Thai Lao Lignite (Thailand) Co. v. Government of the Lao People's Democratic Republic
924 F. Supp. 2d 508
S.D.N.Y.2013Background
- Thai-Lao Lignite seeks to confirm an arbitral Award against the Lao Government under the New York Convention and FAA; Lao Government opposes confirmation and challenges discovery related to assets.
- Judgment of $56,210,000 (later accruing interest to about $70,000,000) entered; post-judgment discovery ongoing under Magistrate Judge Freeman to locate assets in the U.S. to satisfy the judgment.
- Discovery orders (May 29, July 20, July 31, Aug. 1) required Respondent to disclose information about U.S. hydropower payments and U.S. bank accounts; Lao Bank intervened, objecting to disclosure about Lao Bank assets.
- Court previously held that discovery in FSIA matters may proceed circumspectly and that assets outside the U.S. may be examined if there is nexus to U.S. assets used for commercial purposes; EM Ltd. v. Argentina supports broad post-judgment discovery to enforce judgments.
- The challenged orders are reviewed for clear error; magistrate judge’s nondispositive rulings are reviewed under a deferential standard.
- The Lao Bank argues sovereign immunity protects its assets; EM clarifies that discovery may proceed even if assets are potentially immune from attachment; the court ultimately upholds the discovery orders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether discovery orders in aid of execution are proper in a FSIA context. | Thai-Lao contends discovery is appropriate to locate attachable assets. | Respondent asserts immunity, arguing discovery should be circumscribed and limited by FSIA. | Orders affirmed; discovery allowed under EM and related authority. |
| Timeliness and waiver of objections to the May 29 and July 20 orders. | Petitioners argue Respondent waived May 29 objections by not timely appealing; July 20 was clarifying and not new. | Respondent contends timely objections to July 20 but waived May 29; some conflict in waiver law. | May 29 objections deemed untimely and waived; July 20 objections considered on the merits and overruled. |
| Whether the Lao Bank’s invocation of sovereign immunity bars discovery of its accounts. | Discovery should proceed to identify assets used for commercial purposes, including those held by Lao Bank. | Lao Bank seeks immunity for central bank assets; Bank as instrumentality may be immune. | Discovery regarding Respondent’s accounts sustained; Lao Bank’s immunity limited by EM; accounts may be probed with circumspection. |
| Whether discovery may proceed regarding Embassy/Mission accounts despite Vienna Convention concerns. | Accounts may be used for commercial purposes; discovery necessary to test attachability. | Vienna Convention may shield diplomatic funds from attachment; discovery should be limited. | Disclosure and depositions permitted; Vienna Convention does not bar discovery in this context. |
Key Cases Cited
- EM Ltd. v. Republic of Argentina, 695 F.3d 201 (2d Cir. 2012) (discovery in aid of execution may proceed despite sovereign immunity after jurisdiction is established)
- Thai-Lao Lignite (Thailand) Co., Ltd. v. Gov’t of Lao PDR, 492 F.App’x 150 (2d Cir. 2012) (affirmation of judgment and post-judgment discovery standards in FSIA context)
- Rubin v. Islamic Republic of Iran, 637 F.3d 783 (7th Cir. 2011) (pre-EM, debate on discovery vs attachment in FSIA context)
- First Nat’l City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec), 462 U.S. 611 (1983) (alter ego/independence of instrumentalities from sovereign; immunity analysis)
- NML Capital, Ltd. v. Banco Central de la Republica Argentina, 652 F.3d 172 (2d Cir. 2011) (central bank immunity under FSIA; immunity for funds held for own account)