Nml Capital, Ltd., Em Ltd v. the Republic of Argentina
(2d Cir. 03/30/2012)
April 9, 2012
Before: JACOBS, Chief Judge, CABRANES and WESLEY, Circuit Judges.
Appeal from the judgment of the United States District Court for the Southern District of New York (Thomas P. Griesa, Judge), granting and confirming attachment and restraining orders against a New York bank account owned by the Agencia Nacional de Promocion Cientifica y Tecnologica ("ANPCT"), an instrumentality of the Republic of Argentina, pursuant to the commercial use exception to the Foreign Sovereign Immunities Act, 28 U.S.C. § 1602 et seq. The District Court correctly held that the funds in the ANPCT Account were subject to attachment pursuant to 28 U.S.C. § 1610 because they were "used for a commercial activity in the United States." 28 U.S.C. § 1610(a). Affirmed.
The question presented is whether certain funds owned by the Republic of Argentina (the "Republic" or "Argentina") were subject to attachment pursuant to 28 U.S.C. § 1610 because they were "used for a commercial activity in the United States." 28 U.S.C. § 1610(a).*fn1 To resolve this question, we must decide whether the Republic's payment of the purchase price of commercial goods to a seller on behalf of a third party recipient constitutes a "commercial activity" under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1602 et seq.*fn2
This appeal arises from a judgment of the United States District Court for the Southern District of New York (Thomas P. Griesa, Judge), granting and confirming attachment and restraining orders against a bank account*fn3 owned by the Agencia Nacional de Promocion Cientifica y Tecnologica ("ANPCT"), an instrumentality of the Republic, pursuant to the commercial use exception to the FSIA.
BACKGROUND
Plaintiffs-appellees NML Capital, Ltd. ("NML") and EM Ltd. ("EM") (jointly, the "plaintiffs") have acquired on the secondary market hundreds of millions of dollars of non-performing bonds issued by the Republic.*fn4 In due course, the plaintiffs began to bring suit in United States courts to collect the debt. In these eleven consolidated appeals, they moved to attach a New York bank account owned by ANPCT, a sub-unit of Argentina's Ministry of Science, Technology, and Productive Innovation. ANPCT asserts that it employs this account (the "ANPCT Account" or the "Account") for the sole purpose of purchasing scientific equipment for use by grant beneficiaries. Beneficiaries contract with equipment sellers directly, and receive the purchased goods directly from the sellers; ANPCT's only involvement is to remit the prearranged payment to the sellers.
On September 12, 2008, the plaintiffs, moving on an ex parte basis, sought and obtained from the District Court restraining orders (for the actions that had reached final judgment) and attachment orders (for the actions in the pre-judgment phase) seizing the ANPCT Account. On that date, the Account contained more than $3.26 million. On September 30, 2009, the District Court confirmed the restraining orders (but not the attachment orders) to the extent they related to the ANPCT Account, holding that the Account was attachable under § 1610 of the FSIA. NML Capital Ltd. v. Republic of Argentina, No. 08 Civ. 3302, Docket No. 171, at 16 (S.D.N.Y. Sept. 30, 2009)*fn5 ; see note 1, ante. The District Court reasoned that under "the most rudimentary definition," the Account is "used for commercial activity" because "ANPCT funds have been used to purchase scientific equipment." Id. The District Court further explained that by using the Account to buy equipment, the Republic was "acting as a 'private player' in the marketplace, in the same way as any private party engaging in commerce." Id.
The plaintiffs subsequently moved for reconsideration with respect to the pre-judgment attachment orders as they related to the ANPCT Account. On September 30, 2010, the District Court acknowledged its "mistake" and confirmed the attachments of the ANPCT Account. The Republic now appeals the underlying restraining and attachment orders, as well as the orders confirming the restraint and attachment of the ANPCT Account, claiming that the District Court should have granted it immunity from execution pursuant to the FSIA.
DISCUSSION
I. Standard of Review
*fn1 In pertinent part, 28 U.S.C. § 1610(a) provides that "[t]he property in the United States of a foreign state . . . used for a commercial activity in the United States, shall not be immune from attachment . . . or from execution . . . if (1) the foreign state has waived its immunity from attachment in aid of execution or from execution either explicitly or by implication." 28 U.S.C. § 1610(a). Argentina has waived its immunity from attachment. See EM Ltd. v. Republic of Argentina, 473 F.3d 463, 480-81 & n.18 (2d Cir. 2007).
*fn2 We note that, unlike the more frequently-litigated § 1605, § 1610 does not require that the commercial activity giving rise to jurisdiction be related to the action itself. Compare, e.g., 28 U.S.C. § 1605(a)(2) ("A foreign state shall not be immune from . . . jurisdiction . . . in any case . . . (2) in which the action is based upon a commercial activity carried on in the United States by the foreign state . . . ."), with id. § 1610(a), ante.
*fn3 The bank account is held at the New York branch of the Banco de la Nacion Argentina.
*fn5 The full text of the District Court's order is available under the caption of a related case. See EM Ltd. v. Republic of Argentina, No. 08 Civ. 7974 (TPG), 2009 WL 3149601 (S.D.N.Y. Sept. 30, 2009).
*fn6 In full, 28 U.S.C. § 1609 provides that "[s]ubject to existing international agreements to which the United States is a party at the time of enactment of this Act[,] the property in the United States of a foreign state shall be immune from attachment[,] arrest[,] and execution except as provided in sections 1610 and 1611 of this chapter."
*fn7 We note that 28 U.S.C. § 1611, which exempts certain types of property from attachment, is not applicable here.
*fn8 See Letelier, 748 F.2d at 796 (noting that "Congress intended the 'essential nature' of given behavior to determine its status for purposes of the commercial activities exception, and gave the courts a 'great deal of latitude' to decide this issue." (quoting H.R. Rep. No. 94-1487, at 16)).
*fn9 The Republic leans heavily on our decision in Kato v. Ishihara to support the argument that the ANPCT has not undertaken "commercial activity" here because the payments are not made "on its own behalf," Kato, 360 F.3d at 112. But Kato involved alleged sexual harassment that the plaintiff suffered while engaging in "promotional activities on behalf of Japanese companies" in New York. Id. at 109. The Republic has identified no authority for the proposition that the purchase of goods in the market is not commercial activity.
*fn10 The Republic's argument that it was not acting as a "merchant in the marketplace" is similarly unavailing. A party need not be a merchant in order to engage in commercial activity. See, e.g., Tex. Trading & Mill. Corp., 647 F.2d at 310 (finding that Nigeria had engaged in commercial activity despite being the end recipient of goods rather than a merchant engaged in trade).
Keine Kommentare:
Kommentar veröffentlichen