Amaplat Mauritius Ltd. v. Zim. Mining Dev. Corp.

663 F.Supp.3d 11

AMAPLAT MAURITIUS LTD. et al., Plaintiffs, v. ZIMBABWE MINING DEVELOPMENT CORPORATION et al., Defendants.

Case No. 22-cv-58 (CRC)

United States District Court, District of Columbia

Signed March 22, 2023

Joseph Myer Sanderson, Pro Hac Vice, Niyati Ahuja, Pro Hac Vice, Steptoe & Johnson LLP, New York, NY, Steven K. Davidson, Steptoe & Johnson LLP, Washington, DC, for Plaintiffs.

Rodney Quinn Smith, II, GST LLP, Miami, FL, Bethel Kassa, GST LLP, Washington, DC, for Defendant Zimbabwe Mining Development Corporation.

Rodney Quinn Smith, II, Katherine A. Sanoja, GST LLP, Miami, FL, Bethel Kassa, GST LLP, Washington, DC, for Defendants Chief Mining Commissioner, Ministry of Mines of Zimbabwe, Republic of Zimbabwe.

MEMORANDUM OPINION AND ORDER

CHRISTOPHER R. COOPER, United States District Judge

In this case, two Mauritian mining companies seek recognition of a foreign court judgment enforcing an arbitral award against the Republic of Zimbabwe, the Chief Mining Commissioner of the Zimbabwean Ministry of Mines, and the Zimbabwe Mining Development Corporation ("ZMDC"), a corporation that is majority-owned by the government of Zimbabwe. All three Defendants have moved to dismiss the complaint for lack of subject matter jurisdiction, lack of personal jurisdiction, and failure to state a claim. The Court will grant the motions as to ZMDC and the Republic. Plaintiffs' theory for the Court's subject matter jurisdiction over the Republic and their theory for personal jurisdiction over ZMDC are both premised on the allegation that ZMDC is the Republic's alter ego. But, for the reasons explained below, the Court is not convinced that Plaintiffs have adequately pleaded that alter ego relationship. Because Plaintiffs might remedy that omission with more developed factual allegations, the Court will permit them to amend their complaint accordingly. As for the claims against the Chief Mining Commissioner, the Court concludes that it has jurisdiction and will deny the Commissioner's motion to dismiss.

I. Background

Plaintiffs Amaplat Mauritius Ltd. and Amari Nickel Holdings Zimbabwe Ltd. (collectively, "Plaintiffs") are two mining companies incorporated under the laws of the nation of Mauritius. Compl. ¶¶ 13-14. In 2007 and 2008, Plaintiffs each entered into memorandums of understanding ("MOUs") with Defendant ZMDC, which is majority-owned by the Republic of Zimbabwe ("the Republic"), to incorporate as joint ventures to prospect for nickel and platinum deposits and develop mines. Id. ¶¶ 18-22. Both MOUs included arbitration clauses, which provided that the parties must submit disputes arising out of or in relation to the MOUs to the ICC International Court of Arbitration in Paris for final and binding arbitration. Id. ¶¶ 24-25.

In 2010, ZMDC purported to cancel the MOUs. Id. ¶ 23. In 2011, Plaintiffs initiated arbitration proceedings consistent with the MOU arbitration clauses, and the ICC Court determined that arbitration would occur in Zambia. Id. ¶ 28; Compl. Ex. A (ICC Arbitral Award) ¶¶ 8-9. Plaintiffs named both ZMDC and the Chief Mining Commissioner of the Zimbabwean Ministry of Mines (the "Commissioner") as respondents in the arbitration. Compl. Ex. A ¶ 2. The parties participated in the arbitration proceedings for about a year and a half, during which they filed amended pleadings, conducted discovery, prepared expert reports, served various written submissions, and otherwise prepared for arbitration. Id. ¶¶ 12-46. The parties also signed Terms of Reference which, among other things, provided that the parties "acknowledge[d] that they agree to submit to this arbitration and expressly waive any procedural objections they may have with respect to known events." Declaration of John Peter Sangwa ISO Pls' Opp. ("Sangwa Decl.") Ex. 1 § 8.1. At multiple points during this time period, ZMDC and the Commissioner asked the panel to hear a challenge to its jurisdiction as a preliminary matter, but the panel deferred hearing the jurisdictional challenge on the ground that it was inextricably linked to the merits. Compl. Ex. A ¶¶ 28, 45. In August 2012, the arbitral panel began hearing evidence, including testimony from a number of witnesses for Plaintiffs, and ZMDC and the Commissioner cross-examined at least one of Plaintiffs' witnesses. Id. ¶¶ 47-51.

After that cross examination, however, ZMDC and the Commissioner indicated that they wished to challenge the arbitral tribunal under Article 11 of the ICC International Court of Arbitration Rules and applied for the arbitration to be adjourned in the interim. Id. ¶ 51. The panel denied that request, at which point the respondents sought a short adjournment and, shortly thereafter, withdrew from the proceedings, although the panel continued to provide them with submissions and transcripts of the proceedings. Id. ¶ 51-56. After ZMDC and the Commissioner withdrew from the arbitration, their appointed arbitrator likewise tendered his resignation. Id. ¶ 57. Proceedings continued through October 2012, when the now-absent respondents obtained an ex parte order from the Zambian High Court temporarily enjoining the proceeding. Id. ¶¶ 58-67. Eventually, the arbitration panel was reconstituted, and after some further delays and changes of personnel (which were challenged by the respondents), the panel in January 2014 issued an award ordering ZMDC and the Commissioner to pay damages, costs, and expenses, totaling about $50 million. Id. ¶¶ 68-88, 227.¹

After post-award litigation in Zambian courts, in which ZMDC and the Commissioner again challenged the composition and authority of the panel, the High Court of Zambia issued a judgment in Plaintiffs' favor in August 2019. Compl. ¶ 34 & Ex. E (Ex Parte Order for Leave to Register and Enforce the Final Arbitration Award). The Judgment provided that ZMDC and the Commissioner had 30 days after service to move to set aside the Judgment. Id. ¶ 35. Plaintiffs allege that they served the Judgment on October 23, 2019. Id.² The parties negotiated for a time, but after Defendants refused to pay the Judgment, Plaintiffs filed their complaint in this Court against ZMDC, the Commissioner, and the Republic of Zimbabwe. Id. ¶¶ 38-40.

The complaint alleges a cause of action under the D.C. Uniform Foreign-Country Money Judgments Recognition Act, D.C. Code § 15-361 et seq., and asks this Court to enter an order recognizing and enforcing the Judgment, finding that the Republic of Zimbabwe is the alter ego of ZMDC and the Commissioner, and entering a money judgment against Defendants. Id. at 10.

Defendants have filed two separate motions to dismiss—one by the Republic and the Commissioner, and the other by ZMDC. The Republic and Commissioner contend that the Court lacks subject matter jurisdiction under the Foreign Sovereign Immunities Act ("FSIA") because the Republic did not sign the MOUs containing an arbitration agreement, did not participate in the Zambian arbitration, is not an alter ego of ZMDC, and therefore retains its sovereign immunity. See Zimbabwe MTD at 6-12. The motion also maintains that the Court lacks jurisdiction as to the claims against the Commissioner because he is an individual, not an agency or instrumentality of Zimbabwe. Id. at 8-9. In any event, the Republic and the Commissioner further contend that neither the FSIA's waiver exception nor arbitration exception to sovereign immunity applies in this case. Id. at 9-12. Next, the motion contends that the Court lacks personal jurisdiction over both the Republic and the Commissioner. Id. at 13-14. Finally, the Republic and Commissioner maintain (1) that Plaintiffs have failed to state a claim because they are seeking to enforce the arbitration award judgment past the three-year statute of limitations under the New York Convention, (2) that Plaintiffs have failed to allege sufficient facts to support their claim that ZMDC is an alter ego of the Republic, (3) that Plaintiffs have not pleaded an entitlement to fees and interest, and (4) that the Zambian High Court lacked jurisdiction to issue the Judgment. Id. at 15-25. In addition to reiterating many of the same arguments raised by the Republic and the Commissioner, ZMDC separately maintains that it was not properly served under the FSIA and that the Court lacks personal jurisdiction over it because the complaint does not allege minimum contacts with the District of Columbia. ZMDC MTD at 7-9.

Both motions are fully briefed and ripe for decision.

II. Legal Standards

On a motion to dismiss for lack of subject matter jurisdiction or lack of personal jurisdiction, "[t]he plaintiff bears the burden of establishing, by a preponderance of the evidence, that the court has jurisdiction." Cause of Action Inst. v. IRS, 390 F. Supp. 3d 84, 91 (D.D.C. 2019) (quoting Whiteru v. Wash. Metro. Area Transit Auth., 258 F. Supp. 3d 175, 182 (D.D.C. 2017)); see Burman v. Phoenix Worldwide Indus., Inc., 437 F. Supp. 2d 142, 147 (D.D.C. 2006). Because this suit involves claims against a foreign nation, the FSIA provides the framework for determining subject matter jurisdiction. Creighton Ltd. v. Gov't of State of Qatar, 181 F.3d 118, 121 (D.C. Cir. 1999). Under the FSIA, federal district courts "have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state" as defined by the FSIA "with respect to which the foreign state is not entitled to immunity" under the statute. 28 U.S.C. § 1330(a). As the statute's text suggests, "the FSIA begins with a presumption of immunity, which the plaintiff bears the initial burden to overcome by producing evidence that an exception applies." Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175, 1183 (D.C. Cir. 2013). Once the plaintiff has made that threshold showing, however, "the sovereign bears the ultimate burden of persuasion to show that the exception does not apply." Id.; accord Phoenix Consulting Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C....