A.D. Trade Belgium S.P.R.L. v. Republic of Guinea ( 2023 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
A.D. TRADE BELGIUM S.P.R.L., +)
)
Plaintiff/Petitioner, )
) Civil Case No. 22-245 (RJL)
V. )
)
REPUBLIC OF GUINEA, )
)
Defendant/Respondent. )
st
MEMORANDUM OPINION
(March 41, 2023) [Dkt. #17]
A.D. Trade Belgium S.P.R.L. prevailed in two separate French arbitrations against
the Republic of Guinea. The company petitioned this Court to confirm both awards, and
it demanded recognition of a French judgment enforcing the older of the two awards.
Guinea failed to appear, and so A.D. Trade has moved for default judgment. For the
following reasons, A.D. Trade’s Motion for Entry of Default Judgment will be GRANTED.
BACKGROUND
I. Factual Background
A.D. Trade is a Belgian company that sells military and security equipment and
services. Fischer Decl. Ex. B (“2017 Award”) [Dkt. #3-2] J 1-3. It entered into several
agreements with the Republic of Guinea, two of which led to arbitration awards that it
seeks to confirm in this action.
The first agreement, referred to as “Contract Leopard,” was executed in January
2011 and called for A.D. Trade to equip and train a new intelligence service for the newly
elected president. Jd. {9 33, 49-50. Contract Leopard provided for all disputes arising
from the contract to be arbitrated before the International Chamber of Commerce in Paris.
Fischer Decl. Ex. D (“Contract Leopard”) [Dkt. #3-4] 79.1. Guinea failed to make any
payments under the contract, so A.D. Trade initiated arbitration in October 2015. 2017
Award 7 6, 81-99. The arbitration panel issued an award in A.D. Trade’s favor on
November 22, 2017. Jd. at 70.! Referred to as the “2017 Award,” it awarded €45,689,344
in damages on which interest would accrue at 10.3 percent as of October 6, 2016,
$157,402.50 in arbitration costs, and €385,119 in attorneys’ fees. Jd. at 69-70.
In December 2017, A.D. Trade sought to enforce the 2017 Award in France’s
Tribunal de grande instance de Paris. Fischer Decl. Ex. G (“2017 Judgment”) [Dkt. #3-7]
at 2; Fischer Decl. Ex. H [Dkt. #3-8] at 2. The next day, the French court issued an order
called an “exequatur” declaring the award enforceable, referred to as the “2017 Judgment.”
2017 Judgment at 67; Fischer Decl. Ex. H at 3. After being served with the 2017 Judgment,
Guinea filed an appeal for annulment with the Cour d’appel de Paris in May, and the court
denied the appeal in April 2021. Fischer Decl. Ex. O [Dkt. #3-15] at 3-4, 16.
The second agreement, called the “Elephant Protocol,” derived from a separate
contract that was executed in June 2011 and provided for Guinea to acquire a military
aircraft and to receive related training, parts, and services from A.D. Trade. Fischer Decl.
Ex. Q (2020 Award”) [Dkt. #3-17] 99 91-92. Save for a partial payment in mid-2015,
Guinea did not make any payments under that contract, and in June 2015 the parties
executed the Elephant Protocol, which provided for a new payment schedule. Jd. JJ 132-
' When this Memorandum Opinion cites page numbers of exhibits to the Fischer Declaration, it
refers to the page numbers that appear in the ECF stamp at the top of each page.
134. Like Contract Leopard, the Elephant Protocol provided for all disputes arising from
the agreement to be arbitrated before the International Chamber of Commerce in Paris.
Fischer Decl. Ex. S (“Elephant Protocol”) [Dkt. #3-19] {J 5.1-5.4.
After Guinea failed to pay under the Elephant Protocol, A.D. Trade initiated
arbitration in November 2016. 2020 Award {J 8, 148. In what is referred to as the “2020
Award,” dated February 3, 2020, the arbitration panel declared the Elephant Protocol
invalid as prohibited by a European Union embargo on arms sales to Guinea, but it held
that A.D. Trade was entitled to restitution of $5,061,854 because the unfortunate
destruction of the aircraft in 2013 made it impossible to return. Jd. {J 124, 184-186, 210,
314-316; id. at 58-59. Because of the agreement’s invalidity, the panel declined to award
interest for late performance of obligations that never should have been performed. Jd.
4317. It also ordered Guinea to pay $232,000 in arbitration costs with interest to accrue
at the standard French rate from the date of receipt of the award. Jd. at 59.
I. Procedural History
On January 31, 2022, A.D. Trade petitioned this Court to confirm both arbitration
awards under the New York Convention. Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517 [hereinafter New York
Convention]; Compl. [Dkt. #1] 9] 57-62, 70-75. It also sought recognition of the 2017
Judgment under the D.C. Uniform Foreign-Country Money Judgments Recognition Act of
2011 (Recognition Act), D.C. Code §§ 15-361 to -371. Compl. | 63-69. Guinea never
appeared, so A.D. Trade requested and obtained an entry of default from the Clerk of the
Court. Request for Entry of Default [Dkt. #15]; Default [Dkt. #16]. It then moved for
entry of a default judgment. Mot. for Entry of Default J. [Dkt. #17]; Pl.’s Mem. of Law in
Supp. of Mot. for Entry of Default J. (‘Mot.”) [Dkt. #17-1].
LEGAL STANDARD
Default judgment against a foreign state is warranted only if a movant “establishes
[its] claim or right to relief by evidence satisfactory to the court.” 28 U.S.C. § 1608(e).
That burden is not particularly onerous: “§ 1608(e) does not ‘require the court to demand
more or different evidence than it would ordinarily receive’; indeed, ‘the quantum and
quality of evidence that might satisfy a court can be less than that normally required.’”
Owens v. Republic of Sudan, 864 F.3d 751, 785 (D.C. Cir. 2017) (citations omitted),
vacated and remanded on other grounds sub nom. Opati v. Republic of Sudan, 140 S. Ct.
1601 (2020). A court “may accept the plaintiff's uncontroverted factual allegations if they
are supported by documentary and affidavit evidence.” Lanny J. Davis & Assocs. LLC vy,
Republic of Equatorial Guinea, 962 F. Supp. 2d 152, 161 (D.D.C. 2013) (Contreras, J.).
DISCUSSION
I. Jurisdiction
Before entering a default judgment, “the Court must—at a minimum—-satisfy itself
that it has subject-matter jurisdiction over the claims and personal jurisdiction over the
defendants.” Force v. Islamic Republic of Iran, 464 F. Supp. 3d 323, 336 (D.D.C. 2020)
(Moss, J.). The Court has both here.
A. Subject Matter Jurisdiction
The Court has subject matter jurisdiction under 28 U.S.C. § 1330(a). That provision
“confers jurisdiction on district courts to hear suits brought by United States citizens and
by aliens when a foreign state is not entitled to immunity.” Argentine Republic vy. Amerada
Hess Shipping Corp., 488 U.S. 428, 434 (1989). Under the Foreign Sovereign Immunities
Act, a foreign state is immune from the jurisdiction of courts in the United States unless a
statutory exception applies. 28 U.S.C. § 1604; Wye Oak Tech., Inc. v. Republic of Iraq, 24
F.4th 686, 690 (D.C. Cir. 2022).
The arbitration exception easily applies here. Mot. at 10-11. Under that exception,
a foreign state is not immune from jurisdiction in an action “to confirm an award made
pursuant to... an agreement to arbitrate, if... the agreement or award is or may be
governed by a treaty or other international agreement in force for the United States calling
for the recognition and enforcement of arbitral awards.” 28 U.S.C. § 1605(a)(6). For the
exception to apply, A.D. Trade must establish three jurisdictional facts: the existence of an
arbitration agreement, an arbitration award, and a treaty governing the award. LLC SPC
Stileks v. Republic of Moldova, 985 F.3d 871, 877 (D.C. Cir. 2021). As to the first two
facts, A.D. Trade has shown the existence of two arbitration agreements with Guinea
(Contract Leopard and the Elephant Protocol) and two arbitration awards against Guinea
(the 2017 Award and the 2020 Award). Contract Leopard § 9.1; Elephant Protocol {f 5.1-
5.4; 2017 Award at 2; 2020 Award at 2. As to the last fact, the New York Convention, as
codified in the Federal Arbitration Act, governs any “arbitral award arising out of a legal
relationship, whether contractual or not, which is considered as commercial,” unless the
relationship is between U.S. citizens and lacks other significant foreign connection. 9
U.S.C. § 202. Contract Leopard and the Elephant Protocol no doubt established a “legal
relationship” between A.D. Trade and Guinea, Diag Hum., S.E. v. Czech Republic—
Ministry of Health, 824 F.3d 131, 135 (D.C. Cir. 2016), and that relationship is
“commercial,” a term that is given the broadest possible meaning, Belize Soc. Dev. Ltd. v.
Government of Belize, 794 F.3d 99, 103-04 (D.C. Cir. 2015). Finally, the subject matter
is not domestic in scope, because the action arises from agreements between a Belgian
company and a foreign sovereign. 9 U.S.C. § 202. The arbitration exception thus applies.”
B. Personal Jurisdiction
The Court likewise has personal jurisdiction over Guinea. Personal jurisdiction over
a foreign state exists when a court has subject matter jurisdiction and service has been made
in compliance with 28 U.S.C. § 1608. 28 U.S.C. § 1330(b). Section 1608, in turn, sets
forth “four methods of service in descending order of preference.” Barot v. Embassy of
Zambia, 785 F.3d 26, 27 (D.C. Cir. 2015). According to A.D. Trade, the first two methods
were unavailable, Mot. at 12,° so it opted for the third method, which allows “sending a
copy of the summons and complaint and a notice of suit, together with a translation of each
into the official language of the foreign state, by any form of mail requiring a signed receipt,
to be addressed and dispatched by the clerk of the court to the head of the ministry of
foreign affairs of the foreign state.” 28 U.S.C. § 1608(a)(3).
A.D. Trade did just that, causing the Clerk of the Court to send those documents
(and French translations of each) to the head of Guinea’s ministry of foreign affairs via
* The Court therefore need not decide whether, as A.D. Trade argues, the implied waiver exception
also applies. 28 U.S.C. § 1605(a)(1); Mot. at 9-10.
3 A.D. Trade could establish its prima facie showing of personal jurisdiction by resting on that
representation. Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005).
FedEx, at four different addresses. Certificate of Mailing [Dkt. #11]; Return of Service
[Dkt. #12]; see Barot, 785 F.3d at 29-30. The Court therefore has personal jurisdiction.
I. Merits
A. 2017 Award
The 2017 Award will be confirmed. As discussed above as to subject matter
jurisdiction, the 2020 Award falls under the New York Convention, which means it should
be confirmed “unless [the court] finds one of the grounds for refusal or deferral of
recognition or enforcement of the award specified in the said Convention.” 9 U.S.C. § 207.
Those grounds “are tightly construed, and the burden is placed on the party opposing
enforcement.” Diag Hum., S.E. v. Czech Republic—Ministry of Health, 907 F.3d 606, 609
(D.C. Cir. 2018). “Given [Guinea]’s default status in this case, it obviously has not put
forth any arguments against confirmation.” Sterling Merch. Fin. Ltd. v. Republic of Cabo
Verde, 261 F. Supp. 3d 48, 53 (D.D.C. 2017) (Huvelle, J.).
A.D. Trade also argues that, notwithstanding its failure to petition this Court for
confirmation within three years after the 2017 Award was made in November 2017, 9
U.S.C. § 207, the time to file was equitably tolled between the time Guinea filed its appeal
for annulment in May 2018 until the Cour d’appel de Paris denied it in April 2021. Mot.
at 18-19. The Court need not decide that question, however, because Guinea, as an absent
defendant, has forfeited a statute-of-limitations defense, and the Court may not raise it sua
sponte. Maalouf v. Islamic Republic of Iran, 923 F.3d 1095, 1109 (D.C. Cir. 2019).
Accordingly, the Court will confirm the award.
B. 2017 Judgment
The Court will also recognize the 2017 Judgment under the Recognition Act, which
applies to any foreign-country judgment that grants or denies money; is final, conclusive,
and enforceable; and is not a judgment regarding taxes, fines or other penalties, or a
domestic matter. D.C. Code § 15-363(a)-(b).4 The 2017 Judgment fits within that
definition. It granted the money awarded to A.D. Trade in the 2017 Award. 2017 Judgment
at 66-67. It is also final, conclusive, and enforceable. Seetransport Wiking Trader v.
Navimpex Centrala, 29 F.3d 79, 81 (2d Cir. 1994) (assessing French exequatur under New
York law). Finally, the 2017 Judgment does not pertain to taxes, fines or other penalties,
or a domestic matter. 2017 Award ff 29-30. When, as here, the Recognition Act applies,
“a court of the District of Columbia shall recognize [the] foreign-country judgment,” unless
the party resisting recognition shows an exception applies. D.C. Code § 15-364. With
Guinea’s absence from this action, it has not met its burden. The Court therefore will
recognize the 2017 Judgment.
C. 2020 Award
The 2020 Award will also be confirmed, for the same reasons as the 2017 Award.
As discussed above, the 2020 Award falls under the New York Convention, so it should be
confirmed “unless [the court] finds one of the grounds for refusal or deferral of recognition
4 Unlike the petition to confirm the 2017 Award, the action to recognize the 2017 Judgment would
not run into statute-of-limitations issues even if Guinea were here to raise such a defense, because the
Recognition Act’s limitations period is the shorter of the effective term of the foreign judgment or fifteen
years after the foreign judgment became effective. D.C. Code § 15-369. The effective term of the 2017
Judgment is ten years. Code des procédures civiles d’exécution [C.P.C.E.] [Code of Civil Enforcement
Procedures] art. 111-4.
or enforcement of the award specified in the said Convention.” 9 U.S.C. § 207. Because
Guinea, as an absent defendant, has not put forth any arguments against confirmation, the
Court will confirm the award.
II. Prejudgment Interest
With respect to the 2017 Award and the 2017 Judgment, A.D. Trade asks for 10.3
percent prejudgment interest on damages (consistent with the arbitrators’ award), plus
interest on costs and fees under French law. Mot. at 23-25. But federal law governs
confirmation of the 2017 Award and thus governs the award of prejudgment interest.
Stileks, 985 F.3d at 881. The same should be true of D.C. law as it pertains to the 2017
Judgment. Embassy of Nigeria v. Ugwuonye, 945 F. Supp. 2d 81, 86 (D.D.C. 2013)
(Rothstein, J.). After all, the effect of the Recognition Act is essentially to convert the
foreign judgment into a D.C. one. D.C. Code § 15-367(2).
Under both federal and D.C. law, the award of prejudgment interest “is generally a
matter of discretion.” Miminco, LLC v. Democratic Republic of the Congo, 79 F. Supp. 3d
213, 218 (D.D.C. 2015) (Contreras, J.); accord Burke v. Groover, Christie & Merritt, P.C.,
26 A.3d 292, 306 (D.C. 2011). As such, the Court will deny prejudgment interest on the
2017 Award and the 2017 Judgment. Awarding interest would be difficult to square with
the high likelihood that A.D. Trade’s petition to confirm the 2017 Award would be time-
barred had Guinea appeared in this litigation. Without faulting A.D. Trade’s conduct here,
the Court has concerns that the award of interest, combined with the limitations-extending
effect of the D.C. Recognition Act, could incentivize a similarly situated plaintiff to sit on
a foreign judgment to allow interest to accrue at some astronomical rate provided in an
underlying arbitration award or by foreign law, then come to court years later to have it
recognized.
As for the 2020 Award, A.D. Trade seeks prejudgment interest on both restitution
and arbitration costs at the standard French rate, consistent, it claims, with what the
arbitration panel ordered. Mot. at 25—26. It is only partially correct. Interest on restitution
was specifically declined by the arbitration panel, 2020 Award 4317, and “[a] court may
not award pre-judgment interest when the arbitration tribunal has determined that such
interest is not available.” Miminco, 79 F. Supp. 3d at 218. Prejudgment interest on the
arbitration costs, however, is “consistent with the underlying arbitration award,” Stileks,
985 F.3d at 881, which called for interest to accrue at the standard French rate starting on
the date of receipt of the award, February 3, 2020. 2020 Award at 59-60. A.D. Trade is
thus entitled to that interest between February 3, 2020, and today.
A.D. Trade will be ordered to submit to the Court proposed judgment amounts
calculated with prejudgment interest consistent with this Memorandum Opinion.°
CONCLUSION
For the foregoing reasons, plaintiff/petitioner A.D. Trade’s Motion for Entry of
Default Judgment [Dkt. #17] will be GRANTED. An order consistent with this decision
accompanies this Memorandum Opinion.
“Poe deard YLLe pn)
RICHARD J. LEON
United States District Judge
> A.D. Trade will, of course, also be entitled to post-judgment interest on all amounts, which “must
be imposed on ‘any money judgment in a civil case recovered in a district court.’” Miminco, 79 F. Supp.
3d at 218 (quoting 28 U.S.C. § 1961(a)).
10