Embassy Law Web Log   
Washington, DC, USA      

Judgment Execution Immunity for Diplomatic Property

Judgment creditor Republic of Argentina won an important argument on the timing of execution immunity when it defeated a proposed attachment of the ambassadors former residence. The residence was put up for sale and the plaintiff in TIG Insurance Co. v. Republic of Argentina filed for its attachment to partially satisfy arbitral awards. Before the court issued the writ of attachment, the defendant pulled back from the sale. At issue in the decision of the United States District Court for the District of Columbia of July 10, 2019 is when and for how long the property had a commercial quality, allowing for attachment under the exception in 28 USC §1610 to execution immunity under the Foreign Sovereign Immunities Act. The court explained:

The parties’ sole dispute is the relevant time for assessing execution immunity. TIG contends that a foreign state's property may be attached as long as it was "used for a commercial activity" at the time a motion for a writ of attachment was filed. Argentina, on the other hand, argues that the commercial activities exception applies if the property is "used for a commercial activity" at the moment a writ of attachment issues. Text, structure, history, and precedent support Argentina's reading: a property is immune from attachment unless it is "used for a commercial activity" at the time a writ of attachment issues.
After explaining its analysis and applying precedent, the court denies TIG's Motions for Emergency Relief, Attachment-Related Relief, and a Writ of Execution. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.
Disclaimer: The author's law firm assists embassies with FSIA matters and has represented such defendants at the appellate and Supreme Court levels.

Foreign Sovereign Immunity and forum non conveniens

The former business partners in Farhad Azima v. Rak Investment Authority entered into a Settlement Agreement after Azima claimed RAK owed another business partner for investments made during their joint venture. Their Agreement states that the parties agree to litigate all future, related claims in England.

In 2015-2016, RAKIA hired Azima to help negotiate a resolution of dispute between RAKIA and its former CEO Khater Massaad. After a tentative resolution fell apart, RAKIA blamed Azima and threatened him. Azima’s computer was hacked and his documents were published online. RAKIA then sued Azima when the publicized documents showed that Azima committed fraud during an earlier business deal. Azima filed a suit in the U.S. alleging that RAKIA violated the Computer Fraud and Abuse Act, 18 USC §1030. RAKIA moved to dismiss the suit on two grounds. First, it claimed immunity under the Foreign Sovereign Immunities Act, 28 USC §§1602-11. Second, RAKIA asserted that the Settlement Agreement submits the Parties to the exclusive jurisdiction of the courts of England and Wales, thus the court must dismiss the case on forum non conveniens grounds.

The United States Court of Appeals for the District of Columbia on June 18, 2019 concluded that the district court erroneously placed the burden on RAKIA to show that dismissal was warranted. The Court of Appeals exercised its pendent jurisdiction to reverse the denial of RAKIA’s motion to dismiss on forum non conveniens grounds with an opinion that explains the tensions between sovereign immunity and other jurisdictional principles. -- Marco Stewart Lopez, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Expanding the Reach of U.S. Courts Abroad

The noteworthy dissent in Philipp v. Germany of June 18, 2019 submits the concern that construing exceptions under the Foreign Sovereign Immunities Act may turn federal courts into war crimes tribunals for harm caused abroad. A further concern is the disparate understanding of the exceptions by other appellate courts.

The case deals with the expropriation of property in the context of genocide. The dissenting judge of the United States Court of Appeals for the District of Columbia Circuit notes that under his court's interpretation of the statute, redress for property losses are conceivable while the loss of life in an alleged genocide may not be. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Disclaimer: The author's law firm assists embassies with FSIA matters and has represented such defendants at the appellate and Supreme Court levels.

No Skype or Social Media Graces: Age Discrimination

Her lack of familiarity with Skype and social media showed her age, a colleague noted about the plaintiff in the matter Payne v. British Embassy Washington DC. This remark formed the basis for her claim of age discrimination when she was dismissed from her employment. On May 24, 2019, the United States District Court for the District of Columbia found the allegation insufficient and dismissed this claim which requires age to be the cause of, or related to, the dismissal.

Other allegations survived this stage of the litigation, and the plaintiff may pursue her claim for an improperly entered observation in her personnel file, for instance, that she managed well the otherwise burdensome absences from the office to care for a family member with special health needs.

Among other things, the court's reasoning explains the danger of innocent or superfluous remarks, notes and observations which can cause an employer tremendous expense in defending claims, participating in the exchange of evidence during the discovery process, and possibly damages.

Absolute Immunity Dies in Supreme Court

Under the International Organizations Immunities Act of 1945, such organizations were believed, under 22 USC §288a(b), to enjoy absolute immunity from suit in United States courts. On February 27, 2019, the Supreme Court of the United States declared the absolute standard outdated and modified by the subsequent enactment of the Foreign Sovereign Immunities Act of 1976. That act abolished absolute immunity and enacted a restrictive immunity standard in 28 USC §1602, and its original protections have been greatly weakened since its enactment.

The IOIA provides for the same immunity granted states, embassies and consulates. The issue before the Supreme Court was whether same means the equivalance existing when the IOIA was enacted, or the same as the standard for states, embassies and consulates as it evolved before and after the enactment of the FSIA. In Jam v. IFC, the court decided that it is the latter. Therefore, the absolute immunity standard does not apply, and the test for the immunity of international organizations in U.S. courts will be the same as the standard applied today under the FSIA. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Court imposes Sanctions on Foreign Sovereign Nation

In a matter involving arbitration and the confirmation of an award under the New York Convention, the United States Court of Appeals for the District of Columbia Circuit imposed a sanction on the foreign sovereign defendant for procedural misconduct

Venezuela committed a second misdeed, one meriting sanctions. On January 8, 2019, Venezuela filed an emergency motion to hold this case in abeyance. The motion represented that Crystallex had requested Venezuela to seek a stay based on the purported settlement agreement. That representation was misleading. At the time Venezuela filed the emergency motion, Crystallex had declared in the press and in Third Circuit filings that Venezuela had breached the agreement. … Andrew Scurria, Bankers Hired for Citgo Auction Following Scrapped Deal With Venezuela, Wall St. J. (Dec. 12, 2018) … Venezuela's emergency motion was thus misleading and meritless. As a sanction, we believe Venezuela should pay Crystallex's reasonable attorneys' fees and costs incurred in responding to the emergency motion. D.C. Cir. R. 38.
As lies pour out of the current White House, it is good to know that courts do not tolerate them, as explained in the matter on February 14, 2019. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Embassy Loses, Then Appears in Court and Wins

A solid lesson to embassies and foreign sovereigns sued in an American court is found in the January 25, 2019 decision in Dahman v. Qatar. An embassy terminated the employment of an accountant after he remained in his embassy position for many more years than his contract provided for. The employee claimed age discrimination under federal and District of Columbia law and obtained a default against the embassy and the foreign state. The defendants had not responded to the court or taken de­fen­sive action.

When the court set a hearing to determine damages, the defendants reacted, re­que­sting that the court vacate the default, and the court has now dismissed the action. The United States District Court for the District of Columbia took note of the foreign sovereign immunity defense, the forum non conveniens defense and the arbitration clause in the employment contract. Ultimately, the validity of the arbitration clause and its forum selection as well as the public-interest factors caused the court to dismiss the action from the forum non conveniens. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Disclaimer: The author's firm assists embassies with employment and other matters and represented the defendants on the record in this matter.

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.