Lessors of Abchakan Village v. Defense

137 F.4th 1301

• Court: Court of Appeals for the Federal Circuit
• Decided: May 16, 2025
• Docket: 23-1523
• Status: Published

Opinion

Case: 23-1523 Document: 56 Page: 1 Filed: 05/16/2025

United States Court of Appeals for the Federal Circuit ______________________

LESSORS OF ABCHAKAN VILLAGE, LOGAR PROVINCE, AFGHANISTAN, Appellants

v.

SECRETARY OF DEFENSE, Appellee ______________________

2023-1523 ______________________

Appeal from the Armed Services Board of Contract Ap- peals in No. 61787, Administrative Judge J. Reid Prouty, Administrative Judge James R. Sweet, Administrative Judge Richard Shackleford. ______________________

Decided: May 16, 2025 ______________________

WILLIAM PERDUE, Arnold & Porter Kaye Scholer LLP, Washington, DC, argued for appellants. Also represented by MICHAEL BARNICLE, PETER VOGEL, Chicago, IL; ELIZABETH A. LONG, WILLIAM SHARON, New York, NY; KEITH J. FEIGENBAUM, Paul Hastings LLP, Washington, DC.

ANTHONY F. SCHIAVETTI, Commercial Litigation Branch, Civil Division, United States Department of Jus- tice, Washington, DC, argued for appellee. Also Case: 23-1523 Document: 56 Page: 2 Filed: 05/16/2025

represented by BRIAN M. BOYNTON, VINCENT DE PAUL PHILLIPS, JR., MARTIN F. HOCKEY, JR., PATRICIA M. MCCARTHY. ______________________

Before MOORE, Chief Judge, CUNNINGHAM, Circuit Judge, and MAZZANT, Chief District Judge. 1 PER CURIAM. Lessors of Abchakan Village, Logar Province, Afghani- stan (“the Lessors” or “Appellants”) appeal a decision of the Armed Services Board of Contract Appeals (“Board”) grant- ing the U.S. government summary judgment and denying the Lessors’ appeal. Lessors of Abchakan Vill., Logar Prov- ince, Afghanistan, ASBCA No. 61787, 22-1 BCA ¶ 38,234, 2022 WL 17331987 (Oct. 13, 2022) (“Decision”) (J.A. 1–26). 2 For the reasons explained below, we vacate the judgment and remand for further proceedings con- sistent with this opinion. I. BACKGROUND This appeal concerns the U.S. government’s occupation and use of land in Afghanistan and the government’s al- leged failure to pay the Lessors for use of the land. In this section, we first provide an overview of the party interac- tions giving rise to this appeal; we then describe relevant proceedings in the courts of Afghanistan and agreements between the United States and the former government of

1 Honorable Amos Mazzant, Chief District Judge, United States District Court for the Eastern District of Texas, sitting by designation. 2 Because the reported version of the Board’s deci- sion is not paginated, citations in this opinion are to the version of the Board’s decision included in the Joint Appen- dix. For example, Decision at 1 is found at J.A. 1. Case: 23-1523 Document: 56 Page: 3 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 3

Afghanistan; and we then turn to the procedural history before the Board. A. The Lessors are residents of Abchakan Village in Logar Province, Afghanistan. Appellants’ Br. 1; J.A. 428. On April 23, 2009, the Lessors leased to the United States real property (“the Land”) for a United States military base, known as Forward Operating Base Shank (“FOB Shank”), located in Logar Province. Decision at 2–3. Representa- tives for the United States Army Corps of Engineers exe- cuted the relevant lease agreements on behalf of the United States. J.A. 115–98. A U.S. government report indicates that before entering into the lease agreements, the United States military had occupied portions of the Land for over two years without paying rent. J.A. 1324 (negotiations re- port relating to the Land stating back rent was “[n]egoti- ated . . . for the past 2.5 years of occupation of FOB Shank located [at a specified location] down to $0”); J.A. 1325 (memorandum recommending approval of funding request to pay lease rents and explaining “[t]he United States has no formal real estate interest in the areas occupied and has trespassed on private property”). The lease agreements had a one-year term covering calendar year 2009. Decision at 3; see also J.A. 115–98. On July 14, 2009, the U.S. government paid rent in the amount of approximately $2.6 million for the lease period. Decision at 3; see also J.A. 436. In November 2009, the U.S. government sent the Lessors correspondence entitled “Written Notification of Intent to Lease FOB Shank Land from 1JAN10 Through 31DEC10,” which “request[ed] to continue leasing the [L]and on which FOB Shank is located from 1JAN10 to 31DEC10.” J.A. 2089. The Lessors allege that “[f]or calendar years 2011 through [October 15, 2018], the [U.S.] [g]overnment or its assignee occupied the [Land] and enjoyed the full use of the [Land] without Lessor inter- ference.” J.A. 437, 447; see also Decision at 3. The U.S. Case: 23-1523 Document: 56 Page: 4 Filed: 05/16/2025

government does not dispute that “the United States con- tinued to operate FOB Shank” through at least 2014 and that the United States “later established Camp Dhalke on a portion of what was then FOB Shank.” Appellee’s Br. 5–6; Decision at 4 n.4. The Lessors also allege, and the U.S. government does not dispute, that the U.S. govern- ment did not pay the Lessors rent after the July 14, 2009, payment. See Decision at 3–4; see also Appellants’ Br. 1; Appellee’s Br. 4–5; J.A. 436–38. In December 2009, a provincial justice department of the Government of the Islamic Republic of Afghanistan (“GIRoA”) 3 filed a civil lawsuit (“the Afghan lawsuit”) in a court of Afghanistan, alleging that the Land belonged to GIRoA and that the Lessors’ ownership documents were fraudulent. J.A. 439; see also J.A. 1233, 1292. In Au- gust 2010, the U.S. government sent letters to the Lessors stating: [T]his letter provides written notification that your ownership documents have come into question. Although this lease has expired, you must submit official, verifiable documentation to this office. Verifiable documentation means approved by the legal system of the Islamic Republic of Afghani- stan. If it is determined that your claim of ownership was false, all rental monies paid to you under [the] Lease . . . must be refunded to the United State[s.]

3 GIRoA was the government in control of Afghani- stan at the time the leases were executed. In August 2021, the Taliban overthrew GIRoA. See Decision at 9 n.7 (“On August 6, 2021, the Taliban captured its first provincial capital. On August 15, 2021, Taliban forces entered Kabul, and the GIRoA collapsed.” (citation omitted)). Case: 23-1523 Document: 56 Page: 5 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 5

J.A. 2392; see also Decision at 3–4. On November 17, 2012, the U.S. government sent a letter to the Lessors, indicating that the Land ownership had been in dispute for many years. Decision at 4; J.A. 1783. The letter stated that “[b]ecause of those concerns, the United States Govern- ment has stopped all lease actions and payments until the land ownership is clearly and legally identified.” J.A. 1783. B. Relevant to this appeal are several proceedings in the courts of Afghanistan, as well as interactions between the United States and GIRoA. On September 30, 2014, the United States and GIRoA entered into a Bilateral Security Agreement. Decision at 4. Under the Bilateral Security Agreement, GIRoA “pro- vide[d] access to and use of the agreed facilities and areas, as defined in paragraph 7 of Article 1.” J.A. 1178; Decision at 4. The Bilateral Security Agreement Article 1(7) defined “[a]greed facilities and areas” as “the facilities and areas in the territory of Afghanistan provided by Afghanistan at the locations listed in Annex A, and such other facilities and areas in the territory of Afghanistan as may be provided by Afghanistan in the future, to which United States forces . . . shall have the right to access and use pursuant to this Agreement.” J.A. 1171; Decision at 4. Annex A listed several facilities not including FOB Shank but envi- sioned use of “other facilities and areas at other locations in Afghanistan as may be agreed and authorized by the Minister of Defense.” J.A. 1197; Decision at 4–5. By 2014, FOB Shank “was the third largest U.S. base in Afghani- stan . . . , housing nearly 5,200 personnel.” J.A. 1925; see also Decision at 4 n.4. In 2014, the United States turned FOB Shank over to GIRoA. Decision at 4 n.4. As noted above, however, the United States later established Camp Dhalke on a part of what was then FOB Shank. Id. Meanwhile, the Afghan lawsuit proceeded. According to a declaration submitted on behalf of the Lessors, in 2009, Case: 23-1523 Document: 56 Page: 6 Filed: 05/16/2025

an Afghan provincial court dismissed GIRoA’s claims, and GIRoA then appealed that decision. See J.A. 1292. A series of appeals and decisions of Afghanistan courts followed. In 2015, an Afghan appellate court issued a decision in the Lessors’ favor. Decision at 5; J.A. 249, 1784, 2092. Based on the Lessors’ purported ownership documents, which in- clude a deed and tax and water documents, the Afghan ap- pellate court held that GIRoA’s claims “were not proved.” J.A. 2092; see also J.A. 249, 1784. GIRoA appealed to the Afghanistan Supreme Court. Decision at 5. On December 19, 2017, while the Afghan lawsuit was pending before the Afghanistan Supreme Court, GIRoA provided the United States with a declaration (“the 2017 Declaration”) executed by GIRoA’s Minister of Defense. Decision at 5; J.A. 1216; see also J.A. 1214–19. The 2017 Declaration indicates that the Minister of Defense “author- ize[d] Camp Dhalke and its expansion into FOB Shank . . . as an Agreed Facility and Area for the use of U.S. Forces in accordance with the [Bilateral Security Agreement].” J.A. 1216. The 2017 Declaration was specif- ically “executed in accordance with Annex A of the [Bilat- eral Security Agreement].” Id. The 2017 Declaration further states that “GIRoA covenants that it has the legal authority over the [L]and necessary to effect this agree- ment and authorization.” Id. It also states that “[a]ny and all claims made against the Camp Dhalke and FOB Shank land or regarding the ownership of this [L]and are the re- sponsibility of GIRoA and shall be resolved in full by GIRoA.” Id. On February 20, 2018, the Afghanistan Su- preme Court issued a decision (“the 2018 Remand Deci- sion”) “repeal[ing]” the Afghan appellate court’s 2015 decision and remanding the case. Decision at 7; see Case: 23-1523 Document: 56 Page: 7 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 7

J.A. 1232–41. 4 In the 2018 Remand Decision, the Afghan- istan Supreme Court determined that GIRoA “was not given the opportunity to prove [its] claims reflecting [the] fraudulent deed document” and that “th[e] case re- quire[d] . . . a thorough investigation.” J.A. 1240. The Af- ghanistan Supreme Court referred the case to another Afghan court; the case later was transferred to the Special Appeals Court for Government Land Usurpation Cases (“Land Court”). See J.A. 1293, 1302, 1373. On October 3, 2018, the GIRoA Ministry of Defense provided the United States with another declaration (“the 2018 Declaration”) regarding ownership of the land on which FOB Shank and Camp Dhalke were located. Deci- sion at 8; J.A. 1221. The 2018 Declaration stated: The Ministry of Defense (MoD) hereby declares, acknowledges and validates its prior Declaration of 19 December 2017 authorizing the use of FOB Shank and Camp Dhalke, asserting GIRoA land ownership over this area, and accepting full re- sponsibility for any and all land claims that may arise over the use of this area, including accepting for resolution any such land claims filed against the United States Government. J.A. 1221. On August 11, 2021, after a property investigation, the Land Court dismissed GIRoA’s claim to the Land (“the

4 The parties provided a different translation of the 2018 Remand Decision at J.A. 973–80. For purposes of this appeal, we see no meaningful difference between the pro- vided translations. Compare J.A. 1240 (explaining the 2015 decision was “repealed”), with J.A. 979–80 (explain- ing the 2015 decision was “annulled”). Throughout this opinion, we cite to the translation provided at J.A. 1232–41. Case: 23-1523 Document: 56 Page: 8 Filed: 05/16/2025

2021 Decision”). Decision at 8–9; J.A. 1305 (“unanimously dismiss[ing] the claim made by . . . the [GIRoA] govern- ment representative”). The Land Court held that the claims made by GIRoA’s attorney were “not verified” and ordered that GIRoA “shall not bother the [Lessors] and their attorneys from now on regarding the claimed prop- erty.” J.A. 1305. Shortly after the Land Court issued its 2021 Decision, the Taliban overthrew GIRoA. See Decision at 9 n.7. The fall of GIRoA raised questions about whether the Taliban would “implement judgments issued by the courts of the previous administration,” including the 2021 Decision. J.A. 2362. However, on February 15, 2022, the Afghani- stan Supreme Court, under the new Taliban regime, issued an order—or “fatwa” 5 (“the 2022 Fatwa”)—directing that the 2021 Decision “be implemented.” J.A. 1596. C. We now turn to the procedural history before the Board. On April 13, 2018, the Lessors submitted to the U.S. Army Corps of Engineers a certified claim letter de- manding approximately $28 million from the Corps for un- paid rent, interest, and deferred payment losses. Decision at 10; J.A. 38, 93, 112. On September 4, 2018, the Corps issued a contracting officer’s final decision denying the claim. Decision at 10; J.A. 27–29. The Lessors appealed to the Board, J.A. 423, and then filed a five-count complaint. J.A. 428–47; see also Decision at 10. On December 13, 2019, the U.S. government moved to dismiss on the ground that the Lessors’ counsel had no au- thority to act on behalf of the Lessors. J.A. 537–48; see also Decision at 1. On July 21, 2021, the Board denied the U.S.

5 “A fatwa is a legal ruling or opinion given by a rec- ognized authority on Islamic law.” Decision at 10 n.8. Case: 23-1523 Document: 56 Page: 9 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 9

government’s first motion to dismiss based on that ground. Decision at 1; J.A. 1091–97. On October 18, 2021, the U.S. government filed a sec- ond motion to dismiss and motion for judgment on the pleadings, arguing that the Lessors’ claims were: (1) barred by the act of state doctrine; (2) unripe and not justiciable due to the ongoing judicial proceedings in the Afghanistan courts; and (3) inadequately pled. J.A. 1136–38; see also J.A. 1131–66. The parties submitted sur-replies, J.A. 1547–85, 2273–322, but the Board admin- istrative judge did not hear oral argument on the govern- ment’s motion. See J.A. 80–92. On October 13, 2022, the Board issued its decision. De- cision at 1–26. The Board converted the government’s mo- tion to dismiss for failure to state a claim to one for summary judgment “because the parties rel[ied] upon ma- terials outside of the pleadings.” Id. at 2. The Board then granted summary judgment in favor of the U.S. govern- ment on two grounds. Id. First, the Board held that the Lessors “failed to raise a genuine issue of material fact suggesting that they owned the Land.” Id. at 11. The Board “decline[d] to recognize” the 2021 Decision and 2022 Fatwa. Id. at 13; see also id. at 12–16. The Board treated the 2018 Remand Decision as a “final and conclusive judgment,” id. at 17, entitled to recognition, and thus triggering issue preclusion. Id. at 16–19. The Board also found that “no reasonable fact- finder” could rely on the Lessors’ ownership documents be- cause “the tax and water rights documents . . . were insuf- ficient to cover the Land” and the “deed’s handwriting differs from the handwriting on prior and subsequent deeds.” Id. at 19. Second, the Board held that “to provide [the Lessors] with the relief that they seek . . . would violate the act of state doctrine.” Id. at 20. The Board reasoned that, in the 2017 and 2018 Declarations, GIRoA “ha[d] taken the Case: 23-1523 Document: 56 Page: 10 Filed: 05/16/2025

official act within its territory of asserting its ownership of the Land,” id. at 20, and that granting relief to the Lessors “would require [the Board] to declare invalid that GIRoA official act of asserting its ownership over the Land.” Id. at 21. The Lessors timely appealed. We have jurisdiction un- der 28 U.S.C. § 1295(a)(10). II. STANDARD OF REVIEW “We review de novo the Board’s conclusions of law, in- cluding grants of summary judgment, and the interpreta- tion of a government contract.” Cooper/Ports Am., LLC v. Sec’y of Def., 959 F.3d 1373, 1377 (Fed. Cir. 2020) (internal quotation marks and citations omitted). “Summary judg- ment is appropriate when the record, when examined in a light most favorable to the non-movant, indicates that ‘there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law.’” Ryste & Ricas, Inc. v. Harvey, 477 F.3d 1337, 1340 (Fed. Cir. 2007) (quot- ing Flexfab L.L.C. v. United States, 424 F.3d 1254, 1259 (Fed. Cir. 2005)). “[T]he decision of the [Board] on a question of fact is final and conclusive and may not be set aside unless the decision is—(A) fraudulent, arbitrary, or capricious; (B) so grossly erroneous as to necessarily imply bad faith; or (C) not supported by substantial evidence.” 41 U.S.C. § 7107(b)(2)(A)–(C); see also Boeing Co. v. Sec’y of Air Force, 983 F.3d 1321, 1333 (Fed. Cir. 2020). III. DISCUSSION Before this court, the Lessors argue that the Board erred in concluding that (1) the Lessors failed to raise a genuine issue of material fact regarding their ownership of the Land, see Appellants’ Br. 19–20; see also id. at 23–46; and (2) the Lessors’ contractual claims are barred by the act of state doctrine. Id. at 22; see also id. at 46–60. The U.S. government addresses the issues that the Lessors Case: 23-1523 Document: 56 Page: 11 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 11

raise, Appellee’s Br. 25–35, 38–43, but also argues that we should affirm the Board’s grant of summary judgment be- cause the Lessors cannot establish mutual intent to con- tract after 2009, id. at 15–19, and the Lessors’ claims are espoused and extinguished, id. at 36; see also id. at 21–23, 35, 37–38. We address each argument in turn. A. The Lessors argue that the Board erred in granting summary judgment to the government because the Lessors raised genuine issues of material fact regarding ownership of the Land. See Appellants’ Br. 23. First, the Lessors ar- gue the U.S. government bore—and failed to carry—the burden of proving that the Lessors do not own the Land. Id. at 23–26. Second, the Lessors argue that the Board erred by not recognizing the 2021 Decision of the Land Court. Id. at 28–37. The Lessors argue that the 2021 De- cision and 2022 Fatwa prove as a matter of law that the Lessors own the Land or, at minimum, raise genuine issues of material fact precluding granting summary judgment to the U.S. government on this issue. Id. at 26. Third, the Lessors argue that their deed, tax documents, and water- rights documents separately raise genuine issues of mate- rial fact and that the Board’s refusal to credit these docu- ments was improper. Id. at 38–45. The U.S. government counters that the burden of prov- ing land ownership should properly be on the Lessors as part of their burden to show a valid contract. Appellee’s Br. 15–16. Regarding the genuine issues of material fact that the Lessors allege, the U.S. government primarily points back to the Board’s findings. See id. at 38–43. We agree with the Lessors that the Board erred in granting summary judgment to the government because the record before us, “when examined in a light most favor- able to the non-movant,” fails to show that “there is no gen- uine issue of material fact and the movant is entitled to judgment as a matter of law.” Ryste & Ricas, 477 F.3d at Case: 23-1523 Document: 56 Page: 12 Filed: 05/16/2025

1340 (quoting Flexfab, 424 F.3d at 1259). We find the gov- ernment’s arguments to the contrary unpersuasive. i. We start with the burden of proof. We conclude that the Board did not err by placing the burden on the Lessors to show they owned the Land. As a practical matter, when “one party has superior access to the evidence needed to prove [a] fact[,] . . . that party must bear the burdens of proof.” 21B Charles Alan Wright & Kenneth W. Graham, Jr., Federal Practice and Procedure § 5122 (2d ed. 2005). In this case, the Lessors are the purported landowners, and they reside in Afghanistan. As compared to the U.S. gov- ernment, the Lessors have superior access to the evidence needed to prove their ownership of the Land, which is also located in Afghanistan. Accordingly, we decline to disturb the Board’s placement of the burden of proof regarding ownership. ii. We next turn to the Lessors’ contentions that the Board erred in not recognizing the 2021 Decision. This court has recognized that, “at least as of 2008, seven types of docu- ments may serve as proof of land ownership” under GIRoA law, including “documents of a legal court.” Sharifi v. United States, 987 F.3d 1063, 1068 (Fed. Cir. 2021). The Lessors seek to rely on the 2021 Decision to prove that they own the Land. See, e.g., Appellants’ Reply Br. 2. We do not decide whether the 2021 Decision conclusively proves own- ership of the Land. However, we conclude that the Board erred in its non-recognition analysis and in resolving this issue at summary judgment. Ownership of the Land is a material fact question over which there is a genuine dispute. In the 2021 Decision, the Land Court found “the [L]and is privately-owned” by the individuals and residents of Abchakan Village and deter- mined that the claims made by GIRoA’s attorney were “not Case: 23-1523 Document: 56 Page: 13 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 13

verified by the court.” J.A. 1304–05. In resolving Land ownership at summary judgment, the Board based its de- cision in part on “exercis[ing] [its] discretionary power and declin[ing] to recognize [the 2021 Decision] under Restate- ment [(Fourth) of Foreign Relations Law of the United States (“Restatement”)] § 484 [(2018)].” Decision at 13; see also id. at 12–14. But the Board erred in its analysis lead- ing to its nonrecognition conclusion. The Board relied on three of the nine discretionary grounds outlined in Restatement § 484, which states: To the extent provided by applicable law, a court in the United States need not recognize a judgment of a court of a foreign state if: (a) the party resisting recognition did not receive adequate notice of the proceeding in the foreign court in sufficient time to enable it to defend; . . . (g) the judgment was ren- dered in circumstances that raise substantial doubt about the integrity of the rendering court with respect to the judgment; [or] (h) the specific proceeding in the foreign court leading to the judg- ment was not compatible with fundamental princi- ples of fairness . . . . The record here has not been developed sufficiently to sup- port the Board’s conclusion based on these grounds. 6

6 The government failed to address these specific grounds on appeal. The government primarily argued that “[the Lessors] fail to persuasively explain how the 2018 Af- ghan Supreme Court decision [i.e., 2018 Remand Decision] could be reconciled with the subsequent Afghan court deci- sions [i.e., including the 2021 Decision].” Appellee’s Br. 40. But for the reasons explained later in this opinion, the 2018 Remand Decision is not a final decision entitled to preclu- sive effect. See infra at 15–16. Case: 23-1523 Document: 56 Page: 14 Filed: 05/16/2025

First, the Board concluded GIRoA “did not receive no- tice of the proceedings in sufficient time to enable it to de- fend” its position before the Afghanistan court on remand following the 2018 Remand Decision and thus found that the Afghanistan court “failed to provide the GIRoA with notice and an opportunity to be heard.” Decision at 13; see also id. at 9; Restatement § 484(a). But there is simply not enough evidence in the record before us to conclude as a matter of law that any notice or opportunity to be heard was lacking. The Board only cited a declaration from the government’s expert, containing allegations made by a pur- ported prosecutor for GIRoA, to support its lack of notice conclusion. See Decision at 9 (citing J.A. 1374 ¶ 17). When viewing the record in a light most favorable to the Lessors, we conclude that the Board prematurely decided a material factual question, adequacy of notice, that required further factual development. Second, the Board failed to explain why the proceed- ings before the Land Court, which issued the 2021 Decision before the fall of GIRoA, were not “compatible with funda- mental principles of fairness,” Restatement § 484(h), be- yond referencing these same “notice and opportunity to be heard” concerns. Decision at 13, see also id. at 12, 14. We are similarly unconvinced, without further development of the facts, that this ground applies or was appropriately re- solved at summary judgment. Third, the Board erred in concluding that the 2021 De- cision “was rendered in circumstances that raise substan- tial doubts about the integrity of the rendering court with respect to the judgment,” Decision at 13, because this ground of nonrecognition “requires a showing of corruption in the particular case that had an impact on the judgment rendered.” Restatement § 484(g) cmt. i. The Board did not address the corruption requirement, and the government has not made such a showing of corruption. Accordingly, we conclude that the Board erred in its analysis of each of the Restatement § 484 grounds and thus erred by deciding Case: 23-1523 Document: 56 Page: 15 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 15

at the summary judgment stage that the 2021 Decision was not entitled to recognition. We do not decide whether the 2021 Decision conclu- sively proves ownership of the Land. Nor do we decide that the 2021 Decision was entitled to recognition as a foreign judgment. We conclude only that the Board erred in its analysis that led it to refuse to recognize the 2021 Decision and in resolving the Land ownership issue at the summary judgment stage. 7 iii. The Lessors identify three other types of documents that they allege raise genuine issues of material fact: a deed, water-rights documents, and tax documents. Appel- lants’ Br. 38–39. The Board found that those documents do not raise genuine issues of material fact because (1) the 2018 Remand Decision was a final and conclusive judg- ment that created issue preclusion, Decision at 17; and (2) no reasonable factfinder could conclude that the docu- ments establish that the Lessors owned the land, id. at 19. We conclude that the Board erred in both determinations. The 2018 Remand Decision is not “a final, conclusive, and enforceable judgment” entitled to preclusive effect. Re- statement § 481 (“[A] final, conclusive, and enforceable judgment of a court of a foreign state granting or denying recovery of a sum of money, or determining a legal contro- versy, is entitled to recognition by courts in the United States.”); see also Restatement § 487 (“A foreign judgment entitled to recognition under [Restatement] § 481 is given the same preclusive effect by a court in the United States

7 The Board also declined to recognize the 2022 Fatwa. Decision at 13. Because we find that the Board erred in granting summary judgment in light of the 2021 Decision, we do not need to separately address the 2022 Fatwa to decide this case. Case: 23-1523 Document: 56 Page: 16 Filed: 05/16/2025

as the judgment of a sister State entitled to full faith and credit.”). Issue preclusion only applies if the relevant issue was decided in a prior action that “has been finally adjudi- cated on the merits.” Jones v. United States, 846 F.3d 1343, 1361 (Fed. Cir. 2017). The 2018 Remand Decision did not “finally adjudicate[] on the merits” the relevant issues. Id. In the 2018 Remand Decision, the Afghanistan Supreme Court remanded the case because it “require[d] further and a thorough investi- gation[;]” the lower court “had not considered” GIRoA’s claim regarding the deed; and GIRoA had not been given an “opportunity to prove [its] claims” as to the allegedly fraudulent deed. J.A. 1240. These open issues show that the 2018 Remand Decision was not a final decision. There was no reason for the Board to consider the 2018 Remand Decision as “realistically . . . the final and conclusive recog- nizable decision on who owned the Land” due to the over- throw of GIRoA. Decision at 17 n.16. Moreover, the 2021 Decision, which was decided after the 2018 Remand Deci- sion, found in favor of the other party. See J.A. 1304–05. While we do not expect to get another final decision from the Afghan court system due to the fall of GIRoA, neither the Board nor the government on appeal cites precedent requiring us to consider the 2018 Remand Decision final. At oral argument, the government’s counsel conceded that “the 2018 [Remand] Decision is not final” and that issue preclusion does not apply. Oral Arg. at 27:37–27:58, https://oralarguments.cafc.uscourts.gov/default.aspx?fl=23 -1523_07092024.mp3. In sum, the Board erred by giving the 2018 Remand Decision preclusive effect. The Board further erred by resolving material factual issues at the summary judgment stage relating to the deed, tax documents, and water rights documents provided by the Lessors. The 2021 Decision shows the Land Court re- ceived information indicating that the Lessors possess a deed to the Land. J.A. 1303 (2021 Decision referring to “le- gal deed no. 367, dated December 2, 1932[,] issued by Case: 23-1523 Document: 56 Page: 17 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 17

Kulangar Court in Logar”). The Board found that “the Land deed’s handwriting differs from the handwriting on prior and subsequent deeds, so the Land deed contains in- dicia of fraud.” Decision at 19. In making this finding at summary judgment, the Board erred because determining whether the deed is fraudulent requires credibility deter- minations and weighing evidence, both of which are inap- propriate during the consideration of a motion for summary judgment. See, e.g., Rorrer v. City of Stow, 743 F.3d 1025, 1038 (6th Cir. 2014) (“Credibility judgments and weighing of the evidence are prohibited during the con- sideration of a motion for summary judgment; rather, the evidence should be viewed in the light most favorable to the non-moving party.” (citation omitted)); Nyari v. Napoli- tano, 562 F.3d 916, 922 (8th Cir. 2009) (“It is well estab- lished that courts should neither weigh evidence nor make credibility determinations when ruling on a motion for summary judgment.”); cf. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986) (explaining, in context of Fed. R. Civ. P. 56, that “at the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial”). 8 And even if the Board is correct that the “taxes and water rights evi- denced in [the documents provided by the Lessors] were in- sufficient to cover the Land,” Decision at 19, that also raises material factual issues—namely, what, if any, prop- erty rights the Lessors have that are relevant to the Land and what, if any, portion of the Land those rights cover.

8 While the Board is not bound by the Federal Rules of Civil Procedure, Rule 7(c)(2) of the Armed Services Board of Contract Appeals states that “the Board looks to Rule 56 of the Federal Rules of Civil Procedure for guid- ance” “[i]n deciding motions for summary judgment.” Case: 23-1523 Document: 56 Page: 18 Filed: 05/16/2025

When examining the record in a light most favorable to the non-movant, we conclude that the Board erred in de- termining that “the documents fail to raise a genuine issue of material fact suggesting that [the Lessors] owned the Land.” Id. at 19. The evidence in this case, including but not limited to the 2021 Decision and the deed, would allow a reasonable factfinder to conclude that the Lessors owned the Land. B. The Lessors argue that the Board erred in granting summary judgment to the U.S. government under the act of state doctrine. Appellants’ Br. 46. The Lessors argue that the Board’s conclusion that granting relief to the Les- sors would impermissibly invalidate the Declarations was wrong for four separate reasons, id. at 46–47: (1) the Dec- larations were not official sovereign acts, id. at 47–52; (2) granting the Lessors relief would not invalidate the Declarations, id. at 52–55; (3) the policies underlying the act of state doctrine weigh against applying the act of state doctrine here, id. at 55–58; and (4) even if the act of state doctrine applied here, it does not bar all the Lessors’ claims, id. at 58–60. The U.S. government contends that the act of state doc- trine forecloses the Lessors’ claims because “[t]he case un- questionably turns on the validity of the position taken by GIRoA in relations between it and the United States.” Ap- pellee’s Br. 25. The U.S. government further argues that the Lessors cannot establish ownership of the land without the Board invalidating GIRoA’s assertion that the land was public land. Id. at 28. In the U.S. government’s view, GIRoA acted in its sovereign capacity when issuing the Declarations, and the Declarations formally added an area to the Bilateral Security Agreement’s list of agreed facili- ties and areas. Id. at 30. The U.S. government also argues that none of the policies underlying the act of state doctrine Case: 23-1523 Document: 56 Page: 19 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 19

weigh against applying the act of state doctrine in this case. Id. at 31. “Under [the act of state] doctrine, the courts of one state will not question the validity of public acts (acts jure imperii) performed by other sovereigns within their own borders . . . .” Republic of Austria v. Altmann, 541 U.S. 677, 700 (2004); see also Restatement § 441. There is a fac- tual predicate for the act of state doctrine to apply: the suit must “require[] the [c]ourt to declare invalid, and thus in- effective as ‘a rule of decision for the courts of this country,’ the official act of a foreign sovereign.” W.S. Kirkpatrick & Co. v. Env’t Tectonics Corp., Int’l, 493 U.S. 400, 405 (1990) (quoting Ricaud v. Am. Metal Co., 246 U.S. 304, 310 (1918)) (internal citation omitted). In the Board’s act of state doctrine analysis, see Deci- sion at 19–25, the Board refers to various portions of the 2017 and 2018 Declarations and seems to imply the Decla- rations, in their entirety, are the requisite “official act[s] of a foreign sovereign.” W.S. Kirkpatrick, 493 U.S. at 405. But the mere issuance of the Declarations is not in itself an act to which the act of state doctrine applies. The Board relies on three potential sovereign acts in the Declarations: (1) GIRoA’s statements regarding land ownership; (2) the purported waiver 9 of GIRoA’s citizens’ claims against the

9 The Board referred to “GIRoA’s official act of waiv- ing its citizens’ claims against the United States related to the Land.” Decision at 21. Though the Board used the term “waive[r],” id., the Board appeared to be referring to GIRoA’s covenant to “take full responsibility of any and all land cla[i]ms made regarding ownership,” J.A. 1221, and related statements in the Declarations. See Decision at 21. We do not decide here whether such covenants constitute a waiver of GIRoA’s citizens’ claims against the United States related to the Land. We merely use the term waiver Case: 23-1523 Document: 56 Page: 20 Filed: 05/16/2025

United States related to the Land; and (3) the expansion of the Bilateral Security Agreement to include Camp Dhalke and FOB Shank as an agreed facility. See Decision at 21, 19–20, 22–25. We conclude that the Board erred by deter- mining at the summary judgment stage that any of these potential acts triggers the act of state doctrine. First, the Declarations’ statements of land ownership were not official sovereign acts to which the act of state doctrine applies. The act of state doctrine “is typically ap- plied to tangible acts, like the expropriation of property.” PNC Fin. Servs. Grp., Inc. v. Comm’r, 503 F.3d 119, 126 (D.C. Cir. 2007); see also McKesson Corp. v. Islamic Repub- lic of Iran, 672 F.3d 1066, 1073 (D.C. Cir. 2012). Here, the Board stated that “GIRoA has taken the official act within its territory of asserting its ownership of the Land.” Deci- sion at 20; see also id. at 21. But the Declarations do not take or expropriate the Land as an official act. See J.A. 1216, 1221–22. Instead, in the Declarations, GIRoA appears to have recognized that ownership was an ongoing controversy, as evidenced by GIRoA’s “covenant[s]” and “promise[s]” to “take full responsibility of any and all land cla[i]ms made regarding ownership over” the Land. J.A. 1221; see also J.A. 1216 (“GIRoA covenants that it has the legal authority over the land necessary to effect this agreement and authorization.” (emphasis added)). Such recognition of a controversy is not an official sovereign act that would need to be declared invalid for the Board to grant the Lessors’ requested relief. Accordingly, the act of state doctrine does not apply to GIRoA’s statements of land ownership in the Declarations. Second, any waiver of the Lessors’ claims by GIRoA via the Declarations is not the kind of sovereign act to which the act of state doctrine applies. Decision at 20–21. The

as a shorthand to refer to the Declarations’ provisions iden- tified by the Board. Case: 23-1523 Document: 56 Page: 21 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 21

act of state doctrine relates to recognizing the validity of a foreign sovereign’s “official act” “performed within [the sov- ereign’s] own territory.” Restatement § 441. The Supreme Court has explained that “[i]n every case in which [the Court] ha[s] held the act of state doctrine applicable, the relief sought or the defense interposed would have required a court in the United States to declare invalid the official act of a foreign sovereign performed within its own terri- tory.” W.S. Kirkpatrick, 493 U.S. at 405. Here, GIRoA as- sumed responsibility for resolving in full “[a]ny and all claims made against the Camp Dhalke and FOB Shank land or regarding the ownership of this land.” J.A. 1216; J.A. 1221–22. Neither the Board nor the government has identified any precedent applying the act of state doctrine in such a situation. The cases that the Board cites are dis- tinguishable and instead relate to waiver provisions in treaties. See Decision at 21 (first citing S.N.T. Fratelli Gondrand v. United States, 166 Ct. Cl. 473, 478–79 (1964); and then citing Pauly v. United States, 152 Ct. Cl. 838, 844 (1961)). The parties have identified no such waiver provi- sions applicable to the facts before us. Additionally, our sister circuit has explained that “[a]lthough the Supreme Court has not defined the con- tours of the ‘official action’ requirement of the act of state doctrine, the courts of appeals have understood the concept as referring to conduct that is by nature distinctly sover- eign, i.e., conduct that cannot be undertaken by a private individual or entity.” McKesson, 672 F.3d at 1073. GIRoA’s assumption of responsibility in the Declarations is not a distinctly sovereign act—instead, it is the type of assump- tion of responsibility that individuals or entities can under- take in their private capacity. See J.A. 1216 (“Any and all claims made against the Camp Dhalke and FOB Shank land or regarding the ownership of this land are the respon- sibility of GIRoA and shall be resolved in full by GIRoA.”); J.A. 1221–22 (similar). Accordingly, we conclude that any waiver of the Lessors’ claims or assumption of Case: 23-1523 Document: 56 Page: 22 Filed: 05/16/2025

responsibility by GIRoA via the Declarations is not an offi- cial act for purposes of the act of state doctrine. Third, we agree with the U.S. government that the Dec- larations’ expansion of the Bilateral Security Agreement to include Camp Dahlke and FOB Shank as agreed facilities, J.A. 1216, is an official act of GIRoA. Restatement § 441; see J.A. 1221 (“acknowledg[ing]” and “validat[ing]” the 2017 Declaration). But that does not end our inquiry. To prevail, the U.S. government must show that granting the Lessors’ relief in this case would require the Board to de- clare invalid the Declarations’ expansion of the Bilateral Security Agreement. See W.S. Kirkpatrick, 493 U.S. at 405. That is not the situation here. The Board could de- termine that the U.S. government was required to pay rent for the period for which relief was requested without con- cluding any part of the Declarations is invalid. Enforcing the U.S. government’s obligation to pay rent for use of the Land would simply trigger GIRoA’s promise to “accept[] full responsibility for any and all land claims that may arise over the use of [FOB Shank and Camp Dhalke],” as envisioned in the 2018 Declaration. J.A. 1221; see also J.A. 1216. Accordingly, granting the Lessors’ requested re- lief would not require invalidating the Bilateral Security Agreement, the Declarations, or any other sovereign act. Here too, we conclude that granting the Lessors’ relief would not violate the act of state doctrine. Our conclusion that the act of state doctrine is not im- plicated by the facts of this case is further supported by the general principles underlying the doctrine. See W.S. Kirk- patrick, 493 U.S. at 409 (indicating that in considering whether the doctrine should be invoked, the policies under- lying the act of state doctrine may be considered). GIRoA, the government which perpetrated the purported act of state, is no longer in existence. Therefore, there is no risk of imperiling the relationship between the United States government and GIRoA, nor is there any concern about un- due interference with GIRoA’s acts. See, e.g., Restatement Case: 23-1523 Document: 56 Page: 23 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 23

§ 441 cmt. a (explaining the act of state doctrine reflects “considerations of international comity and a concern about undue interference with another sovereign’s acts”). Any action of a tribunal in this country simply cannot in- terfere with GIRoA’s acts going forward. We conclude that the act of state doctrine does not bar the Lessors’ request for relief. Accordingly, the Board erred in granting the government summary judgment under the act of state doctrine. 10 C. The U.S. government raises two additional issues that it argues provide sufficient grounds for affirmance: (1) the purported lack of mutuality of intent to contract between the Lessors and the U.S. Army Corps of Engineers, Appel- lee’s Br. 15–19, and (2) GIRoA’s purported espousal and ex- tinguishment of the Lessors’ claims against the United States related to the Land. Id. at 35–38; see also id. at 21–23. The Board did not rely on either ground as a basis for its decision, however, and so SEC v. Chenery Corp. bars us from affirming on those grounds. 332 U.S. 194, 196 (1947). “It is ‘a simple but fundamental rule of administrative law’ that reviewing courts ‘must judge the propriety of [agency] action solely by the grounds invoked by the agency.’” Calcutt v. FDIC, 598 U.S. 623, 624 (2023) (alter- ation in original) (quoting Chenery, 332 U.S. at 196). “[A]n agency’s discretionary order [may] be upheld,” in other words, only “on the same basis articulated in the order by the agency itself.” Burlington Truck Lines, Inc. v. United

10 Because we conclude that the Board erred in find- ing that the act of state doctrine bars the Lessors’ request for relief, we need not address the Lessors’ fourth argu- ment—that even if the act of state doctrine applied, it does not bar all the Lessors’ claims. Appellants’ Br. 58–60. Case: 23-1523 Document: 56 Page: 24 Filed: 05/16/2025

States, 371 U.S. 156, 169 (1962). The Supreme Court has recognized an exception to Chenery in narrow circum- stances “where ‘[t]here is not the slightest uncertainty as to the outcome’ of the agency’s proceedings on remand,” Calcutt, 598 U.S. at 630 (alteration in original) (quoting NLRB v. Wyman-Gordon Co., 394 U.S. 759, 767 n.6 (1969) (plurality opinion)), such as “[w]here the agency ‘was re- quired’ to take a particular action.” Id. (quoting Morgan Stanley Capital Grp. Inc. v. Public Util. Dist. No. 1 of Snohomish Cty., 554 U.S. 527, 544–45 (2008)). The U.S. government argues that the Lessors cannot establish mutual intent to contract after 2009 and that should conclude the appeal. Appellee’s Br. 15. But the Board did not invoke that ground as a basis for its decision. The Board’s decision addressed mutuality of intent to con- tract only in the context of the land ownership dispute. See Decision at 11. The Board did not invoke the U.S. govern- ment’s intent to contract, or anything about intent to con- tract post-2009, as the basis for any part of its decision. Accordingly, we cannot affirm the Board’s decision on that ground unless a Chenery exception applies. See Calcutt, 598 U.S. at 630. The U.S. government has not argued for the application of an exception, nor do we see one that is applicable. Because the Board was not required to make any particular decision about the U.S. government’s post- 2009 intent to contract and the facts presented in this case do not meet the high bar of showing “there is not the slight- est uncertainty as to the outcome of the agency’s proceed- ings on remand,” we conclude that the government’s alternative ground for affirmance is barred by Chenery. Id. (quoting NLRB, 394 U.S. at 767 n.6) (cleaned up). We also cannot affirm the Board’s judgment based on the government’s newly raised espousal and extinguish- ment ground. Espousal occurs when one sovereign “as- sert[s] the private claims of its nationals against another sovereign.” Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517, 1523 (D.C. Cir. 1984). “Once it has Case: 23-1523 Document: 56 Page: 25 Filed: 05/16/2025

LESSORS OF ABCHAKAN VILLAGE v. DEFENSE 25

espoused a claim, the sovereign has wide-ranging discre- tion in disposing of [the espoused claim],” including “waiv[ing] it entirely”—in other words, extinguishing the claim. Id. Here, the government argues that in the 2017 and 2018 Declarations, “GIRoA espoused the claims of [the Lessors] and extinguished them as against the United States” “[b]y ‘accepting for resolution any such land claims filed against the United States.’” Appellee’s Br. 37 (quoting J.A. 1221). But the U.S. government’s argument fails because the Board relied on the act of state doctrine, not espousal or extinguishment, as a ground for its decision. See Decision at 19–25. The parties agree espousal and extinguishment is an “independent defense” from the act of state doctrine. Appellee’s Br. 36; see also Appellants’ Reply Br. 26. The U.S. government relies on the Board’s analysis relating to the Declarations’ purported waiver provision, which “ac- cept[s] for resolution any such land claims filed against the United States Government,” J.A. 1221—but that analysis was only made relating to the act of state doctrine. See Decision at 21. In fact, the Board did not mention espousal in its decision, nor do the cases cited by the Board in its waiver provision analysis refer to espousal. Id. (first citing S.N.T., 166 Ct. Cl. at 478–79; then citing Pauly, 152 Ct. Cl. at 844). The government also does not argue where it has raised the issue of espousal to the Board. No Chenery ex- ception applies, and we are barred from affirming the Board’s decision based on this belatedly raised ground. It is for the Board, not this court, to decide in the first in- stance whether there is espousal and extinguishment in this case. Accordingly, we decline to address the merits of the U.S. government’s arguments based on the alleged alter- native grounds for affirmance. Case: 23-1523 Document: 56 Page: 26 Filed: 05/16/2025

IV. CONCLUSION We have considered the U.S. government’s remaining arguments and find them unpersuasive. We vacate the Board’s grant of summary judgment in the U.S. govern- ment’s favor and remand to the Board for further proceed- ings consistent with this opinion. VACATED AND REMANDED COSTS Costs awarded to the Lessors.