Cerner Middle East Ltd. v. Al-Dhaheri et al

Filing 36

Judge F. Dennis Saylor, IV: ORDER entered. MEMORANDUM AND ORDER on Motion to Dismiss. (Zaleski, Christine)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_____________________________________
)
CERNER MIDDLE EAST LIMITED,
)
a Cayman Islands Exempted Company,
)
)
Plaintiff,
)
)
v.
)
)
AHMED SAEED MAHMOUD
)
AL-BADIE AL-DHAHERI,
)
)
Defendant,
)
)
and
)
)
ABDULLA AHMED AL-BADIE
)
AL-DHAHERI,
)
)
Defendant/Reach and Apply
)
Defendant.
)
_____________________________________)

Civil Action No.
16-11984-FDS

MEMORANDUM AND ORDER ON DEFENDANTS’ MOTION TO DISMISS
SAYLOR, J.
This is an action for recognition and enforcement of a foreign arbitral award. Plaintiff
Cerner Middle East Limited has brought suit against two individuals, Ahmed Saeed Mahmoud
Al-Badie Al-Dhaheri (“Ahmed Dhaheri”) and his son, Abdulla Ahmed Al-Badie Al-Dhaheri
(“Abdulla Dhaheri”). The complaint alleges that Ahmed Dhaheri owes Cerner more than $62
million pursuant to an arbitral award issued by the International Court of Arbitration of the
International Chamber of Commerce (“ICC”). The complaint further alleges that Ahmed
Dhaheri fraudulently transferred a joint interest in a condominium located at 29 Otis Street in
Cambridge, Massachusetts, to his son six months after the issuance of the award, and that the

pair later transferred the property to a third party for $990,000. Cerner seeks damages from
Ahmed Dhaheri and to reach and apply the proceeds from the sale of the 29 Otis Street property.
Defendants have moved to dismiss the complaint for lack of personal jurisdiction
pursuant to Fed. R. Civ. P. 12(b)(2).1 For the following reasons, the motion will be denied.
I.

Background
A.

Factual Background

Plaintiff Cerner Middle East Limited is a foreign company organized under the laws of
the Cayman Islands, with a principal place of business in Kansas City, Missouri. (Compl. ¶ 2).
Defendants Ahmed Dhaheri and his son, Abdulla Dhaheri, are both residents of Abu Dhabi,
United Arab Emirates, and are U.A.E. citizens. (Id. ¶¶ 3–4; Ahmed Dhaheri Decl.). Ahmed
Dhaheri is one of two members of iCapital, LLC, which is a U.A.E. limited liability company.
(Ahmed Dhaheri Decl.)
1.

Arbitral Award

In 2008, iCapital and Cerner entered into a $94 million contract concerning the
development of a medical information technology platform in the U.A.E. (Compl. ¶ 5).
According to the complaint, iCapital promptly defaulted on its payment obligations under that
contract. (Id. ¶ 15).
On December 29, 2012, after a series of amendments to the contract, iCapital and Cerner
entered into a Settlement and Payment Agreement (“SPA”) and a Fifth Amendment to the
contract. (Id. ¶¶ 19–22; Hadas Decl., Ex 3; Hadas Decl., Ex. 4). The Fifth Amendment provided
that “in the event of a dispute” the parties to the contract would submit to a “binding arbitration

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Defendants have also moved to dismiss for insufficient service of process pursuant to Fed. R. Civ. P.
12(b)(5). However, at oral argument, defendants conceded that the Rule 12(b)(5) motion was premature as Fed. R.
Civ. P. 4(m) does not provide a time limit for service of process in a foreign country. Defendants have agreed to
hold that motion in abeyance.

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under the Rules of Conciliation and Arbitration of the International Chamber of Commerce.”
(Hadas Decl., Ex. 4 § 9.3). The SPA is governed by Missouri law, as is the underlying contract.
(Id. § 14; Id., Ex. 2 § 9.14). Cerner and iCapital, but not Ahmed Dhaheri, are signatories to the
SPA and Fifth Amendment. (Id., Ex. 3–4).
iCapital again failed to make payments in accordance with the SPA and Fifth
Amendment. (Compl. ¶¶ 23–24). On August 23, 2013, Cerner filed a request for arbitration
with the ICC against both iCapital and Ahmed Dhaheri. (Id. ¶ 30). In November 2014, an
arbitration hearing was held in Paris, France. (Id. ¶¶ 34–35). Neither iCapital nor Ahmed
Dhaheri appeared in that proceeding to contest Cerner’s claims. (Hadas Decl., Ex. 5 ch. 1.2.4).
On July 16, 2015, the arbitral tribunal issued a final award of more than $62 million in favor of
Cerner against iCapital and Dhaheri, jointly and severally. (Id. ch. 12). The arbitral tribunal
found that a valid arbitration agreement existed between Cerner and iCapital arising from both
the SPA and the Fifth Amendment, and that it had jurisdiction over Ahmed Dhaheri on the basis
that he was acting as the alter ego of iCapital with respect to the relevant transactions. (Id. ch.
12.1, 10.2.54).
2.

Massachusetts Real Property

In July 2007, Ahmed Dhaheri purchased a condominium located at 29 Otis Street, Unit
601, in Cambridge, Massachusetts, for $799,000. (McGovern Decl., Ex. A). On January 3,
2016, about six months after the final arbitral award was issued, Ahmed Dhaheri transferred the
property to himself and Abdulla Dhaheri as joint tenants with a right of survivorship for nominal
consideration. (Id., Ex. B). On July 15, 2016, defendants sold the property to a third party for
$990,000. (Id., Ex. C).

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B.

Procedural Background

Cerner brought this action in Middlesex Superior Court on August 1, 2016. The
complaint alleges three claims arising under both federal and state law. Defendants removed this
action pursuant to 9 U.S.C. § 205, asserting jurisdiction under 9 U.S.C. § 203. Defendants have
moved to dismiss the complaint on the basis of lack of personal jurisdiction pursuant to Fed. R.
Civ. P. 12(b)(2).
Although defendants have moved to dismiss, they have not yet been properly served with
the complaint in this action. Defendants, as U.A.E. citizens, must be served in accordance with
U.A.E. civil procedure, which presents multiple “procedural hurdles.” See Orsi v. Falah, 2012
WL 4469120, at *4 (D. Mass. Sept. 25, 2012), (describing U.A.E. procedures for effecting
service of process).2 Plaintiff expects that service of process may take up to eighteen months to
complete. (Pl. Opp. 17).
II.

Standard of Review
Plaintiff bears the burden of establishing that the court has personal jurisdiction over the

defendants. Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50 (1st
Cir. 2002). In considering a motion to dismiss under Rule 12(b)(2), the court may employ
several standards to assess whether plaintiff has carried that burden: the “prima facie” standard;
the “preponderance-of-the-evidence” standard; or the “likelihood” standard. See id. at 50 n.5;
Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145–46 (1st Cir. 1995). Where, as
here, the court is called to make that assessment without first holding an evidentiary hearing, the
prima facie standard is applied. See United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618
(1st Cir. 2001). Under that standard, the court takes plaintiff’s “properly documented evidentiary

2

The U.A.E. is apparently not a party to the Hague Convention or any other agreement with the United
States concerning service of process. Orsi, 2012 WL 4469120, at *2.

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proffers as true and construe[s] them in the light most favorable to [plaintiff's] jurisdictional
claim.” A Corp. v. All American Plumbing, Inc., 812 F.3d 54, 58 (1st Cir. 2016) (citing Phillips
v. Prairie Eye Ctr., 530 F.3d 22, 26 (1st Cir. 2008)). A plaintiff may not “rely on unsupported
allegations in [its] pleadings.” A Corp., 812 F.3d at 54 (quoting Platten v. HG Bermuda
Exempted Ltd., 437 F.3d 118, 134 (1st Cir.2006) (alteration in original)). “Rather, [the plaintiff]
must put forward ‘evidence of specific facts’ to demonstrate that jurisdiction exists.” Id.
(quoting Foster-Miller, 46 F.3d at 145). Facts offered by the defendant “become part of the mix
only to the extent that they are uncontradicted.” Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591
F.3d 1, 8 (1st Cir. 2009) (quoting Adelson v. Hananel, 510 F.3d 43, 48 (1st Cir. 2007)).
To establish personal jurisdiction, plaintiff must show that the requirements of the
Massachusetts long-arm statute, Mass. Gen. Laws ch. 223A, § 3, are satisfied, and that the
exercise of jurisdiction is consistent with constitutional due process. Daynard, 290 F.3d at 52;
Intech, Inc. v. Triple “C” Marine Salvage, Inc., 444 Mass. 122, 125 (2005). Due process
requires that a plaintiff alleging specific personal jurisdiction establish the existence of three
conditions:
First, the claim underlying the litigation must directly arise out of, or relate to, the
defendant's forum-state activities. Second, the defendant's in-state contacts must
represent a purposeful availment of the privilege of conducting activities in the
forum state, thereby invoking the benefits and protections of that state's laws and
making the defendant's involuntary presence before the state's courts foreseeable.
Third, the exercise of jurisdiction must be reasonable.
Copia Commc'ns, LLC v. AMResorts, L.P., 812 F.3d 1, 4 (1st Cir. 2016) (quoting Phillips, 530
F.3d at 27 (alterations omitted)).
III.

Analysis
The complaint alleges three claims: (1) a federal claim for recognition and enforcement

of the arbitral award pursuant to 9 U.S.C. § 201, et seq, against Ahmed Dhaheri alone; (2) a
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state-law claim for fraudulent conveyance against both defendants; and (3) a reach-and-apply
claim pursuant to Mass. Gen. Laws ch. 214, § 3(8), against Abdulla Dhaheri alone.
Plaintiff does not contend that this Court has an independent basis for personal
jurisdiction over defendants as to the federal claim; indeed, nothing concerning that claim
occurred in Massachusetts. Instead, plaintiff asserts that the Court has specific personal
jurisdiction over the state-law claims and pendent personal jurisdiction over the recognition and
enforcement claim.
A.

Specific Personal Jurisdiction Concerning State-Law Claims

The complaint alleges a claim of fraudulent transfer against both defendants. To prove a
claim of fraudulent transfer under Massachusetts law, a plaintiff must prove that (1) it is a
creditor and (2) defendants transferred property fraudulently, as defined by the Uniform
Fraudulent Transfers Act. See Alford v. Thibault, 83 Mass. App. Ct. 822, 827 (2013) (citing the
Massachusetts Uniform Fraudulent Transfer Act, Mass. Gen. Laws ch. 109A, § 5). See also
Mass. Gen. Laws ch. 109A, § 6.
The complaint also alleges a claim to reach and apply Abdulla Dhaheri’s proceeds from
the sale of the 29 Otis Street property. See Mass. Gen. Laws ch. 214, § 3(8). Because that claim
simply requests a remedy for the underlying fraudulent-transfer claim, the court’s personal
jurisdiction over that claim rises and falls with its jurisdiction over the fraudulent-transfer claim.
1.

Massachusetts Long-Arm Statute

Plaintiff contends that the court has personal jurisdiction concerning the fraudulenttransfer claim under three separate provisions of the Massachusetts long-arm statute, including §
3(a). Section 3(a) states that “[a] court may exercise personal jurisdiction over a person, who
acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a)

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transacting any business in this commonwealth . . .” Mass. Gen. Laws ch. 223A, § 3. In order
for jurisdiction to exist under that subsection, (1) defendants must have transacted business in
Massachusetts, and (2) plaintiff's claim must have arisen from defendants’ transaction of such
business. See Tatro v. Manor Care, Inc., 416 Mass. 763, 767 (1994).
Here, the fraudulent-transfer claim arises out of the transfer and subsequent sale of a
condominium in Massachusetts. The question is whether the transfer and sale of the
Massachusetts property constitutes “transacting any business in [the] commonwealth.” Mass.
Gen. Laws 223A, § 3(a). Courts have interpreted the “transacting any business” language of §
3(a) broadly. See Amstell Holding, Inc. v. SIG Combibloc, Inc., 2005 WL 6258671, at *4 (D.
Mass. Sept. 27, 2005). For example, a defendant need not be physically present in a state to
“transact business” in that state. See Energy Capital and Services LP II v. Hill Refrigeration,
Inc., 989 F. Supp. 353, 355 (D. Mass. 1997).
Defendants transacted business in Massachusetts by selling property located here.
Selling Massachusetts property necessarily involves a number of activities that occur in
Massachusetts, including showing and inspecting the property as well as recording and
reviewing documents related to it. Plaintiff has produced evidence that defendants caused
numerous legal documents to be created in Massachusetts in order to sell the condominium at 29
Otis Street, including a power of attorney, an owner affidavit, a mechanic lien certificate, and an
application to the City of Cambridge. (See McGovern Decl., Ex. E-I). Although there is no
evidence that defendants themselves were present in Massachusetts in connection with the sale,
someone had to be present in the state in order to accomplish these tasks. Whether they were
acting through agents or personally, defendants transacted business in Massachusetts by
transferring and selling the property. See Haddad v. Taylor, 32 Mass. App. Ct. 332, 336; see

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also Amstell Holding, 2005 WL 6258671, at *4 (interpreting Haddad as standing for principle
that “negotiations by a principal's agent to purchase real estate should be considered ‘transacting
business’ even if the principal was never physically present in the state”).
Accordingly, plaintiff has shown that the court has personal jurisdiction over defendants
under the Massachusetts long-arm statute because the fraudulent-transfer claim arises out of
defendants’ transaction of business in Massachusetts. Having found that the claim satisfies the
requirements of § 3(a), the court need not address plaintiff’s alternative argument that the claim
satisfies two other provisions.
2.

Due Process

Plaintiffs must also prove that the exercise of personal jurisdiction over the state-law
claims comports with the constitutional requirements of “relatedness,” “purposeful availment,”
and “reasonableness.”
a.

Relatedness

To satisfy the relatedness requirement, “the claim underlying the litigation must directly
arise out of, or relate to, the defendant's forum-state activities.” Daynard, 290 F.3d at 60
(quoting Foster-Miller, 46 F.3d at 144). The complaint alleges that Ahmed Dhaheri fraudulently
transferred a joint interest in his Cambridge condominium to Abdulla Dhaheri six months after
plaintiff obtained a $62 million arbitral award against him. Defendants deny that this transfer
was fraudulent, but do not deny the fact of the transfer of real property in Massachusetts. There
is no dispute that when the arbitral award issued in July 2015, Ahmed Dhaheri had full
ownership of the property at 29 Otis Street, which he purchased in 2007 for $799,000. Nor is
there a dispute that Ahmed Dhaheri transferred a joint interest in the Massachusetts property to
himself and Abdulla Dhaheri in January 2016. There is no dispute that defendants jointly held

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the Massachusetts property for about seven months before transferring it to a third party for
$990,000 in July 2016. Each time the property changed hands, activity had to occur in
Massachusetts, either through defendants’ actions directly or at their direction. See Haddad v.
Taylor, 32 Mass. App. Ct. 332, 335. Thus, the claim for fraudulent transfer is “materially
connected to [Massachusetts] because it occurred here.” See AngioDynamics, Inc. v. Biolitec
AG, 780 F.3d 429, 434 (2015) (finding that a Massachusetts court had specific personal
jurisdiction over parent corporation defendants who were alleged to have “looted [subsidiary
corporation] by fraudulently transferring its assets out of Massachusetts”).
Defendants contend that the court nevertheless lacks personal jurisdiction concerning the
fraudulent-transfer claim because it rests on an unenforceable arbitral award. In essence, they
contend that the arbitral tribunal lacked jurisdiction to award damages against Ahmed Dhaheri
because the question of the arbitrability of a claim for breach against a non-signatory to an
agreement who is resisting arbitration must be determined by a court, and not by an arbitral
tribunal. That argument, however, is more appropriate for consideration under a motion to
dismiss for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P.
12(b)(6). The differences between a Rule 12(b)(6) motion and the present Rule 12(b)(2) motion
are more than formalistic. The motions are decided under entirely different standards, with a
focus on different issues, and considering different documents. Defendants contend that its
initial brief in this matter was sufficient to put plaintiff on notice that it was challenging the
sufficiency of the fraudulent-transfer claim, and request that the court consider the merits of that
claim within the context of its Rule 12(b)(2) motion. See Def. Rep. 6. However, because the
record and arguments have focused on the personal-jurisdiction claim, it is not appropriate to
rule on the sufficiency of the claim at this time.

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Furthermore, and in any event, the parties agree that the precise issue on which
defendants rest their motion—whether the arbitral award is enforceable against Ahmed
Dhaheri—is currently under consideration in the District Court for the District of Oregon. Pl.
Supp. Memo. 4; Def. Supp. Memo. 2, 6. Under the circumstances, it would not be prudent to
convert the present motion into a motion to dismiss for failure to state a claim. Because it need
not resolve the issue of whether the award is enforceable against Ahmed Dhaheri for the
purposes of the present motion, the Court expresses no opinion as to the merits of defendants’
claim. Id.
b.

Purposeful Availment

A defendant's in-state contacts “must represent a purposeful availment of the privilege of
conducting activities in the forum state, thereby invoking the benefits and protections of that
state's laws and making the defendant's involuntary presence before the state's courts
foreseeable.” Daynard, 290 F.3d at 60–61 (quoting Foster-Miller, 46 F.3d at 144). “The
cornerstones upon which the concept of purposeful availment rest are voluntariness and
foreseeability.” Id. at 61 (quoting Sawtelle v. Farrell, 70 F.3d 1381, 1391 (1st. Cir. 1995)).
“Voluntariness requires that the defendant's contacts with the forum state ‘proximately result
from actions of the defendant himself.’” Adams v. Adams, 601 F.3d 1, 6 (1st Cir. 2010) (quoting
Phillips, 530 F.3d at 28). “The contacts must be deliberate, and not based on the unilateral
actions of another party.” Id. (quoting Phillips, 530 F.3d at 28) (quotations omitted).
Again, the fraudulent-transfer claim concerns defendants’ transfer and sale of
Massachusetts property. The facts giving rise to that claim establish that Ahmed Dhaheri
voluntarily transferred the Otis Street property, after the arbitral award was issued, and that
defendants jointly sold the property shortly thereafter. In transferring and selling Massachusetts

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property, defendants purposefully availed themselves of the laws of the Commonwealth. In
short, defendants “should not be surprised to find [themselves] in a Massachusetts court since the
transaction at issue included a piece of property in Massachusetts.” Amstell Holding, 2005 WL
6258671, at *7.
c.

Reasonableness

Even if the requisite contacts exist, the court's exercise of jurisdiction must “comport
with fair play and substantial justice.” U.S.S. Yachts, 894 F.2d at 11. The Supreme Court has
identified five “gestalt factors” that bear upon the fairness of subjecting nonresidents to this
court’s jurisdiction. Sawtelle, 70 F.3d at 1394. Those factors are “(1) the defendant’s burden of
appearing; (2) the forum state's interest in adjudicating the dispute; (3) the plaintiff's interest in
obtaining convenient and effective relief; (4) the judicial system's interest in obtaining the most
effective resolution of the controversy; and (5) the common interests of all sovereigns in
promoting substantive social policies.” Id. (citing Burger King v. Rudzewicz, 471 U.S. 462, 477
(1985)).
First, although it would be somewhat burdensome for defendants to appear before this
court, it is “almost always inconvenient and costly for a party to litigate in a foreign jurisdiction.”
Nowak, 94 F.3d at 718. For this factor to have any significance, the defendant must demonstrate
that the “exercise of jurisdiction in the present circumstances is onerous in a special, unusual, or
other constitutionally significant way.” Pritzker v. Yari, 42 F.3d 53, 64 (1st Cir. 1994).
Defendants have owned and sold property in Massachusetts, and there is evidence that Ahmed
Dhaheri currently sits on the board of directors of a Massachusetts corporation. (See McGovern
Decl., Ex. J). Thus, there is no evidence that defendants’ burden of litigating in this forum is any
greater than the burden for a typical foreign defendant. Second, Massachusetts has an interest in

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adjudicating disputes arising out of the transfer and sale of real property located within the state,
and in adjudicating a cause of action arising under Massachusetts state law. Third, plaintiff,
which is a Cayman Islands company with a principal place of business in Missouri, has not
demonstrated why Massachusetts is a more convenient forum to adjudicate this dispute than any
other forum. Nevertheless, “a plaintiff's choice of forum must be accorded a degree of deference
with respect to the issue of its own convenience.” Sawtelle, 70 F.3d at 1395. Fourth, defendants
complain that the U.A.E. is the appropriate place to adjudicate the action for recognition and
enforcement of the foreign arbitral award. However, it is not clear that there is a forum better
suited to consider the Massachusetts fraudulent-transfer claim. Fifth, the interests of the affected
governments in promoting substantive social policies are not affected.
Thus, on balance the “gestalt” factors somewhat favor plaintiff. Accordingly, the
exercise of personal jurisdiction in Massachusetts as to defendants for the two state-law claims
will not offend traditional notions of fair play and substantial justice. Because both the statutory
and constitutional requirements have been satisfied, this court has specific personal jurisdiction
over defendants as to the state-law claims.
B.

Pendent Personal Jurisdiction Concerning Federal Claim

In addition to the state-law claims, plaintiff has asserted a federal claim for recognition
and enforcement of the arbitral award. Plaintiff does not contend that there is an independent
basis for specific personal jurisdiction over that federal claim. There is no question that the $62
million arbitral award is entirely unrelated to Massachusetts. The award concerns a contract
between a Cayman Islands company, headquartered in Missouri, and a U.A.E. company, to
provide services in the U.A.E. The contract applies Missouri law. The arbitration took place in
France. The named defendants are citizens of the U.A.E. In short, there is not a single event that

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ties the arbitral award to this forum.
Although no independent basis for personal jurisdiction exists over the federal claim,
plaintiff requests that the court exercise pendent personal jurisdiction over defendants as to that
claim. See Home Owners Funding Corp. of Am. v. Century Bank, 695 F. Supp. 1343, 1345 (D.
Mass. 1988) (“In a multi-count complaint, if a court has personal jurisdiction over the defendant
with respect to one count, it has personal jurisdiction with respect to all counts.”). Under some
circumstances and at its discretion, a court may exercise pendent personal jurisdiction over
claims that arise out of the same “nucleus of operative facts” as the claims over which the court
has jurisdiction. See, e.g., Amtrol, Inc. v. Vent-Rite Valve Corp., 646 F.Supp. 1168, 1175 (D.
Mass. 1986).
The exercise of pendent personal jurisdiction under the circumstances presented here is
troublesome, to say the least. The principal issue in this dispute is the enforceability of a $62
million arbitration award. Again, that dispute has nothing whatsoever to do with Massachusetts,
and this Court has no independent basis to exercise jurisdiction over that claim (or, more
accurately, jurisdiction over the parties in order to resolve that claim). The state-law claims
involve the sale of a $990,000 condominium, alleged to constitute a fraudulent transfer.
Moreover, the parties have devoted merely two paragraphs of their more than seventy pages of
briefing to the “complex and unsettled doctrine of pendent personal jurisdiction.” See Riley v.
Harr, 292 F.3d 282, 288 n.8 (1st Cir. 2002).
Rather than resolve that issue at this early stage and on this scant record, the Court will
hold resolution of it in abeyance until such time as defendants have been properly served.
Defendants may renew their motion at that time—with appropriate briefing—with respect to the
Court’s ability to assert pendent personal jurisdiction over defendants as to the recognition and

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enforcement claim asserted in Count I.
C.

Subject-Matter Jurisdiction Concerning State-Law Claims

Although the parties have only raised an issue concerning personal jurisdiction, federal
courts, as courts of limited jurisdiction, have an independent obligation to assess subject-matter
jurisdiction. In re Recticel Foam Corp., 859 F.2d 1000, 1002 (1st Cir. 1988) (describing a
federal court’s obligation to inquire sua sponte into its subject-matter jurisdiction as “too
elementary to warrant citation of authority”). Because the Court will hold the determination
concerning plaintiff’s federal claim in abeyance, there is a potential issue concerning the Court’s
subject-matter jurisdiction over the state-law claims.
Defendants removed this action pursuant to 9 U.S.C. § 205, asserting jurisdiction under 9
U.S.C. § 203. Section 205 provides that federal courts have removal jurisdiction “[w]here the
subject matter of an action . . . pending in a State court relates to an arbitration agreement or
award falling under the Convention [on the Recognition and Enforcement of Foreign Arbitral
Awards].” 9 U.S.C. § 205. Section 205 plainly provides for removal jurisdiction over a claim
brought pursuant to 9 U.S.C. § 201, et seq, for recognition and enforcement of a foreign arbitral
award.
It is a closer question whether the Court has subject-matter jurisdiction over the state-law
claims pursuant to this statute.3 The First Circuit has not had occasion to interpret the scope of
the jurisdictional grant in § 205. However, every circuit that has analyzed the issue has
interpreted the statute as conferring broad jurisdiction on the federal courts to hear claims

3

There is no independent basis for diversity jurisdiction over the state law claims pursuant to 28 U.S.C. §
1332. Plaintiff is incorporated in the Cayman Islands and maintains a principal place of business in Missouri.
Accordingly, it is a dual citizen of the Cayman Islands and Missouri and cannot maintain an action in diversity
against another foreign citizen. Halawi Inv. Trust, SAL v. Boston Merch. Fin., Ltd., 2014 WL 2515697, at *2 (D.
Mass. June 2, 2014) (“[A] corporation that is incorporated abroad but maintains a principal place of business [in the
United States] has dual citizenship under the diversity statute and its foreign citizenship destroys jurisdiction when
there is a foreign citizen on the other side of the lawsuit.”).

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“whenever an arbitration agreement falling under the Convention could conceivably affect the
outcome of the plaintiff’s case.” See Infuturia Global Ltd. v. Sequus Pharaceuticals, Inc., 631
F.3d 1133, 1138 (9th Cir. 2011) (quoting Beiser v. Weyler, 284 F.3d 665, 669 (5th Cir. 2002)).
See also Reid v. Doe Run Resources Corp., 701 F.3d 840, 844 (8th Cir. 2012). In coming to that
conclusion, the Fifth, Eighth, and Ninth Circuits pointed to the broad language in the statute that
grants removal jurisdiction over any action that merely “relates to” an arbitral award. See, e.g.,
Infuturia, 631 F.3d 1137–38. In addition, those courts analogized the jurisdictional grant in §
205 to the bankruptcy jurisdictional statute, which contains the same language and which has
been interpreted similarly broadly. See id. at 1138, Beiser, 284 F.3d at 669; Reid, 701 F.3d at
844. The Ninth Circuit also noted that the general thrust of § 205 confers broad jurisdiction by
explicitly abrogating the well-pleaded complaint rule. See Infuturia, 631 F.3d 1138 (citing
language in 9 U.S.C. § 205 stating that “the ground for removal provided in this section need not
appear on the face of the complaint but may be shown in the petition for removal”).
Accordingly, under 9 U.S.C. § 205, this Court has jurisdiction over claims where an
arbitration agreement could “conceivably affect the outcome of the plaintiff’s case.” Infuturia,
631 F.3d at 1138 (quoting Beiser 284 F.3d at 669). Here, the state-law claims for fraudulent
transfer and reach and apply could “conceivably” be affected by the arbitration agreement falling
under the Convention. Indeed, they are premised on the validity of an arbitral award—issued,
ostensibly, pursuant to such an agreement. Accordingly, the Court has subject-matter
jurisdiction to consider the state-law claims under 9 U.S.C. § 205.
IV.

Conclusion
For the foregoing reasons, defendants’ motion to dismiss for lack of personal jurisdiction

is DENIED without prejudice.

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So Ordered.

/s/ F. Dennis Saylor
F. Dennis Saylor IV
United States District Judge

Dated: February 28, 2017

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