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Global Index, Inc. v. Mkapa

November 4, 2003

GLOBAL INDEX, INC., PLAINTIFF,
v.
THE HONORABLE H.E. BENJAMIN W. MKAPA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Henry H. Kennedy, Jr. United States District Judge

MEMORANDUM OPINION

Plaintiff, Global Index, Inc. ("Global Index"), brings this action against defendants, Benjamin W. Mkapa, President of Tanzania, Amani A. Karume, President of Zanzibar, and Suleiman O. Nyanga, Zanzibar's Minister of Finance and Economic Affairs, for their failure to honor promissory notes issued by the government of Zanzibar. Before this court is defendants' motion to dismiss. Upon consideration of the motion, plaintiff's opposition thereto, and the record of this case, the court concludes that the motion must be granted.

I. FACTUAL BACKGROUND

In July 1994, plaintiff, a private company incorporated in Maryland and headquartered in New York, allegedly received $400 million in promissory notes from the government of Zanzibar, a geopolitical entity that is part of the United Republic of Tanzania.*fn1 Plaintiff maintains that the promissory notes were to provide"funding and other means necessary to facilitate various infrastructure enhancements in Zanzibar," and that Tanzania"promised to pay [Global Index] the [face value of the notes] with interest thereon at the rate of six percent (6%) per annum." Compl. ¶¶ 7, 24. In August 1994, Westminster Bank in London informed plaintiff that it had received four $100 million promissory notes from the Tanzanian Ministry of Finance and that the bank was putting them in a sealed envelope in security deposit. In June 2002, plaintiff's counsel sent a letter demanding payment on the promissory notes to the Tanzanian Embassy. Plaintiff's letter indicated that the notes matured on July 28, 1997, and that Tanzania owed accrued interest after the maturity date, which plaintiff eventually claimed to be $125,704,329.

In July 2002, Zanzibar's Minister of Finance sent plaintiff a response which observed that"the Promissory Notes were issued in the name of the Government of Zanzibar by the Signatories" without acknowledging Zanzibar's obligation to pay. Pl.'s Ex. E at 1 (Raphael Ltr. to Larson-Jackson, July 16, 2002). Indeed, the letter asserted that there was"no evidence whatsoever that Zanzibar enjoyed any financial benefits from the issued Promissory Notes" and that the $400 million issuance had far exceed the statutory limit that Zanzibar's law allowed the Minister of Finance to raise. See id. At 1-2. The Finance Minister then requested that plaintiff"assist in identifying types of benefits that [Zanzibar] enjoyed from the issued Promissory Notes... and any other evidence that will help the Government consider further this request." Id. at 2. Plaintiff, without answering the letter, filed this action shortly after, claiming a loss of $525,704,329, including accrued interest, as a result of defendants' non-payment.

II. ANALYSIS

A. Defendants as Foreign Sovereigns

Plaintiff brings this action against President Mkapa, President Karume, and Minister Nyanga in their official capacities and as representatives of a foreign sovereign. Consequently, the exclusive basis for this court to exercise jurisdiction over this suit is the Foreign Sovereign Immunity Act (FSIA), 28 U.S.C. § 1602 et seq. See Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989) ("We think that the text and structure of the FSIA demonstrate Congress' intention that the FSIA be the sole basis for obtaining jurisdiction over a foreign state in our courts.").

The FSIA's definition of"foreign state" includes (1) a political subdivision of a foreign state, (2) an organ, agency, separate legal person or corporate instrumentality of a foreign state, or (3) a political subdivision. 28 U.S.C. § 1603(a)-(b). However, it is well-settled that individuals who act in their official capacities on behalf of a foreign sovereign"are considered agencies or instrumentalities of a foreign state." Jungquist v. Sheik Sultan Bin Khalifa, 115 F.3d 1020, 1027 (D.C. Cir. 1997) (internal citations and quotations omitted); Park v. Shin, 313 F.3d 1138, 1144 (9th Cir. 2002) ("'[A] suit against an individual acting in his official capacity is the practical equivalent of a suit against the sovereign directly.'") (quoting Hilao v. Estate of Marcos ( In re Estate of Marcos ), 25 F.3d 1467, 1472 (9th Cir. 1994)).

The parties agree that the present action is maintained against defendants in their official roles as the highest members of the Tanzanian government. See Pl.'s Opp'n to Defs.' Mot. to Dismiss Compl. ("Pl.'s Opp'n") at 9 ("[T]he purpose of this lawsuit is to hold the responsible government entities responsible [ sic ] for breach of contract and not the parties in their individual capacities."); Defs.' Mot. to Dismiss Compl. ("Defs.' Mot.") at 5 ("Given that Global Index complains of actions taken by the Defendants in their official capacities as agents of a foreign sovereign, the Defendants are entitled to be treated as foreign states, and are presumptively immune from the jurisdiction of this Court."). There is little question, therefore, that defendants are a"foreign state" for purposes of analysis under the FSIA.

B. Standard for Motion to Dismiss

Usually, a motion to dismiss for lack of jurisdiction should not prevail"unless plaintiffs can prove no set of facts in support of their claim which would entitle them to relief." Kowal v. MCI Commun. Corp., 16 F.3d 1271. And, at the dismissal stage, the plaintiff's complaint must be construed liberally, and the plaintiff should receive the benefit of all favorable inferences that can be drawn from the alleged facts. See EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997).*fn2 Because the FSIA immunizes states from suit, not just liability, however, a different standard applies to a motion to dismiss for lack of jurisdiction in FSIA cases. In a FSIA case, after the defendant has produced prima facie evidence supporting its entitlement to immunity,"the burden of going forward... shift[s] to the plaintiff to produce evidence establishing that the foreign state is not entitled to immunity." H.R. Rep. No. 94-1487, at 17 (1976). The defendant then has the ultimate burden of proving immunity. See, e.g., Transamerican S.S. Corp. v. Somali Democratic Republic, 767 F.2d 998, 1002 (D.C. Cir. 1985). When a defendant"challenges only the legal sufficiency of the plaintiff's jurisdictional allegations, then the district court should take the plaintiff's factual allegations as true and determine whether they bring the case within any of the exceptions to immunity invoked by the plaintiff." Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000). However, if a defendant challenges the factual basis of jurisdiction,"the court may not deny the motion to dismiss merely by assuming the truths of the facts as alleged by plaintiff;" rather, the court must"go beyond the pleadings and resolve any disputed issue of fact the resolution of which is necessary to a ruling upon the motion to dismiss." Id. (citing Jungquist, 115 F.3d at 1027-28; Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 448-49 (D.C. Cir. 1990)).

While the court has"considerable latitude in devising procedures... to ferret out the facts pertinent to jurisdiction," id., it must carefully control and limit jurisdictional discovery,"lest the evaluation of immunity itself encroach unduly on the benefits the immunity was to ensure." In re Papandreou, 139 F.3d 247, 253 (D.C. Cir. 1998). As a result, throughout this analysis of the motion to dismiss for lack of ...


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