OGI Grp. Corp. v. Oil Projects Co. of Ministry of Oil, Baghdad, Iraq (SCOP)
| Decision Date | 29 October 2020 |
| Docket Number | Case No. 19-cv-2619 (APM) |
| Parties | OGI GROUP CORPORATION, Petitioner, v. OIL PROJECTS COMPANY OF THE MINISTRY OF OIL, BAGHDAD, IRAQ (SCOP), Respondent. |
| Court | U.S. District Court — District of Columbia |
Petitioner OGI Group Corporation ("OGI Group") brings this action to enforce a 2017 arbitration award returned against Oil Projects Company of the Ministry of Oil, Baghdad, Iraq (SCOP) ("SCOP") issued by the International Chamber of Commerce ("ICC") in Paris, France. The ICC tribunal awarded OGI Group $9.6 million in damages, $1.3 million in costs, and 3% interest. The parties agree that Respondent SCOP still owes OGI Group $1,410,647.52 of that award.
SCOP now moves to dismiss OGI Group's Petition to Confirm an Arbitration Award on the grounds that this court lacks personal jurisdiction over SCOP and that the District of Columbia is an improper venue for the Petition.
For the reasons that follow, the court grants Respondent's Motion to Dismiss the Petition to Confirm an Arbitration Award, both for want of personal jurisdiction and improper venue.
In 2005, OGI Group entered a $177 million contract with SCOP, an Iraqi-owned state corporation, to assist in developing the Hamrin Oil Field in Iraq. Pet. to Confirm Arbitration Award, ECF No. 1 [hereinafter Pet.], ¶¶ 3, 10-11, 13. OGI Group, a Canadian engineering firm, was commissioned "to provide design, engineering, procurement and other services" to support Respondent's construction of "degassing stations and a central treatment plant . . . as well as [to] lay flow lines, gas injection lines and interconnection lines" at the Hamrin Oil Field. Id. ¶ 11.
As relevant here, the contract between OGI Group and SCOP contained an arbitration clause specifying that "[a]ll disputes arising out of or in connection with the Contract for the Development of the Hamrin Oilfield, Iraq" are subject to binding arbitration with the ICC. Id. ¶ 16; Decl. of Steven Jones in Supp. of Pet. to Confirm Award, ECF No. 5 [hereinafter Jones Decl.], Ex. A, ECF No. 5-1 [hereinafter Contract], at 32-33.1 The arbitration clause also identified Geneva, Switzerland, as the seat of arbitration and called for all proceedings to be conducted in English, using the substantive law of Iraq. Pet. ¶ 16; Contract at 33.
Between 2008 and 2013, the parties' relationship devolved as a result of disputes over OGI Group's performance of the contract. SCOP maintained "that not only the engineering, but also the supply of materials and equipment" that OGI Group provided were "incomplete and deficient." Jones Decl., Ex. C, Final Award, ECF No. 7, ¶ 130. SCOP subsequently stopped paying OGI Group's invoices. Id. OGI Group forcefully contested these allegations and argued that SCOP had accepted and approved its materials and equipment as delivered. Id. ¶ 131.
After years of disagreement, OGI Group filed a Request for Arbitration with the ICC in April 2015. Pet. ¶¶ 17-18. The parties participated in an arbitration hearing in October 2017, and the ICC tribunal ultimately awarded OGI Group $9,638,836.52 in damages, $1,285,463.84 in costs, and 3% interest. Id. ¶¶ 26-28. SCOP has since paid the majority of the award, but the parties agree that $1,410,647.52 remains outstanding. Pet.'s Mem. of Law in Opp'n to Resp't's Mot. to Dismiss, ECF No. 20 [hereinafter Pet.'s Opp'n], at 6; Resp't's Reply Mem. in Further Supp. of Resp't's Mot. to Dismiss, ECF No. 23, at 13.
Following the ICC tribunal's decision, SCOP filed an Application for Correction of Award with the ICC and an appeal in the Federal Supreme Court of Switzerland requesting that the award be vacated. Pet. ¶¶ 29-31. Both appeals were denied. Id. ¶¶ 32-33.
OGI Group originally sought to obtain the remaining balance from SCOP by filing a petition to confirm the arbitration award in the Southern District of New York, OGI Grp. Corp. v. Oil Projects Co. of the Ministry of Oil, Baghdad, Iraq (SCOP), No. 1:19-cv-3432-JSR (S.D.N.Y.), but voluntarily dismissed that action before the court made any substantive rulings, Notice of Vol. Dismissal, OGI Grp. Corp., No. 1:19-cv-3432-JSR (S.D.N.Y.), ECF No. 18. OGI Group subsequently refiled the petition before this court. See Pet. SCOP now moves to dismiss on the grounds that this court lacks personal jurisdiction over it and that venue in the District of Columbia is improper. See Resp't's Mot. to Dismiss Pet. to Confirm Arbitration Award, ECF No. 19 [hereinafter Resp't's Br.].
II. LEGAL STANDARD
On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears "the burden of establishing the court's personal jurisdiction over" a defendant. FC Inv. Grp. LCv. IFX Mkts., Ltd., 529 F.3d 1087, 1091 (D.C. Cir. 2008). "To meet this burden, a plaintiff must allege specific facts on which personal jurisdiction can be based; it cannot rely on conclusory allegations." Frost v. Cath. Univ. of Am., 960 F. Supp. 2d 226, 231 (D.D.C. 2013) (internal quotation marks omitted). "While the district court may consider materials outside the pleadings . . . , the court must still 'accept all of the factual allegations in [the] complaint as true.'" Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253-54 (D.C. Cir. 2005) (quoting United States v. Gaubert, 499 U.S. 315, 327 (1991)).
Likewise, on a motion to dismiss for improper venue under Rule 12(b)(3), it is the plaintiff's burden to establish that venue is proper, and the court accepts all well-pleaded allegations as true and draws all reasonable inferences in the plaintiff's favor. Gage v. Somerset County, 322 F. Supp. 3d 53, 56 (D.D.C. 2018).
The primary question in this dispute is whether the court may maintain personal jurisdiction over SCOP consistent with the Due Process Clause. Resolving that issue involves answering three subsidiary questions: (1) whether SCOP is an instrumentality of Iraq; (2) if it is an instrumentality of Iraq, whether OGI Group has alleged facts sufficient to overcome the presumption that SCOP is juridically distinct from Iraq; and (3) if SCOP is to be treated separately from Iraq, whether SCOP has sufficient minimum contacts with the United States of America to render personal jurisdiction over SCOP consistent with due process.2 The court addresses each of these questions in turn and concludes that SCOP does enjoy the protections of the Due Process Clause, and thatSCOP lacks sufficient minimum contacts with the United States for the court to exercise personal jurisdiction over it.
The court then addresses whether venue is proper in the U.S. District Court for the District of Columbia. To do so, the court interprets the scope of the Foreign Sovereign Immunities Act's ("FSIA") venue provision, 28 U.S.C. § 1391(f), and concludes that dismissal of this case is warranted in the alternative for lack of venue.
The "FSIA provides the sole basis for obtaining jurisdiction over a foreign state in federal court." Permanent Mission of India to the United Nations v. City of New York, 551 U.S. 193, 197 (2007) (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439 (1989)). The FSIA chips away at a foreign state's sovereign immunity by listing actions that may be brought against a foreign state; if a plaintiff brings one of the listed actions, the court has subject matter jurisdiction over the dispute and, potentially, personal jurisdiction over the foreign defendant. See Price v. Socialist People's Libyan Arab Jamahiriya, 294 F.3d 82, 89 (D.C. Cir. 2002).
The statute defines a "foreign state" to "include[] a political subdivision of a foreign state or an agency or instrumentality of a foreign state." 28 U.S.C. § 1603(a). To qualify as "[a]n 'agency or instrumentality of a foreign state,'" the entity must be (1) "a separate legal person, corporate or otherwise"; (2) "an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof"; and (3) "neither a citizen of a State of the United States . . . nor created under the laws of any third country." Id. § 1603(b). Courts afford entities that qualify as an "agency or instrumentality" a "presumption of independent status" from the foreign sovereign. Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 446 (D.C. Cir. 1990); see also First Nat'l City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec), 462 U.S. 611, 626-27 (1983) (), abrogated on other grounds by 28 U.S.C. § 1610.
Here, there is no genuine dispute that SCOP is an instrumentality of Iraq. Indeed, Petitioner concedes it. Pet. ¶ 5 (). By law, SCOP "enjoy[s] a corporate status" that is separate from Iraq, and it is "fully owned by the state." Resp't's Br., Decl. of Nowell D. Bamberger in Supp. of Resp't's Mot. to Dismiss the Pet. to Confirm Arbitration Award, Ex. A, ECF No. 19-1 [hereinafter Iraq State Companies Law No. 22], at ch. 1, art. 1. SCOP is further not a citizen of any state of the United States or a third country because it is incorporated and domiciled in Iraq. Pet. ¶ 3; see 28 U.S.C. § 1332(c)(1). SCOP therefore meets the statutory standard for an instrumentality.
Having determined that SCOP is an instrumentality of Iraq, the court must next determine whether SCOP is nonetheless separate from Iraq for jurisdictional purposes. If so, SCOP is entitled to the protections of the Due Process Clause of the Fifth Amendment. Courts have interpreted the Due Process Clause to...
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