Aeons Centro De Administracao De Empresas LTD v. Central Bank of Nigeria

Filing 27

REPORT AND RECOMMENDATIONS re 13 MOTION to Vacate Confessed Judgment and to Dismiss Complaint (Limited Appearance Noted) filed by Central Bank of Nigeria Signed by: Judge Magistrate Judge Paul W. Grimm Objections to R&R due by 7/20/2012. Signed by Magistrate Judge Paul W. Grimm on 7/3/2012. (aos, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

AEONS CENTRO DE
ADMINISTRACAO DE
EMPRESAS, LTD.,
Plaintiff,

:
:
:
CIVIL NO.: BEL-11-3447
:

v.
:
CENTRAL BANK OF NIGERIA,
:
Defendant.
…o0o…

REPORT AND RECOMMENDATION
This Report and Recommendation addresses the timely Motion to Vacate the Confessed
Judgment and to Dismiss the Complaint, ECF No. 13, that Defendant Central Bank of Nigeria
(“CBN”) filed; the Opposition thereto, ECF No. 24, that Plaintiff Aeons Centro de
Administração de Empresas, Ltd. (“Aeons”) filed; and Defendant’s Reply, ECF No. 26. On June
1, 2012, in accordance with 28 U.S.C. § 636 and Local Rules 301 and 302, Judge Legg referred
this case to me to provide a Report and Recommendation on Defendant’s Motion to Vacate the
Confessed Judgment and to Dismiss the Complaint. ECF No. 25. Having reviewed the filings, I
find that a hearing is not necessary. See Loc. R. 105.6. For the reasons stated herein, I
recommend that, following the time to object to this Report and Recommendation, Defendant’s
Motion to Vacate the Confessed Judgment be GRANTED, the case be REOPENED, and
Defendant’s Motion to Dismiss the Complaint be GRANTED.

I.

FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff filed a Complaint for Confessed Judgment on November 30, 2011, claiming that

the parties signed a Payment Guarantee and Settlement Agreement (“Payment Guarantee” or
“Guar.”) that authorized a confessed judgment. Compl. ¶ 1, ECF No. 1. In the Complaint,
Plaintiff claimed that it “is a Portuguese corporation to whom monies are owed for past work
performed,” specifically the staggeringly large sum of $181,817,894.74, plus $8,000.00 in
attorney’s fees, and CBN “is an agent or instrumentality of the Federal Republic of Nigeria, and
is the GUARANTOR of the debt owed by the [Nigerian] GOVERNMENT to AEONS.” Id. ¶¶ 2
& 7. Aeons alleged that it provided “advances” to CBN in excess of $1 million and “formally
demanded payment from GUARANTOR in accordance with the terms of the PAYMENT
GUARANTEE,” but “AEONS has received no payment . . . .” Id. ¶ 8(a)–(b). Plaintiff asserted
that this Court has jurisdiction and that venue is proper. Id. ¶¶ 3–4.
To its Complaint, Plaintiff attached the Payment Guarantee, ECF No. 1-1, and the
Affidavit of Owen Rice, Plaintiff’s Attorney-in-Fact, though not at law, Rice Aff. ¶ 3, ECF No.
1-5.

The Payment Guarantee states that, after AEONS pays $74,530.00 for “missing

documents,” CBN “promises and agrees to pay AEONS by Telegraphic Transfer” a “principal
amount” plus interest, by June 30, 2008, “to AEONS’ account designated.” Guar. 1 & 3.
Additionally, it provides that it will “be governed, construed, interpreted and applied in
accordance with the laws of Maryland,” and that, if the parties failed “to agree in respect to any
matter arising under this PAYMENT GUARANTEE, the GUARANTOR and AEONS agree to
submit to the jurisdiction of the United States District Court in and for Maryland and to have the
dispute settled by that court.” Id. at 4. It provides that CBN
expressly agrees that the United States District Court in and for Maryland may
enter a Judgment by Confession upon the filing of a complaint, the ‘legalized’
2

original or a photocopy of this PAYMENT GUARANTEE AND SETTLEMENT
AGREEMENT (as amended) and an affidavit specifying the Amount due, and the
address specified below in Notices to GOVERNMENT and to GUARANTOR.
Id. at 2. In the Affidavit, Mr. Rice described in detail the circumstances under which Defendant
allegedly executed the Payment Guarantee. Rice Aff. ¶¶ 5–12. He stated that, as of November
19, 2011, $181,817,894.74 was due under the written instrument. Rice Aff. ¶ 9 & Ex. 6, ECF
No. 1-11.
Judge Legg referred the matter to me pursuant to Loc. R. 301.6.ak. ECF No. 3. After
reviewing the Complaint, Affidavit, Exhibits, and Aeons’s supplemental filing, I found that they
substantively met the requirements of Local Rule 108.1.a; that the documents made a prima facie
showing that Defendant, through its representatives, voluntarily, knowingly, and intelligently
waived its right to notice and a prejudgment hearing; and that Plaintiff’s claim for liquidated
damages against Defendant was meritorious. See Loc. R. 108.1.b. Therefore, I ordered the
Clerk of the Court to enter the Confessed Judgment and ensure that notice of the entry was
provided to Defendant. Implicit in this order was the Court’s assumption that the documents
filed by Aeons were genuine and authentic, not fraudulent as CBN now contends.
After receiving that notice, Defendant filed the pending motion. Defendant alleges that
Plaintiff’s Complaint for Confessed Judgment “arises from an unfortunately typical Advance Fee
Fraud or ‘419’[1] scam,” in which a party (in this case, Plaintiff) is asked to send money to the
scammer (in this case, an undisclosed party posing as the Nigerian government), in exchange for
which the scammer promises to send the party significantly more money.

Def.’s Mem.

Supporting CBN’s Mot. to Vacate the Confessed Jmt. & to Dismiss Compl. 2–4 (“Def.’s
1

A “Nigerian 419 scam” is “a type of advance fee fraud and one of the most common types of
confidence frauds in which the victim is defrauded for monetary gain. . . . The number ‘419’
refers to the article of the Nigerian Criminal Code dealing with fraud.” Nigerian Scam,
Wikipedia, http://en.wikipedia.org/wiki/Nigerian_scam (last visited July 3, 2012).
3

Mem.”), ECF No. 13-1. Defendant argues that the Court should vacate the Confessed Judgment
because documents that Plaintiff presented to the Court in support of its Complaint, including the
Payment Guarantee, “are forgeries and frauds.” Id. at 1 & 7.

Alternatively, CBN argues that

the Court lacks both subject matter and personal jurisdiction, such that it should vacate the
Confessed Judgment and dismiss the lawsuit. Id. at 13, 16–17, & 21. In addition, it contends
that the Court should dismiss the case for forum non conveniens. Id. at 19.
Plaintiff responded at length (Plaintiff’s Opposition and attachments, ironically, total 419
pages), arguing for the validity of its contracts with the Nigerian government. Pl.’s Opp’n
¶¶ 11–26. Insisting that “[t]he monies are in fact owed to AEONS,” Plaintiff contends
[T]his is not a typical 419 scam, AEONS was not contacted out of the blue and
asked to participate in helping someone remove money from Nigeria, but rather,
AEONS was simply attempting to collect its funds and was responding to those
persons who were acting on behalf of the Government of Nigeria.
Id. ¶ 26. Plaintiff claims that “[t]he contract work for which AEONS has not been paid was one
of the contracts awarded by the last Military Administration of [the Nigerian] GOVERNMENT.”
Id. ¶ 17.

Plaintiff maintains that “competent solicitors and barristers” of “[the Nigerian]

GOVERNMENT and CBN . . . are the ones who drafted, prepared for execution, oversaw the
execution of the informal agreements and formal instruments, and delivered the written
undertakings to AEONS.” Id. ¶ 11. Plaintiff argues that the debt must be “legitimate” because
“AEONS delivered Notices of Default and Demands for Payment to the Ministry of Finance, the
Ministry of Justice and the CBN more than twenty times: sometimes by facsimile, sometimes by
email, and a few times by commercial courier,” and “the Nigerian GOVERNMENT . . . failed to
respond to over 20 demands for payment.” Id. ¶ 13. In Plaintiff’s view, the Court should
question the veracity of Defendant’s affidavits, not Plaintiff’s documents. Id. ¶ 29.

4

Plaintiff submitted an affidavit from Helder de Moraes e Castro Pina, “the founder,
controlling shareholder and the person who has been and presently is responsible for the
operations of Aeons.” Pina Aff. ¶ 1, ECF No. 24-2. Mr. Pina stated that Aeons entered into a
contract with the Nigerian government on July 26, 1999, id. ¶ 5, and he described Aeons’s
ongoing correspondence with Nigerian officials and their delegates in an attempt to collect the
amount due under the contract, id. ¶¶ 7–109. Mr. Pina declared that the attempts to secure
payment resulted in “the Settlement Agreement with the title PAYMENT GUARANTEE AND
SETTLEMENT AGREEMENT with an EFFECTIVE DATE of May 9, 2008,” which was
“drafted, printed on watermarked stationery, and signed by the signatories in Nigeria,” and then
“presented to AEONS as a properly executed, authenticated and issued document for AEONS to
accept.” Id. ¶ 110. The affidavit’s supporting documents included various documents purporting
to be from the Nigerian government, affirming that Plaintiff had a contract with the Nigerian
government

for

“SUPPLY,

COMMISSIONING

OF

250.000

MONX

TURBINE

POLYPROPELENE PLANTS AND 150,000 BFSD FOR WARRI REFINERY” and
“PIPELINE RECONSTRUCTION AND COMPUTER OPTIMIZATION FOR PLANTS ‘A’ to
‘D’ AT PORT-HARCOURT REFINERY” for US$42,560,000.00; that “the contract has been
completed”; and that Plaintiff “is entitled to his Contract Payment.” Pina Aff. Ex. 3, ECF No.
24-5; see also, e.g., Pina Aff. Ex. 4–6, 8, 29, ECF No. 24-6 – 24-8, 24-10, 24-31. Notably, the
documents did not include the original contract.
II.

MOTION TO VACATE THE CONFESSED JUDGMENT
Local Rule 108.1(e) governs determination of a motion to vacate a confessed judgment.

It provides, in part:
If the evidence presented establishes that there are substantial and sufficient
grounds for an actual controversy as to the merits of the case, the Court shall
5

order the judgment by confession vacated, opened, or modified, with leave to the
defendant to file a pleading, and the case shall stand for trial. If the evidence does
not establish that there are substantial and sufficient grounds for actual
controversy as to the merits of the case, the judgment shall stand to the same
extent as a final judgment.
Put another way, the issue is whether the motion “rais[es] a genuine issue of material fact
sufficient to constitute a meritorious defense to the confessed judgment.” Signet Bank/Md. v.
Wellington, 968 F.2d 1212 (Table), 1992 WL 157429, at *1 (1992); Steamship Trade Ass’n of
Balt., Inc .v. Peters, No. WDQ-09-109, 2009 WL 2924810, at *2 (D. Md. Sept. 9, 2009) (quoting
Signet Bank). “[A]ll that is necessary to establish the existence of a ‘meritorious defense’ is a
presentation or proffer of evidence, which, if believed, would permit either the Court or the jury
to find for the defaulting party,” or, in this case, the defendant. United States v. Moradi, 673
F.2d 725, 727 (4th Cir. 1982). However, “[t]he ‘mere assertion of a defense is insufficient to
satisfy the burden of proof necessary to vacate a confessed judgment.’” Steamship, 2009 WL
2924810, at *2 (quoting Leasing & Fin., Inc. v. IPM Tech., Inc., 885 F.2d 188, 194 (4th Cir.
1989)).
The Rules of Procedure governing confessed judgments in Maryland state courts “are
analogous to this Court’s procedures with respect to confessed judgments.” Sager v. Hous.
Comm’n, No. ELH-11-2631, 2012 WL 1233016, at *19 n.37 (D. Md. Apr. 11, 2012). Notably,
“‘[j]udgments by confession are not favored in Maryland, because Maryland
courts have long recognized that the practice of including in a promissory note a
provision authorizing confession of judgment lends itself far too readily to fraud
and abuse.’” Gambo v. Bank of Md., 102 Md. App. 166, 185, 648 A.2d 1105,
1114 (1994) (citation omitted). Therefore, the Maryland Court of Appeals “has
made clear that judgments by confession are to be ‘freely stricken out on motion
to let in defenses.’” Schlossberg [v. Citizens Bank, 672 A.2d 625, 627 (Md.
1996)] (citation and some internal quotation marks omitted). The disfavored
status of confessed judgments is also made plain by the many provisions of
Maryland law . . . that prohibit the use of confessed judgment clauses in a wide
variety of contractual contexts.

6

Id. at *20.
Defendant argues that the Court should vacate the Confessed Judgment because the
documents that Plaintiff submitted with its Complaint as documents it allegedly received from
the Nigerian government, and as grounds for it to recover the sum sought in the Complaint, “are
forgeries and frauds.” Def.’s Mem. 1, 7. Defendant submitted affidavits from Simon Onekuto, a
Nigerian lawyer who is “the Director in charge of the Legal Department of the Central Bank of
Nigeria,” id. Ex. C, ECF No. 13-4; Abdullahi Ahmed Yola, the “Solicitor-General of the
Federation [of Nigeria] and Permanent Secretary of the Federal Ministry of Justice,” id. Ex. D,
ECF No. 13-5; Danladi Kifasi, the “Permanent secretary of the Ministry of Finance,” who is “the
chief bureaucrat in the Ministry,” id. Ex. E, ECF No. 13-6; and Drs. Ngozi Okonjo-Iweala and
Shamsudeen Usman, Ministers of Finance, id. Ex. F–G, ECF Nos. 13-7 – 13-8. Mr. Onekuto
declared that Plaintiff entered into a “scam” of “fraudulent activity” that did not “benefit[] the
CBN or the Nigerian Government” and was not “pursued by any agents of the CBN acting on
behalf of CBN or the Nigerian Government.” Onekuto Aff. ¶ 7. He insisted that “[n]o person
committing such fraudulent activity would be acting within the scope of his authority as an agent
of the CBN or the Nigerian Government.” Id. In support of his assertion that “each of the
exhibits attached to plaintiff’s Complaint . . . . are forgeries and were not authorized by CBN or
the Nigerian Government,” id. ¶ 8, Mr. Onekuto noted various inaccuracies that he found in
Plaintiff’s exhibits and inconsistences that he noticed among the exhibits and actual Nigerian
documents, id. ¶¶ 9–12. Similarly, Mr. Yola and Mr. Kifasi stated that Plaintiff’s documents are
fraudulent and forgeries, noting various indicators of fraud. Yola Aff. ¶¶ 4–7; Kifasi Aff. ¶¶ 4–
13. Dr. Okonjo-Iweala insisted that he “never conducted any negotiation with the plaintiff,” nor
“caused the Nigerian government to issue any documents whatsoever to the plaintiff,” and that

7

the June 12, 2005 Statutory Guarantee with his signature on it, Rice Aff. Ex. 4, ECF No. 1-9, “is
forged.” Okonjo-Iweala Aff. ¶¶ 3–4. Dr. Usman declared that the documents Plaintiff submitted
“that claim to bear [his] signature . . . . are all forgeries.” Usman Aff. ¶ 6.
As noted, Plaintiff provided various documents in response to show that its negotiations
and the Payment Guarantee were legitimate. Plaintiff challenges the veracity of Defendant’s
affidavits, alleging that “the affidavit of Abdullah Ahmed Yola, which states under oath that
AEONS is not owed money by the Nigerian government, is at least, in that respect, patently
untrue,” and “the affidavit of Danladi Kifasi . . . states that the Nigerian Government had no
relationship with a bank, Sabadell Atlantico,” but that also appears inaccurate because “another
contractor confirmed payment by the Nigerian government through Sabadell Atlantico.” Pl.’s
Opp’n ¶ 29. According to Plaintiff, “[a]dditional time is required to fully investigate and resolve
the multiple issues of credibility that arise by virtue of the divergent positions taken by the
parties with respect to the issues of the existence of debt, execution of documents, identities of
persons and attempts at collection.”2

Id. ¶ 24.

Alternatively, stating that “[t]he level of

government corruption in Nigeria is well known,” id. ¶ 2, Plaintiff argues that even if the
documents AEONS has were not signed by the officials whose names appear on them or in
accordance with the Nigerian government’s wishes, they are enforceable nonetheless under two
theories. First, Plaintiff argues that “the signature [may have been] appended on [the official’s]
behalf by another government employee, acting with actual or apparent authority.” Id. ¶ 29.
Second, Plaintiff contends that the Nigerian government and CBN cannot “evade liability for
promises made by employees and relied upon by AEONS . . . who in good faith contracts with
the Federal Republic of Nigeria.” Id. ¶ 2.
2

The Court already granted Plaintiff’s motion for a sixty-day extension of its deadline for filing
its Opposition. ECF No. 19.
8

If the documents Plaintiff submitted in support of its Complaint are fraudulent and
forgeries, a position that Defendant supports with substantial evidence, then not only did CBN
not enter into a contract under which it now owes Aeons a considerable sum of money, but it
also did not agree to a confessed judgment. Thus, through this evidence, Defendant without
question “rais[es] a genuine issue of material fact sufficient to constitute a meritorious defense,”
under which Defendant would not be obligated to Plaintiff. See Signet Bank/Md. v. Wellington,
968 F.2d 1212 (Table), 1992 WL 157429, at *1 (1992). Although Plaintiff contests Defendant’s
assertions, Plaintiff’s own evidence to the contrary convincingly shows that “there are substantial
and sufficient grounds for an actual controversy as to the merits of the case,” Loc. R. 108.1(e), as
the parties dispute the validity of the documents on which the controversy is based. Moreover, it
is not for this Court at this time to determine whether Defendant’s evidence is authentic. Rather,
it is a question of whether “if believed, [the evidence presented] would permit either the Court or
the jury to find for [Defendant].” United States v. Moradi, 673 F.2d 725, 727 (4th Cir. 1982)
(emphasis added). If the fact-finder believed Defendant’s evidence over Plaintiff’s, the factfinder would have to reach the conclusion that the documents were fraudulent and forgeries and
it would find for Defendant. Therefore, I recommend that the Court vacate the Confessed
Judgment on that ground and reopen the case. See id.; Loc. R. 108.1(e).
III.

MOTION TO DISMISS
Defendant also argues for dismissal under the doctrine of forum non conveniens3 because

“this dispute – involving alleged Nigerian documents, Nigerian witnesses, and ultimately,
sovereign obligations of Nigeria – is a dispute properly brought in Nigeria (and not in Maryland,
which has no connection . . . to the dispute).” Def.’s Mem. 19. Plaintiff does not address this
3

The other grounds that Defendant asserts for vacating the Confessed Judgment and dismissing
the Complaint are discussed infra, in Part IV.
9

argument.
The common-law doctrine of forum non conveniens provides federal courts with
“discretion to dismiss a case ‘when an alternative forum has jurisdiction to hear [the] case, and
. . . trial in the chosen forum would establish . . . oppressiveness and vexation to a defendant . . .
out of all proportion to plaintiff’s convenience,’” provided that “‘the alternative forum is
abroad’” or, rarely, a state or territorial court. Sinochem Int’l Co. v. Malaysia Int’l Shipping
Corp., 549 U.S. 422, 429 (2007) (quoting Am. Dredging Co. v. Miller, 510 U.S. 443, 447–48
(1994) (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981) (quoting Koster v. (Am.)
Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947)))); Poe v. Marquette Cement Mfg. Co.,
376 F. Supp. 1054, 1060 (D. Md. 1974). When the case is more conveniently tried in another
U.S. district court, then the court transfers, rather than dismisses, the case under 28 U.S.C.
§ 1404(a), which codified the doctrine insofar as it applies to alternative domestic fora.
Sinochem, 549 U.S. at 430. Here, the alternative forum is Nigeria, a foreign country. See Def.’s
Mem. 19.

Therefore, the common-law doctrine of forum non conveniens, not 28 U.S.C.

§ 1404(a), governs. See Sinochem, 549 U.S. at 429.
A court may dismiss under the common-law doctrine even if the court has jurisdiction
and the venue is proper, Am. Dredging Co., 510 U.S. at 448, although the court need not
establish either subject matter or personal jurisdiction prior to dismissing for forum non
conveniens, Sinochem, 549 U.S. at 425. Such a dismissal “reflects a court’s assessment of a
‘range of considerations, most notably the convenience to the parties and the practical difficulties
that can attend the adjudication of a dispute in a certain locality.’” Sinochem, 549 U.S. at 429
(quoting Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 723 (1996)) (citations omitted).
Typically, when a defendant moves to dismiss under forum non conveniens, the defendant “bears
10

a heavy burden in opposing the plaintiff’s chosen forum.” Id. at 430. However, when the
plaintiff has not chosen its home forum, “the presumption in the plaintiff’s favor ‘applies with
less force,’ for the assumption that the chosen forum is appropriate is in such cases ‘less
reasonable.’” Id. (quoting Piper Aircraft Co., 454 U.S. at 255–56); see Poe, 376 F. Supp. at
1060 (“When the doctrine is invoked on a motion to dismiss, it is subject to careful limitation
and applied only in exceptional cases. Unless the balance is strongly in favor of the defendant,
the forum chosen by the plaintiff should not be disturbed.”) (citations omitted).
Without a doubt, this is the “exceptional case[].” See Poe, 376 F. Supp. at 1060.
Plaintiff chose to bring suit in the United States District Court for the District of Maryland,
which is not its home forum. Plaintiff, now a dissolved entity, was organized as a corporation in
Portugal under Portuguese law. See Def.’s Mem. 1; Pl.’s Opp’n 1 & ¶ 21; Pina Aff. ¶ 2.
According to its “founder, controlling shareholder and the person . . . responsible for [its]
operations,” Mr. Pina, Plaintiff “maintains a principal office at Rua Eduardo Augusto Pedroso,
No. 18-C in Alge, Lisbon, Portugal.” Pina Aff. ¶ 1–2. Additionally, the Portuguese documents
attached to the legal opinion that Plaintiff submitted from its counsel provide addresses for
Aeons in Portugal. Pina Aff. Ex. 1 at 6 & 7. Also, Mr. Pina is a Portuguese citizen who has
“resided in Lisbon,” Portugal, since he was approximately twenty-three years old. Pina Aff. ¶ 1.
Moreover, the Payment Guarantee and other documents on which Plaintiff relies are Nigerian;
the signers of those documents appear to be in Nigeria; and the individuals whom Plaintiff
alleges participated in negotiations on behalf of CBN appear to be in Nigeria. See Guar. 1 & 5;
Rice Aff. 2 nn. 1–7 & Ex. 2, 4, 9, & 22, ECF Nos. 1-7, 1-9, 1-14, & 1-27; Pina Aff. Ex. 3, 4, 8, 9,
11, & 28, ECF Nos. 24-5, 24-6, 24-10, 24-11, 24-13, & 24-30. These individuals are likely to be
critical witnesses for Plaintiff at an evidentiary hearing or trial, yet they will have to travel from

11

Nigeria to appear before this Court. Additionally, those who are not officers of CBN are beyond
the subpoena power of this Court. See Fed. R. Civ. P. 45(c)(3)(A)(ii) (stating that, on motion,
the court must quash or modify a subpoena that “requires a person who is neither a party nor a
party’s officer to travel more than 100 miles from where that person resides, is employed, or
regularly transacts business in person”). Therefore, it cannot seriously be disputed that this
Court is not a convenient forum for Plaintiff, its representative, or its likely witnesses.
This Court is an equally-inconvenient forum for Defendant, which is an instrumentality
of the Nigerian government, which, self-evidently, is located in Nigeria. The individuals who
have provided affidavits for Defendant, likely the same individuals who would be called by
Defendant to testify at an evidentiary hearing or trial, appear to be in Nigeria and would have to
travel a great distance to appear before this Court. Def.’s Mem. Ex. C–G. Some of them may be
beyond the subpoena power of this Court. See Fed. R. Civ. P. 45(c)(3)(A)(ii).
Nigeria should have jurisdiction over this case because the incident arose in Nigeria and
Defendant is Nigerian. See Sinochem, 549 U.S. at 429. Nigeria would be the more convenient
forum for Defendant because its representatives and likely witnesses are in Nigeria. Although,
pursuant to the terms of the Payment Agreement, the Nigerian court would have to construe and
apply Maryland law, it would have the advantage of familiarity with Nigerian documents and
government officials. Indeed, Nigeria also would be a more convenient forum for Plaintiff
because a number of its likely witnesses would be in the country, and the Nigerian courts would
have a greater familiarity than this Court with Nigerian documents for the purpose of assessing
their authenticity. Thus, “trial in the chosen forum” would provide little, if any, convenience to
Plaintiff,” and the “oppressiveness and vexation” to Defendant of proceedings in this Court
would be great. Sinochem, 549 U.S. at 429. Consequently, applying the test stated in Sinochem,
12

549 U.S. at 429, the “oppressiveness and vexation” to Defendant” is “out of all proportion to
plaintiff’s convenience.” Id. Having considered “the convenience to the parties and the practical
difficulties that can attend the adjudication of a dispute in a certain locality,” id., I recommend
that the Court dismiss this lawsuit for forum non conveniens.
IV.

ALTERNATIVE GROUNDS
As alternative grounds for vacating the confessed judgment, and as grounds for

dismissing the lawsuit, Defendant argues that subject matter jurisdiction is lacking in two4
respects: (1) because “CBN is an agency or instrumentality of the defendant Republic of Nigeria,
as defined in 28 U.S.C. 1603(b) and is entitled to immunity” under the Foreign Sovereign
Immunities Act (“FSIA” or “Act”), Def.’s Mem. 13; and (2) because “Aeons has no standing to
bring this suit,”5 id. at 21; and that the Court also lacks personal jurisdiction, id. at 16–17. In its
Complaint, Plaintiff conceded that “[t]he Central Bank of Nigeria (GUARANTOR) is an agent
or instrumentality of the Federal Republic of Nigeria, a foreign government.”

Compl. 2.

4

Defendant also argues that “Maryland’s three (3) year statute of limitations . . . bars this suit,”
Def.’s Reply 12 (capitalization removed), which can be seen as another challenge to the Court’s
subject matter jurisdiction. See Wright & Miller, 5B Fed. Prac. & Proc. § 1350, at 96 (“Courts
have recognized a variety of . . . defenses that one normally would not think of as raising subject
matter jurisdiction questions when considering a Rule 12(b)(1) motion, including claims that the
plaintiff’s suit is barred by the governing statute of limitations . . . .”). However, “[t]he ordinary
rule in federal courts is that an argument raised for the first time in a reply brief or memorandum
will not be considered,” because the argument’s late appearance leaves the opposing party
without the opportunity to respond. Clawson v. FedEx Ground Package Sys., Inc., 451 F. Supp.
2d 731, 734–35 (D. Md. 2006) (citing United States v. Williams, 445 F.3d 724, 736 n.6 (4th Cir.
2006)). Because the Confessed Judgment should be vacated on the basis that the documents may
be fraudulent and forgeries, and the suit should be dismissed under the doctrine of forum non
conveniens, there is no need for the Court to exercise its discretion to consider whether the
statute of limitations ran before this suit commenced. See id.
5

Although Defendant does not state explicitly that this is a jurisdictional argument, “standing
represents a jurisdictional requirement which remains open to review at all stages of the
litigation,” Nat’l Org. for Women v. Scheidler, 510 U.S. 249, 255 (1994), and the “issue of
standing [may be] asserted as a basis for lack of subject matter jurisdiction under Rule 12(b)(1),”
Trinity Outdoor, L.L.C. v. City of Rockville, 123 Fed. App’x 101, 105 (4th Cir. 2005).
13

Nonetheless, citing 28 U.S.C. § 1605(a)(1), which provides that “[a] foreign states shall not be
immune from the jurisdiction of the courts of the United States . . . in any case . . . in which the
foreign state has waived its immunity either explicitly or by implication,” Plaintiff alleged that
CBN “waived any claim of immunity” by “stipulat[ing] [in the Payment Guarantee] that any
dispute is to be resolved by this Court under the laws of the State of Maryland.”

Id.

Additionally, Plaintiff attached the Payment Guarantee, which provided that CBN agreed “to
submit to the jurisdiction of the United States District Court in and for Maryland and to have the
dispute settled by that court.” Compl. Ex. 1 at 4.
However, Plaintiff’s response is too clever by half, as the document it relies on to
establish its forum selection argument is one of those that Defendant contends is fraudulent and
forged. If valid, this document arguably confers subject matter jurisdiction, yet its validity
cannot be established without an evidentiary hearing. See Equal Rights Ctr. v. AvalonBay
Communities, Inc., No. AW-05-2626, 2009 WL 1153397, at *2 (D. Md. March 23, 2009) (If the
defendant “contend[s] that the jurisdictional allegations in the complaint are not true” in its Rule
12(b)(1) motion to dismiss, then “the Court may conduct an evidentiary hearing and consider
matters beyond the allegations in the complaint.”). However, the majority of the necessary
witnesses are abroad, and travel to the hearing would be costly and burdensome. Additionally,
some may be beyond the subpoena power of this Court. See Fed. R. Civ. P. 45(c)(3)(A)(ii).
Therefore, I recommend that the Court grant the Motion to Vacate the Confessed Judgment on
the basis of possible fraud, and grant the Motion to Dismiss under the common law doctrine of
forum non conveniens, rather than relying on Defendant’s alleged immunity under the FSIA to
vacate the judgment and dismiss the case for lack of subject matter jurisdiction.

14

Defendant’s second argument that subject matter jurisdiction is lacking6 is that “Aeons
has no standing to bring this suit.” Def.’s Mem. 21. “Under Rule 12(b)(1), if a party lacks
standing the court automatically lacks subject matter jurisdiction.” Hufford v. Bank United, FSB,
No. RDB-11-1207, 2011 WL 4985920, at *2 (D. Md. Oct. 18, 2011) (citing Pitt County v.
Hotels.com, L.P., 553 F.3d 308, 312 (4th Cir. 2009)). Defendant alleges that Aeons “was
involuntarily dissolved on October 14, 2008 by the Portuguese corporation registration
authorities,” and “a non-existent entity cannot sue.” Def.’s Mem. 21. According to Defendant,
Plaintiff’s power to sue “passe[d] effectively into the hands of the corporation’s directors who
stand as trustees,” who are unidentified and not involved in this lawsuit. Id. at 3, 20–21.
Rule 17(b)(2) provides that “[c]apacity to sue or be sued is determined . . . for a
corporation, by the law under which it was organized.” Fed. R. Civ. P. 17(b)(2); see Cape v. von
Maur, 932 F. Supp. 124, 128 n.3 (D. Md. 1996). The parties agree that Aeons was organized as
a corporation under Portuguese law. See Def.’s Mem. 1; Pl.’s Opp’n 1; Pina Aff. ¶ 2. Although
Plaintiff concedes that it is a dissolved corporation, it argues that the suit still is proper because
“AEONS, notwithstanding administrative dissolution, has the power and authority to proceed
with its collection and payment of debts.” Pl.’s Opp’n ¶ 21. To support its assertion that Aeons
retains that capacity to bring a lawsuit, Aeons submitted Mr. Pina’s affidavit, in which he stated
that AEONS “is a corporation organized and still existing under the laws of Portugal,” and that
its “Counsel advised that statutes and court cases established clearly that in Portugal a dissolved
corporation continues as a juridical entity and can sue and be sued in its own right thereafter
while it collects assets and resolves its debts.” Pina Aff. ¶¶ 2 & 4. Mr. Pina attached a legal
opinion from Aeons’s counsel in Portugal. Pina Aff. Ex. 1. The opinion states:
6

Defendant does not state whether Aeons’s purported lack of standing is a grounds to vacate the
Confessed Judgment or to dismiss the Complaint.
15

[E]ven though the company AEONS has been administratively dissolved, the fact
it holds patrimonial assets, of credits over its clients and also litigation rights
(which amount is not yet determined but will be determined upon the outcome of
the litigation) keeps intact its juridical personality and judiciary capacity. Article
9., no. 1 and no. 2 of the Code of Civil Procedure confers to Aeons the capacity to
be by itself in court and fully exercise of its rights as a creditor. One can draw this
same conclusion comes from the art. 5th, No. 1, of the Code of Civil
Procedure. . .
We can thus conclude that Aeons Centro de Administração de Empresas
Limitada still has juridical personality and judiciary capacity and is entitled to be
in court in its own name claiming credits it owns and that are due.
Id. at 2-3. Without access to the Portuguese Code of Civil Procedure or the ability to subpoena
Aeons’s Portuguese counsel, see Fed. R. Civ. P. 45(c)(3)(A)(ii), the Court cannot verify the
assertions by Aeons’s counsel. Once again, I recommend that the Court grant the Motion to
Vacate the Confessed Judgment on the basis of possible fraud, and grant the Motion to Dismiss
under the common law doctrine of forum non conveniens, rather than relying on Defendant’s
purported lack of standing to vacate the judgment and dismiss the case for lack of subject matter
jurisdiction.
Finally, Defendant contends that this Court lacks personal jurisdiction because the
documents supporting the Complaint, including the Payment Guarantee, are fraudulent, such that
the forum selection clause in the Payment Guarantee is fraudulent as well, and CBN does not
have minimum contacts with Maryland. Def.’s Mem. 16–17. It is true that Plaintiff has not met
its burden of showing that Defendant has minimum contacts with Maryland. See Mylan Labs.,
Inc. v. Akzo, N.V., 2 F.3d 56, 59–60 (4th Cir. 1993) (“When a court’s personal jurisdiction is
properly challenged by motion under Federal Rule of Civil Procedure 12(b)(2), the jurisdictional
question thereby raised is one for the judge, with the burden on the plaintiff ultimately to prove
grounds for jurisdiction by a preponderance of the evidence.”); Estes v. Midwest Prods., Inc., 24
F. Supp. 2d 621, 622 (S.D. W. Va. 1998) (same). However, whether this Court has personal

16

jurisdiction by virtue of the forum selection clause in the Payment Guarantee cannot be decided
without determining the validity of the Payment Guarantee through an evidentiary hearing. The
distance the parties and witnesses would have to travel would be costly and burdensome, and the
limitations on the Court’s subpoena power, see Fed. R. Civ. P. 45(c)(3)(A)(ii), could be an issue
once again. Therefore, I recommend that the Court grant the Motion to Vacate the Confessed
Judgment on the basis of possible fraud, and grant the Motion to Dismiss under the common law
doctrine of forum non conveniens, rather than relying on the Court’s alleged lack of personal
jurisdiction to vacate the judgment and dismiss the case.
V.

CONCLUSION
In sum, I recommend that the Court
1. GRANT Defendant’s Motion to Vacate Judgment by Confession on the basis that
Defendant has presented evidence that, “if believed, . . . would permit either the Court
or the jury to find for [Defendant],” United States v. Moradi, 673 F.2d 725, 727 (4th
Cir. 1982);
2. REOPEN this case; and
3. GRANT Defendant’s Motion to Dismiss for forum non conveniens.
The parties have fourteen (14) days in which to file objections to this Report and

Recommendation pursuant to Fed. R. Civ. P. 72(b) and Local Rule 301.5.b.
A proposed Order follows.

Dated: July 3, 2012

/s/
Paul W. Grimm
United States Magistrate Judge

lyb
17

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

AEONS CENTRO DE
ADMINISTRACAO DE
EMPRESAS, LTD.,
Plaintiff,

:
:
:
CIVIL NO.: BEL-11-3447
:

v.
:
CENTRAL BANK OF NIGERIA,
:
Defendant.
…o0o…
ORDER
For the reasons stated in the Report and Recommendation that United States Magistrate
Judge Paul W. Grimm submitted on July 3, 2012, and the time for filing objections to the Report
and Recommendation having passed, it is, this _____th day of ___________, 2012, ORDERED
that
1. Defendant’s Motion to Vacate Judgment by Confession IS GRANTED;
2. This case IS REOPENED; and
3. Defendant’s Motion to Dismiss IS GRANTED.

Benson Everett Legg
United States District Judge