Embassy Law Web Log   
Washington, DC, USA      

Exceptions to Immunity under Terror Laws

The sovereign immunity of nations is subject to many exceptions. In the United States, they are governed by the Foreign Sovereign Immunities Act. The act has been amended frequently in order to permit victims of foreign terrorism to pierce the immunity of state sponsors of terrorism by giving the federal courts subject matter jurisdiction over foreign states and their instrumentalities, both for the principal litigation and for the enforcement of judgments, including default judgments, against states linked to terrorists.

The complex network of statutory opportunities for victims is explained in the August 31, 2012 decision in the matter Heiser v. Islamic Republic of Iran, docket number 00-2329, from the United States District Court for the District of Columbia.

Chief Judge Lamberth discusses the means of piercing sovereign immunity in a ruling on motions by banks holding state-owned funds where the banks seek to interplead third parties with claims to bank-held funds that partially involve OFAC-blocked EFT transfers. These pose their own problems which the court also addresses. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Award Against Bulgaria not Confirmed in U.S. Court

An arbitration clause in a contract with Bulgaria provides for the execution of an eventual award in Bulgaria under its laws. The United States Court of Appeals for the Second Circuit in New York City agreed with the lower court that the confirmation of the award must also be sought in Bulgaria, not in the United States under Article V of the Convention on the Recognation and Enforcement of Foreign Arbitral Awards of 1958. The August 24, 2012 decision on venue for the confirmation, when the clause uses the term execution and is silent on confirmation, under the New York Convention in the matter Zeevi Holdings Ltd. v. Republic of Bulgaria, docket number 11-1705, approves the lower court's analysis of the arbitration clause. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Bilateral Investment Treaty: Arbitration

Was the district court required to make an independent determination of the arbitrability of an investment dispute under the Germany - Thailand bilateral investment treaty in the matter Schneider v. The Kingdom of Thailand , docket number 11-1458, the United States Court of Appeals for the Second Circuit in New York City explored in great detail, on August 8, 2012.

Thailand had opposed the arbitration initiated by a German construction company for a tollway project in Thailand. It argued the BIT arbitration clause required an approved investment which the tollway project were not. The tribunal determined, however, that the project had been approved and certified under the treaty by various Thai government agencies, and proceeded with the arbitration.

The Kingdom sought review of the same issue in the recognition proceeding in the United States and lost when the United States District Court applied a deferential review. The appellate court noted that the lower court should have initially assessed whether there was clear and unmistakable evidence of an agreement in favor of the tribunal's authority to find its own jurisdiction. -- , partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Local Hires: The Relativity of Salaries

A great salary in the host nation may not seem that good to an expatriate. The relativity of salaries for local hires at diplomatic mission is evident in a report from India. In Indian staff may sue Italy embassy over bias in wages, Dhananjay Mahapatra of the Times of India reports on the stark contrast in pay for local hires at the Italian embassy to India, some of whom are Italian expatriates, while others are nationals of India.

The disparity in pay leads to allegations of discrimination on the basis of nationality and race. The report quotes the Indian nationals' attorney as believing that the only option available to his clients is a law suit in the Delhi high court. Mediation or consensual arbitration may also be options, all of which raise foreign sovereign immunity issues. -- , partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

FSIA Pierces Immunity for Art Exchanges

Courts applying the Foreign Sovereign Immunities Act undermine the protections for the international art exchange by museums that the Immunity from Seizure Act, 22 USC §2459, is intended to afford, Kathryn Hines and Manuel Gomez argue in Lend us Your Ears on July 24, 2012. The act provides the United States’ guarantee to foreign art lenders that their art is immune from judicial seizure while in [the USA]. An example of the FSIA piercing the this immunity is the decision by the United States District Court for the District of Columbia in Malewicz v. City of Amsterdam, 362 F. Supp. 2d 298 (2005). The authors favor a bill in the United States Senate, the Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, S. 2212, which would effectively override such rulings. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

France Concedes Jurisdiction in Civil Rights Case

Without much fanfare or explanation, the United States District Court for the District of Columbia noted on July 16, 2012 that the French embassy in Washington, DC had conceded jurisdiction of an American court over the civil rights claim of a French embassy employee.

The plaintiff alleges mistreatment by colleagues and Title VII discrimination. She lost her claim for retaliatory termination but may seek compensation for disparate treatment based on race and origin. In the matter Ashraf-Hassan v. Embassy of France, docket number 11-0805, the court found her complaint to meet the requirements of Rule 12(b)(6) FRCP. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

FSIA Direct Effects in the USA

Foreign nations and their agencies may be sued in United States court for commercial activities but there are limits. These limits are outlined in a Ninth Circuit decision of July 16, 2012, Terenkian v. Iraq, docket number 10-56708.

Under a United Nations humanitarian program permitting the sale of oil and the purchase of necessities for the Iraqi population, Cyprus companies had concluded contracts with Iraq which they later claim breached the contracts. They sued in the United States although the contracts provided for arbitration.

The court analyzed whether their commercial activity claim for an exception from FSIA immunity held up. It does not, the Court explained, because the commercial activity had not direct effect in the United States under 28 USC §1605(a)(2). -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

State Bound by Arbitration Clause

Unsurprisingly, and with a concise ruling, the United States Court of Appeals for the Second Circuit in New York City cut short the reviews of an arbitral award the government of Laos sought to challenge in the matter Thai-Lao Lignite v. Government of the Lao People's Democratic Republic. First, the court explained that the Republic had bindingly submitted to UNCITRAL arbitration and accepted the tribunal's authority to determine its jurisdiction under UNCITRAL Arbitration Rules, art. 21. Secondly, the challenge of certain damages awarded despite an express contractual provision against that type of damages was not an abuse and, instead, reflected a valid construction of the contract. A court may not second-guess the contract interpretation by the panel, the court confirmed on July 13, 2012. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Outrage Over Slow Embassy Implementation of Ruling

A column in Ghanaweb by Kofi Ata, Are Embassies Engaged in Dual Citizenship Fraud? points to the delay common in implementing at embassies new rules of law and, in this instance, the resulting outrage. The June 23, 2012 contribution explains in detail, and distributes to affected readers, a Ghana Supreme Court constitutional ruling of May 22, 2012. The court held that certain provisions of the Citizenship Act 2002 (Act 591) do not require citizen Ghana who hold a second citizenship to obtain an expensive dual citizenship certificate. The London and Washington, DC, embassies contacted by the columnist continue to provide the certificate which the court held to contravene Article 17 of the constitution of 1992, according to the article. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Inviolability: Premises and Documents

A translation of treaties between the Vatican and Italy on the internet holds some clues to the inviolability of Vatican-owned real estate in Italy, papal documents located or in transit in Italy and the special status of diplomats accredited, and staff employed, by the Vatican but operating outside Vatican City.

The embassy-law issues of immunity and inviolability become important in the relations between Italy and the Vatican. According the various reports, Italy gained possession of documents prepared for the Vatican head of state, Pope Benedict XIV, in the search of a dismissed Vatican executive's house in Italy by Italian officials.

The two nations are reportedly embroiled in a conflict over the seizure. The Conciliation Treaty, one of the Lateran Pacts of 1929, offers solutions in several articles beginning with Article X. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.