Funnekotter v. Agric. Dev. Bank of Zimbabwe, Minerals Mktg. Corp.

• Decision Date: 03 June 2013
• Docket Number: Case No. 13 Civ. 1917 (CM)
• Parties: BERNARDUS HENRICUS FUNNEKOTTER, HERMANNES VAN DUREN, JR., MARGARETA VAN DUREN, DICKEY ROELANDA BREYTENBACH, ROMELIA GWENDOLYN FISHER, MAX WILLEM ARTHUR GRAAF VAN RECHTEREN L IMPURG, ROLF JAN PHILIP WALRAVEN, WESSEL JOHANNES WELLER, LOEKIE WELLER, JOHAN PIETER WELLER, LION HELLMUT BENJAMINS, CAREL FREDERIK DES TOMBE and ERICA HANSEN, Plaintiffs, v. AGRICULTURAL DEVELOPMENT BANK OF ZIMBABWE, MINERALS MARKETING CORPORATION OF ZIMBABWE, ZB BANK LIMITED, ZIMBABWE MINING DEVELOPMENT CORPORATION, ZIMRE HOLDINGS LIMITED and REPUBLIC OF ZIMBABWE, Defendants.
• Court: U.S. District Court — Southern District of New York

BERNARDUS HENRICUS FUNNEKOTTER, HERMANNES VAN DUREN, JR.,MARGARETA VAN DUREN, DICKEY ROELANDA BREYTENBACH,ROMELIA GWENDOLYN FISHER, MAX WILLEM ARTHUR GRAAF VAN RECHTEREN L IMPURG,ROLF JAN PHILIP WALRAVEN, WESSEL JOHANNES WELLER, LOEKIE WELLER,JOHAN PIETER WELLER, LION HELLMUT BENJAMINS, CAREL FREDERIK DES TOMBE and ERICA HANSEN, Plaintiffs, v. AGRICULTURAL DEVELOPMENT BANK OF ZIMBABWE, MINERALS MARKETING CORPORATION OF ZIMBABWE,ZB BANK LIMITED, ZIMBABWE MINING DEVELOPMENT CORPORATION, ZIMRE HOLDINGS LIMITEDand REPUBLIC OF ZIMBABWE, Defendants.

Case No. 13 Civ. 1917 (CM)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

June 3, 2013

Edward P. Gilbert

Mark S. Jarashow

MORRISON COHEN LLP

909 Third Avenue

New York, New York 10022

(212) 735-8600

Attorneys for Defendant

ZB Bank Limited

DEFENDANT ZB BANK LIMITED'S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...................................................................................................... iii

PRELIMINARY STATEMENT .................................................................................................. 1

FACTUAL BACKGROUND ....................................................................................................... 3

ARGUMENT ................................................................................................................................ 5

POINT I

THE COURT LACKS SUBJECT-MATTER AND PERSONAL JURISDICTION OVER THE CLAIMS AGAINST ZB BANK, AS ZB BANK IS ENTITLED TO AND HAS NOT WAIVED SOVEREIGN IMMUNITY .............................................................................................. 5

A. APPLICABLE STANDARDS ............................................................................. 5

B. PLAINTIFFS HAVE NOT ALLEGED AN INDEPENDENT BASIS FOR JURISDICTION OVER ZB BANK ................................................ 7

C. THE REPUBLIC OF ZIMBABWE DID NOT WAIVE SOVEREIGN IMMUNITY FOR ITSELF OR FOR ANY ALLEGED "ALTER EGO," INCLUDING ZB BANK, BY BECOMING A SIGNATORY TO THE CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES ............................... 11

D. ZB BANK HAS NOT ENGAGED IN FSIA COMMERCIAL ACTIVITY ......................................................................................................... 13

E. THE PLAINTIFFS HAVE FAILED TO ESTABLISH JURISDICTION OVER ZB BANK PURSUANT TO 28 U.S.C. § 1605(a)(6) ....................................................................................... 15

POINT II

THE COMPLAINT FAILS TO STATE A CLAIM THAT ZB BANK IS THE ALTER EGO OF THE REPUBLIC OF ZIMBABWE ..................................... 19

A. PLEADING REQUIREMENTS UNDER IQBAL AND TWOMBLY ................ 19

B. THE ELEMENTS OF AN ALTER EGO CLAIM UNDER BANCEC .............. 20

C. THE COMPLAINT'S CONCLUSORY ALLEGATIONS MUST BE DISREGARDED ................................................................................................ 23

D. THE COMPLAINT'S ALLEGATIONS OF "FRAUD AND INJUSTICE" UNDER BANCEC ARE PURELY CONCLUSORY .................. 24CONCLUSION ........................................................................................................................... 25TABLE OF AUTHORITIES

Page

CASES

Alejandre v. Telefonica Larga Distancia de Puerto Rico, Inc., 183 F.3d 1277 (11th Cir. 1999) ................................................................................................. 22

Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (1989) ..................................................................................................................... 6

Ashcroft v. Iqbal, 556 U.S. 662 (2009) ............................................................................................. 2, 17, 19-20, 23

Bayer & Willis Inc. v. Republic of Gambia, 283 F. Supp. 2d 1 (D.D.C. 2003) ............................................................................................... 22

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................. 2, 17, 19-20, 23

Butler v. Sukhoi Co., 579 F.3d 1307 (11th Cir. 2009) ................................................................................................. 11

Capital Ventures Int'l v. Republic of Argentina, 552 F.3d 289 (2d Cir. 2009) ........................................................................................................ 6

Covington Marine Corp. v. Xiamen Shipbuilding Indus. Co., No. 12 Civ. 30383, 2012 U.S. App. LEXIS 26297 (5th Cir. Dec. 21, 2012) ...................... 15-17

Dole Food Co. v. Patrickson, 538 U.S. 468 (2003) ..................................................................................................................... 6

EM Ltd. v. Republic of Argentina, 473 F.3d 463 (2d Cir. 2007) ...................................................................................................... 21

Epperson v. Entertainment Express, Inc., 242 F.3d 100 (2d Cir. 2001) ................................................................................................ 10-11

Fagan v. Republic of Austria, No. 08 Civ. 6715 (LTS), 2011 U.S. Dist. LEXIS 32058 (S.D.N.Y. Mar. 25, 2011) ................... 1

First Inv. Corp. v. Fujian Mawei Shipbuilding, Ltd., 703 F.3d 742 (5th Cir. 2012) ............................................................................................... 16-18

First Nat'l City Bank v. Banco Para El Comercio Exterior De Cuba, 462 U.S. 611 (1983) ..................................................................................................... 2, 8, 20-25

Flatow v. Islamic Republic of Iran, 308 F.3d 1065 (9th Cir. 2002) ..................................................................................................... 9

Flatow v. Islamic Republic of Iran, 67 F. Supp. 2d 535 (D. Md. 1999), aff'd, 225 F.3d 653 (4th Cir. 2000) ................................... 10

Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438 (D.C. Cir. 1990) ................................................................................................. 7, 9

Gabay v. Mostazafan Found. of Iran, 151 F.R.D. 250 (S.D.N.Y 1993) ................................................................................................ 10

Gates v. Victor Fine Foods, 54 F.3d 1457 (9th Cir. 1995) ..................................................................................................... 13

Hercaire Int'l, Inc. v. Argentina, 821 F.2d 559 (11th Cir. 1987) ................................................................................................... 22

Hester Int'l Corp. v. Federal Republic of Nigeria, 879 F.2d 170 (5th Cir. 1989) ..................................................................................................... 24

In re Arbitration Act of 1996 v. Xiamen Shipbuilding Indus. Co., No. 09-CV-7041, 2012 U.S. Dist. LEXIS 26741 (E.D. La. Feb. 29, 2012) .............................. 17

Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 313 F.3d 70 (2d Cir. 2002) .......................................................................................................... 6

Kensington Int'l Ltd v. Republic of Congo, No 03 Civ. 4578 (LAP), 2007 U. S. Dist. LEXIS 25282 (S.D.N.Y Mar. 30 2007) .................... 3

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LNC lnvs., Inc. v. Republic of Nicaragua, 115 F. Supp. 2d 358 (S.D.N.Y.), aff'd, 228 F.3d 423 (2d Cir. 2000) .............................. 8, 21, 24

Letelier v. Republic of Chile, 748 F.2d 790 (2d Cir. 1984) .......................................................................................... 21-22, 25

Liberian Eastern Timber Corp. v. Government of the Republic of Liberia, 650 F. Supp. 73 (S.D.N.Y. 1986), aff'd without opinion, 854 F.2d 1314 (2d Cir. 1987) .......... 13

Library of Congress v. Shaw, 478 U.S. 310(1986) ................................................................................................................... 13

Mason v. Am. Tobacco Co., 346 F.3d 36 (2d Cir. 2003), cert. denied, 541 U.S. 1057 (2004) ................................................. 3

Matar v. Dichter, 563 F.3d 9 (2d Cir. 2009) ............................................................................................................ 6

McKesson Corp. v. Islamic Republic of Iran, 52 F.3d 346 (D.C. Cir. 1995) ..................................................................................................... 10

Minpeco, S.A. v. Hunt, 686 F. Supp. 427 (S.D.N.Y. 1988) .......................................................................................... 8-9

Peacock v. Thomas, 516 U.S. 349 (1996) ................................................................................................................... 11

Pravin Banker Assocs., Ltd. v. Banco Popular del Peru, 9 F. Supp. 2d 300 (S.D.N.Y. 1998) ............................................................................................ 22

Rogers v. Petroleo Brasileiro, S.A., 741 F. Supp. 2d 492 (S.D.N.Y. 2010) ......................................................................................... 6

Saudi Arabia v. Nelson, 507 U.S. 349 (1993) ............................................................................................................... 6, 14

Scheidemann v. Qatar Football Ass'n, No. 04 Civ. 3432 (LAP), 2004 U.S. Dist. LEXIS 2852 (S.D.N.Y. Jan. 15, 2008) ................... 21

Smith v. Local 819 I.B.T. Pension Plan, 291 F.3d 236 (2d. Cir. 2002) ....................................................................................................... 3

Transamerica Leasing, Inc. v. La Republica de Venezuela, 200 F.3d 843 (D.C. Cir. 2000) ................................................................................................... 24

Transatlantic Shiffahrtskontor GmBH v. Shanghai Foreign Trade Corp., 204 F.3d 384 (2d Cir. 2000)...