Sace S.P.A. v. Republic of Paraguay
Civil Action No. 2015-1042
| D.D.C. | Mar 21, 2017Background
- SACE, assignee of several banks, seeks enforcement in D.C. of two Swiss money judgments against the Republic of Paraguay under the D.C. Uniform Foreign-Country Money Judgment Recognition Act; SACE invokes FSIA §1605(a)(1) (waiver) to establish subject-matter jurisdiction.
- The Swiss judgments trace to loan financings for two Paraguayan private companies (Rosi and Lapachos). Gustavo Gramont Berres signed unconditional guaranties purporting to bind Paraguay and containing express waivers of sovereign immunity.
- Gramont held titles as Paraguay’s Consul in Geneva and “Ambassador on special mission” by presidential decree and received ministerial letters/resolutions describing broad powers; he was not, however, a duly accredited ambassador to Switzerland.
- Paraguay disavowed the guaranties, later prosecuted and convicted Gramont in Paraguayan courts for misuse of office/forgery; Swiss courts found against Paraguay on liability but did not finally resolve Gramont’s actual authority to bind the state.
- SACE concedes Gramont lacked actual authority; it argues apparent authority (under international consular principles or agency law) suffices to invoke the FSIA waiver. Paraguay contends actual authority is required and that, in any event, apparent authority is lacking (self-dealing, no clear manifestations, red flags).
- The district court held that FSIA waiver requires actual authority and alternatively found no reasonable basis for apparent authority here; it dismissed for lack of subject-matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSIA §1605(a)(1) waiver can be established by an agent with apparent authority | Apparent authority suffices; Gramont’s presidential decree and ministerial communications (and consular role) gave reasonable appearance of authority | Waiver requires actual authority from the foreign state; apparent authority is insufficient | Court: Actual authority is required to trigger FSIA waiver; SACE conceded actual authority was lacking, so jurisdiction fails |
| If apparent authority suffices, whether Gramont had apparent authority to waive Paraguay’s immunity | The documents and international consular practice created a reasonable belief in Gramont’s authority | No manifestation by Paraguay authorized waiver; facts (Gramont’s personal interest, lack of accreditation, forged seals) made any belief unreasonable | Court: Even if apparent authority could suffice, Gramont did not have apparent authority here—banks’ reliance was unreasonable due to self-dealing and warning signs |
| Whether diplomatic/consular status changes the analysis (ambassador vs. consul) | Gramont’s special mission status and ministerial communications support treating him as authorized to perform diplomatic acts where no embassy existed | A consul is not equivalent to an accredited ambassador; consuls lack the plenary diplomatic power to waive sovereign immunity absent clear state manifestation | Court: Ambassadors may create different presumptions, but Gramont was not a duly accredited ambassador; consul status and documents did not manifest waiver authority |
| Whether comity / prior foreign proceedings or extraterritoriality affect the waiver inquiry | SACE: FSIA is a jurisdictional statute not territorially limited; enforcing foreign judgments against assets in U.S. fits FSIA framework | Paraguay: FSIA waiver exception should be narrowly read; prior inconsistent positions and foreign adjudications undermine SACE’s estoppel and waiver claims | Court: Did not reach broad extraterritoriality or estoppel holdings; dismissal rested on lack of waiver (actual and apparent authority analyses) |
Key Cases Cited
- Aquamar S.A. v. Del Monte Fresh Produce N.A., Inc., 179 F.3d 1279 (11th Cir. 1999) (ambassadorial acts may carry presumptive authority to waive immunity in judicial proceedings)
- Jota v. Texaco, Inc., 157 F.3d 153 (2d Cir. 1998) (diplomatic representatives’ courtroom statements can be relied on absent notice they lack authority)
- Velasco v. Gov’t of Indon., 370 F.3d 392 (4th Cir. 2004) (FSIA commercial-activity exception requires actual authority to bind the foreign state)
- Phaneuf v. Republic of Indon., 106 F.3d 302 (9th Cir. 1997) (unauthorized acts of foreign officials cannot be attributed to the state under FSIA)
- Dale v. Colagiovanni, 443 F.3d 425 (5th Cir. 2006) (apparent authority insufficient to trigger FSIA commercial exception)
- First Fid. Bank, N.A. v. Gov’t of Antigua & Barbuda—Permanent Mission, 877 F.2d 189 (2d Cir. 1989) (apparent authority may bind sovereign in commercial contexts; ambassadorial context distinguished)
- World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154 (D.C. Cir. 2002) (foreign-state waiver of immunity must be clear and unambiguous)
- Transamerica Leasing, Inc. v. La Republica de Venezuela, 200 F.3d 843 (D.C. Cir. 2000) (expressed doubt that mere apparent authority suffices to bind foreign sovereign)
- Mar. Int’l Nominees Establishment v. Republic of Guinea, 693 F.2d 1094 (D.C. Cir. 1982) (acts of individuals do not waive sovereign immunity absent authorization)