Immunity of International Organizations
On August 16, 2010, the United States Court of Appeals for the Third Circuit confirmed the District Court's decision that the European Space Agency is not entitled to immunity in the case of Oss Nokalva, Inc. v. European Space Agency, docket number 09-3601. While the District Court concluded that ESA waived the absolute immunity that it usually is entitled to, the decision by the U.S. Court of Appeals was made for different reasons.
The District Court based its ruling on the precedent of Atkinson v. Inter-American Development Bank, 156 F.3d 1335, 1340 (D.C. Cir. 1998), which determined that the Inter-American Development Bank, an international organization under the International Organizations Immunities Act, was entitled to virtually absolute immunity. The court found that ESA was entitled to absolute immunity under the IOIA. However, the appellate court did not accept the District Court's finding that ESA was entitled to absolute immunity and did not need to address whether ESA waived its immunity or not.
The reasoning behind its decision relies on the IOIA which states that international organizations shall enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments… 22 USC §288a(b). Such shorthand legislation linked the immunity of international organizations with the immunity of foreign governments.
While the District Court interpreted this statutory reference as the IOIA providing international organizations indefinitely with the same "virtually absolute" immunity as foreign sovereigns regardless of later changes to the law, the appellate court recognizes the changes to foreign sovereign immunity that have occurred since 1945.
With the creation of the Foreign Sovereign Immunities Act of 1976, foreign governments enjoy immunity from the jurisdiction of U.S. courts with a few specific exceptions. The exception relevant to this case states that
"the foreign state has waived its immunity either explicitly or by implication and in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere…" §1605(a)(1)-(2).The appellate court believes that the IOIA is clearly written and that Congress made its intent clear. Congress intended that the immunity created by the IOIA would adapt with the law of foreign sovereign immunity. For these reasons, the court concluded that ESA is not entitled to immunity as it stood in 1945 for foreign sovereigns and affirmed the District Court's order denying ESA's motion to dismiss. The court noted that
It is undisputed that the Agreements at issue here constituted such commercial activity and, because we construe the IOIA to incorporate the exceptions to immunity set forth in the FSIA, we will affirm the District Court's order denying ESA's motion to dismiss.-- Melanie Hardcastle, Legal Assistant, Berliner, Corcoran & Rowe, LLP, Washington, D.C.
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New York Cannot Tax Mission Property
On August 17, 2010, the United States Court of Appeals for the Second Circuit in New York City ruled against New York City and in favor of The Permanent Mission of India to the United Nations and the Principal Resident Representative of the Mongolian People's Republic to the United Nations. It reversed the judgment of the District Court, which permitted the city to tax property owned by the governments of India and Mongolia being used to house mission employees.
In its decision, the Court pointed to a June 2009 Notice from the U.S. State Department, which exempted foreign governments from paying real property taxes on property used to house the staff of permanent missions to the United Nations. The State Department explained that
As the largest foreign-government property owner overseas, the United States benefits financially much more than other countries from an international practice exempting staff residences from real property taxes, and it stands to lose the most if the practice is undermined.
The case is City of New York v. The Permanent Mission of India to the United Nations, docket number 08-1805. -- Sara Harr, Legal Assistant, Berliner, Corcoran & Rowe, LLP, Washington, DC.
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Foreign Defendant Government and Forum non Conveniens
In a 14 page opinion, the United States Court of Appeals for the District of Columbia affirmed the District Court in the matter MBI Group, Inc. v. Credit Foncier Du Cameroun , docket number 09-7079, on August 6, 2010. An American plaintiff sued the government of Cameroon and parties from Cameroon in a contract and bribery matter.
The lower court had found the nexus to Cameroon to be very strong and the public interest nexus to the United States to be outweighed by the public interest of a trial in Cameroon that it had dismissed the matter under the forum non conveniens doctrine.
Instead of pursuing litigation in Cameroon as instructed by the District Court, the plaintiffs undertook minimal efforts abroad and soon petitioned the U.S. court to resume its proceedings because filing suit in Cameroon would be too expensive and a fair trial would be elusive.
On further instruction, the parties returned to the Cameroonian judiciary and defendants managed to arrange for hearings which could potentially reduce the burdensome filing fees for the plaintiffs. The latter refused to pursue such remedies, however, and turned once more to the District Court which again found against plaintiffs.
The Circuit Court upheld the forum non conveniens analysis of the lower court in all respects. There is not absolute right of an American plaintiff company doing business abroad to have its case heard in a United States court, the court explained. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.
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Attachment of Argentinian Assets
On August 3, 2010, the United States Court of Appeals for the Second Circuit in New York City ruled in favor of EM Ltd. and NML Capital Ltd. in confirming ex parte orders dated May 22, 2007. The orders restrain and attach certain assets of the Republic in a trust administered by the U.S. Bank Trust National Association and deny BNA's motion to vacate these orders. The case is EM Ltd. v. The Republic of Argentina, docket number 09-3908. -- Sara Harr, Legal Assistant, Berliner, Corcoran & Rowe, LLP, Washington, DC.
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Questions Surrounding Embassy Property Sales
Post removed at reader's request. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP.
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FSIA Governs old Debt Claims Against Germany
On July 27, 2010, the United States Court of Appeals for the Second Circuit in New York City ruled in favor of Germany in confirming the dismissal of claims for old East German debentures by adding as a basis for dismissal the lack of allegations of commercial activities by state actors. The case is Mortimer Off Shore Services Ltd. v. The Federal Republic of Germany, docket number 08-1783. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.
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The Kosovo Advisory Opinion
On July 22, 2010, the International Court of Justice issued its advisory opinion on the unilateral declaration of independence by Kosovo. The 123-page decision is published on the court's website. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.
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Service of Process on Foreign State
Actual notice is insufficient in the service of process on Brazil, the United States District Court for the District of Columbia explained on July 10, 2010. In the matter Ibiza Business Ltd. et al. v. United States of America et al., docket number 10-296, the plaintiff had sought entry of a default judgment against Brazil but the court advised it to serve in strict compliance with 28 USC §1608(a)(3). -- Clemens Kochinke,, partner, Berliner, Corcoran & Rowe, LLP, Washingcton, DC.
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Samantar Effect in New York City
The United States Court of Appeals for the Second Circuit in New York City followed the Supreme Court and, on June 28, 2010, affirmed in part, vacated in part and remanded the lower court's decision in Carpenter v. Republic of Chile, docket number 09-3743, with an eight-page opinion which begin as follows:
Plaintiff appeals from a judgment of the United States District Court for the Eastern Districtof New York (Joanna Seybert, Judge) dismissing plaintiff's claims against the Republic of Chile, various government officials of Chile, and British Airways. Because the Supreme Court's recent opinion in Samantar v. Yousuf, --- S. Ct. ---, No. 08-1555, 2010 WL 2160785 (S. Ct. June 1, 2010) abrogated our prior holding that the Foreign Sovereign Immunities Act extends to officials of a foreign government acting in their official capacities, we vacate the judgment of the District Court insofar as it dismissed plaintiff's claims against the government officials of Chile.The ruling helps in clarifying the limits of immunity under the FSIA for government officials. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.
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Final Judgment Determinations under FSIA
On June 18, 2010, the United States District Court for the District of Columbia entered final judgment in the matter of Elisa Nili Cirilo Peres Ben-Rafael, et al. v. Islamic Republic of Iran, et al., docket number 08-0716. This case is based on the default judgment in favor of the estate of David Ben-Rafael, a victim of a 1992 terrorist bombing at the Israeli Embassy in Buenos Aires, Argentina.
Less than one month before the court entered default judgment in the original case, the National Defense Appropriations Act for Fiscal Year 2008 28 USC §1605A was signed into law by then-President Bush, replacing the Foreign Sovereign Immunities Act's original state-sponsor-of-terrorism exception. The act allows for awards of punitive damages and attempts to make it easier to collect FSIA judgments by entitling plaintiffs to impose liens on property belonging to state sponsors of terrorism.
The change prompted the plaintiffs to petition for the reissuing of the default judgment from Ben-Rafael I as to defendant Iran using the new jurisdictional grant in §1605A and for the court to declare a new defendant, the International Risk Governance Council, subject to the attachment provisions of §§1605A(g) and 1608(g) as an agency or instrumentality or Iran.
This court noted that it has jurisdiction over this case because service was proper and defendants' conduct falls within the state sponsor of terrorism exception in §1605A. Its jurisdiction to hear the case as a related action to Ben-Rafael I is based on the 2008 NDAA grandfathering related actions to timely commenced prior actions under §1605A's jurisdictional grant.
The court noted its ruling that plaintiffs here established their claims by evidence satisfactory to the court and reentered default judgment as to defendant Iran. The plaintiffs did not meet the burden showing that IRGC is an agency or instrumentality of Iran as required by 28 USC §1603(b). The court agrees that under the core commercial function test the IRGC is a government entity, not a separate legal person. Therefore, the court did not need to reach the second or third elements of the agency or instrumentality analysis.
The court decided that there is no reason for delay in directing the entry of final judgment and this conclusion is supported by the fact that in the past the identical judgment was issued and was itself a final judgment. The court entered judgment for plaintiffs in the amounts specified in Ben-Rafael I, 540 F. Supp. 2d 59 (2008) and directs entry of that judgment as final pursuant to Federal Rules of Civil Procedure. -- Melanie Hardcastle, Legal Assistant, Berliner, Corcoran & Rowe, LLP, Washington, D.C.
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