Uni-Top Asia Inv. Ltd. v. Sinopec Int'l Petroleum Exploration & Prod. Corp.
| Decision Date | 22 April 2022 |
| Docket Number | 20-cv-1770 (DLF) |
| Parties | UNI-TOP ASIA INVESTMENT LTD., Petitioner, v. SINOPEC INTERNATIONAL PETROLEUM EXPLORATION AND PRODUCTION CORP., Respondent. |
| Court | U.S. District Court — District of Columbia |
Gary Born, Pro Hac Vice, Jonathan Lim, Pro Hac Vice, Wilmer Cutler Pickering Hale and Dorr LLP, London, United Kingdom, John V.H. Pierce, Pro Hac Vice, Wilmer Cutler Pickering Hale & Dorr LLP, New York, NY, David W. Bowker, Wilmer Cutler Pickering Hale & Dorr LLP, Washington, DC, for Petitioner.
John M. Townsend, James H. Boykin, III, Shayda Daniela Vance, Hughes Hubbard & Reed LLP, Washington, DC, Mary Margaret Utterback, Pro Hac Vice, King & Wood LLP, New York, NY, Michael S. DeVincenzo, Pro Hac Vice, New York, NY, Vincent Filardo, Jr., Pro Hac Vice, New York, NY, Michael Amberg, Pro Hac Vice, King & Wood Mallesons LLP, Menlo Park, CA, for Respondent.
In this case, Uni-Top Asia Investment Ltd. (Uni-Top) seeks to confirm a foreign arbitral award that it obtained against Sinopec International Petroleum Exploration and Production Corp. (SIPC). See Pet'r’s Pet. to Confirm Arbitral Award ¶¶ 1–2, Dkt. 1. SIPC has moved to dismiss for lack of jurisdiction, improper venue, and the failure to state a claim. See Resp't’s Mot. to Dismiss, Dkt. 26. Uni-Top, in turn, has moved for jurisdictional discovery. See Pet'r’s Mot. for Jurisdictional Discovery, Dkt. 30. In a previous opinion, this Court denied jurisdictional discovery with respect to the theory that SIPC is "political subdivision" of the People's Republic of China (PRC). Mem. Op. of Jan. 26, 2022 at 10, Dkt. 34. It also ordered supplementary briefing on whether venue would be proper in this District under Uni-Top's remaining theories of personal jurisdiction, which all require classifying SIPC as an "agency or instrumentality" of the PRC. Id. For the reasons that follow, the Court will hold that venue would be improper if SIPC were an "agency or instrumentality" of the PRC. Accordingly, it will grant SIPC's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(3) and deny Uni-Top's motion for jurisdictional discovery as moot.
Uni-Top is an oil and gas company that is organized under the laws of the British Virgin Islands. See Pet. to Confirm ¶ 3; Pet'r’s Mem. in Supp. of Pet. to Confirm at 6, Dkt. 1-1. SIPC is an oil and gas company that is organized under the laws of the People's Republic of China (PRC). See Pet. to Confirm ¶ 4; Resp't’s Mem. in Supp. of Mot. to Dismiss at 2–4, Dkt. 26-1 (citations omitted). As relevant here, the parties dispute whether Uni-Top is entitled to a commission under the terms of their Agency Agreement. See Mem. Op. at 1–2. That Agreement requires the parties to resolve their disputes through arbitration pursuant to Chinese law and before the China International Economic and Trade Arbitration Commission (CIETAC). See id. at 2. Although one CIETAC tribunal found that Uni-Top was entitled to the commission, the Beijing Fourth Intermediate People's Court (Beijing Court) annulled the tribunal's decision. See id.
Uni-Top filed this action to confirm the CIETAC tribunal's decision. See Pet. to Confirm ¶¶ 11–12. In doing so, Uni-Top relies on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), a "multilateral treaty that addresses international arbitration," GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC , ––– U.S. ––––, 140 S. Ct. 1637, 1644, 207 L.Ed.2d 1 (2020). See Pet. to Confirm ¶¶ 1, 12. It also relies on that treaty's implementing legislation, which "grants federal courts jurisdiction over actions governed by the Convention" and "establishes venue for such actions," Outokumpu , 140 S. Ct. at 1644 (citation omitted). See Pet. to Confirm ¶¶ 5, 6. That legislation grants federal district courts original jurisdiction over all actions "falling under the Convention." 9 U.S.C. § 203. It also provides that those actions "may be brought" either in any district "designated in [an arbitration] agreement" or in any court where an action "between the parties could be brought" "save for the arbitration agreement." Id. § 204.
Uni-Top argues that this Court has personal jurisdiction over SIPC pursuant to 28 U.S.C. § 1330(a) – (b), which confers personal jurisdiction in certain actions1 against "foreign state[s]," as that term is "defined in [ 28 U.S.C. §] 1603(a)." Pet. to Confirm ¶ 6. Section 1603(a), in turn, defines "foreign state[s]" to include both "political subdivision[s]" of those states and "agenc[ies] or instrumentalit[ies]" of the same. 28 U.S.C. § 1603(a). To invoke those provisions in this case, Uni-Top relies on SIPC's structure. SIPC represents that it is jointly owned by three entities: China Chengtong Kechuang Investment Co., Ltd. (CCKI), China Reform Yuanbo Investment Co., Ltd. (CRYI), and Sinopec Group. See Resp't’s Mem. at 2–3 (citations omitted). It further represents that none of those entities is a majority shareholder, but that each of them is owned by the State Council of the PRC.2 See id. Uni-Top argues that this structure, combined with additional information about the companies’ relationship, suffices to classify SIPC as either a political subdivision or an agency or instrumentality of the PRC.
Uni-Top also relies on SIPC's structure to establish venue. In the petition to confirm its arbitration award, Uni-Top invoked 9 U.S.C. § 204, which provides that actions under the New York Convention may be brought in any court where the parties could have proceeded "save for [their] arbitration agreement." Id. § 204. It further invoked 28 U.S.C. § 1391(f)(4), which allows civil actions to be brought in this District if they are "brought against a foreign state or political subdivision thereof," as those terms are used in " section 1603(a)." See Pet. to Confirm ¶ 8. Uni-Top argued that the combination of those provisions allows its action to proceed here.
SIPC timely moved to dismiss the case on three grounds: first, that this Court lacks personal jurisdiction because SIPC is not a "foreign state;" second, that venue is improper under 9 U.S.C. § 1391(f)(4); and third, that Uni-Top has failed to state a claim for which relief can be granted. See generally Resp't’s Mot. to Dismiss. Determining whether SIPC is a foreign state turns on disputed questions of fact. Accordingly, Uni-Top moved to stay all proceedings on SIPC's motion to dismiss pending the resolution of its motion for jurisdictional discovery. See Pet'r’s Mot. to Stay Proceedings, Dkt. 28. The Court granted Uni-Top's motion for a stay, see Minute Order of April 13, 2021, which SIPC did not oppose, see Pet'r’s Mot. to Stay Proceedings at 2. Because of that stay, Uni-Top postponed filing a response to SIPC's motion to dismiss.
In its motion for jurisdictional discovery, Uni-Top offers four theories for how SIPC could qualify as either a "political subdivision" or an "agency or instrumentality" of the PRC. 28 U.S.C. § 1330, 1603(a). First, it argues that the SIPC is a "political subdivision" because it is an "alter ego" of one of its shareholders and because its shareholders are "political subdivision[s]" of the PRC. Pet'r’s Mem. in Supp. of Mot. for Jurisdictional Discovery at 21, Dkt. 30-1. Second, it argues that SIPC is an "agency or instrumentality" because "it is majority-owned by [the PRC] or its political subdivision[s]." Id. at 9 (citing 28 U.S.C § 1603(b)(2) ). Third, it argues that SIPC is an "agency or instrumentality" because it is an "organ" of either the PRC or its political subdivisions. Id. at 14 (quoting 28 U.S.C. § 1603(b)(2) ). Finally, it argues that the SIPC is an "agency or instrumentality" because it is an "alter ego" of one of its shareholders and because that shareholder is also an agency or instrumentality of the PRC. Id. at 21.
In a previous opinion, this Court denied jurisdictional discovery with respect to the theory that SIPC is an alter ego of a "political subdivision" of the PRC See Mem. Op. at 6–8. The Court reasoned that Uni-Top had not "establish[ed] a good faith belief that SIPC is an alter ego of one of its shareholders." Id. at 6 (citing Caribbean Broad. Sys., Ltd. v. Cable & Wireless P.L.C. , 148 F.3d 1080, 1090 (D.C. Cir. 1998) ). It further reasoned that Uni-Top had failed to "establish a good faith belief that one or more of SIPC's shareholders is a ‘political subdivision’ of the PRC. Id. at 7 (quoting 28 U.S.C. § 1603(a) ). Finally, it found that Uni-Top made no " ‘detailed showing of what discovery it wishe[d] to conduct’ in support of its theory." Id. at 8 (quoting NBC-USA Hous., Inc., Twenty-Six v. Donovan , 774 F. Supp. 2d 277, 295 (D.D.C. 2011) ). As a result of that holding, Uni-Top may establish personal jurisdiction over SIPC only if it shows that the company is an "agency or instrumentality" of the PRC, 28 U.S.C. § 1603(a).
In that same opinion, this Court ordered supplemental briefing on whether venue would be proper if Uni-Top were an "agency or instrumentality." See Mem. Op. at 8–10. As discussed above, Uni-Top's initial theory of venue relied on 28 U.S.C. § 1391(f)(4), which allows civil actions to proceed in this District if they are "brought against a foreign state or political subdivision thereof." See supra. The Court interpreted that language to exclude actions brought against an "agency or instrumentality" of a foreign state. See Mem. Op. at 8–9; see also OGI Grp. Corp. v. Oil Projects Co. of Ministry of Oil , No. 19-cv-2619 (APM), 2020 WL 6342886, at *8–10 (D.D.C. Oct. 29, 2020) (). The Court also noted that Uni-Top had "not identified another provision that allows litigation in this District." Mem. Op. at 9. Accordingly, the Court directed Uni-Top to file a supplemental brief on whether this action should be dismissed for improper venue. See id. at 10. The Court also allowed SIPC to file a...
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