Themis Capital, LLC et al v. Decocratic Republic of Congo et al
Filing
233
OPINION & ORDER re: 227 MOTION for Reconsideration of the Court's September 4, 2014 Opinion and Order. filed by Des Moines Investments LTD., Themis Capital, LLC. Under the Credit Agreement, only the Obligor - the DRC-is li able for paying an award of attorneys' fees and costs. This award therefore runs solely against the DRC, and not against the Central Bank of the DRC. Accordingly, plaintiffs' motion for reconsideration is denied. The Clerk of Court is di rected to terminate the motion pending at docket number 227. The parties are directed to submit, no later than September 24, 2014, a proposed judgment consistent with the Court's rulings. On Friday, September 26, 2014, the Court intends to issue a final judgment and to close this case. (Signed by Judge Paul A. Engelmayer on 9/22/2014) (kgo)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
:
THEMIS CAPITAL and DES MOINES
INVESTMENTS LTD.,
:
:
Plaintiffs,
:
-v:
:
DEMOCRATIC REPUBLIC OF CONGO and
:
CENTRAL BANK OF THE DEMOCRATIC
:
REPUBLIC OF CONGO,
:
:
Defendants.
:
:
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09 Civ. 1652 (PAE)
OPINION & ORDER
PAUL A. ENGELMAYER, District Judge:
On July 9, 2014, the Court ruled in favor of Themis Capital, LLC (“Themis”) and Des
Moines Investments, Ltd. (“Des Moines”) (collectively, “plaintiffs”) in this breach-of-contract
lawsuit against the Democratic Republic of the Congo (the “DRC”) and the Central Bank of the
Democratic Republic of the Congo (“Central Bank of the DRC”) (collectively, “defendants”).
See Themis Capital, LLC v. Democratic Republic of Congo, No. 09 Civ. 1652 (PAE), 2014 WL
3360709 (S.D.N.Y. July 9, 2014); see also Dkt. 213. The Court held that plaintiffs were entitled
to recover the principal, interest, and certain compound interest on debt that had been
restructured in 1980—pursuant to a Restructuring Credit Agreement (“Credit Agreement”)—and
which had gone unpaid since 1990.
On August 8, 2014, plaintiffs, as the prevailing party to the lawsuit, moved for attorneys’
fees and costs, pursuant to Credit Agreement § 12.05(a). Dkt. 218. Defendants’ opposition brief
was filed on August 15, 2014. Dkt. 223. Defendants did not dispute plaintiffs’ right to recover
fees and costs, but they disputed the amount requested. On September 4, 2014, the Court issued
an Opinion & Order, awarding plaintiffs the sum of $3,469,940.68 in attorneys’ fees and costs,
less those fees and costs billed between October 3 and October 22, 2013, which the Court
directed the parties to tabulate. See Themis Capital v. Democratic Republic of Congo, No. 09
Civ. 1652 (PAE), 2014 WL 4379100, at *13 (S.D.N.Y. Sept. 4, 2014) (Dkt. 224). Construing
the Credit Agreement, the Court also held that this amount was “recoverable solely from the
DRC.” Id.
On September 10, 2014, plaintiffs moved for partial reconsideration. Although plaintiffs
did not ask the Court to reconsider its determination of the amount of fees and costs to which
they are entitled, plaintiffs argued that they were entitled to recover the award of fees and costs
from both defendants—the DRC and the Central Bank of the DRC. Dkt. 227, 228 (“Pl.
Br.”). On September 19, 2014, defendants opposed plaintiffs’ motion, Dkt. 232 (“Def. Br.”),
both on the grounds that reconsideration is unjustified and on the merits.
As an initial matter, the Court declines to analyze plaintiffs’ motion under the District’s
strict standards for reconsideration. See S.D.N.Y. Local Civil Rule 6.3. This is an instance in
which a party validly seeks reconsideration because it did not have a realistic opportunity earlier
to litigate the issue whose resolution it challenges. Plaintiffs moved globally for fees and costs
against both defendants, implicitly treating the Credit Agreement’s fee provision, § 12.05(a), as
applicable to both the DRC and the Central Bank. The argument that § 12.05(a) imposes a fee
obligation only on the DRC was first made in defendants’ opposition brief, and the Court
accepted that argument. The Court, however, had not invited plaintiffs to file a reply brief, and
thus plaintiffs—at least without seeking leave to file such a brief—did not have an opportunity to
refute defendants’ argument. The core policy limiting bids for reconsideration—that a party not
get an unwarranted second bite at the apple—does not apply here. Basic fairness instead favors
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allowing plaintiffs to argue, at least once, why the construction of § 12.05(a) advocated by
defendants and accepted by the Court was in error. The Court has, therefore, carefully
reconsidered that question, in light of plaintiffs’ arguments.
However, plaintiffs’ motion for reconsideration fails on the merits. Having carefully
examined the Credit Agreement, the Court reaffirms its previous holding that the duty to pay
attorneys’ fees and costs contained § 12.05(a) of the Credit Agreement runs only against the
DRC. Section 12.05(a) reads, in pertinent part:
The Obligor agrees to pay, in the currency in which incurred:
...
(iv) to each Bank and Agent upon its demand all out-of-pocket expenses (including,
without limitation, all counsel fees and court costs, stamp taxes, duties and fees)
incurred in connection with investigating any Event of Default or enforcing this
Agreement or suing for or collecting any overdue amount payable by the Obligor
hereunder or otherwise protecting its rights in the event of any failure by the
Obligor or Bank of Zaire to comply with the provisions [of the Credit Agreement.]
Credit Agreement § 12.05(a) (emphasis added). Under the Agreement, the DRC alone is the
“Obligor,” see Credit Agreement at R-1; the Central Bank of the DRC is not.
Notwithstanding this plain text, plaintiffs argue that the DRC and the Central Bank of the
DRC are jointly liable for attorneys’ fees and costs. Plaintiffs argue that the same reasoning
underlying the Court’s holding that the two defendants are jointly liable for the principal,
interest, and compound interest due on the outstanding debt, see 2014 WL 3360709, at *30–31,
applies to the duty to pay fees and costs. That holding rested on two provisions of the Credit
Agreement—§§ 9.01 and 8.03—that expressly make “the Central Bank of the DRC legally
responsible for paying plaintiffs the principal and interest owed them.” Id. at *30. Properly
analyzed, however, these two provisions do not make the Central Bank of the DRC legally
responsible for paying a post-hoc award of the fees and costs owed under § 12.05(a).
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Section 9.01 of the Credit Agreement states:
The Bank of Zaire irrevocably and unconditional states and agrees for the benefit
of each Bank that: (a) All payments of principal, interest and other
amounts required under this Agreement are irrevocably authorized by all action
required in the Republic of Zaire so that such payments can be made in the currency
and manner and at the time required by the terms of this Agreement.
Credit Agreement § 9.01 (emphasis added).
Section 8.03 states:
The Obligor hereby irrevocably and unconditionally instructs the Bank of Zaire, for
the benefit of each Bank, to make all payments required by this Agreement as
contemplated by clause (ii) of Section 9.01(c).
Id. § 8.03 (emphasis added). Taken together, these two sections obligate the Central Bank of the
DRC to make all “payments” of “principal, interest and other amounts” required by the Credit
Agreement. The issue, then, is whether the fees and costs addressed by § 12.05 (a) are covered
by the term “other amounts” as used in § 9.01 so as to obligate the Central Bank to pay that
award as well.
The Court concludes that they are not, for two related reasons. First, the Credit
Agreement’s use and non-use of the word “payments” is illuminating. It suggests that the
meaning in § 9.01 of “payments of principal, interest, and other amounts” does not include
attorneys’ fees and costs. The word “payments” is used with some frequency in the Agreement.
In the definition section—§ 1—it is used in reference to “principal payments” and “interest
payments.” And that term is repeatedly used later in the Agreement: in Article II (“Payment and
Refinancing”) to refer to certain defined principal payments; in Article III (“Interest”) to refer to
interest payments; in Article IV (“Principal Payments”) to refer to defined principal payments;
and in Article V (“Other Payment Provisions”) to refer to other identified payments, which are
defined to include fees and other amounts due to “Servicing Bank[s].” However, tellingly,
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“payment” is not used anywhere in § 12.05(a), including in subsection (iv), which imposes upon
the “Obligor” the duty to pay “counsel fees and court costs.” It thus appears that “payments,” as
used in the Agreement, was a term intended to refer to the DRC’s inherent monetary obligations
under the Agreement—i.e., those obligations that automatically existed, not those that might
come to exist if the DRC failed to comply and came to be successfully sued.
Second, the structure of the Credit Agreement undermines plaintiffs’ notion that the term
“other amounts”—the § 9.01 term on which plaintiffs rely—encompasses attorneys’ fees and
costs. The language of § 9.01 (“[a]ll payments of principal, interest and other amounts”) tracks
that overall structure. Specifically, as noted, Article III covers payments of interest, Articles II
and IV covers payments of principal, and Article V (entitled “Other Payment Provisions”)
covers payments of other amounts, including fees due to servicing banks. It appears, therefore,
that § 9.01’s reference to the payments which the Bank of Zaire—today the Central Bank of the
DRC—agreed to backstop is a backward-looking reference to the preceding provisions in the
Agreement—Articles II through V. And thus, it appears, the term “other amounts” as used in §
9.01 refers to the payments addressed by Article V of the Credit Agreement, which, in fact, bears
the parallel name “Other Payment Provisions.” The duty to pay litigation fees and costs, by
contrast, is provided for only later in the Agreement, in § 12.05(a), which is situated in Article
XII (entitled “Miscellaneous”), and which addresses a variety of scenarios, some of which do not
relate to or impose any monetary obligation on the DRC.
The Court, therefore, rejects plaintiffs’ broad reading of “other amounts.” Sections 9.01
and 8.03 instead, properly considered, make the Central Bank of the DRC responsible for the
regular payments set forth in Articles II through V, but not the post-hoc reimbursement of the
attorneys’ fees and costs set forth in Article XII.
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