Chiejina v. Federal Republic of Nigeria ( 2022 )


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  • UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF COLUMBIA
    PETER A. CHIEJINA, et al.,
    Petitioners,
    V.
    Civil Case No. 21-2241 (RJL)
    FEDERAL REPUBLIC OF NIGERIA,
    Newe4 Nem Nene Nee Nee eee ee ee” ee”
    Respondent.
    MEMORANDUM OPINION
    (August 58, 2022) [Dkt. # 17]
    Peter A. Chiejina and PICCOL Nigeria Ltd. (““PICCOL”) together have petitioned
    the Court to confirm and enforce an arbitral award entered in their favor against the Federal
    Republic of Nigeria (“Nigeria”), stemming from a contract to construct a gully-erosion
    control system. Nigeria has moved to dismiss the petition on two grounds: first, that the
    Court lacks personal jurisdiction over it because it was not properly served with process;
    and second, that the Court lacks subject matter jurisdiction over the petition pursuant to the
    Foreign Sovereign Immunities Act (“FSIA”). However, because the Court finds no merit
    in either objection to its jurisdiction, Nigeria’s motion to dismiss must be DENIED.
    BACKGROUND!
    The pending petition arises from a 2005 contract entered into by Nigeria and
    PICCOL, according to which PICCOL would construct.a gully-erosion control system in
    ' The facts recounted here are drawn from the Petition, which for purposes of adjudicating this motion to
    dismiss are to be treated as true.
    Imo State, Nigeria. See Pet. to Confirm Arbitration Award § 8 [Dkt. # 1] (“Petition”); see
    also Contract Agreement Between the Federal Government of Nigeria and PICCOL
    Nigeria Ltd., Ex. 1 to Decl. of Theodore Folkman (“Contract’’) [Dkt. # 3-1]. The Contract
    provided that PICCOL would construct the gully erosion structures in exchange for an
    advance payment and scheduled interim payments. See Pets.’ Mem. in Support of Petition
    at 2 [Dkt. #2]. Nigeria was obligated to pay any sums due “with minimal delay.” Jd.
    (quoting Contract { 19.0). Petitioners claim that Nigeria breached the contract by delaying
    payment on several of the interim payments “beyond what the contract permitted,” Petition
    at 2, which Nigeria disputes, see Resp.’s Mot. to Dismiss at 5 [Dkt. # 17] (“MTD”).
    The Contract contains an arbitration agreement, which provides that:
    Any dispute, controversy or claim arising out of or relating to this contract
    or the breach, termination or invalidity thereof, shall be settled by arbitration
    at the Regional Centre for International Commercial Arbitration, Lagos,
    under the applicable Arbitration Rules in the schedule to the Arbitration and
    Conciliation Act Cap. 19 Laws of the Federation of Nigeria 1990.
    Contract { 18.0. Pursuant to that agreement, PICCOL filed an arbitration against Nigeria
    in March 2014; however, Nigeria successfully objected to the chosen venue’s jurisdiction,
    leading to both PICCOL and Chiejina filing a second arbitration at the Regional Centre for
    International Commercial Arbitration in 2016. See Resp.’s Mot. to Dismiss at 5; Petition
    at 4-5. Following a full arbitral proceeding in which Chiejina participated and served as a
    witness on behalf of the claimants, the arbitrator issued an award in June 2019. Petition at
    4—5; see also Final Award, PICCOL Nigeria Ltd. & P.A. Chiejina v. Federal Republic of
    Nigeria, Reg. Centre for International Commercial Arbitration (June 7, 2019), Ex. 2 to
    Decl. of Theodore Folkman [Dkt. # 3-2].
    Because Nigeria has allegedly thus far not paid the award, Petition at 7, PICCOL
    and Chiejina filed their petition to confirm the arbitration award in August 2021 and then
    attempted to serve the petition on Nigeria’s Minister of Foreign Affairs in Abuja, Nigeria.
    See Resp.’s Mot. to Dismiss at 7. The petition and accompanying documents were received
    on September 28, 2021. See Return of Serv. [Dkt. #9]. Nigeria thereafter filed its now-
    pending motion to dismiss, in which it argues that the Court lacks both personal jurisdiction
    over Nigeria and subject matter jurisdiction over the petition pursuant to the FSIA. See
    generally Resp.’s Mot. to Dismiss.
    ANALYSIS
    I. Personal Jurisdiction
    First, Nigeria contends that the Court lacks personal jurisdiction over it because
    petitioners failed to serve Nigeria in accordance with the requirements of the FSIA. The
    FSIA “provides the sole basis for obtaining jurisdiction over a foreign state in federal
    court.” Argentine Republic v. Amerada Hess Shipping, 
    488 U.S. 428
    , 434 (1989). In
    keeping with the general principle that the FSIA provides for only narrow exceptions to a
    generalized grant of immunity to foreign sovereigns, service on foreign sovereigns must
    be completed in strict accordance with the methodology provided for in 
    28 U.S.C. § 1608
    .
    See, e.g., Enron Nigeria Power Holding, Ltd. v. Federal Republic of Nigeria, 
    225 F. Supp. 3d 18
    , 20 (D.D.C. 2014) (quoting Fed. R. Civ. P. 4(j)). “[T]he plaintiff wishing to effect
    service ‘has the burden of establishing its validity when challenged; to do so, he must
    demonstrate that the procedure employed satisfied the requirements of the relevant portions
    of [Federal Rule of Civil Procedure 4] and any other applicable provision of law.’” Jd. at
    20-21 (quoting Light v. Wolf, 
    816 F.2d 746
    , 751 (D.C. Cir. 1987).
    Section 1608 provides four permissible methods of service for foreign sovereigns.
    These methods are hierarchical, meaning a plaintiff seeking to effect service must attempt
    service under the first method (or determine it is unavailable) before proceeding to the next
    method. See Republic of Sudan v. Harrison, 
    139 S. Ct. 1048
    , 1054 (2019). The first
    method calls for delivery of a copy of the summons and complaint “in accordance with any
    special arrangement for service between the plaintiff and the foreign state or political
    subdivision.” § 1608(a)(1). The second method, to be used “if no special arrangement
    exists,” requires delivery of a copy of the summons and complaint “in accordance with an
    applicable international convention on service of judicial documents.” § 1608(a)(2). Only
    if service is not possible under either of the first two methods can the third method, relied
    on by petitioners here, be used. The third method requires “sending a copy of the summons
    and complaint and a notice of suit, together with a translation of each into the official
    language of the foreign state, by any form of mail requiring a signed receipt, to be addressed
    and dispatched by the clerk of the court to the head of the ministry of foreign affairs of the
    foreign state concerned.” § 1608(a)(3).” Petitioners followed this third method because,
    they contend, neither the first nor second method was available to them.
    ? Though not at issue here, if service cannot be made within thirty days under § 1608(a)(3), service may be
    effected by sending the documents “by any form of mail requiring a signed receipt, to be addressed and dispatched by
    the clerk of the court to the Secretary of State in Washington, District of Columbia,” for transmittal “through
    diplomatic channels to the foreign state.” § 1608(a)(4).
    However, Nigeria argues that a “special arrangement” within the meaning of
    § 1608(a)(1) existed between it and the petitioners, and thus the petitioners’ service via the
    third method was improper.? See Resp.’s Mot. to Dismiss at 6. More specifically, Nigeria
    contends that the contract’s “notices” provision, combined with the arbitration clause
    quoted above, creates a special arrangement for service within the meaning of § 1608(a)(1).
    Id. With such a special arrangement purportedly in place, Nigeria continues, petitioners
    were required to effect service in the method prescribed by that provision, and petitioners’
    failure to do so renders their service ineffective and deprives the Court of personal
    jurisdiction over Nigeria. Jd. Please!
    To say the least, I find Nigeria’s argument to be unpersuasive. The notices provision
    in the Contract does not create the kind of special arrangement for service contemplated by
    § 1608(a)(1), and thus petitioners properly served Nigeria via mail to the Minister of
    Foreign Affairs pursuant to § 1608(a)(3).4 The Contract’s notices provision provides only
    that “any notice, authorisation, information, instruction and correspondence required or
    authorised by this Agreement to be given by either party to the other shall be sent by
    registered post to the other party at” a specified address for each party. Contract § 27.0
    (emphasis added). In arguing that this provision creates an arrangement for service of
    process, Nigeria ignores that the provision is by its terms limited to notices (and other
    > Nigeria does not argue that petitioners failed to comply with the procedures specified in § 1608(a)(3), only
    that service pursuant to that particular subsection was not proper in light of the purported special arrangement.
    * Nigeria does not appear to dispute that the second method of service was unavailable to the petitioners. See
    Resp.’s Mot. to Dismiss at 7; Pets.’ Opp. to Mot. to Dismiss at 4 n.4 [Dkt. # 19].
    information) that are “required or authorized” by the Contract itself. This kind of
    limitation is crucial in determining whether the provision creates a special arrangement, as
    courts have generally found such arrangements in contracts “only where the language is
    ‘all encompassing’ rather than ‘confined to the contract or agreement at issue.’” Berkowitz
    v. Republic of Costa Rica, 288 F. Supp. 3d. 166, 173 (D.D.C. 2018) (quoting Orange
    Middle East & Africa v. Republic of Equatorial Guinea, No. 15-CV-849 (RMC), 
    2016 WL 2894857
    , at *4 (D.D.C. May 18, 2016)).° Provisions that are limited in this way do not,
    by their terms, tend to encompass service of process related to separate court proceedings.
    Such is the case here, where the provision plainly governs only communications
    that are directly authorized, or required, by the terms of the Contract. The provision cannot
    be read to encompass all communications between Nigeria and the petitioners, nor is there
    any reason to find that the provision specifically covers the service of documents stemming
    from confirmation proceedings in the U.S. courts.’ Jd. Accordingly, the notices provision
    > Indeed, Nigeria conspicuously omitted this language from its Motion to Dismiss. See Resp.’s Mot. to
    Dismiss at 4, 7.
    ° Two of the cases Nigeria relies on, Marlowe v. Argentine Naval Commission, 
    604 F. Supp. 703
    , 707 (D.D.C.
    1985) and Arbitration Between Space Systems/Loral, Inc. and Yuzhnoye Design Office, 164 F. Supp. 2d. 397, 402
    (S.D.N-Y. 2001), only underscore this point. In both of those cases, the relevant contractual language covered all
    communications between the two parties, and the courts accordingly concluded that the contracts created a special
    arrangement for purposes of service of process. The decision in G.E. Transport S.P.A. v. Republic of Albania, 
    693 F. Supp. 2d 132
    , 136-37 (D.D.C. 2010), would seem to lend more support to Nigeria’s position, as the court there found
    a special arrangement based in a contract providing that “[a]ny notice to be given to [Albania] under these Conditions
    shall be in writing.” Jd. However, in its decision the court left out the limiting language (“under these Conditions”),
    suggesting they were not central to the court reaching that conclusion. Jd. And to the extent they were considered, I
    would disagree with the court’s conclusion that a special arrangement existed. See Orange, 
    2016 WL 2894857
    , at *4
    (reaching same conclusion in not relying on G.E. Transport).
    7 Nigeria’s alternative argument—that service of a petition to enforce an award arising from a dispute over
    the Contract is in fact within the scope of notices “authorized” by the Contract itself—is also unavailing. Even to the
    extent communications related to disputes arising from the Contract, including notices of arbitration, were to come
    within this definition, Nigeria stretches the provision too far in making its argument here. The Contract neither
    requires nor authorizes service of process for a wholly separate proceeding in a United States District Court. See
    does not create any special arrangement for service within the meaning of § 1608(a)(1),
    and Nigeria has not identified any other such arrangement. Without any “special
    arrangement for service” in place, petitioners’ service of Nigeria via § 1608(a)(3) was
    proper and effectual, and the Court accordingly has personal jurisdiction over Nigeria in
    this case.
    i. Subject Matter Jurisdiction
    Alternatively, Nigeria moves to dismiss on the basis that, as a foreign sovereign,
    Nigeria is immune from the petition, and thus the Court lacks subject matter jurisdiction.
    Petitioners, meanwhile, contend that the petition comes within the so-called “arbitration
    exception” to sovereign immunity contained in the FSIA. See 
    28 U.S.C. § 1605
    (a)(6)
    (providing for exception to foreign sovereign immunity for certain actions brought “to
    confirm an award made pursuant to . . . an agreement to arbitrate”).2 To establish
    Jurisdiction pursuant to the FSIA’s arbitration exception, petitioners bear an initial burden
    Enron, 
    225 F. Supp. 3d at 22-23
     (finding that contract’s provision governing ““‘communications required or permitted
    to be given hereunder’... would not include service of process”).
    8 The full text of the exception provides as follows:
    A foreign state shall not be immune from the jurisdiction of courts of the United States or of the
    States in any case . . . in which the action is brought, either to enforce an agreement made by the
    foreign state with or for the benefit of a private party to submit to arbitration all or any differences
    which have arisen or which may arise between the parties with respect to a defined legal relationship,
    whether contractual or not, concerning a subject matter capable of settlement by arbitration under
    the laws of the United States, or to confirm an award made pursuant to such an agreement to
    arbitrate, if (A) the arbitration takes place or is intended to take place in the United States, (B) the
    agreement or award is or may be governed by a treaty or other international agreement in force for
    the United States calling for the recognition and enforcement of arbitral awards, (C) the underlying
    claim, save for the agreement to arbitrate, could have been brought in a United States court under
    this section or section 1607, or (D) paragraph (1) of this subsection is otherwise applicable.
    
    28 U.S.C. § 1608
    (a)(6).
    of producing (1) a valid arbitration agreement, (2) an award made pursuant to that
    agreement, and (3) a treaty in force calling for the recognition and enforcement of the
    award. See Chevron Corp. v. Ecuador, 
    795 F.3d 200
    , 204 (D.C. Cir. 2015). However,
    “this is only a burden of production; the burden of persuasion rests with the foreign
    sovereign claiming immunity, which must establish the absence of the factual basis by a
    preponderance of the evidence.” Jd. (quoting Agudas Chasidei Chabad of U.S. v. Russian
    Fed’n, 
    528 F.3d 934
    , 940 (D.C. Cir. 2008)). Nigeria here challenges petitioners’
    production as to the first requirement. It contends that the Contract’s arbitration provision
    creates an agreement to arbitrate only as to the parties to the Contract, which are Nigeria
    and PICCOL—not Chiejina. According to Nigeria, Chiejina’s presence in this lawsuit,
    combined with the apparent lack of an arbitration agreement between him and Nigeria, is
    sufficient to remove this petition from the scope of the FSIA’s arbitration exception.’
    Though I agree with Nigeria that, on its face, the Contract’s arbitration agreement
    does not include Chiejina, I do not agree with Nigeria’s conclusion that the Court
    accordingly lacks subject matter jurisdiction over this petition. Instead, I find that
    petitioners have met their burden to establish that the FSIA’s arbitration exception applies
    by producing the arbitration agreement between Nigeria and PICCOL, an award made
    pursuant to that agreement (one that includes both PICCOL and Chiejina as claimants),
    and an applicable treaty governing enforcement of the award (in this case, the Convention
    ° Nigeria also disputes petitioners’ alternative argument that it has impliedly waived its sovereign immunity
    for purposes of this petition, see 
    28 U.S.C. § 1608
    (a)(1), but I need not decide that question because, as explained
    below, I find that the Court has subject matter jurisdiction pursuant to the arbitration exception of the FSIA.
    on the Recognition and Enforcement of Foreign Arbitral Awards, more commonly referred
    to as the New York Convention). To the extent Nigeria has raised doubts as to the validity
    of an award made to Chiejina because he is not a signatory to the Contract containing the
    arbitration provision, such doubts ultimately implicate the arbitrability of Chiejina’s
    contract claims against Nigeria. And arbitrability, in turn, is a question that goes to the
    merits of whether the award should be confirmed pursuant to the New York Convention,
    rather than a basis on which to conclude that the Court lacks jurisdiction under the FSIA.
    See, e.g., Chevron, 795 F.3d at 205 (finding that a sovereign’s challenge to arbitrability
    “conflates the jurisdictional standard of the FSIA with the standard for review under the
    New York Convention”).!°
    Though neither party, nor the Court, has identified a case applying the arbitration
    exception in these specific circumstances, a number of cases considering analogous
    circumstances have reached decisions consistent with my conclusion here. For example,
    in Chevron Corp. v. Ecuador, Ecuador argued that it had not agreed to arbitrate Chevron’s
    claims pursuant to a bilateral investment treaty because Chevron’s claims did not involve
    an “investment” within the meaning of the treaty. Jd. at 202-05. But our Court of Appeals
    held that such an argument did not bear on the district court’s jurisdiction; it was instead a
    challenge to the petition on the merits. Jd. at 205. This holding was reaffirmed just last
    !0 Article V of the New York Convention provides the sole grounds on which a reviewing court may decline
    to confirm an award. See, e.g., TermoRio S.A. E.S.P. v. Electranta S.P., 
    487 F.3d 928
    , 935 (D.C. Cir. 2007); see also
    
    9 U.S.C. § 207
    . These grounds include, in relevant part, when the “award deals with a difference not contemplated
    by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope
    of the submission to arbitration.” New York Convention, Art. V(1), opened for signature June 10, 1958, 21 U.S.T.
    2517.
    year, when our Court of Appeals reached an identical conclusion in LLC SPC Stileks v.
    Republic of Moldova. 
    985 F.3d 871
    , 877 (D.C. Cir. 2021). There, the foreign sovereign
    objected that the petitioner was not a “qualifying investor” within the meaning of the
    relevant treaty (the Energy Charter Treaty), and thus had no agreement to arbitrate with the
    state. See 
    id.
     (citing Chevron, 795 F.3d at 205). Again, the Circuit Court held this
    challenge went to the merits of the petition, not the court’s jurisdiction. And lastly, in
    Balkan Energy Ltd. v. Republic of Ghana, one of my colleagues declined to treat as
    jurisdictional an argument by Ghana that, for purposes of the arbitration exception, it had
    not agreed to arbitrate with the petitioner because the petitioner was not a valid assignee of
    the underlying arbitral award. See 
    302 F. Supp. 3d 144
    , 154-55 (D.D.C. 2018) (Mehta, J.)
    (quoting Blue Ridge Invs., LLC v. Rep. of Argentina, 
    902 F. Supp. 2d 367
    , 375 n.7
    (S.D.N.Y. 2012) (“Nothing in the plain language of [the arbitration exception] suggests
    that an action ‘to confirm an award made pursuant to . . . an agreement to arbitrate’ must
    be brought by the party that entered into the arbitration agreement with the foreign state.”)).
    In sum, each of these cases rejected challenges to the court’s jurisdiction under the
    arbitration exception that rested, essentially, on the premise that a given petitioner or claim
    was not encompassed by the underlying agreement to arbitrate with the foreign sovereign.
    In every case, those challenges were held to implicate only the merits of the petition, rather
    than the court’s jurisdiction under the FSIA. And those challenges are identical in all
    material respects to the one made by Nigeria here. Indeed, nothing in the FSIA or the cases
    interpreting it suggests that the question of whether Chiejina was a proper claimant under
    10
    the Contract is distinguishable from the arbitrability challenges posed in Stileks, Chevron,
    and Balkan Energy. I see no reason, then, to conclude that Nigeria has shown that the
    Court lacks jurisdiction to adjudicate the petition on this basis. Instead, Nigeria will have
    the opportunity, pursuant to the New York Convention, to argue on the merits that the
    award should not be confirmed as to Chiejina. For now, though, Nigeria’s motion to
    dismiss for lack of subject matter jurisdiction under the FSIA must be denied."!
    CONCLUSION
    For the foregoing reasons, the Court has both personal jurisdiction over Nigeria and
    subject matter jurisdiction to adjudicate the pending petition pursuant to the FSIA.
    Accordingly, Nigeria’s motion to dismiss the petition on those bases is DENIED. A
    separate order consistent with this decision accompanies this Memorandum Opinion.
    A
    |
    RICHARD J. N
    United States District Judge
    'l Tt bears noting that, even if I had agreed with Nigeria as to Chiejina, it is not at all clear that the Court
    would lack subject matter jurisdiction over the entire petition so as to require its dismissal. See, e.g., Pets.” Opp. to
    Mot. to Dismiss at 15-16. Indeed, Nigeria has made no argument that a petition brought solely by PICCOL would
    not come within the arbitration exception. Because I agree with petitioners here, however, I need not further address
    this question.
    11