Commissions Import Export SA v. Republic of the Congo
Filing
49
MEMORANDUM DECISION AND ORDER - granting 8 Motion to Compel. Counsel for Plaintiff has indicated that furnishing the information in digital form would be satisfactory; Bank of Utah should do so within 10 days from the date of this order. Signed by Judge Bruce S. Jenkins on 7/20/2016. (las)
FILED
2016 JUL 20 PM 3:03
CLERK
U.S. DISTRICT COURT
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
COMMISSIONS IMPORT EXPORTS.A.,
MEMORANDUM OPINION AND
ORDER
Plaintiff,
v.
REPUBLIC OF THE CONGO,
Case No. 2:16-CV-00404-BSJ
Defendant.
District Judge Bruce S. Jenkins
On June 8, 2016, Commissions Import Export S.A. ("Commissions") filed a Motion to
Compel Compliance with a Subpoena Duces Tecum it had served on Bank ofUtah. 1 Bank of
Utah filed a Memorandum in Opposition to the Motion to Compel Compliance with Subpoena
Duces Tecum on June 15, 2016. 2 The motion was heard before the Court on June 17, 2016 at
2:00 PM and again on July 12, 2015 at 1 :30 PM. Kamie F. Brown, Michael R. Johnson, and
Ellen Toscano appeared on behalf of Commissions. Robert G. Barnes and Aaron D. Lebenta
appeared on behalf of Bank of Utah.
For the reasons set forth below, after reviewing the arguments of counsel, the parties'
memoranda, and the relevant legal authorities, Commissions' Motion to Compel Compliance
with Subpoena Duces Tecum is GRANTED. The remaining question as to who should bear the
cost of in camera production is for another day.
BACKGROUND
1
Motion to Compel Compliance with Subpoena Duces Tecum, CM/ECF No. 8 (June 8, 2016).
Opposition of Non-Party Bank of Utah to Plaintiff's Motion to Compel Compliance with Subpoena Duces Tecum,
CM/ECF No. 24 (June 16, 2016).
2
1
This case arises out of a thirty year effort to collect monies owed by the Republic of the
Congo. 3 Throughout the 1980s, contracts for public works and materials were entered into and
guaranteed by the Republic of the Congo. 4 When the Republic of the Congo failed to pay the
promised amounts, Commissions filed a request for arbitration with the International Court of
Arbitration of the International Chamber of Commerce in 1998. 5 The tribunal issued a final
award in favor of the Commissions which included "principal owed under the agreement,
interest, penalty interest on various promissory notes, and costs. " 6
On July 10, 2009, Commissions obtained an order from the Queen's Bench Division of
the High Court of Justice, Commercial Court in London which found that the award "was
enforceable in the same manner as a judgment under section 101 of the 1996 Arbitration Act of
England, and recalculate[ ed] the amount due to include additional interest and other costs." 7
Shortly thereafter, Commissions filed a complaint in federal court in the Southern District of
New York to enforce the English Judgment, which was then transferred to the District of
Columbia. On October 9, 2013, the U.S. District Court for the District of Columbia granted
Commissions' Motion for Default Judgement and Confirmation of Arbitration Award and an
award amount of€ 567,184,160.72 and U.S. $855,000.00, or approximately U.S.
$630,202,544.73. 8 On May 13, 2016, Commissions filed with this Court a registration of a
foreign judgment, Commissions Import Export S.A. v. Republic of the Congo, No. 1:13-cv-713-
RLW, from U.S. District Court for the District of Columbia. 9
3
See Commissions Import Export S.A. v. Republic of the Congo, 757 F.3d 321, 324 (D.C. Cir. 2014).
4 Id.
5
Id.
Id.
Id. at 325.
8
Motion to Compel Compliance, CM/ECF No. 8, para. 12.
9
Registration of Foreign Judgment from U.S. District Court, District of Columbia, CM/ECF No. 2(May13, 2016).
6
7
2
On May 13, 2016, Commissions caused a subpoena to be served on Bank of Utah to
produce documents related to Bank of Utah's role as owner trustee and security trustee for a
Boeing 787-8 Dreamliner aircraft, serial number 37306, Federal Aviation Administration
registration number N887BA, including two engines, Rolls Royce Trent 1000, serial numbers
10312 and 10293 (collectively the "aircraft"). 10 On June 17, 2016, the Republic of the Congo
was served with notice of the subpoena served to Bank ofUtah. 11
On June 8, 2016, Commissions filed a motion to compel compliance with subpoena
duces tecum. 12 On June 16, 2016, Bank of Utah filed a response and memorandum in opposition
to the motion to compel compliance. 13 This motion was heard on June 17, 2016 at 2:00 PM and
again on July 12, 2016 at 1:30 PM.
On June 17, 2016, the Court noted that Bank of Utah had attached to its opposition
memorandum to compel certain documents which had been requested by Commissions and that
other classes of requested documents are publically available. The Court suggested that
Commissions eliminate such documents from its request to Bank of Utah and that Commissions
file an amended description of documents requested for delivery to the Court for examination in
camera. 14 The modification was filed and Bank of Utah sought a continuation of the date for
delivery to the Court. 15 An extended delivery date was granted. 16 To the Court's surprise, Bank of
Utah delivered 12 bankers boxes of double sided printed documents to the Court, estimated to
contain some 55,000 page-a most daunting task for in camera review.
10
Return of Service Executed for Authorized served on Bank of Utah, CM/ECF No. 3 (May 25, 2016).
Return of Service, CM/ECF No. 28 (June 17, 2016).
12
Motion to Compel Compliance, CM/ECF No. 8.
13
Opposition to Motion to Compel Compliance, CM/ECF No. 24.
14
Order granting Motion for Extension of Time to Produce Documents to the Court in Camera, CM/ECF No. 36
(June 29, 2016).
is Id.
16 Id.
11
3
On July 12, 2016, Bank of Utah renewed its opposition to Commissions' motion to
compel while Commissions again asked that its motion be granted. On July 18, 2016 Bank of
Utah filed a motion for leave to file supplemental brief. 17 This supplemental brief discusses the
contractual waiver of immunity by the Republic of the Congo in its guaranty of the loan RPK
Africa Investment made to Equatorial Congo Airlines and any resulting import to the aircraft's
immunity from attachment or execution. At this stage, the question of immunity from attachment
or execution is premature and irrelevant.
LEGAL STANDARD
The standard for granting a judgment creditor's motion to compel compliance with a
subpoena duces tecum arises under Rule 69 and Rule 45 of the Federal Rules of Civil Procedure.
Rule 69 provides that "in aid of the judgment or execution, the judgment creditor or a successor
in interest whose interest appears ofrecord may obtain discovery from any person-including
the judgment debtor-as provided in these rnles or by the procedure of the state where the court
is located." 18 A part of this standard is the notion that "the judgment creditor must be given the
freedom to make a broad inquiry to discover hidden or concealed assets of the judgement
debtor." 19 Furthennore, district courts are given "broad latitude to detennine the scope of
discovery and to manage the discovery process."20 Particularly relevant to this case is Rule 45 of
the Federal Rules of Civil Procedure which authorizes the use of a subpoena to obtain
information from non-parties in relation to a judgment debtor's financial affairs. 21
DISCUSSION
17
Motion for Leave to File Supplemental Brief, CM/ECF No. 47 (July 18, 2016).
Fed. R. Civ. P. 69(a)(2).
19
Zoobuh, Inc. v. Rainbow Int'l Corp., No. 2:14-CV-00477-DN, 2015 WL 2093292, at 1 (D. Utah May 5, 2015).
20
EM Ltd. v. Republic of Argentina, 695 F.3d 201, 207 (2d Cir.2012) affd sub nom. Republic of Argentina v. NML
Capital, Ltd., 134 S.Ct. 2250 (2014).
21
Zoobuh, Inc. v. Rainbow Int'l Corp., No. 2:14-CV-00477-DN, 2015 WL 2093292, at 1 (D. Utah May 5, 2015).
18
4
I. It is permissible for Commissions to seek discovery from Bank of Utah.
As Rule 69 and Rule 45 of the Federal Rules of Civil Procedure pennit, Commissions,
the judgment creditor, is engaging in "inquiry to discover hidden or concealed assets" 22 of the
Republic of the Congo, the judgment debtor. Commissions is interested in the aircraft because it
believes that the Republic of the Congo has an ownership interest in that property. 23
Bank of Utah argues that the specific details concerning the scope and nature of the
subpoena should be tailored because the discovery sought is burdensome, overbroad, and touches
upon privileged information. 24 These concerns may be used to narrow the nature, scope, and
manner of the subpoena to avoid the alleged harm. However, the existence of these issues does
not abrogate Bank of Utah's obligation to respond.
II. Foreign Sovereign Immunities Act does not discuss discovery in aid of execution.
Bank of Utah claims that discovery in aid of execution on the aircraft is barred by the
Foreign Sovereign Immunities Act ("FSIA") and that district courts are obligated to sua sponte
analyze whether FSIA immunity applies. 25 Bank of Utah analyzes several cases which establish
that courts are obligated to evaluate FSIA immunity when a judgment creditor is seeking to
attach a specific piece of prope1iy owned by a foreign sovereign. 26 However, this does not
directly address the current matter before this Court which concerns discovery in aid of
execution, not execution itself. Of course, Bank of Utah is not a foreign sovereign.
The situation before this Court is distinguishable from the case law presented by Bank of
Utah because Commissions by its motion to compel is not yet seeking to attach or execute upon
its judgment. Rather, Commissions is seeking information from Bank of Utah concerning the
22
23
24
Id.
See Motion to Compel Compliance, CM/ECF No. 8, paras 14-16.
Opposition to Motion to Compel Compliance, CM/ECF No. 24, p. 25.
25
Id. at p. 16.
26
Id. at p. 16-23.
5
aircraft so that it might be able to evaluate whether this is a viable asset to pursue in execution of
its judgment and whether an exception to FSIA immunity applies. Because Commissions is
seeking infonnation and not attachment or execution, a FSIA immunity analysis at this stage is
not relevant.
The Supreme Court has addressed the issue of discovery in aid of execution in cases
concerning a foreign sovereign judgment debtor. In Republic ofArgentina v. NML Capital, Ltd.,
134 S. Ct. 2250 (2014), NML Capital ("NML") served subpoenas on nonparty banks seeking
information concerning Argentina's global financial transactions in order to satisfy a judgment.
The Supreme Court explained that FSIA "confers on foreign states two kinds of immunity."27
"Jurisdictional immunity" under 28 U.S.C. § 1604 limits suits that can be litigated against a
foreign sovereign. 28 This immunity had been waived by Argentina which allowed NML
ultimately to obtain ajudgment. 29 "Execution immunity" under 28 U.S.C. § 1609 shields
"property in the United States of a foreign state ... from attachment[,] arrest[,] and execution."30
Concerning the matter directly before the Supreme Court, Justice Scalia noted that "[t]he
Act has no third provision forbidding or limiting discovery in aid of execution of a foreignsovereign judgment debtor's assets," 31 and does not say "a word about postjudgment discovery
in aid of execution." 32 Therefore, the Supreme Court found that NML's subpoenas served to the
banks did not violate FSIA immunity. 33
27
Republic of Argentina v. NML Capital, Ltd., 134 S. Ct. 2250, 2256 (2014).
Id.
29 Id.
30 Id.
31 Id.
32 Id.
33
"Argentina maintains that, if a judgment creditor could not ultimately execute a judgment against certain property,
then it has no business pursuing discovery of information pertaining to that property. But the reason for these
subpoenas is that NML does not yet know what property Argentina has and where it is, let alone whether it is
executable under the relevant jurisdiction's law. If, bizarrely, NML's subpoenas had sought only 'information that
could not lead to executable assets in the United States or abroad,' then Argentina likely would be correct to say that
28
6
The Supreme Court's analysis in Republic ofArgentina v. NML Capital, Ltd. accurately
reflects the situation currently before this Court. The subpoena in this case was served on a
nonpartybank, Bank of Utah, seeking information about a foreign sovereign, the Republic of the
Congo, in aid of satisfying its judgement. This is not an attachment or execution proceeding, but
similar to NML Capital, this is a discovery proceeding. This is an area (discovery in aid of
execution) that the Supreme Court has said FSIA does not cover. 34 Other district courts applying
this standard have also found that "[f]oreign sovereigns enjoy no such 'discovery-in-aid-ofexecution' immunity under the FSIA." 35
As the current motion before this Court concerns discovery in aid of execution and not
execution or attachment itself, the FSIA does not apply. Thus, the arguments Bank of Utah
asserts regarding FSIA immunity and exceptions thereto are not currently before the Court.
Instead, as the motion at issue concerns discovery, not attachment or execution, the legal
foundation upon which the Court takes its direction from is Rule 69 and Rule 45 of the Federal
the subpoenas were unenforceable-not because information about nonexecutable assets enjoys a penumbral
'discovery immunity' under the Act, but because information that could not possibly lead to executable assets is
simply not 'relevant' to execution in the first place, Fed. Rule Civ. Proc. 26(b)(l); N.Y. Civ. Prac. Law Ann.§ 5223.
But of course that is not what the subpoenas seek. They ask for information about Argentina's worldwide assets
generally, so that NML can identify where Argentina may be holding property that is subject to execution. To be
sure, that request is bound to turn up information about property that Argentina regards as immune. But NML may
think the same property not immune. In which case, Argentina's self-serving legal assertion will not automatically
prevail; the District Court will have to settle the matter." Republic of Argentina v. NML Capital, Ltd., 134 S. Ct.
2250, 2257-58 (2014).
34
See id.
35
See, e.g., Cont'l Transfert Technique Ltd. v. Fed. Gov't of Nigeria, 308 F.R.D. 27, 34 (D.D.C. 2015). That court
noted that the discovery sought, in this case a deposition notice, "does not implicate any immunity from execution
that Nigeria may have under FSIA. It does not attach Nigeria's property, nor does it have any legal effect whatsoever
on Nigeria's property; it simply mandates Nigeria's compliance with the subpoena. Accordingly, whatever execution
immunity Nigeria may possess under the FSIA, it currently possess no bar to the discovery [the judgment creditor]
seeks. As the Secoi;td Circuit held in EM Ltd. v. Republic ofArgentina, 695 F.3d 201, 209 (2nd Cir.2012), a.ffd sub
nom. Republic ofArgentina v. NML Capital, Ltd., -U.S.--, 134 S.Ct. 2250, 189 L.Ed.2d 234 (2014), whether
a foreign sovereign's property identified during post-judgment discovery ultimately satisfies FSIA's attachment
requirements 'must be detennined separately under the FSIA, but this determination does not affect discovery. This
is because a court's power to order discovery to enforce its judgment does not derive from its ultimate ability to
attach the property in question but from its power to conduct supplementary proceedings, involving persons
indisputably within its jurisdiction, to enforce valid judgments.' EM Ltd., 695 F.3d at 208 ." Cont'l Transfert
Technique Ltd. v. Fed. Gov't ofNigeria, 308 F.R.D. 27, 34 (D.D.C. 2015).
7
Rules of Civil Procedure. And those rules dictate that Batik of Utah respond to Commissions'
subpoena.
Counsel for Batik of Utah suggests that several circuits have passed on this subject; 36 the
Tenth Circuit has not. While historically interesting, the Supreme Court seems to have spoken on
the subject of discovery and recognizes that the problem is one of sequence. It recognizes that
information is one thing, execution is quite another. In the thinking process, one is ordinarily
concerned with adequate information. There is virtue in the fact that a third party Batik of Utah
should provide information to enable either a paiiy or the court an informational footing for
decision.
CONCLUSION
For the foregoing reasons, Commissions' Motion to Compel Compliance with Subpoena
Duces Tecum is GRANTED. Counsel for Plaintiff has indicated that furnishing the information
in digital form would be satisfactory; Batik of Utah should do so within 10 days from the date of
this order.
DATED this
~~f.._ day of July, 2016.
36
In re Ohntrup, 628 Fed. Appx. 809 (3d Cir. 2015); Rubin v. Islamic Republic oflran, 637 F.3d 783 (7th Cir. 2011);
Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1128 (9th Cir. 201 O); C01mecticut Bank of Commerce v.
Republic of the Congo, 309 F.3d 240 (5th Cir. 2007); EM Ltd. Ltd. v. Republic of Argentina, 473 F.3d 463 (2d Cir.
2007).
8
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