NML Capital, Ltd. v. Republic of Argentina
680 F.3d 254
2d Cir.2012Background
- NML Capital and EM Ltd hold large amounts of Argentine bonds and sue to collect debt; they moved to attach a New York bank account (ANPCT Account) held by Argentina's instrumentality.
- ANPCT purchases scientific equipment; payments to sellers are remitted by ANPCT, and the equipment is delivered directly to third parties; ANPCT does not take delivery of goods.
- The district court issued restraining and attachment orders in stages beginning September 2008; the order attachment of ANPCT Account was confirmed and later reconsidered.
- Argentina argues ANPCT funds are immune under the FSIA because the purchases serve a sovereign purpose; Plaintiffs urge the account was used for a commercial activity in the United States.
- The Second Circuit adopts de novo review for FSIA immunity questions and reviews attachment orders for abuse of discretion; the central issue is whether the ANPCT Account was used for a commercial activity under §1610(a).
- The court concludes that the ANPCT Account was used for a commercial activity because the act of purchasing equipment in the market constitutes a private-like commercial transaction, despite governmental purpose.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ANPCT Account was used for a commercial activity under FSIA §1610(a). | NML argues the payment to sellers constitutes a market transaction. | Republic contends the payments support a sovereign program and are not commercial. | Yes; the Account was used for a commercial activity. |
| Whether governmental purpose negates commercial activity under FSIA. | Not applicable; commercial activity is determined by conduct, not purpose. | Governmental aim should immunize the activity. | No; governmental purpose does not immunize the activity. |
| What standard governs review of FSIA immunity and attachment orders. | De novo review for immunity questions. | Attachment orders reviewed for abuse of discretion. | De novo for immunity; abuse-of-discretion for attachments. |
Key Cases Cited
- Weltover v. Republic of Argentina, 504 U.S. 607 (U.S. Supreme Court 1992) (commercial activity when sovereign buys goods in the market; private-like transaction)
- Texas Trading & Mill. Corp. v. Federal Republic of Nigeria, 647 F.2d 300 (2d Cir. 1981) (private contract for goods can constitute commercial activity; public purpose irrelevant)
- Letelier v. Republic of Chile, 748 F.2d 790 (2d Cir. 1984) (legislative history supports broad view of commercial activity; essential nature not controlling)
- Kato v. Ishihara, 360 F.3d 106 (2d Cir. 2004) (court broad latitude in determining commercial activity; not limited by purpose)
- Saudi Arabia v. Nelson, 507 U.S. 349 (U.S. Supreme Court 1993) (governmental power vs. private-like activity; commercial activity analysis focuses on conduct)
- Anglo-Iberia Underwriting Mgmt. v. P.T. Jamsostek, 600 F.3d 171 (2d Cir. 2010) (framework for assessing acts that private parties engage in trade/commerce)