United States District Court, D. Columbia.
GSS GROUP LTD. (a/k/a GLOBAL SECURITY SEALS GROUP, LTD.), Petitioner,
REPUBLIC OF LIBERIA et al., Respondents
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For GSS GROUP LTD., also known as GLOBAL SECURITY SEALS GROUP LTD., Petitioner: Charles B. Wayne, DLA PIPER LLP (U.S.), Washington, DC.
For REPUBLIC OF LIBERIA, Respondent: Robert Benjamin Wolinsky, LEAD ATTORNEY, HOGAN LOVELLS U.S. LLP, Washington, DC.
PAUL L. FRIEDMAN, United States District Judge.
This matter is before the Court on the respondents' motion to dismiss petitioner's Amended Petition for an Order Confirming Foreign Arbitral Award. Petitioner GSS Group Ltd. (" GSS" ) seeks confirmation of an award of approximately $44 million issued against respondent National Port Authority of Liberia (" NPA" ), arising from GSS's claim that the NPA breached a contract under which GSS was to build and operate a container park at the Freeport of Monrovia, in Liberia's capital city. GSS's first attempt to confirm its arbitral award -- in a separate action brought before this Court in 2009 -- was dismissed for lack of personal jurisdiction over the NPA, and the D.C. Circuit affirmed that dismissal.
GSS has now returned to this Court seeking confirmation of the same award, but this time it has added the Republic of Liberia (" Liberia" ) as an additional party against which confirmation is sought, on the theory that the NPA acted as Liberia's agent. Liberia and the NPA move to dismiss GSS's amended petition on a number of grounds, including lack of personal jurisdiction over the NPA, lack of subject matter jurisdiction over the action against Liberia, improper venue, as well as a number of merits-based grounds. Based on careful consideration of respondents' motion, petitioner's opposition, respondents' reply, the relevant legal authorities, and portions of the record in this case, the Court will grant respondents' motion to dismiss for two reasons: there is no personal jurisdiction over the NPA, and the Court lacks subject matter jurisdiction over the action against Liberia.
The facts of this case have already been set forth in three judicial opinions: this Court's decision dismissing GSS's original action seeking confirmation of the award
against the NPA, GSS Group Ltd. v. Nat'l Port Auth., 774 F.Supp.2d 134 (D.D.C. 2011); this Court's subsequent denial of GSS's motion to alter or amend that judgment, GSS Group Ltd. v. Nat'l Port Auth., Dkt. No. 25, Civil Action No. 09-1322, Opinion, (D.D.C. Aug. 10, 2011); and the court of appeals' affirmance of those decisions, GSS Group Ltd. v. Nat'l Port Auth., 680 F.3d 805, 401 U.S.App.D.C. 1 (D.C. Cir. 2012). Accordingly, this Opinion shall set forth only those facts necessary to establish the essential background.
The NPA " is a public corporation, organized under the laws of Liberia, responsible for the management, operation, and maintenance of Liberia's port facilities." GSS Group Ltd. v. Nat'l Port Auth., 680 F.3d at 808. Though wholly state-owned, the NPA " operates at some remove from the government itself." Id. Its organic statute, the National Port Authority Act, establishes that the NPA is a distinct juridical entity with the capacity to enter into contracts and to sue and be sued in its own name. See Public Authorities Law, Ch. VI, § 54(2) (Liberia).
In June of 2005, GSS and the NPA entered into an agreement under which GSS was " to construct and operate a new container park at the Freeport of Monrovia." Am. Pet. ¶ 8. But the following month, a Liberian government agency -- the Contract and Monopolies Commission (" CMC" ) -- advised the NPA that its contract with GSS was invalid because it had not resulted from a competitive bidding process, as required under Liberia's Interim Public Procurement Policy and Procedures. Id. ¶ 9; Opp., Ex. 10, at 150 [Dkt. No. 19-6]. Rather than put the contract out for a competitive bid, however, the NPA petitioned the CMC to grant an exemption allowing GSS to be awarded the contract directly, pursuant to a " single-source procurement" arrangement. Opp., Ex. 10, at 154-59. The NPA argued that there was an urgent need to rehabilitate the Port, and that GSS would help further Liberia's compliance with the International Ship and Port Facility Security (" ISPS" ) Code. Id. The CMC accepted these arguments and granted the exemption. Id. at 160, 176; see also Stmt. of Claim ¶ ¶ 27-29. GSS and the NPA subsequently signed an amended agreement in August 2005. Am. Pet. ¶ 9; Stmt. of Claim ¶ ¶ 28-29.
Shortly thereafter, the amended contract between GSS and the NPA came under scrutiny from the International Contact Group of Liberia (" ICGL" ). Am. Pet. ¶ ¶ 30-31. The ICGL was an entity tasked with helping to monitor and enforce the 2003 peace agreement that ended Liberia's civil war, and the United States was among its members. See MTD at 2. In October 2005, the ICGL wrote to the National Transitional Government of Liberia (" NTGL" ) -- which was governing the country until post-war elections could take place -- and outlined a number of reasons why the contract between GSS and the NPA caused it " deep concerns." Opp., Ex. 10, at 206-14 [Dkt. No. 19-7]. Specifically, the ICGL noted its reservations regarding the CMC's approval of the exemption permitting the direct award of the contract to GSS, opining that the requirements under Liberia's Interim Public Procurement Policy and Procedures governing single-source procurement arrangements had not been satisfied. Id. at 208-09. The ICGL also cautioned that the agreement represented poor value for money, and that the contract itself suffered from certain technical deficiencies. See id. 209-14. In light of this scrutiny, GSS and the NPA signed an amendment to the contract in an effort to address the ICGL's concerns. See Am. Pet. ¶ 10; Stmt. of Claim ¶ ¶ 38-39.
Just one month later, however, the Chairman of the NTGL, C. Gyude Bryant,
wrote to the Chairperson of the NPA's board, " directing that the GSS contract be cancelled." Opp., Ex. 10, at 263-65 [Dkt. No. 19-8]. Chairman Bryant explained that the government's analysis showed that " the contract as negotiated and concluded places the Port Authority in a grossly disadvantageous position for more than a decade," and that " the contract does not contribute in any material way to compliance with the ISPS regulations." Id. The Chairman directed that any subsequent contract result from a competitive bidding process, and that " proper terms of reference [be] agreed upon and approved by the [CMC] and the technical committee of the [Economic Governance Steering Committee]" of the Governance and Economic Management Assistance Program, an entity established jointly by the ICGL and the NTGL. Id.; see MTD at 2. Subsequently, on January 26, 2006 -- following the inauguration of Liberia's post-war elected government, headed by President Ellen Johnson-Sirleaf -- the NPA notified GSS by letter that it was cancelling the contract, citing the reasons stated by the NTGL's Chairman in his letter directing cancellation. Opp., Ex. 10, at 273. In a second letter written by the NPA to GSS on February 18, 2006, the NPA's board Chairperson explained that it appeared upon review that the single-source exemption granted by the CMC had been obtained through " misrepresentation," and therefore the contract was " invalid and null and void ab initio." Id. at 285-87 [Dkt. Nos. 19-8 to 19-9].
GSS initiated arbitration proceedings pursuant to Article VIII of its agreement with the NPA, which provided that disputes arising from it would be arbitrated in London in accordance with the laws of England and Wales. Am. Pet. ¶ ¶ 11-12. Because the NPA refused to participate, a sole arbitrator was appointed. Id. ¶ ¶ 12-13. Meanwhile, the Liberian Public Procurement and Concession Commission initiated an action in the Liberian courts seeking a declaration that the GSS contract, as well as its arbitration clause, were invalid. Stmt. of Claim ¶ ¶ 73-77. In March 2008, the arbitrator, Lord Mustill, determined that he had jurisdiction over the matter notwithstanding the parallel Liberian court action. See Am. Pet. ¶ 14; Ruling on Jurisdiction. Lord Mustill then proceeded to issue an award in GSS's favor on the issue of liability, followed by a damages award in the amount of $44,347,260. Am. Pet. ¶ ¶ 15-16.
In July of 2009, GSS filed its first petition in this Court seeking confirmation of the arbitral award. The NPA moved to dismiss the petition, arguing, among other defenses, that the Court could not exercise personal jurisdiction over it consistent with due process, given the NPA's lack of " minimum contacts" with the United States. In response, GSS argued that the NPA, as a wholly state-owned enterprise, could not claim the status of " personhood" within the meaning of the due process clause. This Court held, however, that although foreign sovereigns lack such personhood, the NPA " functions more like a private corporation than a foreign government for the purposes of a Fifth Amendment analysis," and it " therefore may not be haled into an American court without having a sufficient quantum of minimum contacts with the United States." GSS Group Ltd. v. Nat'l Port Auth., 774 F.Supp.2d at 141. " Because [GSS] ha[d] not demonstrated, or even attempted to demonstrate, that the [NPA] has any contacts with the United States," the Court concluded that it lacked jurisdiction over the person of the NPA, and, accordingly, GSS's petition was dismissed. Id.
Following the Court's dismissal of the petition, GSS moved to alter or amend the judgment pursuant to Rule 59(e) of the Federal Rules of Civil Procedure.
Its motion raised two arguments that GSS had not advanced in opposition to the NPA's motion to dismiss: (1) that petitions for confirmation of foreign arbitral awards are mere " summary proceedings" and therefore do not infringe on a respondent's due process rights; and (2) that the NPA had acted as an agent of the Liberian government and, therefore, because foreign sovereigns lack due process rights, the NPA was similarly entitled to none. GSS Group Ltd. v. Nat'l Port Auth., Dkt. No. 25, Civil Action No. 09-1322, *9. GSS also sought jurisdictional discovery to develop the factual record regarding the NPA's relationship to the Liberian government. Id. at 9. But this Court concluded that GSS's failure to raise these arguments or to seek jurisdictional discovery earlier in the action meant that these efforts had been waived. Id. at 9-14. GSS appealed, and the D.C. Circuit affirmed the dismissal of the petition. GSS Group Ltd. v. Nat'l Port Auth., 680 F.3d at 813, 816-17.
The case presently before the Court, GSS contends, " is different from the prior action because it is brought (a) against Liberia as the principal of the NPA of Liberia, and (b) against the NPA of Liberia as the agent of Liberia." Opp. at 1. According to GSS, the significance of these differences is twofold. " First, Liberia will be bound by Lord Mustill's award even though not a signatory to the Contract containing the arbitration agreement. Second, the NPA of Liberia, like Liberia itself, will be subject to this Court's jurisdiction because it will not have a constitutional due process defense to GSS's petition." Id. at 11.
Liberia and the NPA move to dismiss the petition on a number of grounds. Among these are jurisdictional grounds -- including arguments that the Court lacks personal jurisdiction over the NPA and subject matter jurisdiction over the action against the Republic of Liberia, due to Liberia's sovereign immunity. MTD at 18-27, 33-47. In addition, the respondents argue that venue is improper in this forum. Id. at 47-48. The respondents also raise a number of merits-based grounds for dismissal, including that: Liberia was not a party to the arbitration agreement or arbitral proceedings; the NPA lacked the capacity to enter into the contract with GSS; the contract is invalid under the laws of England and Wales; the petitioner, GSS, was in fact not a party to the contract; and enforcement of the arbitral award would ...