Azima v. Rak Inv. Auth.

Decision Date18 June 2019
Docket NumberNo. 18-7055,18-7055
Citation926 F.3d 870
Parties Farhad AZIMA, Appellee v. RAK INVESTMENT AUTHORITY, Appellant
CourtU.S. Court of Appeals — District of Columbia Circuit

Linda C. Goldstein argued the cause for appellant. With her on the briefs were Michael H. McGinley and D. Brett Kohlhofer.

Laura G. Ferguson argued the cause for appellee. With her on the brief were Kirby D. Behre, Charles F.B. McAleer, Jr., and Ian A. Herbert.

Before: Griffith and Millett, Circuit Judges, and Edwards, Senior Circuit Judge.

Griffith, Circuit Judge:

Farhad Azima and the Ras Al Khaimah Investment Authority (RAKIA) were once business partners. But disagreements arose. As part of a broad settlement of their grievances with one another, they agreed to litigate all future, related claims in England. RAKIA argues that this litigation is covered by that agreement and should be dismissed so that it can instead proceed in England. We agree and reverse the district court’s decision to the contrary.


Farhad Azima is an international businessman who resides in Missouri.1 RAKIA is the investment and wealth fund of one of the United Arab Emirates, Ras Al Khaimah (RAK). RAK "is the sole owner of [RAKIA]," J.A. 528, and Sheikh Saud bin Saqr al Qasimi is the current ruler of RAK. Over the years, Azima and RAKIA have entered into various business deals, three of which are relevant here. In 2007, RAKIA and HeavyLift International Airlines, one of Azima’s companies, created a joint venture to build and operate a flight training academy. In 2011, RAKIA paid another of Azima’s companies to identify a prospective buyer for a hotel that RAKIA owned. And from mid-2015 to July 2016, Azima helped negotiate the resolution of a dispute between RAKIA and its former Chief Executive Officer, Khater Massaad.

With regard to the Massaad negotiation, by the fall of 2015, Azima had met several times with representatives of RAKIA and RAK to discuss a settlement. Negotiations appeared to be progressing, but on October 14, 2015, Sheikh Saud emailed Massaad to express his "disappointment" over information his law firm had uncovered about Massaad’s actions. J.A. 419 ¶ 25. Despite this, the parties continued to work towards a settlement for several more months.

The Massaad negotiation was still underway in March 2016 when RAKIA agreed to settle Azima’s claim that RAKIA owed HeavyLift money for investments the company had made pursuant to their joint venture (the "Settlement Agreement"). The Agreement is brief. It lists the parties, provides that RAKIA will pay HeavyLift to resolve all claims it or Azima has against RAKIA or any other entity owned by RAK, states that the parties agree to act in good faith towards one another, and imposes conditions of confidentiality and non-disparagement. Most important for present purposes are the six "Whereas" (preamble) clauses, J.A. 603, and the final section, titled "Governing law and jurisdiction," J.A. 605. The whereas clauses summarize the respective roles of RAKIA and HeavyLift in the joint venture, the basis of HeavyLift’s claim against RAKIA, and other relevant background considerations. The section of the Agreement titled "Governing law and jurisdiction" provides:

This Settlement Agreement and any dispute or claim arising out of, or in connection with, it or its subject matter or formation (including, without limitation, any contractual or non-contractual disputes, claims or obligations) is governed by and shall be construed in accordance with English law and the Parties submit to the exclusive jurisdiction of the courts of England and Wales.

J.A. 605-06. We refer to this provision as the "forum-selection clause."

Four months after executing the Settlement Agreement, the parties reached a tentative resolution in the Massaad negotiation. But when that deal later fell apart, RAKIA and its attorneys blamed Azima and threatened that he would become " ‘collateral damage’ in the war RAKIA intended to wage against" Massaad. J.A. 421-22 ¶ 35.

Shortly after RAKIA’s threat, files from Azima’s computers began to appear online, including documents, messages, contacts, and photos. Unbeknownst to Azima, on October 14, 2015—the same day Sheikh Saud expressed disappointment over Massaad’s actions—Azima’s U.S.-based business and personal computers were hacked and infected with software that monitored their use. When Azima realized that his computers had been compromised, he changed his passwords, increased his security protocols, and hired experts to assess the damage. Eventually, he replaced the infected computers.

The hack triggered two lawsuits. First, RAKIA sued Azima in England, claiming that some of the documents made public after the hack show that Azima committed fraud against RAKIA during the hotel deal and breached the Settlement Agreement’s warranty of good faith (the "English Action"). That Action is still ongoing. As part of his defense, Azima has argued that RAKIA should not be allowed to rely on stolen documents to support its claims. Separately, Azima filed this suit alleging that, by hacking his computers, RAKIA violated the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and committed the common-law torts of conversion and unfair competition.

RAKIA moved to dismiss this suit on two grounds. First, as an entity of a foreign government, it claimed immunity under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1602 - 11. Next, RAKIA asserted that because the forum-selection clause in the Settlement Agreement requires Azima to litigate his claims in England, the court must dismiss the case for forum non conveniens , a common-law doctrine that requires dismissal if the plaintiff files suit in "an unsuitable court." Forum non conveniens , BLACK’S LAW DICTIONARY (10th ed. 2014). The district court denied RAKIA’s motion on both grounds, reasoning that the FSIA’s commercial activities exception stripped RAKIA of its immunity, the forum-selection clause did not apply, and dismissal for forum non conveniens was not otherwise warranted. Azima v. RAK Inv. Auth. , 305 F. Supp. 3d 149, 161-76 (D.D.C. 2018). RAKIA timely appealed.


Although our jurisdiction over "final decisions of the district courts" typically does not include the denial of a motion to dismiss, United States v. Rose , 28 F.3d 181, 185 (D.C. Cir. 1994) (quoting 28 U.S.C. § 1291 ), the collateral order doctrine allows us to review "[t]he denial of a motion to dismiss on the ground of sovereign immunity," Kilburn v. Socialist People’s Libyan Arab Jamahiriya , 376 F.3d 1123, 1126 (D.C. Cir. 2004). And because the denial of RAKIA’s forum non conveniens motion is pendent to the FSIA claim, we have jurisdiction to review that order as well. Although we exercise pendent jurisdiction sparingly, and "only when substantial considerations of fairness or efficiency demand it," Gilda Marx, Inc. v. Wildwood Exercise, Inc. , 85 F.3d 675, 679 (D.C. Cir. 1996) (per curiam), RAKIA’s forum non conveniens argument satisfies these requirements. Exercising pendent jurisdiction over a threshold issue in an FSIA case is appropriate where "pendent review will likely terminate the entire case, sparing both this court and the district court from further proceedings and giving the parties a speedy resolution." Id. ; see Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp. , 549 U.S. 422, 433, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007) (explaining that forum non conveniens is a "threshold, nonmerits issue"); see also Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan , 115 F.3d 1020, 1026-27 (D.C. Cir. 1997) (exercising pendent jurisdiction to consider a personal jurisdiction issue in an FSIA case that could dispose of the case); Rendall-Speranza v. Nassim , 107 F.3d 913, 917 (D.C. Cir. 1997) (same, for statute of limitations).


Because "[t]here is a ‘substantial presumption’ in favor of a plaintiff’s chosen forum," lawsuits usually proceed where they are filed. MBI Grp., Inc. v. Credit Foncier Du Cameroun , 616 F.3d 568, 571 (D.C. Cir. 2010) (quoting Agudas Chasidei Chabad of U.S. v. Russian Fed’n , 528 F.3d 934, 950 (D.C. Cir. 2008) ). But if the plaintiff has entered into a contract to litigate his claims in a specific forum, the defendant may enforce that agreement by moving to dismiss for forum non conveniens . As long as the forum-selection clause is applicable, mandatory, valid, and enforceable, the court must almost always grant the motion to dismiss. See Atl. Marine Constr. Co. v. U.S. Dist. Court for W.D. Tex. , 571 U.S. 49, 62 n.5, 63-65, 134 S.Ct. 568, 187 L.Ed.2d 487 (2013). The reason is simple: when a plaintiff has agreed in advance to litigate future claims in a specific venue, we will enforce—and give deference to—that contractual choice.

A clause is applicable if its scope encompasses the dispute, which we assess using normal principles of contract interpretation. It is mandatory if it requires that litigation proceed in a specific forum. By contrast, "a permissive clause permits litigation to occur in a specified forum but does not bar litigation elsewhere." BAE Sys. Tech. Sol. & Servs., Inc. v. Republic of Korea’s Def. Acquisition Program Admin. , 884 F.3d 463, 470 (4th Cir. 2018). We presume that a mandatory forum-selection clause is legally valid and enforceable absent a "strong showing" that (1) "the clause was invalid for such reasons as fraud or overreaching"; (2) "enforcement would be unreasonable and unjust"; (3) "enforcement would contravene a strong public policy of the forum in which [the plaintiff filed suit], whether declared by statute or judicial decision"; or (4) "trial in the contractual forum would be so gravely difficult and inconvenient that [the plaintiff] will for all practical purposes be deprived of his day in court." M/S Bremen v. Zapata Off–Shore Co. , 407 U.S. 1, 15, 18, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972).

If the forum-selection clause does not meet these criteria, we use the typical forum non conveniens analysis, and the...

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