before the United States District Court for the District of Columbia. In its September 6, 2012 decision in the matter Great Socialist People's Libyan Arab Jamahiriya v. Miski, docket number 06-2046, the court carefully analyzed the facts and law underlying Libya's claim to the domains and found the term embassy in conjunction with a country descriptive.

In turn, that determination meant Libya needed to prove a secondary meaning attached to the descriptive designation. Absent such evidence, Libya suffered a well-reasoned defeat, and the non-embassy owner of the domains may continue its misleading use. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.