Gretton Ltd. v. Republic of Uzb.

GRETTON LIMITED, Petitioner, v. REPUBLIC OF UZBEKISTAN, Respondent.

Civil Action No. 18-1755 (JEB)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

July 30, 2019

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.

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.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

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 hasthe 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,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...