Default judgments against foreign sovereigns are especially disfavored, the United States District Court for the District of Columbia explained in a 20-page memorandum opinion on December 28, 2009. In Reuven Gilmore et al. v. Palestinian Interim Self-Government Authority et al., docket number 01-853, the court examined the default of the Authority in case alleging acts of terrorism.

The sovereign suffered a default but after consultation with the United States Department of State understood that such complaints deserve a proper response, and it launched its defense. The Authority is not recognized by the United States as a sovereign nation, but they maintain diplomatic relations.

Therefore, the court decided to apply the precedential reasoning from Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1551 n. 19 (D.C. Cir. 1987), to the instant case. An important factor for the leniency afforded the Authority is its accommodation of plaintiffs in certain regards to mitigate undue hardship to them. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

The United States Secretary of State has a brief note on the Sean Goldman return to his American father from Brazil under the Hague Convention on International Child Abduction. There are no details on the efforts of the embassy in what has been called the Miracle in Rio.

When it completed a form in a garnishment matter and objected to the personal jurisdiction, did the Japan Bank for International Cooperation imply a waiver of its immunity from subject matter jurisdiction? On December 3, 2009, the United States District Court for the District of Columbia held in Inversora Murten S.A. v. Energoproject Holding Co., docket number 03-73, that the bank did not.

The court explains the reasons in its detailed opinion. Most importantly, the garnishment form does not constitute one of the pleadings where a failure to object would be harmful. In addition, the court emphasizes the intent standard that bars an inadvertent waiver from becoming effective under the Foreign Sovereign Immunities Act. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

On November 30, 2009, the United States District Court for the District of Columbia dismissed the complaint in the matter Asemani v. Syrian Arab Republic, docket no. 09-1158, on the basis of the defendant's immunity under the Foreign Sovereign Immunities Act.

The plaintiff alleged that he was tortured on July 14, 2000 by several members of the Iranian Revolutionary Guards Corps in Tehran. He claimed that the Syrian Arab Republic was liable for his personal injury because Syrian military and intelligence agents informed Iranian authorities of his religious dissent. This exchange of information, he claimed, proximately caused his torture and resulting injuries.

The court noted that foreign states are not immune from claims for damages based on personal injury … caused by an act of torture under 28 U.S.C. §1605A, the most recent amendment to the FSIA. However, in order for the plaintiff to be awarded damages, he must show that "the foreign sovereign engaged in conduct that falls within the ambit of the statute,"i.e. here by providing material support for an act of torture.

Upon reviewing the definition of material support as defined in 18 U.S.C. §2339A, the court determined that Syria's relaying of information to Asemani's torturers fell short of the statutory definition of 'material support'. -- Laura P. Valle, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington D.C.

Foreign states providing assistance in emergencies should be immune from proceedings for acts or omissions in such assistance. The same applies to their personnel, an Australian bill, Foreign States Immunities Amendment Bill 2009, provides. The November 7, 2009 bill is available at Lexis Legal. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Juris Publishing recently released a treatise entitled, Enforcement of Arbitral Awards Against Sovereigns. Bound in hard-cover and measuring approximately 500 pages, the volume is described as a comprehensive discussion of the trials parties face when initiating arbitration against a foreign sovereign. The publisher notes that the book includes a thorough discussion of immunities, diplomatic protection, and enforcing awards won against sovereigns before ending with a discourse on several jurisdictions where enforcement against sovereign assets is commonly sought. Through November 25, 2009, the publisher is offering a 20% discount off of the regular price of $125. -- Laura P. Valle, Legal Assistant, Berliner Corcoran & Rowe, LLP, Washington D.C.

On November 12, 2009 the United States Department of Justice reported that the United States Attorney for the Southern District of New York filed an amended complaint in United States v. Assa Corp., docket no. 08-10934. The amended complaint seeks the complete forfeiture of all assets belonging to Assa Corp. and the Alavi Foundation. Assets are reported to include several bank accounts, a 36-story high-rise in Manhattan, and a number of other properties throughout the United States including four places of worship.

According to the Alavi Foundation website, the foundation is a charitable organization which promotes Islamic education and culture through academic grants and scholarships. Assa Corp. is a subsidiary of Assa Co. Ltd.; an entity which, the amended complaint alleges, represents the interests of Iranian board members in the nationalized Bank Melli Iran.

The amended complaint relies on evidence which suggests that both Assa Corp. and the Alavi Foundation provide illicit financial services for Bank Melli Iran and the Iranian government including but not limited to, managing assets and income in the Manhattan building and running a charitable organization for Iran, according to the U.S. Department of Justice. The United States argues that because neither the Alavi Foundation nor Assa Corp. ever applied for a license from the Department of the Treasury, providing any financial services to Bank Melli or the Government of Iran violates the International Emergency Economic Powers Act (IEEPA).

On November 15, 2009 the government of Iran condemned the U.S. move, calling the action a disgrace, the Washington Post wrote. -- Laura P. Valle, Legal Assistant, Berliner Corcoran & Rowe, LLP, Washington D.C.

On November 3, 2009, the United States District Court for the District of Columbia dismissed the complaint in the matter Baumel v. the Syrian Arab Republic, docket number 06-682.

On June 11, 1982, the Syrian Army captured Zachary Baumel, an American citizen and member of the Israeli Defense Forces Armored Corps, in Lebanon. He was taken to Damascus where he was displayed as a trophy of war in a victory parade. Since then, Baumel has not been seen or contacted by friends, family, or members of the international community. The plaintiffs, representing the Baumel family, sued the Syrian government for several claims including battery, assault, and solatium, and asked for punitive damages.

The plaintiffs filed the suit on April 14, 2006 under 28 USC §1605(a)(7), the FSIA exception for state sponsors of terrorism, and then amended their complaint under §1605A on July 14, 2009. The new statute gave plaintiffs with pending suits against state sponsors of terrorism the ability to sue for solatium and ask for punitive damages.

The defendants argued that the amendment to the claim was time-barred. The statute gave pending suits 60 days to re-file their claim under §1605A after its enactment on January 28, 2008. The court agreed with Syria that the plaintiffs had brought their cause of action against Syria a year too late.

Also, the court found that the plaintiffs' cause of action under 28 USC §605(a)(7) failed. The court concluded that it is not an act of 'terrorism' for a designated foreign state to fail to release a combatant captured on the battlefield upon cessation of military hostilities. Therefore, the exception to Syria's immunity under 28 USC §1605(a)(7) did not apply in this case. -- Laura P. Valle, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington D.C.

Courthouse News Service describes the determination by United States District Court Judge Richard J. Howell of the dismissall of a claim by Gloria Bolanos Pons and Aitor Rodriguez Soria against the People's Republic of China for some $2.4 billion in bonds issues by the Chinese government in 1913. The November 5, 2009 report China Off the Hook for $2.4B Bond-Holder Debt states that the claims are barred by the Foreign Sovereign Immunities Act. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

On November 5, 2009, the United States Court of Appeals for the Second Circuit remanded Seijas v. Argentina, docket number 08-2847, to the lower court to explain its 2008 Temporary Restraining Orders and address Argentina's FSIA claims.

On April 18, 22 and 25, 2008 the District Court had granted several TROs which restrained Argentina's ability to transfer, sell, pledge, loan, or otherwise encumber Argentinean bonds held in the Depository Trust Corporation in New York.

The District Court held a hearing on April 30, 2008, to determine whether these TROs should be converted into preliminary injunctions but the court reserved a decision, thus allowing the TROs to continue until they converted automatically into preliminary injunctions on May 23, 2008. Argentina appealed, claiming that the injunctions were precluded by the FSIA which granted it immunity under 28 USC §1609.

The Second Circuit found that the preliminary injunctions were unsupported by the requisite findings and remanded the case to allow the District Court to provide an explanation for its decision. While this represents a small victory for Argentina, the Circuit Court refused to address the FSIA claim and allowed the foreign nation's assets to remain frozen. -- Laura P. Valle, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington, D.C.

The Sofia Echo describes a November 5, 2009 raid by Russian forces of a Bulgarian state office in Moscow, in Russian police storms Bulgarian state properties in Moscow and noted the explanation for the raid: A search warrant based on allegations of violations of intellectual property.

The article alleged a breach of the 1961 Vienna Convention of Diplomatic Relations which provides for the inviolability of diplomatic premises. The affected property is part of the Bulgarian Ministry of Economy, Energy and Tourism and is one of the biggest Bulgarian state-owned properties abroad. It is home to a number of Bulgarian companies that rent offices there, the report continues. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

On November 2, 2009, Lynne Marek provides details on a case involving the discovery of assets held by foreign nations. The issue is of significant interest to the United States, she reports in DOJ Urges 7th Circuit to Shield Iranian Artifacts From Seizure by Terrorism Victims. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP. Disclaimer: The author's partner appears in the matter on behalf of a foreign government; the outcome could affect other government clients of the author's firm.

The International Court of Justice published a press release dated October 29, 2009, on the filing by the Republic of Honduras of a claim against the Federative Republic of Brazil. Allegedly, Brazil's embassy in Honduras awards critics of the Honduras government safe haven and enables the critics' political propaganda. The release states:

Honduras respectfully requests the Court to adjudge and declare that Brazil does not have the right to allow the premises of its Mission in Tegucigalpa to be used to promote manifestly illegal activities by Honduran citizens who have been staying within it for some time now and that it shall cease to do so. Just as Brazil rightly demands that the Honduran authorities guarantee the security and inviolability of the Mission premises, Honduras demands that Brazil's diplomatic staff stationed in Tegucigalpa devote themselves exclusively to the proper functions of the Mission and not to actions constituting interference in the domestic affairs of another State. Id.

On October 28, 2009, the United States District Court for the District of Columbia determined that terror activities cannot simply be restyled as commercial activities. Plaintiffs had based certain claims for compensation on the terror exception to the sovereign immunities of Libya under the Foreign Sovereign Immunities Act.

When the exception for state sponsors of terrorism became inapplicable after the renewal of relations between the United States and Libya, they sought to pursue their claims under the commercial exception of the FSIA.

The court explained why that avenue is not open to the plaintiffs, in the matter McDonald et al. v. Socialist People's Libyan Arab Jamahiriya et al., docket number 06-0729. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

In an October 16, 2009 decision, the United States Court of Appeals for the Second Circuit reversed its Winter Storm doctrine in the matter The Shipping Corporation of India Ltd v. Jaldhi Overseas Pte Ltd., docket number 08-3477, but skipped a decision on an underlying FSIA issue because it would become moot.

Under Winter Storm, the presence of Dollar-denominated funds in the Second Circuit for merely a split second could trigger attachments in certain maritime matters. The court explains the critical views and economic effects of the precedent. It also details how subsequent decisions changed some of its effects on the EFT practice.

By expressly overruling Winter Storm, the appellate court in New York City intends to increase clarity and legal certainty which should be welcomed by the banking sector and U.S. marshalls in its district as well as foreign defendants who - aside from EFT transfers in United States currency - lack other connections to the United States courts in the district. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

In an October 15, 2009 decision, the United States Court of Appeals for the Second Circuit reversed the order of attachment against the Republic of Argentina in Aurelius Capital Partners v. The Republic of Argentina, docket number 08-5621. Justice Sotomayor belonged to the panel before her call to the United States Supreme Court and did not participate in the decision. The court summarizes the matter as follows:

The Republic of Argentina appeals from the district court's orders of attachment and execution entered in late 2008 over Argentine social security funds, which under proposed Argentine legislation were to be transferred to the Administración Nacional de Seguridad Social (the Administration), an Argentine governmental entity. The orders were confirmed in the district court's opinion and order dated December 11, 2008, immediately after the legislation transferring the funds to the Administration became effective. We reverse the decision of the district court and vacate the orders.

Two brief opinions on the reconciliation of precedent with respect to the immunity of international organizations excel in Jorge Villa v. Inter-American Development Bank, docket number 08-7042. The October 5, 2009 decision relates to the denial of a rehearing en banc and is of interest to practitioners of international organization law. -- Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington DC.

The violation of human rights may be sanctioned by U.S. courts. Even if they involve non-American corporations and human rights violations by foreign nations, claims find their way to American courts.

But the latter will not necessarily remain there, as the new decision from the United States Court of Appeals for the Second Circuit illustrates with its October 2, 2009 dismissal in the matter The Presbyterian Church of Sudan et al. v. Talisman Energy, Inc., docket number 07-0016.

The complaint is based on the Alien Tort Statute, 28 USC § 1350. The dismissal of the suit against the Canadian defendent corporation concludes a detailed legal analysis which the court summarized:

We hold that under the principles articulated by the United States Supreme Court in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), the standard for imposing accessorial liability under the ATS must be drawn from international law; and that under international law, a claimant must show that the defendant provided substantial assistance with the purpose of facilitating the alleged offenses. Applying that standard, we affirm the district court's grant of summary judgment in favor of Talisman, because plaintiffs presented no evidence that the company acted with the purpose of harming civilians living in southern Sudan. Id. 8.

The United States Court of Appeals for the Second Circuit in New York City overruled its precedent allowing for due process protections for states in the context of a jurisdictional analysis. The September 28, 2009 ruling in the matter Frontera Resources Azerbaijan Corporation v. State Oil Company of the Azerbaijan Republic, docket number 07-1815, involves a conflict between a Cayman Islands company and the state oil agency over the confirmation of a Swedish arbitral award against the state entity. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Plaintiffs, alleging expropriation of art by Nazi Germany, may rely for subject matter jurisdiction of United States courts on 28 USC §1605(a)(3) even if they seek to recover the art from another nation.

On September 8, 2009, the United States Court of Appeals for the Ninth Circuit decided in Claude Cassirer v. Thyssen-Bornemisza Collection Foundation, docket number 06-56325, that the expropriation exception of the Foreign Sovereign Immunities can apply to a state and its foundation that have not been involved in the expropriation.

In addition, the court explored whether the required commercial activity of the defendants King of Spain and the Thyssen-Bornemisza in the United States suffice to meet the definition in 28 USC §1604(d). In relying on Siderman de Blake v. Republic of Argentina, 965 F.2d 699 (1992) and Altmann v. Republic of Austria, 317 F.3d 954 (2002), the court upheld the lower court's finding of commercial transactions by the art foundation as generating a sufficient nexus.

Based on limited jurisdictional discovery, the district court had concluded that the foundation transacted business as a purchaser and a seller of goods and services and as an advertiser in distributing marketing and other commercial materials in the United States.

The appellate court concluded its analysis with a detailed discussion of the exhaustion requirement, developed for Alien Tort Statute litigation, as applied to FSIA matters. Its remand to the district court includes instructions for a further analysis of the case in light of a limited exhaustion requirement to be imposed on the plaintiff. As a result, the plaintiff may need to pursue claims in Spain or Germany, not in the United States, if the district court so decides.

Judge Ikuta's minority opinion takes exception to writing a judge-made exhaustion requirement into the FSIA. -- Clemens Kochinke, partner, Berliner, Corcoran & Rowe, LLP, Washington, DC.