Justia International Law Opinion Summaries

Articles Posted in Contracts
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The parties to this appeal were a Bolivian company, Compania de Inversiones Mercantiles S.A. (“CIMSA”), and Mexican companies known as Grupo Cementos de Chihuahua, S.A.B. de C.V. and GCC Latinoamerica, S.A. de C.V. (collectively “GCC”). Plaintiff-appellant CIMSA brought a district court action pursuant to the Federal Arbitration Act to confirm a foreign arbitral award issued in Bolivia against Defendant-appellee GCC. The underlying dispute stemmed from an agreement under which CIMSA and GCC arranged to give each other a right of first refusal if either party decided to sell its shares in a Bolivian cement company known as Sociedad Boliviana de Cemento, S.A. (“SOBOCE”). GCC sold its SOBOCE shares to a third party after taking the position that CIMSA failed to properly exercise its right of first refusal. In 2011, CIMSA initiated an arbitration proceeding in Bolivia. The arbitration tribunal determined that GCC violated the contract and the parties’ expectations. GCC then initiated Bolivian and Mexican court actions to challenge the arbitration tribunal’s decisions. A Bolivian trial judge rejected GCC’s challenge to the arbitration tribunal’s decision on the merits. A Bolivian appellate court reversed and remanded. During the pendency of the remand proceedings, Bolivia’s highest court reversed the appellate court and affirmed the original trial judge. But as a result of the simultaneous remand proceedings, the high court also issued arguably contradictory orders suggesting the second trial judge’s ruling on the merits remained in effect. GCC filed a separate Bolivian court action challenging the arbitration tribunal’s damages award. That case made its way to Bolivia’s highest court too, which reversed an intermediate appellate court’s nullification of the award and remanded for further proceedings. Invoking the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, CIMSA filed a confirmation action in the United States District Court for the District of Colorado. After encountering difficulties with conventional service of process in Mexico under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents, CIMSA sought and received permission from the district court to serve GCC through its American counsel pursuant to Federal Rule of Civil Procedure 4(f)(3). The district court then rejected GCC’s challenges to personal jurisdiction, holding (among other things) that: (1) it was appropriate to aggregate GCC’s contacts with the United States; (2) CIMSA’s injury arose out of GCC’s contacts; (3) exercising jurisdiction was consistent with fair play and substantial justice; and (4) alternative service was proper. The district court rejected GCC's defenses to CIMSA's claim under the New York Convention. Before the Tenth Circuit Court of Appeals, the Court affirmed the district court: the district court properly determined that CIMSA’s injury arose out of or related to GCC’s nationwide contacts. "The district court correctly decided that exercising personal jurisdiction over GCC comported with fair play and substantial justice because CIMSA established minimum contacts and GCC did not make a compelling case to the contrary." The Court also affirmed the district court's confirmation of the arbitration tribunal's decisions. View "Compania De Inversiones v. Grupo Cementos de Chihuahua" on Justia Law

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Saw worked for Avago’s Malaysian subsidiary and could acquire ordinary shares and stock options of Avago stock under a management shareholders' agreement governed by the laws of Singapore. The agreement allowed Avago to repurchase shares and options at fair market value should an employee be terminated “for any reason whatsoever” within five years from the date of purchase. After Saw’s position was eliminated in 2009, Avago repurchased his equitable interest. Saw sued Avago’s subsidiary for wrongful termination and obtained a favorable judgment in Malaysia. Saw separately sued Avago in San Mateo County, asserting that Avago breached the shareholders' agreement by relying on an unlawful termination to repurchase his shares.The court of appeal affirmed summary judgment in favor of Avago. Saw is not entitled to any relief under Singapore law. The shareholders' agreement's choice of law provision requires the application of the substantive law of Singapore. Whether his termination was lawful or unlawful under Malaysian law has no bearing on Avago’s contractual right to repurchase shares acquired by a former employee. Saw’s breach of contract claim fails as a matter of law under the express terms of the shareholders' agreement. Saw has no viable cause of action under an implied duty of good faith. View "Saw v. Avago Technologies, Ltd." on Justia Law

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After DSCI filed suit against the Kingdom of Saudi Arabia, the Kingdom removed the case to federal district court and filed a motion to dismiss the complaint on the grounds of forum non conveniens, pointing to the forum-selection clause in the parties' contract. In this case, the contract provided that the Board of Grievances, a Saudi Arabian administrative court, shall be the assigned settlement of any disputes arising out of the contract. The DC Circuit affirmed the district court's grant of the Kingdom's motion, holding that the contract's forum-selection clause is mandatory and the dispute thus belonged before the Board of Grievances. View "D&S Consulting, Inc. v. Kingdom of Saudi Arabia" on Justia Law

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Plaintiff-appellant Germaninvestments Aktiengesellschaft (AG) (“Germaninvestments”) was a Swiss holding company formed to manage assets for the Herrling family. Defendant Allomet Corporation (“Allomet”) was a Delaware corporation that manufactured high-performance, tough-coated metal powders using a proprietary technology for coating industrial products. Defendant Yanchep LLC (“Yanchep”), was also a Delaware limited liability company with Mirta Hereth as its sole member (together, Allomet and Yanchep are referred to as “Appellees”). Allomet struggled with declining performance as early as 2002. In mid-2016, Tanja Hausfelder, an insurance professional who apparently knew or worked with the Herrlings and Hereth, advised Herrling that Hereth was looking for a joint venture partner to join Allomet. After a meeting in Switzerland, Herrling and Hereth discussed a general structure for their joint venture to raise capital for Allomet. The issue this case presented for the Delaware Supreme Court’s review centered on whether the Court of Chancery correctly determined that a provision in a Restructuring and Loan Agreement between the parties was a mandatory, as opposed to a permissive, forum selection clause. The Court of Chancery held that Austrian law governed the analysis of the forum selection provision, and determined that the provision is governed by Article 25 of the European Regulation on Jurisdiction and Recognition and Enforcement of Judgments in Civil and Commercial Matters. Based upon these conclusions, the court granted Defendants’ motion to dismiss in favor of the Austrian forum. The Delaware Supreme Court held that Appellees, who raised Austrian law as a basis for their motion to dismiss, had the burden of establishing the substance of Austrian law, and that the Court of Chancery erred in determining that Appellees had carried that burden. Accordingly, the forum selection provision analysis should have proceeded exclusively under Delaware law. Applying Delaware law, the Delaware Court determined the forum selection provision was permissive, not mandatory. “As such, the forum selection provision is no bar to the litigation proceeding in Delaware.” The Court affirmed the Court of Chancery’s holding that 8 Del. C. section 168 was not the proper mechanism for the relief Appellants sought. Therefore, this matter was affirmed in part, reversed in part, and remanded to the Court of Chancery for further proceedings. View "Germaninvestments AG v. Allomet Corporation" on Justia Law

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Plaintiff, a Singaporean shipping company, entered into shipping contracts with an Indian mining company. The Indian company breached those contracts. Plaintiff believes that American businesses that were the largest stockholders in the Indian company engaged in racketeering activity to divest the Indian company of assets to thwart its attempts to recover damages for the breach. Plaintiff filed suit under the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1964(c). While the case was pending, the Supreme Court decided RJR Nabisco v. European Community, holding that “[a] private RICO plaintiff … must allege and prove a domestic injury to its business or property.” The district court granted the American defendants judgment on the RICO claims. The Seventh Circuit affirmed. Plaintiff’s claimed injury—harm to its ability to collect on its judgment and other claims—was economic; economic injuries are felt at a corporation’s principal place of business, and Plaintiff’s principal place of business is in Singapore. The court noted that the district court allowed a maritime fraudulent transfer claim to go forward. View "Armada (Singapore) PTE Ltd. v. Amcol International Corp." on Justia Law

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Kung Da Chang entered into a credit facility arrangement with Shanghai Commercial Bank (SCB) between March and April 2008 by executing five agreements. Together, these five agreements enabled Chang and his father, Clark Chang, to borrow large sums from SCB, and those sums make up the underlying debt obligation at issue in this lawsuit. These five documents defined Chang and SCB's agreement and governed their obligations. The parties' agreement explicitly included a choice of law provision selecting Hong Kong law as the governing law. SCB delivered the agreement papers for Chang's signature to an address in Shanghai that was actually Clark's residence. Clark sent the documents to his son in Seattle. Chang signed the documents, returned them to his father in Shanghai, and Clark forwarded them to SCB in Hong Kong. There was no indication that SCB knew that it was dealing with a person residing in Seattle. Chang ultimately defaulted on the debt obligation, and the parties litigated the matter in Hong Kong. SCB prevailed and secured a $9 million judgment. The Hong Kong judgment encompassed what Washington State considered Chang and his wife's marital community; Hong Kong law exempted solely separate property of a spouse, not community property, from judgments entered against one spouse. The issue this case presented for the Washington Supreme Court's review was whether the Hong Kong judgment as enforceable against marital community property in Washington State. Specifically, the issue was whether the choice-of-law provision in the contracts along with application of the "most significant relationship" test for determining conflict of law issues, and ultimately, whether Hong Kong law should be applied to reach the community assets in Washington to satisfy the valid and enforceable foreign judgment. The Washington Supreme Court determined that under the facts of this case, the debtor's community property could be reached to satisfy the Hong Kong judgment. View "Shanghai Commercial Bank, Ltd. v. Kung Da Chang" on Justia Law

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Plaintiffs, citizens of the United States and Haiti, filed suit against the UN, asserting various causes of action sounding in tort and contract, seeking to hold defendants responsible for injuries directly resulting from the cholera epidemic in the Republic of Haiti in 2010. Principally at issue on appeal is whether the UN’s fulfillment of its obligation under Section 29 of the Convention on the Privileges and Immunities of the United Nations (CPIUN), Apr. 29, 1970, 21 U.S.T. 1418, to “make provisions for appropriate modes of settlement of . . . disputes arising out of contracts or other disputes of a private law character to which the [UN] is a party,” as well as “disputes involving any official of the [UN] who by reason of his official position enjoys immunity, if immunity has not been waived by the Secretary‐General,” is a condition precedent to its immunity under Section 2 of the CPIUN, which provides that the UN “shall enjoy immunity from every form of legal process except insofar as in any particular case it has expressly waived its immunity.” The court held that the UN’s fulfillment of its Section 29 obligation is not a condition precedent to its Section 2 immunity. Accordingly, the court affirmed the district court's dismissal against named defendants for lack of subject matter jurisdiction. View "Georges v. United Nations" on Justia Law

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GSS appealed the district court’s dismissal of its second attempt to confirm a $44 million arbitral award entered against the Port Authority for breach of a construction contract. GSS first tried to confirm the award, but the district court found that it had no personal jurisdiction over the Port Authority. Then GSS filed its second petition, also naming the Republic of Liberia, which owns the Port Authority, as respondents. The district court again dismissed GSS’s petition, finding that issue preclusion barred relitigating its personal jurisdiction over the Port Authority and that GSS failed to demonstrate that Liberia was liable for the Port Authority’s alleged breach. The court affirmed the district court's dismissal of the claims against Liberia for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1330 et seq.; affirmed the district court's dismissal of GSS's petition against the Port Authority on sovereign immunities grounds; and concluded that the district court did not abuse its discretion by dismissing GSS's petition before allowing jurisdictional discovery. View "GSS Group Ltd. v. Republic of Liberia" on Justia Law

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Plaintiff Archangel Diamond Corporation Liquidating Trust, as successor-in-interest to Archangel Diamond Corporation (collectively, “Archangel”), appealed dismissal of its civil case against defendant OAO Lukoil (“Lukoil”), in which it alleged claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), breach of contract, and commercial tort law. The district court dismissed the case for lack of personal jurisdiction over Lukoil and under the doctrine of forum non conveniens. Archangel Diamond Corporation was a Canadian company and bankrupt. The liquidating trust was located in Colorado. In 1993, Archangel entered into an agreement with State Enterprise Arkhangelgeology (“AGE”), a Russian state corporation, regarding a potential license to explore and develop diamond mining operations in the Archangelsk region of Russia. Archangel and AGE agreed that Archangel would provide additional funds and that the license would be transferred to their joint venture company. However, the license was never transferred and remained with AGE. In 1995, AGE was privatized and became Arkhangelskgeoldobycha (“AGD”), and the license was transferred to AGD. Diamonds worth an estimated $5 billion were discovered within the license region. In 1998, Lukoil acquired a controlling stake in AGD, eventually making AGD a wholly owned subsidiary of Lukoil. Pursuant to an agreement, arbitration took place in Stockholm, Sweden, to resolve the license transfer issue. When AGD failed to honor the agreement, Archangel reactivated the Stockholm arbitration, but the arbitrators this time concluded that they lacked jurisdiction to arbitrate the dispute even as to AGD. Archangel then sued AGD and Lukoil in Colorado state court. AGD and Lukoil removed the case to Colorado federal district court. The district court remanded the case, concluding that it lacked subject-matter jurisdiction because all of the claims were state law claims. The state trial court then dismissed the case against both AGD and Lukoil based on lack of personal jurisdiction and forum non conveniens. The Colorado Supreme Court affirmed the dismissal as to AGD, reversed as to Lukoil, and remanded (leaving Lukoil as the sole defendant). On remand, the Colorado Court of Appeals reversed the trial court’s previous dismissal on forum non conveniens grounds, which it had not addressed before, and remanded to the trial court for further proceedings. The trial court granted Lukoil and AGD's motion to hold an evidentiary hearing, and the parties engaged in jurisdictional discovery. In 2008 and early 2009, the case was informally stayed while the parties discussed settlement and conducted discovery. By June 2009, Archangel had fallen into bankruptcy due to the expense of the litigation. On Lukoil’s motion and over the objection of Archangel, the district court referred the matter to the bankruptcy court, concluding that the matter was related to Archangel’s bankruptcy proceedings. Lukoil then moved the bankruptcy court to abstain from hearing the matter, and the bankruptcy court concluded that it should abstain. The bankruptcy court remanded the case to the Colorado state trial court. The state trial court again dismissed the action. While these state-court appeals were still pending, Archangel filed this case before the Tenth Circuit Court of Appeals, maintaining that Lukoil had a wide variety of jurisdictional contacts with Colorado and the United States as a whole. Finding no reversible error in the district court's ruling dismissing the case on forum non conveniens grounds, the Tenth Circuit affirmed. View "Archangel Diamond v. OAO Lukoil" on Justia Law

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VLM, a Montreal-based supplier, sold frozen potatoes to IT in Illinois. After nine successful transactions, IT encountered financial difficulty and failed to pay for the next nine shipments. Invoices sent after delivery included a provision purporting to make IT liable for collection-related attorney’s fees if it breached the contracts. VLM sued; the deadline for an answer passed. The court entered a default. On defendants' motion, the court vacated the default as to IT’s president only. All three defendants then filed answers, contesting liability for attorney’s fees. The judge applied the Illinois Uniform Commercial Code and found that the fee provision had been incorporated into the contract. The Seventh Circuit reversed, holding that the U.N. Convention on Contracts for the International Sale of Goods applied. On remand, the judge applied the Convention and held that the fee provision was not part of the contracts and that IT could benefit from this ruling, despite the prior entry of default. The Seventh Circuit affirmed. IT never expressly assented to the attorney’s fees provision in VLM’s trailing invoices, so under the Convention that term did not become a part of the contracts. VLM waived its right to rely on the default by failing to raise the issue until its reply brief on remand. View "VLM Food Trading Int'l, Inc. v. Ill. Trading Co." on Justia Law