Process & Indus. Devs. Ltd. v. Fed. Republic of Nigeria

• Decision Date: 19 June 2020
• Docket Number: No. 18-7154,18-7154
• Citation: 962 F.3d 576
• Parties: PROCESS AND INDUSTRIAL DEVELOPMENTS LIMITED, Appellee v. FEDERAL REPUBLIC OF NIGERIA and Ministry of Petroleum Resources of the Federal Republic of Nigeria, Appellants
• Court: U.S. Court of Appeals — District of Columbia Circuit

962 F.3d 576

PROCESS AND INDUSTRIAL DEVELOPMENTS LIMITED, Appellee

v.FEDERAL REPUBLIC OF NIGERIA and Ministry of Petroleum Resources of the Federal Republic of Nigeria, Appellants

No. 18-7154

United States Court of Appeals, District of Columbia Circuit.

Argued October 4, 2019

Decided June 19, 2020

Joseph D. Pizzurro argued the cause for appellants. With him on the briefs were Kevin A. Meehan and Juan O. Perla.

Michael S. Kim argued the cause for appellee. With him on the brief were Josef M. Klazen and Darryl G. Stein.

Before: Pillard, Wilkins, and Katsas, Circuit Judges.

Katsas, Circuit Judge:

This appeal presents the question whether a district court, in considering a petition to confirm an arbitral award against a foreign sovereign, may order the sovereign to brief the merits before resolving a colorable assertion of immunity. We hold that such an order is immediately appealable and that the immunity question must be resolved first.

I

In 2010, Process and Industrial Developments Ltd. (P & ID) contracted with the Federal Republic of Nigeria to build and operate a natural gas processing facility in the Niger Delta. Nigeria agreed to supply gas for the plant and to build supporting infrastructure. The deal fell apart; P & ID never broke ground on the plant, and Nigeria never supplied any gas. By its terms, the contract was governed by Nigerian law. It provided for arbitration in London, in accordance with the Nigerian Arbitration and Conciliation Act.

P & ID sought arbitration. The arbitral panel bifurcated the proceeding and found Nigeria liable for breach of contract. Nigeria unsuccessfully challenged the liability determination in the London Commercial Court. Nigeria then challenged the determination in the Federal High Court of Nigeria, which set it aside as inconsistent with Nigerian law. P & ID, which never appeared in the Nigerian proceeding, asked the arbitral panel to hold that the Nigerian court had no jurisdiction to set aside the award. The panel agreed and, over Nigeria's objection, proceeded to consider damages. It awarded $6.597 billion plus interest, though a dissent would have limited the damages to $250 million. The award now stands at about $9 billion.

In 2018, the dispute reached the United States. P & ID filed a petition to confirm the award under the Federal Arbitration Act (FAA), which provides for the recognition and enforcement of awards governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). 9 U.S.C. § 201. Nigeria moved to dismiss for lack of subject-matter jurisdiction. It invoked the Foreign Sovereign Immunities Act (FSIA), which makes foreign sovereigns generally "immune from the jurisdiction of the courts of the United States." 28 U.S.C. § 1604. In its petition, P & ID had argued that the waiver and arbitration exceptions to the FSIA apply to this case. In the motion to dismiss, Nigeria argued that neither exception applies.

Instead of responding to Nigeria's motion to dismiss, P & ID moved for an order requiring Nigeria to present all its defenses—both jurisdictional and merits—in a single response to the petition to confirm. P & ID argued that the FAA, in providing that petitions to confirm be treated as motions rather than pleadings, required joint briefing of immunity and merits issues. Nigeria countered that the FAA imposed no such requirement and that the FSIA required a threshold immunity determination before Nigeria could be compelled to litigate the merits. The district court sided with P & ID and ordered Nigeria to file a response containing its "merits arguments" in addition to its immunity and other jurisdictional defenses. Process & Indus. Devs. Ltd. v. Fed. Republic of Nigeria , No. 18-594, 2018 WL 8997443, at *3 (D.D.C. Oct. 1, 2018) ( P & ID ).

Nigeria filed a notice of appeal. P & ID asked the district court to forge ahead anyway because the appeal was frivolous. The district court refused, concluding that it was unresolved whether a foreign sovereign could seek immediate review of an order requiring it to brief the merits before its immunity assertion was resolved. P & ID then moved this Court to dismiss the appeal for lack of jurisdiction. A motions panel referred P & ID's motion to this merits panel.

Nigeria's appeal raises two related questions. The first is whether we have jurisdiction to review what P & ID characterizes as nothing more than a briefing order. The second is whether that order, by requiring Nigeria to defend the merits while its assertion of sovereign immunity remains unresolved, impermissibly risked abridging the immunity.

II

This appeal is about jurisdiction—both ours and that of the district court. We must begin with the question of our jurisdiction. See , e.g. , Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ; Mansfield, Coldwater & Lake Mich. Ry. v. Swan , 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884). It turns on whether the district court's ruling fell within the collateral-order doctrine.

A

With narrow exceptions, we have jurisdiction to review only "final decisions" of the district courts. 28 U.S.C. § 1291. Ordinarily, a final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States , 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945). But under the collateral-order doctrine, section 1291 also applies to interlocutory orders "that are conclusive, that resolve important questions separate from the merits, and that are effectively unreviewable on appeal from the final judgment in the underlying action." Mohawk Indus. Inc. v. Carpenter , 558 U.S. 100, 106, 130 S.Ct. 599, 175 L.Ed.2d 458 (2009) (quotation marks omitted).

Applying these criteria, this Court repeatedly has held that the collateral-order doctrine applies to the denial of a motion to dismiss on the ground of foreign sovereign immunity. See , e.g. , Kilburn v. Socialist People's Libyan Arab Jamahiriya , 376 F.3d 1123, 1126 (D.C. Cir. 2004) ; Price v. Socialist People's Libyan Arab Jamahiriya , 294 F.3d 82, 91 (D.C. Cir. 2002) ; Foremost-McKesson, Inc. v. Islamic Republic of Iran , 905 F.2d 438, 443 (D.C. Cir. 1990). In each of these cases, we explained that foreign sovereign immunity provides not only a defense from liability but also a shield "from trial and the attendant burdens of litigation." E.g. , Kilburn , 376 F.3d at 1126. So if the immunity is wrongly denied at the outset of a case, it cannot be vindicated after final judgment. See id.

In this case, the district court ordered Nigeria to present its immunity and merits arguments in one opposition to the petition to confirm. P & ID contends that the collateral-order doctrine does not apply because the court simply deferred ruling on the immunity defense rather than conclusively rejecting it. But the court did conclusively hold that, at least in the context of petitions to confirm arbitral awards, immunity issues need not be resolved until after the merits have been fully briefed. See P & ID , 2018 WL 8997443, at *2–3. Then, in refusing to lift a stay pending appeal, the court again stressed that it had decided Nigeria could be "forced to submit a merits defense" while its assertion of immunity remained pending. J.A. 236. On appeal, Nigeria contends that an immunity defense must be resolved before a foreign sovereign can be compelled to defend on the merits. Because the district court conclusively rejected that contention, the first prong of the collateral-order doctrine is satisfied.

Our decision in Phoenix Consulting, Inc. v. Republic of Angola , 216 F.3d 36 (D.C. Cir. 2000), is instructive. There, the district court denied a motion to dismiss on the ground of foreign sovereign immunity. The court concluded that the immunity question turned on disputed facts which, together with facts bearing on the merits, would need to be proven either on summary judgment or at trial. Id. at 39. On appeal, we held that the collateral-order doctrine was satisfied, reversed the district court's order, and remanded with instructions for the court to resolve the immunity question at the outset, even if that would require separate rounds of jurisdictional and merits discovery. Id. at 39–41. We did not question our jurisdiction on the theory that the district court had merely deferred its final immunity determination until a later stage of the case. Instead, we stressed that the order had conclusively denied the asserted "immunity from suit," and we reviewed it on that basis. Id. at 39. To be sure, the order in Phoenix Consulting was styled as denying immunity pending further factual development, whereas the order here is styled as merely deferring a ruling on immunity. But the effect of the orders is identical—forcing a foreign sovereign to defend litigation on the merits despite an unresolved assertion of immunity. And appealability turns on what the order at issue does, not what it is called. See , e.g. , Zapata v. Melson , 750 F.3d 481, 484 (5th Cir. 2014) ; Workman v. Jordan , 958 F.2d 332, 336 (10th Cir. 1992).

The second and third prongs of the collateral-order doctrine are also satisfied. P & ID does not dispute this point, but we must independently confirm our jurisdiction. See , e.g. , Steel Co. , 523 U.S. at 95–96, 118 S.Ct. 1003. As to the second prong, we have held that an assertion of foreign sovereign immunity presents important questions distinct from the merits of a case. See , e.g. , Kilburn , 376 F.3d at 1126. As to the third prong, we have held that an improper rejection of foreign sovereign immunity is effectively unreviewable on an appeal from final judgment. See , e.g. , id. To be sure, an outright denial of immunity may inflict greater harms on a foreign sovereign than an order merely subjecting it to litigation burdens at the early stages of a case. But subjecting a foreign sovereign to litigation burdens is precisely what...