Firebird Global Master Fund II Ltd. v. Republic of Nauru

915 F. Supp. 2d 124, 2013 WL 151201, 2013 U.S. Dist. LEXIS 5805
CourtCourt of Appeals for the D.C. Circuit
DecidedJanuary 15, 2013
DocketCivil Action No. 12-230 (RWR)
StatusPublished
Cited by8 cases

This text of 915 F. Supp. 2d 124 (Firebird Global Master Fund II Ltd. v. Republic of Nauru) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Firebird Global Master Fund II Ltd. v. Republic of Nauru, 915 F. Supp. 2d 124, 2013 WL 151201, 2013 U.S. Dist. LEXIS 5805 (D.C. Cir. 2013).

Opinion

MEMORANDUM OPINION

RICHARD W. ROBERTS, District Judge.

Plaintiff Firebird Global Master Fund II Ltd. (“Firebird”) brings this action under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq., seeking to enforce a foreign judgment against the defendant Republic of Nauru (“Nauru”). After default was entered against Nauru, Firebird moved for entry of default judgment arguing that Nauru waived sovereign immunity and Firebird is entitled to enforce the foreign judgment against Nauru in the United States. Because Firebird has not shown that Nauru waived sovereign immunity as to United States courts, the court lacks subject matter jurisdiction, the motion for entry of default judgment will be denied, and the complaint will be dismissed.

BACKGROUND

The Republic of Nauru Finance Corporation (“Ronfin”) issued two series of Japa[126]*126nese yen bond certificates, Series B and Series C certificates. Compl. ¶¶ 7-8. Nauru guaranteed paying principal and interest on the bond certificates in bond purchase agreements. Id. ¶ 10. Nauru explicitly waived sovereign immunity as to the courts of Japan and Nauru in the Conditions of Guarantee annexed to the bond purchase agreements. Id., Ex. B, Series B Bond Purchase Agreement Annex 2, ¶ 9 and Series C Bond Purchase Agreement Annex 2, ¶ 9. On the relevant redemption dates, Ronfin did not redeem the bond certificates. Id. ¶ 9. Firebird currently holds the bond certificates. Id. ¶ 13. Firebird brought an action in the Tokyo District Court against Nauru seeking payment of the principal and interest oil the bonds. Id. ¶ 14. In 2011, the Tokyo District Court ruled in favor of Firebird and awarded the equivalent of $37,427,658.29 in Japanese yen to Firebird. Id. ¶¶ 15-16; see also id., Ex. A at 1, 20. Firebird seeks to enforce that award here. The Clerk entered default and Firebird moves for entry of default judgment.

DISCUSSION

The FSIA is “the sole basis for obtaining jurisdiction over a foreign state in [United States] courts” and “ ‘must be applied by the district courts in every action against a foreign sovereign!.]’ ” Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434-35, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989) (quoting Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 493, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983)). “Under the [FSIA], a foreign state is presumptively immune from the jurisdiction of United States courts; unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state.” Saudi Arabia v. Nelson, 507 U.S. 349, 355, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993) (citing Verlinden B.V., 461 U.S. at 488-89, 103 S.Ct. 1962); see also Kilburn v. Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123, 1126 (D.C.Cir.2004) (citing 28 U.S.C. § 1604).

Default judgment may not be entered against a foreign state under the FSIA “unless the claimant establishes his claim or right to relief by evidence satisfactory to the court.” 28 U.S.C. § 1608(e). This provision “ ‘imposes a duty on FSIA courts to not simply accept a complaint’s unsupported allegations as true, and obligates courts to inquire further before entering judgment against parties in default.’ ” Wultz v. Islamic Republic of Iran, 864 F.Supp.2d 24, 28-29 (D.D.C.2012) (quoting Rimkus v. Islamic Republic of Iran, 750 F.Supp.2d 163, 171 (D.D.C.2010)). In evaluating whether a plaintiff has sufficiently established its claim, courts may accept the plaintiffs “uncontroverted factual allegations, which are supported by ... documentary and affidavit evidence.” Oveissi v. Islamic Republic of Iran, 879 F.Supp.2d 44, 49 (D.D.C.2012) (internal quotation marks omitted).

Firebird argues that the waiver exception to sovereign immunity in 28 U.S.C. § 1605(a)(1) is applicable in this case. That exception denies immunity to a foreign state when

the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver[.]

28 U.S.C. § 1605(a)(1). Generally, with regard to express waivers under this provision, “[a] foreign sovereign will not be found to have waived its immunity unless it has clearly and unambiguously done so.” World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1162 (D.C.Cir.2002). “[E]xplicit waivers of sovereign im[127]*127munity are narrowly construed in favor of the sovereign and are not enlarged beyond what the language requires.” Id. (internal quotation marks omitted).

Firebird argues that Nauru’s explicit waiver in the Conditions of Guarantee annexed to the Bond Purchase Agreement waived any and all defenses, including sovereign immunity. Pl.’s Mot. for Entry of Final J. by Default (“PL’s Mot.”) at 4-5. Firebird also claims that the waiver is “not limited to actions brought in Japan or Nauru, but goes to any legal action relating to the Guarantee [.]” Id. at 5. However, the context of the language in the Conditions of Guarantee indicates otherwise. The relevant provision in the Conditions of Guarantee for both series of bonds states:

Any legal action relating to the Guarantee (including the Conditions of Guarantee) may be brought against the Republic in the Tokyo District Court ..., to the jurisdiction of which the Republic hereby expressly and irrevocably submits for purposes of any such action. Any such action may also be brought against the Republic in any competent court of the Republic. To the extent permitted by applicable law the Republic hereby irrevocably waives any immunity to which it might otherwise be entitled from jurisdiction, suit, attachment, judgment or execution in any such action.

Compl. Ex. B, Series B Bond Purchase Agreement Annex 2, ¶ 9 and Series C Bond Purchase Agreement Annex 2, ¶ 9.

Firebird relies on Capital Ventures Int’l v. Republic of Arg., 552 F.3d 289 (2d Cir.2009). In that case, Capital Ventures, the owner of the bonds, brought suit against Argentina, the issuer of the bonds, after Argentina defaulted on principal and interest payments. Id. at 291-92. The bonds in that case were issued with an offering circular which provided: 1) a forum selection clause which waived immunity in the District Court in Frankfurt and any federal court in Buenos Aires, and 2) an immunity clause which waived “any immunity (sovereign or otherwise) from jurisdiction of any court or from any legal proeess[.]” Id.

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915 F. Supp. 2d 124, 2013 WL 151201, 2013 U.S. Dist. LEXIS 5805, Counsel Stack Legal Research, https://law.counselstack.com/opinion/firebird-global-master-fund-ii-ltd-v-republic-of-nauru-cadc-2013.