Orange Middle East and Africa v. Republic of Equatorial Guinea

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________
)
ORANGE MIDDLE EAST & AFRICA )
f/k/a FRANCE CABLES & RADIOS, )
)
Petitioner, )
)
v. ) Civil Action No. 15-cv-849 (RMC)
)
REPUBLIC OF EQUATORIAL )
GUINEA, )
)
Respondent. )
_________________________________ )
OPINION
Petitioner asks this Court to enforce an international arbitration award. Because
Respondent is a foreign state, Petitioner was required to effect service under the Foreign
Sovereign Immunities Act. Petitioner has failed to demonstrate that it followed one of the
methods for service prescribed by FSIA, and thus proper service was never effected. The
petition must be dismissed without prejudice.
I. FACTS
The following facts are taken from the operative pleading, Petition to Confirm
Arbitral Award [Dkt. 1] (Pet.), and are taken as true in this procedural posture. Baird v.
Gotbaum, 792 F.3d 166, 169 n.2 (D.C. Cir. 2015).
Petitioner, Orange Middle East and Africa (Orange MEA), and Respondent, the
Republic of Equatorial Guinea, were joint shareholders in a telecommunications company
(Telecomunicaciones Sociedad Anonima or “GETESA”) that provided service to Equatorial
Guinea. See Pet. ¶ 7. Equatorial Guinea and Orange MEA owned 60 percent and 40 percent of
the corporate capital of the company, respectively. See id.
1
On November 4, 2011, after disputes between the two parties arose regarding the
management of GETESA, the parties entered into a settlement agreement. See id. ¶ 8 & Ex. 1,
Settlement Agreement [Dkt. 1-1 at 4] (Agreement). Article 9 of the Agreement contained an
“Exit Clause,” in which Equatorial Guinea made an “irrevocable promise” to purchase Orange
MEA’s 40% share in GETESA in the event that a telecommunications license were granted to a
third party in Equatorial Guinea. See Pet. ¶ 9; Agreement at 5-6.
In December 2011, Equatorial Guinea granted a telecommunications license to a
third party, triggering the Exit Clause. Pet. ¶ 9. However, Equatorial Guinea did not purchase
Orange MEA’s 40% stake in GETESA, as Article 9 of the Agreement required. See id. That
failure precipitated the instant dispute.
Article 11 of the Agreement required Orange MEA and Equatorial Guinea to
submit to arbitration any unresolved disputes over the settlement agreement. Id. ¶ 11;
Agreement at 7. Specifically, it provided that should conciliation procedures fail, “the Parties
agree that any dispute arising from or related to the Agreement shall be definitively settled in
accordance with the ICC’s arbitration regulations in accordance with this regulation. The arbitral
tribunal shall consist of three (3) arbitrators and shall take place in Paris.” Pet. ¶ 11; Agreement
at 7.
On March 22, 2013, Orange MEA filed an arbitration request with the
International Chamber of Commerce’s (ICC’s) International Court of Arbitration. See Pet. ¶ 12
& Ex. 2, Final Arbitral Award [Dkt. 1-1 at 70] (Award) at 1. According to Orange MEA,
Equatorial Guinea disputed the arbitral tribunal’s jurisdiction and “refused to submit any
arguments relating to the substantive issues in dispute.” See Pet. ¶ 13. Seven representatives for
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Equatorial Guinea attended the hearing, including the Deputy Minister of Justice and the
Attorney General. Id.
On July 8, 2014, the tribunal issued its Final Arbitral Award in favor of Orange
MEA. See id. ¶ 14; Award at 47. Among other things, it ordered Equatorial Guinea to pay
€ 131,992,915 plus interest and fees for Orange MEA’s stake in GETESA. Pet. ¶ 14.
On August 7, 2014, Equatorial Guinea petitioned the Paris Court of Appeals to set
aside the Final Arbitral Award. Id. ¶ 17. This appeal was still pending at the time Orange MEA
filed its petition. See id. Orange MEA also sought an order authorizing the enforcement of the
Final Arbitral Award in France. The Paris Court of Appeals authorized the enforcement of the
award on February 5, 2015. See id.
Orange MEA seeks a judgment from this Court confirming the arbitral award
pursuant to Section 207 of the Federal Arbitration Act, 9 U.S.C. § 207 (FAA). See id. ¶ 1.
Orange MEA alleges that the Court has subject matter jurisdiction under Section 203 of the FAA
because the Petition constitutes an action to confirm an arbitral award governed by the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York
Convention or Convention). See id. ¶ 4 (citing FAA § 203). Orange MEA maintains that the
New York Convention, as implemented by the FAA, governs the confirmation of the Final
Arbitration Award because it arises from a commercial relationship and does not arise out of a
relationship entirely between United States citizens. See Pet. ¶ 18; FAA § 202.
In its Petition, Orange MEA alleged that this Court would have personal
jurisdiction over Equatorial Guinea, pursuant to 28 U.S.C. § 1330(b), once Orange MEA
completed service on Equatorial Guinea as authorized by the Foreign Sovereign Immunities Act
3
(FSIA), 28 U.S.C. § 1608(a). Pet. ¶ 5.1 Two months later, Orange MEA filed a Certificate of
Service [Dkt. 8] (Certificate) indicating that Equatorial Guinea was served on August 6, 2015.
On the day its answer was due, Equatorial Guinea filed a motion to dismiss. See
Def. Mot. to Dismiss [Dkt 12-1] (Mot.). Equatorial Guinea argues that the Petition should be
dismissed because Orange MEA failed to serve it properly as required by FSIA § 1608(a).
Orange MEA has filed an Opposition [Dkt. 16] (Opp’n) and Equatorial Guinea has filed a Reply
[Dkt. 17]. The motion is ripe for resolution.
II. LEGAL STANDARD
FSIA is the source of jurisdiction in federal court over claims against foreign
states, their agencies, or their instrumentalities. Argentine Republic v. Amerada Hess Shipping
Corp., 488 U.S. 428, 443 (1989). Under FSIA, “subject matter jurisdiction plus service of
process equals personal jurisdiction.” Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d
1543, 1548 n.11 (D.C. Cir. 1987) (quoting Tex. Trading & Milling Corp. v. Federal Republic of
Nigeria, 647 F.2d 300, 308 (2d Cir. 1981)). “[A] rule 12(b)(5) motion is the proper vehicle for
challenging the mode of delivery or the lack of delivery of the summons and complaint.”
1
Orange MEA also alleged that “[i]n the arbitration clause in the November 4, 2011 Settlement
Agreement, Equatorial Guinea ‘expressly waive[d] its right to any immunity from jurisdiction
and enforcement.’” Id. (quoting Agreement at 7). The full provision of the Agreement reads:
To the extent needed, the State expressly waives its right to any
immunity from jurisdiction and enforcement. However, this waiver
shall not allow the use of executive measures against State assets
reserved exclusively for administrative, military or diplomatic use,
or those pertaining more generally to the State’s sovereignty.
Agreement at 7.
4
Candido v. District of Columbia, 242 F.R.D. 151, 162 (D.D.C. 2007) (citing 5B Wright &
Miller, Federal Practice & Procedure: Civil § 1353 (3d ed. 2006)).2
There are two requirements to obtain personal jurisdiction over a foreign state
under FSIA. First, there must be an exception to the sovereign immunity that otherwise applies
under 28 U.S.C. §§ 1605-07 “or under any applicable international agreement.” See 28 U.S.C.
§ 1330(a). Second, service must be made by one of the means identified in 28 U.S.C. § 1608.
See 28 U.S.C. § 1330(b).
III. ANALYSIS
Equatorial Guinea concedes that an exception to sovereign immunity exists,
Reply at 3, and argues only that service was not made as required by 28 U.S.C. § 1608. That
statute provides four means of serving a foreign state. First, if a “special arrangement for
service” is in place between the plaintiff and the foreign state, a copy of the summons and
complaint may be delivered thereunder. 28 U.S.C. § 1608(a)(1). Second, absent such an
agreement, delivery may be made “in accordance with an applicable international convention on
service of judicial documents.” Id. § 1608(a)(2). If neither of those options can be used, the
plaintiff may send the summons, complaint, a “notice of suit” and a translated copy of each to
the head of the ministry of foreign affairs in the foreign state. Id. § 1608(a)(3). And finally, if
the third option will not effect service within 30 days, the plaintiff may attempt to channel
service through the U.S. State Department. Id. § 1608(a)(4).3
2
The passage from Candido is quoted by Equatorial Guinea, Mot. at 3, although it also mentions
in passing Federal Rules of Civil Procedure 12(b)(2) and 12(b)(4). See Mot. at 1. However, as
its proposed Legal Standard suggests, it relies on Rule 12(b)(5) alone.
3
The third and fourth options are slightly more complicated, but in ways that are irrelevant here.
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The D.C. Circuit requires “strict adherence to the terms of 1608(a).” Barot v.
Embassy of the Republic of Zambia, 785 F.3d 26, 27 (D.C. Cir. 2015) (quoting Transaero, Inc. v.
La Fuerza Aerea Boliviana, 30 F.3d 148, 154 (D.C. Cir. 1994)); see also; Kettey v. Saudi
Ministry of Education, 53 F. Supp. 3d 40, 47 (D.D.C. 2014); Opati v. Republic of Sudan, 978 F.
Supp. 2d 65, 68 (D.D.C. 2013); Baumel v. Syrian Arab Republic, 550 F. Supp. 2d 110, 113
(D.D.C. 2008); BPA Intern., Inc. v. Kingdom of Sweden, 281 F. Supp. 2d 73, 84 (D.D.C. 2003).
“Neither substantial compliance with § 1608(a)’s requirements nor actual notice of the suit
excuses plaintiffs’ deviation from the section’s mandates.” Doe I v. State of Israel, 400 F. Supp.
2d 86, 102 (D.D.C. 2005) (citing Transaero, 30 F.3d at 153-54).
In this case, Orange MEA argues that its petition and summons were “mailed via
DHL to the Republic of Equatorial Guinea at the addresses provided in Article 12 of the
Settlement Agreement.” Certificate at 1. DHL delivered the documents to the Minister of
Telecommunications on August 5, 2015 and to Equatorial Guinea’s ambassador in Paris on
August 6, 2015. Id. at 2. Orange MEA expressly relies on 28 U.S.C. § 1608(a)(1) and Article 12
of the Agreement to conclude that it “completed service on Equatorial Guinea on August 6,
2015.” Id.
The problem is that § 1608(a)(1) does not apply here. Section 1608(a)(1) requires
a “special arrangement for service,” id. (emphasis added) and Article 12 is not such an
arrangement. Rather, Article 12 describes how the parties were to transmit “notices, agreements,
waiver declarations, and other communications made under this Agreement.” Agreement at 7, 8
(emphasis added). Limited as it is to the Agreement, the language does not constitute a special
arrangement for service of legal process under FSIA.
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The distinction in the case law is evident. When a notice provision is all
encompassing, it usually qualifies as a “special arrangement for service” under § 1608(a)(1). But
when a notice provision is confined to the contract or agreement at issue, it does not qualify as a
special arrangement for service.
Judges on this Court have regularly distinguished communications provisions
limited to a contract/agreement and more general provisions. Compare Int’l Road Fed’n v.
Embassy of the Democratic Republic of the Congo, 131 F. Supp. 2d 248, 251 (D.D.C. 2001)
(finding special arrangement in lease provision that stated that “‘[a]ll notices, demands, or
requests between Sublessor and Sublessee shall be delivered in person, by certified mail, return
receipt requested, or by registered mail . . . .”); Marlowe v. Argentine Naval Comm’n, 604 F.
Supp. 703, 707 (D.D.C. 1985) (finding special arrangement under contract that provided, “[a]ll
notices, requests, demands, or other communications to or upon the respective parties hereto
shall be deemed to have been given or made when deposited in the mail, postage prepaid”) with
Underwood v. United Republic of Tanzania, No. 94-902, 1995 WL 46383, at *2 (D.D.C. Jan. 27,
1995) (finding no special arrangement when contract stated that “any notices ‘required or
permitted herein’” should be transmitted a particular way).4
Courts in other districts have adopted the same distinction. See, e.g., Berdakin v.
Consulado de la Republica de El Salvador, 912 F. Supp. 458, 466 (C.D. Cal. 1995) (finding no
special arrangement in lease provision addressing “any demand, notice or declaration of any
kind” made “under this Lease”); Glencore Ltd. v. Occidental Argentina Exploration and
Production, Inc., No. H–11–3070, 2012 WL 591226, at *5 (S.D. Tex. Feb. 22, 2012) (finding no
4
Orange MEA distinguishes Underwood as a suit for breach of contract and not to enforce an
arbitral award. The basis for a lawsuit does not affect the requirements for service on a foreign
sovereign under FSIA. See Underwood, 1995 WL 46383, at *2.
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special arrangement in contract stating “‘[a]ll notices and other communications required to be
given hereunder;” because such “language patently does not cover service of process, as service
is not a notice or communication required to be given under the contract”) (emphasis in
original).
The provision in the Agreement between Orange MEA and Equatorial Guinea
was restrictive. Agreement at 7, 8 (“. . . made under this Agreement”). As the decisions cited
above made clear, service of legal process prescribed by § 1608(a)(1) is not a communication
made under the Agreement. To the contrary, service is a communication made for the purposes
of instigating a lawsuit. Such a lawsuit, apart from being made outside the Agreement, was
likely not even contemplated by it; the parties agreed that arbitration would bind them both.
Orange MEA urges the Court to follow G.E. Transportation v. Republic of
Albania, 693 F. Supp. 2d 132 (D.D.C. 2010), in which a member of this Court found a special
arrangement for service in a contract provision requiring that “[a]ny notice to be given to
[Albania] . . . shall be in writing . . . .” Id. at 136-37. The first ellipsis in the quote omitted the
words “under these Conditions.” The entire phrase was thus, “[a]ny notice to be given to
[Albania] under these Conditions shall be in writing, and shall be sent by personal delivery, air
post . . . .” The formal Contract at issue was a mere five pages, while the detailed contract terms
were contained in a 68-page document titled Contract Conditions. See Decl. of Henry Weisburg,
Ex. B, Contract Agreement & Contract Conditions, G.E. Transp. Sys. v. Albania, 08-cv-2042
(RMU) (D.D.C. Apr. 17, 2009), ECF No. 12-2. Since the Judge did not include the limiting
words in his opinion, they were clearly not important to his analysis. To the extent that the Judge
would have found a special arrangement even with the omitted words, this Judge disagrees.
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Orange MEA labors to convince the Court that Articles 10 and 11 of the
Agreement, taken together, encompass post-arbitration enforcement in court. Opp’n at 7 (“The
Settlement Agreement and attached shareholders’ agreement, however, set out a comprehensive
framework to govern the relations between the parties.”); id. at 8 (“Because this action seeks the
enforcement of an arbitral award entered pursuant to Article 11 of the Settlement Agreement,
service of process of this action arises under the provisions of the Settlement Agreement.”). But
the instant Petition was not, strictly speaking, filed “pursuant to Article 11 of the Settlement
Agreement.” By its terms, the Agreement provided for dispute resolution through conciliation
and binding arbitration; that is the outer limit of the Agreement’s reach. A Petition to enforce the
ensuing arbitral award is another matter—one that must respect the sovereignty of Equatorial
Guinea and conform to FSIA’s prerequisites to jurisdiction in this Court.
The four methods of service allowed by §1608(a) are listed “in descending order
of preference—meaning that a plaintiff must attempt service by the first method (or determine
that it is unavailable) before proceeding to the second method, and so on.” Opati v. Republic of
Sudan, 978 F. Supp. 2d 65, 67 (D.D.C. 2013). Orange MEA’s attempt under the first method has
failed. It may either retry that method (under another arrangement) or proceed to the second.
IV. CONCLUSION
FSIA’s requirements for service of process on a foreign sovereign are strictly
construed. Orange MEA has failed to prove the existence of a special arrangement between the
parties. Respondent’s motion to dismiss [Dkt. 12] must be granted. The Petition will be
dismissed without prejudice. A memorializing Order accompanies this Opinion.
Date: May 18, 2016 /s/
ROSEMARY M. COLLYER
United States District Judge
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