875 F. Supp. 2d 264
S.D.N.Y.2012Background
- PDVSA moved to dismiss Skanga's amended complaint under Rule 12(b)(1) and forum non conveniens, arguing immunity and inapplicability of the commercial activity exception.
- Skanga alleges PDVSA acted through Arevenca as its agent in a US-connected commercial transaction causing a direct US effect.
- Skanga, Nigerian importer, paid $11.2 million for petroleum products that were not delivered, seeking a refund.
- Allegations include that PDVSA and Arevenca arranged payments to New York accounts and that documents bore PDVSA’s logo, tying the deal to PDVSA.
- The payments were wired to New York banks pursuant to Arevenca's and Alvarez's instructions, with funds allegedly used for PDVSA's US operations.
- PDVSA argues no agency and no direct US effect; Skanga argues the transaction and actors created an agency relationship and direct effect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSIA commercial activity exception applies | Skanga pleads agency and direct US effect through Arevenca/Alvarez. | PDVSA contends no agency and no direct effect established. | Yes; agency plausibly alleged and direct US effect shown, so FSIA exception applies. |
| Whether forum non conveniens dismissal is appropriate | Strong deference to Skanga's New York forum choice due to connections and banking links. | Alternative forums (Venezuela/Nigeria) adequate; private/public factors favor dismissal. | No; Skanga's forum choice deserves substantial deference and public factors favor retention in New York. |
Key Cases Cited
- Rogers v. Petróleo Brasileiro, S.A., 673 F.3d 131 (2d Cir.2012) (establishes FSIA subject matter jurisdiction basics and burden-shifting)
- Virtual Countries, Inc. v. Republic of South Africa, 300 F.3d 230 (2d Cir.2002) (defines 'direct effect' under 1605(a)(2))
- Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (Supreme Court 1992) (direct effect and currency/payment clarity in FSIA context)
- Guirlando v. T.C. Ziraat Bankasi A.S., 602 F.3d 69 (2d Cir.2010) (agency and authority concepts in FSIA analysis)
- Iragorri v. United Technologies Corp., 274 F.3d 65 (2d Cir.2001) (deference framework in forum non conveniens)
- Norex Petroleum Limited v. Access Industries, Inc., 416 F.3d 146 (2d Cir.2005) (three-step forum non conveniens test and deference to forum choice)
- Gross v. British Broadcasting Corp., 386 F.3d 224 (2d Cir.2004) (public interest factors in forum non conveniens)
- First Fidelity Bank, N.A. v. Gov't of Antigua & Barbuda-Permanent Mission, 877 F.2d 189 (2d Cir.1989) (non-substantive FSIA considerations; nexus to agency discussion)