Creighton Limited v. Gov't of the State of Qatar

• Decision Date: 02 July 1999
• Docket Number: No. 98-7063,98-7063
• Citation: 1999 WL 446009,181 F.3d 118
• Parties: (D.C. Cir. 1999) Creighton Limited, Appellant v. Government of the State of Qatar, Appellee
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 118

181 F.3d 118 (D.C. Cir. 1999)

Creighton Limited, Appellant v. Government of the State of Qatar, Appellee

No. 98-7063

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 7, 1998

Decided July 2, 1999

[Copyrighted Material Omitted] Appeal from the United States District Court for the District of Columbia, (No. 97cv00191)

Joseph P. Hornyak argued the cause and filed the briefs for appellant.

Eugene D. Gulland argued the cause and filed the brief for appellee.

Before: Ginsburg, Henderson, and Rogers, Circuit Judges.

Opinion for the court filed by Circuit Judge Ginsburg.

Ginsburg, Circuit Judge:

Creighton Limited, a Cayman Islands corporation with offices in Tennessee, contracted with the Government of the State of Qatar to build a hospital in Doha, the Qatari capital. Following a dispute over its performance, Creighton obtained an arbitral award against Qatar from the International Chamber of Commerce in Paris. Creighton now seeks to enforce the award in the United States District Court for the District of Columbia. Qatar claims the court lacks subject matter jurisdiction over the action pursuant to the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1330, 1602-1611, and lacks personal jurisdiction over Qatar pursuant to the Due Process Clause of the Fifth Amendment to the Constitution of the United States. We hold that the district court has subject matter jurisdiction but affirm its dismissal of Creighton's suit for lack of personal jurisdiction.

I. Background

In the late 1970s the Government of Qatar decided to build a new hospital in Doha. Creighton obtained the necessary Qatari sponsor, submitted the low bid, and in 1982 contracted with Qatar to build the hospital. The contract required Creighton to obtain a performance bond from a Qatari issuer and to maintain an office in Qatar, to which notices under the contract would be sent. Qatar was to pay Creighton in Qatar, and in fact all payments were made there in Qatari riyals. The contract provided that it was to be performed and interpreted under Qatari law and that all disputes were to "be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce."

In 1986 Qatar expelled Creighton from the construction site for unsatisfactory performance. Creighton contested its expulsion by commencing arbitration before the ICC in 1987.Because the contract did not specify a place for arbitration, the ICC decided to conduct the arbitration in Paris. Qatar willingly participated in the arbitration, which resulted in an order for Qatar to pay Creighton damages, interest, and attorney's fees totaling over $8 million. Qatar then filed a court action in France to set aside the award as invalid under French law, which the Supreme Court of France ultimately rejected. Nonetheless, Creighton has been unable to enforce the award in France. It attempted to attach Qatari assets located there but the Superior Court of Paris held the particular assets in question were immune from attachment under French law. Creighton's appeal of that decision is now pending before the Supreme Court of France.

Meanwhile, Creighton filed this action seeking enforcement of the award in the United States District Court for the District of Columbia; Qatar moved to dismiss on a number of grounds. The district court granted the motion on the ground that it lacks personal jurisdiction over Qatar because Qatar does not have sufficient contact with the United States to make it amenable to suit here consistent with the due process requirement of the fifth amendment.

II. Analysis

Qatar claims the district court lacks both subject matter jurisdiction over this action, pursuant to the Foreign Sovereign Immunities Act, and personal jurisdiction over Qatar, pursuant to the due process clause. Under the FSIA, the district court has subject matter jurisdiction of a civil action against a foreign state only if "the foreign state is not entitled to immunity either under [the immunity provisions of the FSIA itself, 28 U.S.C. §§ 1605-1607] or under any applicable international agreement." 28 U.S.C. § 1330(a).

Creighton claims that by agreeing to arbitrate in France Qatar impliedly waived both its sovereign immunity, thereby conferring subject matter jurisdiction upon the court, see id. § 1605(a)(1) & (6), and its due process objection, thereby conferring personal jurisdiction upon the court. Alternatively, Creighton claims that Qatar's agreement to arbitrate in France confers subject matter jurisdiction, see id. § 1605(a)(6), and its contacts with the United States are sufficient to satisfy the constitutional requirements of personal jurisdiction. Although we hold below (in Part II.A.2.b) that the court has subject matter jurisdiction pursuant to § 1605(a)(6), we find it necessary also to discuss § 1605(a)(1) because one of Creighton's due process arguments (see Part II.B.1) presupposes that Qatar, by agreeing to arbitrate in France, waived its immunity pursuant to § 1605(a)(1). We cannot resolve that due process argument without addressing the claim about § 1605(a)(1) upon which it is predicated.

A. Subject Matter Jurisdiction

There are two prerequisites to the district court having subject matter jurisdiction over this case. First, there must be a basis upon which a court in the United States may enforce a foreign arbitral award; and second, Qatar must not enjoy sovereign immunity from such an enforcement action.We discuss each requirement separately.

1.The New York Convention

Both France and the United States, but not Qatar, are parties to the so-called New York Convention, a multilateral treaty providing for "the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought." Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, art. I.1, 21 U.S.T. 2517, reprinted in 9 U.S.C.A. § 201 (historical and statutory note). The U.S. legislation implementing the Convention declares that

[a]n action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States ... shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.

9 U.S.C. § 203.

That the New York Convention applies to the arbitral award Creighton obtained against Qatar in France, and that the award is therefore enforceable in United States courts, is undisputed. See Restatement (Third) of Foreign Relations Law § 487 comment b (1987) ("the critical element is the place of the award: if that place is in the territory of a party to the Convention, all other Convention states are required to recognize and enforce the award, regardless of the citizenship or domicile of the parties to the arbitration"). If Qatar were a private party, then there could be no doubt about the subject matter jurisdiction of the district court; because it is a foreign state, however, we must consider the effect of the FSIA upon the court's power to hear this case.

2.Sovereign Immunity

The FSIA is "the sole basis for obtaining jurisdiction over a foreign state in our courts." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989). A foreign state is "presumptively immune from the jurisdiction of United States courts," Saudi Arabia v. Nelson, 507 U.S. 349 355 (1993), that is, the state is immune unless the particular lawsuit comes within an exception in the FSIA. See 28 U.S.C. § 1604. Creighton claims that the exceptions for an implied waiver and for arbitration, see id. § 1605(a)(1), (6), apply to this case.

a. Implied Waiver The former exception provides:

(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case --

(1) in which the foreign state has waived its immunity ... by implication.

Id. § 1605(a)(1). Creighton claims that Qatar, by agreeing to arbitrate in France, implicitly waived its sovereign immunity in the United States for, by virtue of the New York Convention, Qatar was "on notice" that an arbitral award rendered in France would be enforceable in this country. Qatar responds that "the FSIA and decisions applying it make clear that a sovereign's agreement to arbitrate in a New York Convention state is not a waiver of immunity to suit in the U.S. unless the foreign sovereign is also party to the New York Convention."

The FSIA does not define an implied waiver. We have, however, followed the "virtually unanimous" precedents construing the implied waiver provision narrowly. Shapiro v. Republic of Bolivia, 930 F.2d 1013, 1017 (2d Cir. 1991). In particular, we have held that implicit in § 1605(a)(1) is the requirement that the foreign state have intended to waive its sovereign immunity. See Princz v. Federal Republic of Germany, 26 F.3d 1166, 1174 (1994) ("[A]n implied waiver depends upon the foreign government's having at some point indicated its amenability to suit"); Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 444 (D.C. Cir. 1990) ("courts rarely find that a nation has waived its sovereign immunity ... without strong evidence that this is what the foreign state intended").

The closest Creighton comes to arguing that Qatar intended to waive its sovereign immunity is in pointing to this statement in the House Report accompanying the FSIA: "the courts have found [implicit] waivers in cases where a foreign state has agreed to arbitration in another country." H.R. Rep. No. 94-1487, at 18 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6617. Creighton claims Qatar's agreement to arbitrate in France should be deemed an implicit waiver of its sovereign immunity in U.S. courts. Cf. id. (explaining courts have also found such waivers "where a foreign state has agreed...