Gretton Limited v. Republic of Uzbekistan

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
GRETTON LIMITED,
Petitioner,
v. Civil Action No. 18-1755 (JEB)
REPUBLIC OF UZBEKISTAN,
Respondent.
MEMORANDUM OPINION
Petitioner Gretton Ltd. seeks to enforce a foreign arbitral award issued in Paris under 9
U.S.C. § 207 and the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, better known as the New York Convention. Before addressing what it perceives as the
infirmities of such award, Respondent Republic of Uzbekistan offers multiple challenges to the
jurisdiction of this Court to even hear the matter. First, Uzbekistan argues that this Court lacks
personal jurisdiction over it because it was never served in strict compliance with 28 U.S.C.
§ 1608. Second, it contends that subject-matter jurisdiction does not exist because Gretton’s
claim does not meet the requirements of the arbitration exception to the Foreign Sovereign
Immunities Act. Finally, it maintains that, even if this Court finds it has jurisdiction, it should
dismiss the case under the doctrine of forum non conveniens. Although it finds the last two
arguments wanting, the Court will require a hearing on the first. It will, accordingly, deny in part
Uzbekistan’s Motion.
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I. Background
The Court recited the facts of the underlying controversy in its February 2019 Opinion,
but sees no harm in briefly retracing its steps. See Gretton Ltd. v. Republic of Uzbekistan, 2019
WL 464793, at *1 (D.D.C. Feb. 6, 2019).
On August 31, 2011, an entity named Oxus Gold filed a notice of arbitration against
Uzbekistan seeking $1.2 billion for the purported expropriation of its investments. Id. On
December 17, 2015, the arbitral panel, sitting in Paris, found Uzbekistan liable to Oxus for just
over $13 million. Id. Oxus appealed that decision, but on May 14, 2019, the Paris Court of
Appeal dismissed that appeal. See ECF No. 28 (Joint Status Report) at 3. Oxus consequently
decided not to further press the issue. See ECF No. 31 (Gretton Supplemental Status Report) at
1.
While the appeal unfolded in Paris, Gretton, as purported assignee of Oxus’s, filed a
Petition against Uzbekistan in this Court in July 2018 seeking to enforce the piece of the Award
in which Oxus had prevailed. See ECF No. 1. Uzbekistan subsequently moved to dismiss the
Petition on several grounds or, in the alternative, to stay the case. See ECF No. 17 (MTD). On
February 6, 2019, this Court stayed the case pending the outcome of the proceedings in Paris.
See Gretton Ltd., 2019 WL 464793, at *7. With those now concluded, the Court considers
Uzbekistan’s jurisdictional challenges.
II. Legal Standard
“[T]he FSIA is the sole basis for obtaining jurisdiction over a foreign state in our courts.”
Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989). Under the Act,
“‘[p]ersonal jurisdiction over a foreign state shall exist as to every claim for relief over which’
subject matter jurisdiction exists . . ., so long as the defendant was properly served.” I.T.
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Consultants, Inc. v. Islamic Republic of Pakistan, 351 F.3d 1184, 1191 (D.C. Cir. 2003) (quoting
28 U.S.C. § 1330(b)).
The Act lists, “in hierarchical order,” four methods for serving a foreign state. Republic
of Sudan v. Harrison, 139 S. Ct. 1048, 1054 (2019). The summons and complaint may be
delivered, first, “in accordance with any special arrangement for service between the plaintiff and
the foreign state or political subdivision,” 28 U.S.C. § 1608(a)(1), or, second, “in accordance
with an applicable international convention on service of judicial documents.” Id., § 1608(a)(2).
If the countries lack such agreements, respondents may be served through a third method, which
involves sending the summons, complaint, Notice of Suit, a copy of the FSIA, and translations
into the official language of the foreign state, “by any form of mail requiring a signed receipt . . .
to the head of the ministry of foreign affairs of the foreign state concerned.” Id., § 1608(a)(3);
see also 22 C.F.R. § 93.2(e) (requiring inclusion of copy of FSIA). And “if service cannot be
made within 30 days” under that method, petitioners may resort to method four: sending those
same documents to the Secretary of State for transmittal “through diplomatic channels to the
foreign state.” 28 U.S.C. § 1608(a)(4); see also Harrison, 139 S. Ct. at 1054.
Regarding subject-matter jurisdiction, “a foreign state is presumptively immune from the
jurisdiction of United States courts[] unless a specified exception applies.” Saudi Arabia v.
Nelson, 507 U.S. 349, 355 (1993). Because “subject matter jurisdiction in any such action
depends on the existence of one of the specified exceptions[,] . . . [a]t the threshold of every
action in a District Court against a foreign state, . . . the court must satisfy itself that one of the
exceptions applies.” Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 493–94 (1983).
Relevant here is the FSIA exception for actions to confirm certain arbitration awards.
See 28 U.S.C. § 1605(a)(6). Specifically, foreign sovereigns are not immune from suits
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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
. . . or to confirm an award made pursuant to such an agreement to
arbitrate, if . . . 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.
Id. Notably, once a petitioner produces evidence showing that an FSIA exception applies, “the
defendant bears the burden of proving that the . . . allegations do not bring its case within a
statutory exception to immunity.” Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36,
40 (D.C. Cir. 2000) (citing Transamerican S.S. Corp. v. Somali Democratic Republic, 767 F.2d
998, 1002 (D.C. Cir. 1985)); accord Chevron Corp. v. Ecuador, 795 F.3d 200, 204 (D.C. Cir.
2015).
Finally, dismissal under the doctrine of forum non conveniens is a “non-merits threshold
inquiry,” which “reflects a court’s assessment of a range of considerations, most notably the
convenience to the parties and the practical difficulties that can attend the adjudication of a
dispute in a certain locality.” MBI Grp., Inc. v. Credit Foncier du Cameroun, 558 F. Supp. 2d 21,
26 (D.D.C. 2008) (quoting Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422,
429 (2007)). Applying forum non conveniens is a two-fold inquiry. First, the court asks whether
an adequate alternative forum exists. If so, it next looks to a set of public and private factors to
determine if they favor dismissal. “If the balance favors the foreign forum, and if the Court is
convinced that plaintiff effectively can bring its case in the alternative forum, the Court may
dismiss the case on grounds of forum non conveniens.” KPMG Fin. Advisory Servs. Ltd. v.
Diligence LLC, 2006 WL 335768, at *1 (D.D.C. Feb. 14, 2006) (citing Pain v. United Techs.
Corp., 637 F.2d 775, 785–86 (D.C. Cir. 1980)). In asserting the doctrine, “[t]he defendant has
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the burden on all aspects of a motion to dismiss on forum non conveniens grounds, including the
obligation to establish as a prerequisite that an adequate alternative forum exists.” Id.III. Analysis
Uzbekistan raises three threshold challenges. The Court begins with personal jurisdiction
before moving to subject-matter jurisdiction and concluding with forum non conveniens.
A. Personal Jurisdiction
Uzbekistan initially contends that this Court lacks personal jurisdiction over it because it
was never properly served. It makes two arguments in support. First, it asserts that Gretton
failed to serve it with the necessary documents — namely, “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,” as well as a copy of the FSIA. See 28 U.S.C. § 1608(a)(3); 22 C.F.R. § 93.2(e);
see also MTD at 15. Second, it believes that the service package was not “addressed and
dispatched by the clerk of the court,” as required by statute. See 28 U.S.C. § 1608(a)(3); see also
MTD at 15.
In response to a motion to dismiss for improper service, “[t]he party on whose behalf
service is made 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
Rule 4 [of the Federal Rules of Civil Procedure] and any other applicable provision of law.”
Light v. Wolf, 816 F.2d 746, 751 (D.C. Cir. 1987) (citation omitted); see also Fed. R. Civ.
P. 12(b)(5). “A signed return of service,” however, “constitutes prima facie evidence of valid
service, which can be overcome only by strong and convincing evidence.” Roland v. Branch
Banking & Tr. Corp., 149 F. Supp. 3d 61, 65 (D.D.C. 2015) (quoting Gates v. Syrian Arab
Republic, 646 F. Supp. 2d 79, 85–86 (D.D.C. 2009)); see also Pollard v. District of Columbia,
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285 F.R.D. 125, 127–28 (D.D.C. 2012) (applying rebuttable presumption where defendants
challenged that person served was authorized agent). Where litigants rely on dueling affidavits
to prove or contest completed service of process, the Court must hold an evidentiary hearing to
resolve the conflict. See Durukan Am., LLC v. Rain Trading, Inc., 787 F.3d 1161, 1162 (7th
Cir. 2015); cf. Wash. Post Co. v. U.S. Dep’t of Health & Human Servs., 865 F.2d 320, 326 (D.C.
Cir. 1989) (vacating summary judgment on ground that dueling affidavits created “controverted
factual issue”); Sears, Roebuck & Co. v. Gen. Servs. Admin., 553 F.2d 1378, 1382 (D.C. Cir.
1977) (similar).
Uzbekistan’s first challenge has legs; its second does not. Dispensing with the latter, the
Court finds that the service package was properly “addressed and dispatched by the clerk of the
court,” as required by the Act. See 28 U.S.C. § 1608(a)(3). While Uzbekistan argues that
service is defective because Gretton provided a pre-addressed label to the Clerk, see ECF No. 19
(Resp. Reply) at 19, the statute does not mandate that the Clerk herself physically type up the
address label — only that the package be labeled by and sent from the Clerk’s office. See 28
U.S.C. § 1608(a)(3). Here, the Clerk’s office did in fact affix the DHL Waybill and send that
package to Uzbekistan. See ECF No. 18 (Pet. Opp.), Attach. 1 (Declaration of Kevin N.
Ainsworth), ¶¶ 9–10; Pet. Opp., Attach. 6 (Declaration of Dennis L. Tonic), ¶ 2; ECF No. 10
(Clerk Certificate). That is all the statute requires, and Gretton for now remains in the clear.
Uzbekistan’s other contention — that it never received full English-language copies of
the Notice of Suit and of the FSIA — is more serious. As the challenged party, Gretton bears the
initial burden of proving the validity of its service. It has done so here by producing a Certificate
of Mailing signed by a Deputy Clerk, which certifies under penalty of perjury that she dispatched
all the documents at issue to the Uzbekistan Ministry of Foreign Affairs. See Clerk Certificate.
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Gretton has also produced a DHL Waybill and a signed return of service, which show the
package was delivered to, and signed for by, someone at the Ministry. See Pet. Opp., Attach. 5
(Waybill and Signed Delivery Slip). Finally, counsel for Gretton submitted an affidavit
certifying that it had sent the Clerk of the Court all the pertinent documents for inclusion in the
package. See Ainsworth Decl., ¶ 8. Yet, the Court notes that neither the Clerk’s affidavit nor
counsel’s amended return-of-service affidavit specifically mentions delivering copies of the
FSIA to Uzbekistan. Counsel only says in its final affidavit that it included those copies. See
Clerk Certificate; Waybill and Signed Delivery Slip; Ainsworth Decl., ¶ 8.
Not to be outdone, Uzbekistan answered with evidence of its own. It produced a sworn
affidavit from the Ministry of Foreign Affairs clerk who received and processed the DHL
package, who attests that several documents were missing — namely, full English copies of the
Notice of Suit and of the FSIA. See Resp. Reply, Attach. 1 (Declaration of Dilfuza
Abdukayumova), ¶¶ 7–8. In support, Uzbekistan attached scanned images of the documents it
received and pointed out the missing pages. See MTD, Attachs. 8–12. As “neither substantial
compliance, nor actual notice, suffice[s] under section 1608(a)(3),” omission of these documents
would render service incomplete. See Barot v. Embassy of the Republic of Zambia, 785 F.3d 26,
27 (D.C. Cir. 2015).
The question before the Court, then, is whether Gretton’s evidence of service is
sufficiently compelling to overcome contrary evidence provided by Uzbekistan. The answer
turns on resolving the parties’ directly dueling affidavits. Gretton insists it sent all the requisite
materials to Uzbekistan; Uzbekistan rejoins that the materials were not in the package it
received. Because the DHL package was not tampered with, see Waybill and Signed Delivery
Slip, the parties’ representations seem to be in direct conflict with each other. If Gretton’s are
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correct, service was properly effected; if Uzbekistan’s are correct, service was not. Resolving
that conflict requires a hearing. See Durukan Am., LLC, 787 F.3d at 1164. Given the logistics,
the Court would permit Respondent’s witness to appear via videoconference.
If it wishes to avoid the uncertainty of such a hearing, Gretton is alternatively free to re-
attempt service under 28 U.S.C. § 1608(a)(3). Uzbekistan overreaches in arguing that the
consequence of improper service should be either dismissal or a requirement that Gretton attempt
service through the onerous diplomatic process described in 28 U.S.C. § 1608(a)(4). See Resp.
Reply at 19–20. Dismissal is improper because, even on Uzbekistan’s facts, Gretton’s attempt at
service “came very close to satisfying the Act’s requirements,” and thus “[t]here clearly ‘exists a
reasonable prospect that service can be obtained.’” Barot, 785 F.3d at 29 (quoting Novak v.
World Bank, 703 F.2d 1305, 1310 (D.C. Cir. 1983)). For the same reasons, the Court will not
find that service “cannot be made” under § 1608(a)(3); indeed, the facts indicate that service
could be achieved under that method were Gretton allowed to re-attempt it. The Court expects
that, in the interest of judicial efficiency and given that it has done so once before, Uzbekistan
will accept service by this method.
The parties should inform the Court within a week how they wish to proceed:
specifically, whether an evidentiary hearing will be necessary or whether Gretton intends to re-
attempt service under § 1608(a)(3). Assuming that Gretton will ultimately perfect service, the
Court finds it worthwhile to address other jurisdictional issues here.
B. Subject-Matter Jurisdiction
In bringing suit here, Gretton asserts a waiver of Uzbekistan’s sovereign immunity under
the FSIA’s arbitration exception. See 28 U.S.C. § 1605(a)(6). Respondent disagrees, contending
that such exception does not apply because Uzbekistan had only agreed to arbitrate with Oxus,
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not Gretton. Finding Gretton has the better of the argument, the Court holds that it has subject-
matter jurisdiction.
Courts in this district have read the FSIA’s arbitration exception to require only that an
award be made pursuant to an agreement to arbitrate, irrespective of whether the claimant is an
assignee. For example, in Balkan Energy Ltd. v. Republic of Ghana, 302 F. Supp. 3d 144(D.D.C. 2018), the court considered the jurisdictional effect of the assignment of a final arbitral
award from Balkan Ghana to Balkan UK. Id. at 154. Respondent Ghana challenged the validity
of the assignment and argued that the court consequently lacked subject-matter jurisdiction to
enforce the award. Id. The court disagreed. “Nothing in Section 1605(a)(6),” it held, “requires
a court to resolve whether an arbitration award was validly assigned as a necessary precondition
to recognizing subject-matter jurisdiction under the arbitration exception.” Id. That holding is in
harmony with the reasoning of other courts in this district, as affirmed by the D.C. Circuit; other
courts that have considered the issue agree as well. See, e.g., Belize Soc. Dev. Ltd. v. Gov’t of
Belize, 5 F. Supp. 3d 25, 34 n.8 (D.D.C. 2013) (“I am aware of [no case] in which a foreign
state’s amenability to suit under the FSIA turns on the validity of an assignment to the
plaintiff.”), aff’d, 794 F.3d 99 (D.C. Cir. 2015); Blue Ridge Invs., LLC v. Republic of Argentina,
902 F. Supp. 2d 367, 375 n.7 (S.D.N.Y. 2012) (“Nothing in the plain language of [28 U.S.C.
§ 1605(a)(6)] 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.”) (quoting 28 U.S.C. § 1605(a)(6)), aff’d, 735 F.3d 72 (2d Cir. 2013).
That reasoning is sound, and this Court adopts it. Again, the FSIA arbitration exception
confers jurisdiction over suits
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
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differences which have arisen or which may arise between the
parties with respect to a defined legal relationship . . . or to confirm
an award made pursuant to such an agreement to arbitrate.
28 U.S.C. § 1605(a)(6). Nothing in the statute requires that the original private party to that
arbitration bring the action for a court to have jurisdiction; indeed, the statute’s locution “with or
for the benefit of” naturally broadens its reach beyond parties the state directly agreed to arbitrate
with. See 28 U.S.C. § 1605(a)(6) (emphasis added). Gretton has thus met its initial burden of
showing that the FSIA exception applies.
Uzbekistan offers two rejoinders. First, it argues that the plain language of the FSIA
exception only confers jurisdiction over claims by parties to an original arbitration, not by
assignees. See MTD at 8–10. It emphasizes that the phrases “differences . . . between the
parties” and “defined legal relationship” indicate that the exception only applies where a state
directly agreed to arbitrate with a petitioner. See Resp. Reply at 6–7. This is a bold argument, as
courts in this district — with the blessing of the D.C. Circuit — have time and again found
jurisdiction over arbitration assignees’ confirmation suits. See, e.g., Balkan Energy, 302 F. Supp.
3d at 154–55; Belize Soc. Dev. Ltd., 5 F. Supp. 3d at 33–34, aff’d, 794 F.3d 99 (D.C. Cir. 2015).
Their reasoning applies in full force here: nothing in the language respondents highlight requires
that a suit be brought by a party with whom a respondent agreed to arbitrate. The cases
Uzbekistan cites present only instances where a respondent country, rather than a petitioning
company, was absent from the original arbitration. See, e.g., DRC Inc. v. Republic of Honduras,
71 F. Supp. 3d 201, 207–08 (D.D.C. 2014); First Inv. Corp. v. Fujian Mawei Shipbulding, Ltd.,
703 F.3d 742, 756 (5th Cir. 2012), as revised (Jan. 17, 2013); see also Resp. Reply at 8.
Uzbekistan’s first argument thus holds no water.
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It next challenges the contractual validity of the actual assignment from Oxus to Gretton.
See MTD at 10–13. Given the above reasoning, this argument is best understood as protesting
the merits of Gretton’s claim rather than this Court’s jurisdiction to hear it. As such, the Court
need not consider it at this juncture.
C. Forum Non Conveniens
Last up, Uzbekistan maintains that even if this Court properly has jurisdiction, it should
dismiss the claim under the doctrine of forum non conveniens. Id. at 16–19. Under that doctrine,
a court “must decide (1) whether an adequate alternative forum for the dispute is available and, if
so, (2) whether a balancing of private and public interest factors strongly favors dismissal.”
Agudas Chasidei Chabad of U.S. v. Russian Fed’n, 528 F.3d 934, 950 (D.C. Cir. 2008) (citing
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 n. 22 (1981)). A court only progresses to the
second inquiry if the first is satisfied — that is, if there exists an adequate alternative forum for
the dispute. Id.Here, Uzbekistan’s argument is squarely foreclosed by binding circuit precedent, which
holds that no adequate alternative foreign forum exists for domestic enforcement of an
arbitration claim. In TMR Energy Ltd. v. State Prop. Fund of Ukraine, 411 F.3d 296 (D.C. Cir.
2005), the D.C. Circuit held that the doctrine of forum non conveniens does not apply to
enforcement of arbitral awards against foreign nations in the United States. Id. at 303–04. The
court reasoned that only American courts may attach commercial property of foreign sovereigns
located in the United States and, consequently, that no other court may provide the requested
relief. Id. at 303. Petitioners need not show that the foreign sovereign has attachable property in
the United States, held the court, because the country “may own property here in the future.” Id.11
The court thus found that FNC challenges to arbitral confirmation suits fail at the first step of the
analysis. Id. at 304.
The D.C. Circuit has stood by TMR Energy’s holding. See BCB Holdings Ltd. v. Gov’t
of Belize, 650 F. App’x 17, 19 (D.C. Cir. 2016) (finding FNC argument “squarely foreclosed by
our precedent” because “[i]n [TMR Energy], we held that the doctrine of forum non conveniens
does not apply to actions in the United States to enforce arbitral awards against foreign nations”).
District courts have time and again applied that holding as well. See, e.g., Balkan Energy Ltd.,
302 F. Supp. 3d at 155 (“The D.C. Circuit continues to apply TMR, and so too must this court.”);
Belize Soc. Dev. Ltd., 5 F. Supp. 3d at 34 (“[TMR Energy] is the controlling law in our Circuit,
and I will therefore apply it faithfully.”).
Uzbekistan attempts to sidestep this formidable precedent. First, it suggests that this
Court instead follow the Second Circuit’s ruling in Monegasque De Reassurances S.A.M. v. Nak
Naftogaz of Ukraine, 311 F.3d 488 (2d Cir. 2002). See Resp. Reply at 20. Yet even if this Court
believed the Second Circuit’s holding more persuasive than our own precedent, its hands are
tied. See Belize Soc., 5 F. Supp. 3d at 34 n.9 (“TMR Energy is binding, unlike Second Circuit
case law.”). Second, Uzbekistan’s argument that it lacks property in the United States, see Resp.
Reply at 21, is equally unavailing given the D.C. Circuit’s directly contrary reasoning. See TMR
Energy, 411 F.3d at 303 (“Even if the SPF currently has no attachable property in the United
States, however, it may own property here in the future, and TMR's having a judgment in hand
will expedite the process of attachment.”). The Court thus sides with Gretton here and will not
dismiss the suit on forum non conveniens grounds.
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D. Further Merits Briefing
The parties last disagree over next steps. Gretton argues that Uzbekistan should have
asserted all available defenses in its response and has thus waived any merits arguments. See
Pet. Opp. at 25–27. Uzbekistan disagrees, saying that it should first raise jurisdictional questions
and then, only if necessary, file a merits brief. See Resp. Reply at 2–5.
‘‘[M]otions to enforce arbitral awards should proceed under motions practice.”
TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 940 (D.C. Cir. 2007); see also 9 U.S.C.
§ 6 (specifying that claims to confirm arbitral awards ‘‘shall be made and heard in the manner
provided by law for the making and hearing of motions’’). As a consequence, Uzbekistan should
have asserted all its arguments at once, rather than in “piecemeal fashion” as it has here. See
Balkan Energy Ltd, 302 F. Supp. 3d at 149 n.2. Nonetheless, while including all arguments
would certainly have been preferable, given the jurisdictional hiccups left for resolution, the
Court will allow the parties further briefing if service is found to be perfected. Cf. id. at 149
(offering petitioners option to submit additional briefing); Air Line Pilots Ass’n v. Miller, 523
U.S. 866, 879 n.6 (1998) (noting district court’s authority to “control the disposition of the
causes on its docket with economy of time and effort for itself, for counsel, and for litigants”).
The Court reminds the parties, however, that “[c]onfirmation proceedings under the Convention
are summary in nature, and the court must grant the confirmation unless it finds that the
arbitration suffers from one of the defects listed in the Convention.” Argentine Republic v.
National Grid Plc, 637 F.3d 365, 369 (D.C. Cir. 2011) (citation omitted).
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IV. Conclusion
For these reasons, the Court will deny in part Uzbekistan’s Motion to Dismiss and order a
hearing to resolve disputed jurisdictional facts, subject to representations from Gretton on how it
wishes to proceed with service. A separate Order so stating will issue this day.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: July 30, 2019
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