Regarding the case: Madame Habyarimana V Kagame, President of Rwanda:
In April 2013; the U.S. Supreme Court decided: Certiorari Denied. The decision upholds the United States Court of Appeals decision for the 10th Circuit concerning the Foreign Sovereign Immunities Act (FSIA) affirming “that a foreign head of state is immune from suit – even for acts committed prior to assuming office.”

In a surprise decision concerning Yousuf v. Samantar, the United States Court of Appeals for the Fourth Circuit, a federal appeals court located in Richmond, Virginia, concluded “officials from other countries are not entitled to foreign official immunity for jus cogens violations, even if the acts were performed in the defendant’s official capacity.”
According to Petitioner, a foreign official acting on behalf of the foreign state is to be considered a foreign state; thus argued Muhammad Al Samantar, First Vice President and Minister of Defense of Somalia from 1987 to 1990. Samantar, had originally been denied FSIA protection as the State Department did not grant him immunity and the court decided that as an individual, he did not qualify.
Previously, the Court decided that although this interpretation is literally possible from the definition of foreign state provided in the Act, a holistic reading of the act shows that Congress intended otherwise. The definition of ‘foreign state’ in the Act includes an ‘agency or instrumentality’ of the state, but the definition of ‘agency or instrumentality’ does not indicate and inclusion of individuals. First, an ‘entity’ is an organization, not an individual, and ‘separate legal person’ typically refers to the legal fiction that allows an entity to hold personhood separate from the natural persons who are its shareholders or officers. Thus, the defining terms chosen by Congress shows their decision not to include/refer to individual officials.
Per the Court’s previous decision, “Reading the FSIA as a whole, there is nothing to suggest we should read ‘foreign state’ in §1603(a) to include an official acting on behalf of the foreign state, and much to indicate that this meaning was not what Congress enacted. The text does not expressly foreclose Petitioner’s reading, but it supports the view of respondents and the United States that the Act does not address an official’s claim to immunity.”
Although the court’s new ruling agreed that head-of-state immunity is absolutely controlled by the Executive branch, it concluded that U.S. courts, while giving deference to the views of the Executive, may make their own decisions regarding official acts immunity.
The court’s decision is consistent with the International Military Tribunal at Nuremberg, which concluded::
Where the act in question is an act of State, those who carry it out are not personally responsible, but are protected by the doctrine of the sovereignty of the State. In the opinion of the Tribunal, this contention must be rejected. The principle of international law, which under certain circumstances protects the representative of a state, cannot be applied to acts, which are condemned as criminal by international law. The authors of these acts cannot shelter themselves behind their official position in order to be freed from punishment in appropriate proceedings.
Human Rights activists, who sought to sue Samantar on the part of Somalis claiming they were tortured by the Somali military and presently living in the US, were happy with the decision; while its implications make the Executive Branch nervous. The government officials are concerned that it will also make them vulnerable to lawsuits on the part of others suing them for jus cogens violations, including the use of drone strikes.

The Second Circuit Court of Appeals ruled in Rogers v. Petroleo Brasileira, S.A. that the Brazilian oil company Petroleo Brasileiro (Petrobrás) did not need to convert bearer bonds held by U.S. citizens to preferred shares because the commercial activity exception of the Foreign Sovereign Immunities Act (FISA) was not satisfied.

Petrobrás issued a series of bearer bonds to cover payment of a government fee complying with the law that requires owners of motor vehicles to pay an annual fee. The value of each bond was 1,000 cruzeiros, and the company stated that bondholders could exchange the bonds for preferred shares during the redemption period, which ended in 1980. Petrobrás has denied any request for redemption or conversion since 1980 and the Brazilian government has upheld these denials.

In 2009, two plaintiffs mailed a claim to Petrobrás’ New York City office demanding the company convert their bonds to preferred shares. In response to this claim, Petrobrás claimed that the court did not have subject matter jurisdiction since the commercial activity exception under the FISA was not satisfied in this situation. The FISA law grants immunity to a “foreign state”—which Petrobrás is—with exceptions.

There are two clauses of commercial activity exceptions relevant to the case. Firstly, under the law immunity is given for an act performed in the United States in connection with a commercial activity of the foreign state elsewhere. The plaintiffs asserted their claim was within the bounds of this condition because the notice was sent via email from Petrobrás’ NY office. Petrobrás countered that the email was notification only of the breach. The court deemed that the relevant act performed in this case was not in the U.S. Secondly, exemption is not conferred if the action is based upon an act outside of the U.S. regarding a commercial activity of the foreign state elsewhere and causes a direct effect in the U.S. The court’s decision on this clause was based on the fact that the bonds were issued in Portuguese and pertained to a Brazilian motor vehicle fee. Hence, the U.S. was not the place where the events occurred.

The United States Court of Appeals, Second Circuit issued on March 30th its decision in the case of NML Capital, LTD. v. Republic of Argentina, whereby it upheld the attachment and restraining orders of the District Court for the Southern District of New York, relative to funds deposited in a New York bank belonging to the Agencia Nacional de Promocion Cientifica y Tecnologica (ANPCT), an Argentinean government agency. The action, encompassing 11 consolidated proceedings, had been initiated by NML Capital and EM Ltd. as a means to secure debt, totaling hundreds of millions of dollars, traced to non-performing Argentinean government bonds obtained on the secondary market, with the American judiciary as the forum. ANPCT declared that the aforementioned bank account served only to procure scientific equipment for grant beneficiaries, said beneficiaries ordering and receiving delivery straight from the equipment suppliers, and ANPCT responsible for payment alone. A series of District Court judgments rendered during the period of September 2008 through September 2010 granted restraining orders (final decision suits) and attachment orders (pre-final decision suits), followed by confirmation of the restraining orders solely, and then the admission of error and confirmation of the attachment orders. The basis for the District Court rulings favorable to the plaintiffs was the commercial activity exception set forth in the Foreign Sovereign Immunities Act (FSIA) that denies the shield sovereign immunity affords foreign nations from the jurisdiction of American courts. Argentina all along has asserted its sovereign immunity under the FSIA.
The Court of Appeals made clear that foreign debt proceedings are not normally subject to the jurisdiction of American courts unless the disputed foreign assets are tied to commercial transactions in the United States. It therefore employed a commercial activity analysis, determining if the commercial activity requirements of the FSIA were met, to reach its decision. The court found that the buying of scientific equipment by ANPCT was of the type of commercial dealing in which a private party would enter. It rejected Argentina’s contention that the transactions were cloaked in sovereign immunity because the equipment was bought in conjunction with the establishment of a national program of scientific research and development. In addition to casting aside Argentina’s “essential nature” argument linked to the aim of commercial activity, the court concluded that the claim Argentina made of no profit incentive did not have a bearing whatsoever on the evaluation of commercial character.

The Supreme Court was to begin hearing arguments last week in the appeal of the Kiobel v. Royal Dutch Petroleum case, whereby Royal Dutch Petroleum and subsidiary Shell in America were sued over business connections to a barbarous past Nigerian regime, and revolving around the issue of whether corporations can be held liable for human rights violations committed by ruthless regimes to which they are linked. The former Nigerian government’s military police were guilty of the torture, rape, and executions of denizens of the oil abundant delta. The 2010 ruling being appealed was handed down by the United States Court of Appeals in New York, which found by a 2-1 margin that nations, but not corporations, were accountable for violations of international law, and consequently dismissed the Royal Dutch action. The Obama administration along with human rights activists oppose the blanket immunity that decision confers on corporations, setting in motion the current proceedings.

Other multinational corporations are embroiled in similar actions, including Exxon-Mobil for its purported role in the torture and murder of Indonesians ten years ago. California was the jurisdiction where suit was brought against the British mining company Rio Tinto, over claims of atrocities perpetrated against residents of Papua New Guinea more than two decades back. Each of the aforementioned cases turns on the Alien Tort Statute of 1789, a little known law resurrected by human rights attorneys in the 1980s, and employed to an ever greater extent against corporations with ties to brutal governments. Specifically, said legislation invests federal courts with the authority to adjudicate suits initiated by an alien asserting violation of the “law of nations.” The exact significance of the preceding phrase remains unclear, as the sole Supreme Court decision pertaining to the statute declared its lone applicability to very restricted types of well established violations of international law, perhaps encompassing torture, enslavement, and genocide. Corporate attorneys dispute the validity of a law permitting foreigners to resort to American courts as a forum for suits involving deeds of foreign origin under the aegis of foreign regimes. Corporations as well as the British, Dutch, and Australian governments have argued that the American judiciary is without jurisdiction over proceedings relative to foreign companies with dealings in foreign countries.

The United States Magistrate Court in Tampa decreed on the 17th that Odyssey Marine Exploration Inc., a Florida deep sea recovery company, must hand back to Spain by the 24th of this month the 17 tons of treasure and artifacts the company salvaged from the shipwreck of the nineteenth century Spanish galleon Nuestra Senora de las Mercedes off the Portuguese coast. Odyssey recovered approximately 595,000 gold and silver coins from the Atlantic Ocean wreckage it unearthed in 2007, with the total haul appraised in excess of $500 million, marking the single largest sunken treasure salvage ever. The Mercedes was transporting its valuable cargo as one of the vessels in a Spanish convoy in 1804 from Peru, a Spanish viceroyalty at the time, to Spain, when the aforesaid convoy was engaged in battle by a British squadron, and the explosion of the Mercedes followed shortly thereafter. U.S. Magistrate Judge Mark Pizzo also blocked Odyssey’s efforts at securing reimbursement from the Spanish government in the amount of $412,814 for its alleged expenditures regarding the storage and preservation of the Mercedes booty. During the course of Odyssey’s legal disputes with Spain and Peru over rights to the wreck’s bounty, the gold and silver were kept in a warehouse in Tampa.
The December 2009 ruling of United States District Court Judge Steven D. Merryday, Middle District of Florida (Tampa), affirmed Spain’s sovereign immunity pursuant to the Foreign Sovereign Immunities Act, and the accompanying absence of jurisdiction by the court over the case. Hence, the court ordered the dismissal of Odyssey’s complaint. The latter party had contended that the final voyage of the Mercedes was overwhelmingly commercial in nature and, therefore, precluded invocation of sovereign immunity. Odyssey’s counsel had asserted further that under such circumstances the designation of the Mercedes as a warship was inapplicable. Judge Merryday directed that the treasure remain in Odyssey’s possession throughout the appellate process. The United States Court of Appeals in Atlanta rendered its decision on September 21st of last year, whereby it agreed with Spain’s contention concerning the Mercedes that the vessel was a sovereign asset and could not be the subject of a suit brought in America. The appellate court consequently refused to reverse the dismissal of the Odyssey action. Prior to the current magistrate judicial proceedings, the United States Supreme Court earlier this month upheld the lower court findings pertaining to Spain’s rightful ownership of the Mercedes bounty.

The International Court of Justice, the UN’s highest court, handed down a decision on the third of this month that held sovereign immunity shielded Germany from actions in foreign jurisdictions brought by the victims of Nazi atrocities perpetrated during WWII. Specifically, the 15-judge panel ruled that the Italian Supreme Court erred in its 2008 finding that forced laborer Luigi Ferrini, an Italian civilian transported to Germany in 1944 in order to toil in the armaments industry, should receive reparations. The judges found 12-3 that the outcome of the Ferrini proceedings violated Germany’s sovereign immunity. Germany had claimed that the Italian decision posed a threat to an already established restitution system that served as the means for tens of billions of dollars of reparation payments dating back to the 1950s. It warned that if the international court upheld the Italian ruling, the result would be a slew of reparation suits worldwide, an occurrence it had attempted to avert by reaching reparation accords with Israel, Second World War era occupied nations, and particular groups, including the Conference on Jewish Material Claims against Germany. Italy in turn asserted that the principle of sovereign immunity was inapplicable where wartime crimes and crimes against humanity were concerned, an argument the world court dismissed. Greece has backed the Italian efforts, largely because of similar Greek cases instituted against Germany. The International Court of Justice decision is final and binding.

The United States Supreme Court this past Tuesday made known its desire for the Obama administration’s input regarding the appeal sought by holders of Argentina’s defaulted bonds, who dispute the Second United States Circuit Court of Appeals ruling last July that blocked the seizure of approximately 105 million dollars in Central Bank of Argentina assets held at the Federal Reserve Bank in New York. The justices requested that the administration’s counsel at the high court, the United States solicitor general, articulate the official government position on the appeal question. The Second Circuit decision constituted a serious setback for holdout bondholders, including plaintiffs EM Ltd. and NML Capital Ltd. in the current action, that refused to participate in a greatly discounted Argentine bond swap. The court held that the principle of sovereign immunity delineated in the Foreign Sovereign Immunities Act protected the Central Bank of Argentina deposits from confiscation or freeze, because said funds linked to a foreign central bank did not figure in commercial transactions. Thus, the freeze on the aforementioned assets in effect since 2006, was lifted. The present suit numbers among many arising from attempts to recover debt created by Argentina’s 100 billion dollar bond default more ten years ago, and Argentine funds in the U.S. have been targeted. The submission of the solicitor general’s brief elaborating the government’s views on the proceedings might be months away. Only at that time will the Supreme Court make its determination on the appeal issue.

A Claim for Restitution of Assets seized by the Hungarian National Railroad and Banks from Jews.

The U.S. Court of Appeals for the Seventh Circuit hear arguments regarding the restitution suit brought by Holocaust survivors and heirs against the Hungarian national railway and banks. The case, in reality a number of related actions, centers on the assets seized by the Hungarian national railroad and banks from Jews sent to Nazi death camps in 1944. The three judge panel considered an appeal sought by the defendants in the action already underway for trial. The appellate ruling, not subject to time constraints, will decide if the trial being held in the U.S. District Court proceeds. The suit was instituted in February 2010 in a federal court in Chicago by Northwestern University law professor Anthony D’Amato on behalf of Hungarian Holocaust survivors and heirs. Mr. D’Amato, whose area of expertise is international law, was aware of the restrictions placed on actions against foreign countries or state controlled entities involving claims of suffering or death. Knowing that no such limitations extend to the loss of assets, his suit turned on the stealing of possessions of the victims rather than their suffering or deaths. Requested were compensatory damages totaling 240 million dollars, or 5 percent of the approximate value of everything confiscated, along with punitive damages in the amount of 1 billion dollars.

Arguments as to sovereign immunity and personal jurisdiction have figured prominently during the proceedings. Since the current case entails American citizens suing in American courts for losses inflicted in Hungary, Judge David Hamilton then inquired of the plaintiffs if it followed that American Indians could sue in European courts with respect to the lands taken from them. Other questions posed dealt with whether restitution
cases constituted an obstacle to U.S. diplomacy, and what was the original American aim of sovereign immunity. According to Peter Black, U.S. Holocaust Memorial senior historian, other restitution suits of late have met with success. Swiss banks finally admitted to deposits made by Holocaust victims, and European insurance companies have at last acknowledged policies purchased by persons who perished at the hands of the Nazis. Also, the Germans have set up a fund as a means to make reparations to forced laborers. A spokesman for the Hungarian delegation in America declared no official response to the current action would be forthcoming.

The United States District Court for the District of Columbia denied a motion to confirm an arbitration award sought by GSS Group Ltd. (GSS) against the National Port Authority of Liberia (NPA). The court granted NPA’s motion to dismiss the confirmation petition due to lack of personal jurisdiction. The roots of the case lie in a contract entered into in June 2005 between GSS, a private corporation established in the British Virgin Islands, and NPA, a state owned corporation, for the express purpose of building and operating a container park in the Liberian capital of Monrovia. GSS later claimed breach of contract and consequently instituted arbitration proceedings the following year. NPA largely ignored the proceedings, which went ahead in spite of its minimal presence. In the end, the arbitrator agreed that NPA did breach the
contract with GSS, culminating with two arbitration awards totaling $44,347,260 in damages. GSS then sought confirmation of said arbitration awards and petitioned the court to that effect in July 2009.

The court resorted to sovereign immunity exception requirements set forth in the Foreign Sovereign Immunities Act (FSIA) in its consideration of the jurisdiction question, and concluded that the requisite subject matter jurisdiction and proper service had been satisfied. First and foremost, it held that NPA was a foreign state according to the FSIA, which specifies instrumentalities and agencies of a foreign state as well. Secondly, the FSIA withholds the shield of sovereign immunity in particular actions, one of which is the petitioning for confirmation of arbitration awards made pursuant to the New York Convention. Lastly, the court emphasized that the issue of service of process never was raised. Thus, it found that a statutory basis for personal jurisdiction had been demonstrated. However, the court also examined the applicability of the Due Process Clause with regards to the exercise of such jurisdiction. The Due Process Clause restricts the jurisdiction of courts over nonresident defendants and stipulates that minimum contacts with the forum are necessary in constituting jurisdiction. Its protections do not extend to foreign sovereign states and the court stressed they only pertained to private foreign entities. While acknowledging that NPA occupied a somewhat fuzzy area between the two groups of defendants, the court maintained that because NPA portrayed itself as legally and financially autonomous from the Liberian government, a representation to which GSS offered no opposition, the exemption of foreign states from due process rights was not called for in this case. In addition, NPA described itself as operating solely in Liberia, again eliciting no opposition from GSS to such characterization, as the court pointed out. It ruled that it did not have jurisdiction over NPA, the minimum contacts standard not having been met, and underscored the fact that GSS had not tried in the least to show that NPA had any contacts with the United States.