Chowdhury v. Veon Ltd.
| Decision Date | 30 March 2022 |
| Docket Number | 21 Civ. 3527 (JPC) (RWL) |
| Parties | NAYEEM A. CHOWDHURY, Plaintiff, v. VEON LTD. and BANGLADESH TELECOMMUNICATION REGULATORY COMMISSION, Defendants. |
| Court | U.S. District Court — Southern District of New York |
This case involves a dispute arising from a March 8, 2021 auction of a spectrum bandwidth license in Bangladesh. Nayeem Chowdhury claims to be an investor in a Bangladeshi telecommunications company called WorldTel Bangladesh Limited (“WorldTel”). He brings this suit against the telecommunications regulator of the Bangladeshi government the Bangladesh Telecommunication Regulatory Commission (“BTRC”), and another telecommunications company VEON Ltd. In essence, Chowdhury alleges that BTRC illegally auctioned broadband spectrum, which was in fact licensed to WorldTel, to VEON's Bangladeshi subsidiary, with VEON knowing of WorldTel's pre-existing license. He further accuses VEON of misleading its investors in connection with this auction. Both Defendants move to dismiss. Because BTRC has sovereign immunity from suit, and Chowdhury lacks standing to sue VEON, the motions are granted.
Chowdhury, a resident of New York City, along with others, invested in WorldTel “to build and construct a wireless telecom infrastructure in Bangladesh.” Complaint ¶¶ 1, 5;[2] see Opposition, Exh. 3 at 3 (WorldTel brochure explaining that the company was incorporated in 2000 to operate a “fixed line wireless network” in Dhaka, Bangladesh). WorldTel has “licenses to operate” in Bangladesh “with 7.4 MHz spectrum bandwidth in the 1800 MHz Band.” Complaint ¶ 5. WorldTel “received its license . . . in 2001 through international competitive bidding” pursuant to a License Agreement. Id. ¶ 8. Chowdhury describes this License Agreement as “25 years and renewable.” Id. ¶ 5. The market value of the 7.4 MHz bandwidth is $230 million. Id. The License Agreement contains an arbitration clause, “which makes compulsory for the parties to resolve any dispute by the process of informal dispute resolution or arbitration.” Id. ¶ 7. After entering into the License Agreement in 2001, WorldTel commenced business with Chowdhury and others investing more than $250 million in WorldTel's Bangladeshi telecommunications project. Id. ¶¶ 8-9.
BTRC is “a telecommunication [r]egulator and [c]omission of [the] [g]overnment of Bangladesh, under the Ministry of Post and Telecommunication.” Id. ¶ 4. Chowdhury alleges that BTRC “thwarted and sabotaged” WorldTel, id. ¶ 8, and that “[a] similar malaise is seen in the environment against other smaller competitors, ” id. ¶ 9. Three larger competitors, including VEON's Bangladeshi subsidiary, Bangalink, “have more than 90% market share.” Id. ¶¶ 3, 9. VEON is headquartered in the Netherlands, and its stock is traded on the NASDAQ exchange. Id. ¶¶ 2-3.
On March 8, 2021, BTRC held a spectrum auction, at which the agency auctioned the rights to the 1800 MHz spectrum band-the same band for which Chowdhury contends WorldTel obtained a 25-year license in 2001. Id. ¶ 6. Participants in the auction included Banglalink and other unidentified multinational companies. Id. ¶¶ 6, 15-16. Four days prior to the auction, on March 4, 2021, WorldTel sent a “Demand of Justice Notice and Notice of Arbitration” to BTRC, VEON, and the two other multinational companies. Id. ¶¶ 14-15. While the Complaint does not explain the nature or content of the notice, Chowdhury asserts that VEON and the others were “duly informed . . . of the legal dispute” regarding the bandwidth. Id. ¶ 10. Four legal notices regarding the issue have been sent to BTRC since 2017. Id. ¶ 13. The auction went forward, with Bangalink bidding on the subject bandwidth (and presumably prevailing in the auction). Id. ¶ 10. Chowdhury further alleges that “in spite [of] having knowledge of questionable and incomplete” auction procedures, “VEON continues to provide misinformation to its investors . . . with a malafide intent to increase its share prices.” Id. ¶ 18.
Chowdhury filed suit against BTRC and VEON in New York Supreme Court, New York County, on March 19, 2021. Id. at 1. On the face of the Complaint, Chowdhury alleges that Defendants committed breach of contract, in connection with the March 8, 2021 auction. Id. ¶ 19. As noted below, the Court also liberally construes Chowdhury as alleging fraud against both Defendants in connection with the auction. See Id. ¶ 16 (). He further alleges that VEON's provision of providing misinformation to its investors “amounts to . . . Federal Securities Exchange Commission violations.” Id. ¶ 18. In all, Plaintiff demands judgment against Defendants, jointly and severally, for at least $2.39 billion. Id. ¶ 20.
VEON removed the case to federal court on April 21, 2021. Dkt. 1. Soon after, on May 19, 2021, VEON moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b), raising several grounds for dismissal. Dkts. 24, 26 (“VEON Motion”). Chowdhury filed his opposition to VEON's motion on July 19, 2021, and VEON filed a reply brief on August 9, 2021, Dkt. 35. On August 31, 2021, BTRC also moved to dismiss. Dkts. 44, 45 (“BTRC Motion”). The Court ordered Chowdhury to oppose the BTRC Motion by October 1, 2021, Dkt. 42, and BTRC served a notice on Chowdhury explaining that the failure to oppose could lead to the case's dismissal. Dkt. 46. Chowdhury, however, has neither opposed the BTRC Motion nor sought an extension to do so.
Defendants attack Chowdhury's Complaint on numerous threshold, non-merits grounds. Federal courts have “leeway to choose among threshold grounds for denying audience to a case on the merits.” Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 431 (2007) (quotations omitted). The arguments the Court considers dispositive-related to subject-matter jurisdiction and standing-all lie under Federal Rule of Civil Procedure 12(b)(1). See All. for Envtl. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 88 n. 6 (2d Cir. 2006). “When presented with a facial Rule 12(b)(1) motion to dismiss, i.e., one that is based solely on the allegations in the complaint, ” the Court “accepts as true all material factual allegations of the complaint[] and draws all reasonable inferences in the plaintiff's favor.” Colpitts v. Blue Diamond Growers, 527 F.Supp.3d 562, 574 (S.D.N.Y. 2021). The Court must still decide an unopposed motion to dismiss on its merits. See McCall v. Pataki, 232 F.3d 321, 322-23 (2d Cir. 2000).
The Court liberally construes the pro se Complaint as alleging, first, breach of contract and fraud claims against both BTRC and VEON, and second, a securities fraud claim against VEON. Sovereign immunity precludes this Court's exercise of jurisdiction over Chowdhury's claims against BRTC. And the Court also lacks jurisdiction over Chowdhury's claims against VEON on account of his lack of standing to bring those claims.
“The Foreign Sovereign Immunities Act [(“FSIA”)] ‘provides the sole basis for obtaining jurisdiction over a foreign state'” in American courts. Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993) (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443 (1989)). The FSIA provides that, subject to international agreements to which the United States was a party at the time of the statute's enactment, “a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter.” 28 U.S.C. § 1604; see Id. § 1605 (); id. § 1607 (). The statute defines a “foreign state” to include “an agency or instrumentality of a foreign state.” Id. § 1603(a). “Under the FSIA, in the context of a Rule 12(b)(1) motion based on factual insufficiency, a court may look beyond the pleadings, to the evidence properly before it, and assess the substance of the allegations” in light of the “particular significance” of sovereign immunity. Mortimer Off Shore Servs., Ltd. v. Federal Republic of Germany, 615 F.3d 97, 105 (2d Cir. 2010).
“A defendant seeking sovereign immunity bears the burden of establishing a prima facie case that it is a foreign sovereign.” Pablo Star Ltd. v. Welsh Gov't, 961 F.3d 555, 559-60 (2d Cir. 2020). Here, Chowdhury has alleged as much. In the Complaint, Chowdhury pleads that BTRC is a regulator and commission of the Bangladeshi government. Complaint ¶ 4; see also Opposition at 8 (). This status is confirmed by evidence presented by BTRC. BRTC Motion, Exh. A ¶ 5 (Director (Legal) of BTRC declaring that “BTRC is an independent commission formed by the Parliament of Bangladesh”). As such, BTRC is an “agency or instrumentality of a foreign state” for purposes of the FSIA, and thus a “foreign state” subject to the FSIA's requirements. 28 U.S.C. § 1603(a)-(b); see also Peninsula Asset Mgmt. (Cayman) Ltd. v. Hankook Tire Co., 476 F.3d 140, 143 (2d Cir. 2007).
Under the FSIA, “unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state.” Nelson, 507 U.S. at 355; see also 28 U.S.C. § 1605 (). Once a defendant shows that it is a foreign state, “the burden shifts to the plaintiff to make an initial showing that an enumerated exception...
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