Aenergy, S.A. v. Republic of Angl.

678 F.Supp.3d 147

AENERGY, S.A., Plaintiff, v. REPUBLIC OF ANGOLA, et al., Defendants.

Case No. 1:22-cv-02514 (TNM)

United States District Court, District of Columbia

Signed June 20, 2023

Kevin D. Benish, Vincent Levy, Holwell Shuster & Goldberg LLP, New York City, NY, for Plaintiff.

Kiran Nasir Gore, Law Offices of Kiran N. Gore, PLLC, Washington, DC, Michael David Ehrenstein, Pro Hac Vice, Ehrenstein Sager, Coral Gables, FL, for Defendants.

MEMORANDUM OPINION

TREVOR N. McFADDEN, United States District Judge

This is a case about forum-shopping. Plaintiff Aenergy, S.A. alleges that the Republic of Angola unlawfully terminated several utility contracts awarded to it by the Angolan government. Aenergy sought to have those contracts reinstated in Angolan court, and that case remains pending. Soon after, Aenergy filed a lawsuit seeking damages for breach of contract in the Southern District of New York. The court dismissed that suit under the doctrine of forum non conveniens. The Second Circuit affirmed.

Aenergy takes another swing in this district. It again sues Angola and various arms of Angola's government for breach of contract. Defendants again move to dismiss. The Court will grant that motion. Aenergy cannot overcome the prior dismissal's preclusive effect. And regardless, this Court agrees with the well-reasoned decisions of the Southern District and Second Circuit and finds that this case belongs in an Angolan court.

I.

Aenergy is an Angolan energy company owned by a Portuguese citizen, Ricardo Machado. Am. Compl. (Compl.) ¶ 28, ECF No. 28. Between 2014 and 2017, Aenergy inked 13 contracts with Defendants Empresa Pública de Produção de Electricidade, EP ("PRODEL") and Empresa Nacional de Distribuição de Electricidade ("ENDE"). See id. ¶ 36. These utility companies are subsidiaries of the Angolan Ministry of Energy and Water. See id. ¶¶ 12-13.

The contracts at issue required Aenergy to construct, supply, and maintain power plants and water infrastructure in Angola. See id. ¶ 36. Together, these utility contracts are worth over a billion dollars. See id.

Aenergy worked with General Electric ("GE") and some of its corporate affiliates to fulfill the contracts. See id. ¶¶ 14-16. In particular, the contracts required Aenergy to install turbines manufactured by GE Packaged Power, Inc. See id. ¶ 37. Angola also partnered with GE. To fund its infrastructure projects, Angola entered a financing agreement with General Electric Capital Energy Financial Services, Inc. ("GE Capital"), the financial arm of GE. See id. ¶ 31. GE Capital provided one billion dollars in credit to Angola in exchange for a sovereign guarantee of repayment. See id. Under the terms of the agreement, GE Capital would disburse money from the credit facility at the request of the Angolan Ministry of Finance. See id. ¶ 37.

Ordinarily, Angola would have transferred funds from GE into its own accounts to pay Aenergy. Then Aenergy would have used a portion of those funds to pay GE Packaged Power for the turbines. See id. ¶ 32(b). To simplify this arrangement, Angola and GE Capital added a "direct funding" mechanism to their financing agreement. See id. ¶ 32(c). This mechanism allowed GE Capital to transfer the money owed to Aenergy by Angola directly into Aenergy accounts. See id. ¶ 32(d). Similarly, GE Capital would directly transfer the funds owed to GE Packaged Power for the turbines into its accounts. See id. ¶ 33. This funding mechanism created efficiencies by avoiding transferring funds through the Angolan government as an intermediary. See id. ¶ 32(c).

After the Angolan government finalized the financing arrangement, Aenergy began performance and invoiced the Angolan government for its work. See id. ¶¶ 38-39. In December 2017, Angola withdrew $644 million of its GE credit, sending $277 million to Aenergy and $367 million to GE Packaged Power. See id. ¶ 46.

Things went south in early 2019. A dispute arose between Aenergy and GE over the terms of their turbine supplier agreement. See id. ¶ 48. GE claimed that even though Aenergy had invoiced Angola only for eight turbines, Angola had paid Aenergy for 12 turbines. See id. ¶ 49. By Aenergy's account, this was a "lie" based on a GE accounting error. Id.

Soon after, Angola's president directed the Ministry of Energy and Water to terminate the utility contracts over concerns about the "irregularities" in the number of turbines Aenergy had purchased. See id. ¶ 48. The Angolan government claimed that Aenergy had purchased four turbines without its approval. See Mot. to Dismiss (MTD) at 5, ECF No. 24. And Angola revealed its intention to transfer the utility contracts directly to GE. See Compl. ¶ 48. Angola viewed Aenergy as an "intermediary" between Angola and GE—and the Angolan government decided to cut out the middleman. See id. ¶ 67(f).

In August 2019, the president formally authorized the Ministry of Energy and Water to terminate the contracts with Aenergy. See id. ¶ 52. The president also authorized the minister to seize the four turbines that Aenergy had bought from GE. See id. The minister then provided Aenergy notice of the contract termination in a letter. See id. ¶ 53. Following the termination, Angola made no more payments to Aenergy. See id. ¶ 54.

In response, Aenergy launched an international legal campaign. See id. ¶¶ 56-59. Aenergy started in Angola. First, it appealed Angola's decision to terminate the contracts to the Ministry of Energy and Water. See id. ¶ 57. The Ministry denied that appeal. See id. Aenergy then appealed that decision to the president. See id. After he denied its appeal, Aenergy appealed to the Supreme Court of Angola. See id. That appeal remains pending. See id.

A few months after filing that appeal, Aenergy decided to try its luck with U.S. courts. See id. ¶ 58. It sued the Republic of Angola, the Ministry of Energy and Water of Angola, the Ministry of Finance of Angola, PRODEL, and ENDE (together, "the Angolan Defendants") in the Southern District of New York. Id. It also sued three GE entities for their role in the kerfuffle. Id. Aenergy explains that it decided to initiate parallel proceedings there because the Angolan Supreme Court had missed procedural deadlines and a limitations period was approaching for some of its claims. See id.

Aenergy brought ten claims against the various Defendants. See Compl., Aenergy, S.A. v. Republic of Angola (Aenergy I), No. 20-cv-3569 (S.D.N.Y. May 7, 2020), ECF No. 1. Against the Angolan Defendants, Aenergy asserted six claims, including breach of contract, unjust enrichment, taking of physical assets, taking of intangible assets, and conversion. Id. ¶¶ 227-77. Against the GE Defendants, Aenergy alleged tortious interference with contract and tortious interference with prospective business relations. Id. ¶¶ 278-89. And Aenergy asserted an accounting claim and aiding and abetting claim against them all. Id. ¶¶ 290-98.

All Defendants moved to dismiss, arguing, among other things, that forum non conveniens warranted dismissal in favor of an Angolan forum. See Aenergy, S.A. v. Republic of Angola (Aenergy I), No. 20-cv-3569, 2021 WL 1998725, at *7 (S.D.N.Y. May 19, 2021). In a 29-page opinion, Judge Cronan agreed with Defendants and dismissed on forum non conveniens grounds without reaching Defendants' other arguments. See id. at *20. Aenergy then appealed to the Second Circuit.

The Second Circuit affirmed in a published opinion. See Aenergy, S.A. v. Republic of Angola (Aenergy II), 31 F.4th 119, 124 (2d Cir. 2022). Aenergy then sought panel rehearing and rehearing en banc. See Pet. for Reh'g or Reh'g En Banc, No. 21-cv-1752 (2d Cir. May 11, 2022), ECF No. 125. Those requests were denied. See Order, No. 21-cv-1572, ECF No. 130. Undeterred, Aenergy filed a writ of certiorari with the Supreme Court, which was also denied. See — U.S. —, 143 S.Ct. 576, 214 L.Ed.2d 341 (2023) (mem.).

Two months after the Second Circuit denied rehearing and rehearing en banc, Aenergy filed a new Complaint here. This time around, Aenergy dropped its claims against the GE Defendants. But it sued the same Angolan Defendants, narrowing its Complaint to one count of breach of contract. See generally Compl.

Defendants now move to dismiss. They argue that (1) they are immune from suit under the Foreign Sovereign Immunities Act ("FSIA"); (2) this suit is precluded by the prior New York litigation; (3) the Court should dismiss this case under the doctrine of forum non conveniens; (4) this suit is subject to mandatory arbitration; (5) the pending parallel proceedings in Angola justify abstention; and (6) Aenergy fails to state a claim against each Defendant.¹

The Court agrees that Aenergy is precluded from relitigating the Southern District's and Second Circuit's comprehensive decisions. Even if Aenergy were entitled to another chance, the result would be the same: this suit belongs in Angola and should be dismissed on forum non conveniens grounds. The Court will thus grant Defendants' motion to dismiss.

II.

Courts use the doctrine of forum non conveniens "to deal with inappropriate forum-shopping." Hueter v. Kruse, 610 F. Supp. 3d 60, 66 (D.D.C. 2022). It is a threshold inquiry that permits dismissal "when considerations of convenience, fairness, and judicial economy so warrant." Sinochem Int'l Co. v. Malaysia Int'l Shipping Co., 549 U.S. 422, 432, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007) (cleaned up). The doctrine is most often invoked when the alternative proposed forum is foreign. See Hueter, 610 F. Supp. 3d at 67. And unlike the statutes governing venue within the federal-court system, dismissal rather than transfer is the proper remedy. See id.

Defendants submit that the Southern District's forum non conveniens dismissal precludes Aenergy from challenging the doctrine's application here. They rely on issue preclusion, also called "collateral estoppel." See Bushrod v. District of Columbia, 521 F. Supp. 3d 1, 12 (D.D.C. 2021).

Under that doctrine, "once a court has...