881 F. Supp. 2d 508
S.D.N.Y.2012Background
- 1980 Refinancing Credit Agreement restructured Zaire's debt with multiple creditors; Bank of Tokyo Trust Company served as servicing bank.
- Themis Capital and Des Moines Investments are assignees with combined principal amounts totaling about $10,022,499.67, plus additional amounts listed in Schedule A and subsequent assignments.
- Zaire's last scheduled payment under the Credit Agreement occurred in 1990; the Bank of Zaire was to make payments on behalf of Zaire if funds were available.
- In 2003 the DRC and Central Bank signed a one-page Letter acknowledging unpaid principal and interest, attempting to address prescription concerns; creditors were not signatories to this Letter.
- Plaintiffs filed suit in 2009 alleging breach of the Credit Agreement; defendants challenge sovereign immunity and statute of limitations; court allows limited discovery before ruling on summary judgment.
- The court notes no formal discovery had occurred prior to the motion and contemplates targeted discovery on authority and related issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSIA sovereign-immunity jurisdiction exists over the DRC | DRC waived jurisdictional immunity in the 1980 Credit Agreement | DRC has not explicitly or implicitly waived jurisdictional immunity | Yes; the waiver is irrevocable and grants jurisdiction. |
| Whether immunity from execution applies to asset attachment | Waiver in §12.07(c) extends to execution against assets | No irrevocable waiver for executional assets? | Yes; waiver from execution is irrevocable under FSIA. |
| Whether the 2003 Letter renews the debt and tolls New York statute of limitations | Letter restarts the statute under NY Gen. Oblig. Law §17-103(1) | Authenticity and authority uncertain; discovery needed | Premature; limited discovery required to resolve proper renewal. |
| Authenticity of signatures on the 2003 Letter | Signatures appear authentic and binding | Signatures may be forged or unauthenticated | Limited discovery permitted on authenticity. |
| Whether apparent authority can bind the DRC in a private commercial act | Alleged apparent authority of Luongwe and Masangu to renew obligations | Authority contested; choice-of-law issues and discovery needed | Discovery needed; not resolved at summary judgment stage. |
Key Cases Cited
- First Fidelity Bank v. Gov’t of Antigua, 877 F.2d 189 (2d Cir.1989) (apparent authority to bind sovereigns in private acts (ambassador context))
- Jota v. Texaco, Inc., 157 F.3d 153 (2d Cir.1998) (apparent authority can bind foreign states for certain commercial acts)
- Kensington Int’l Ltd. v. Itoua, 505 F.3d 147 (2d Cir.2007) (FSIA jurisdictional immunity and waivers analyzed)
- Walters v. Industrial & Commercial Bank of China, Ltd., 651 F.3d 280 (2d Cir.2011) (separate immunities from suit and from attachment clarified)
- NML Capital, Ltd. v. Republic of Argentina, 680 F.3d 254 (2d Cir.2012) (most significant relationship and treaty-like sovereign obligations)
- Rogers v. Petroleo Brasileiro, S.A., 673 F.3d 131 (2d Cir.2012) (most significant-relationship approach to sovereign contract disputes)