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GSS Grp. Ltd. v. Nat'l Port Auth. of Liber. & Republic of Liber.

United States Court of Appeals, District of Columbia Circuit

May 17, 2016


         Argued March 9, 2016

          Appeal from the United States District Court for the District of Columbia. (No. 1:12--cv--00332).

         Stanley McDermott III, pro hac vice, argued the cause for the appellant. Charles B. Wayne was with him on brief.

         Colleen E. Roh Sinzdak argued the cause for the appellees. Jessica L. Ellsworth was with her on brief.

         Before: HENDERSON, ROGERS and KAVANAUGH, Circuit Judges.


         Karen LeCraft Henderson, Circuit Judge

         GSS Group, Ltd. (GSS), a construction company incorporated in the British Virgin Islands and headquartered in Israel, appeals the district court's dismissal of its second attempt to confirm a $44 million arbitral award entered against the National Port Authority of Liberia (Port Authority) for breach of a construction contract. When GSS first tried to confirm the award, the district court found, and we affirmed, that it had no personal jurisdiction over the Port Authority. When GSS filed its second petition, it named not only the Port Authority but also the Republic of Liberia, which owns the Port Authority, as respondents. The district court again dismissed GSS's petition, finding that issue preclusion barred relitigating its personal jurisdiction over the Port Authority and that GSS failed to demonstrate that Liberia was liable for the Port Authority's alleged breach. For the reasons stated below, we affirm.

         I. BACKGROUND

         Although resolution of this case is ultimately straightforward, the history leading to our disposition is not. Three district court orders[1] and one opinion from this Court[2] have set out the relevant background but a refresher is nonetheless needed for completeness.

         A. Factual Background

         The contract dispute at issue has its genesis in the turmoil following Liberia's Second Civil War. After four years of conflict, two separate rebel groups besieged Monrovia, Liberia's capital, in 2003. Within months, Liberian President Charles Taylor was exiled and the separate political factions signed a Comprehensive Peace Agreement. The Peace Agreement created the National Transitional Government of Liberia, a power-sharing entity designed to govern the recovering nation until it could hold democratic elections. Monitoring and enforcing the Peace Agreement became the responsibility of the International Contact Group on Liberia (ICGL), a multi-national advisory board led by the United States and including members of the United Nations, the European Union, the Economic Community of West African States and the World Bank.

         The Peace Agreement also created the Liberian Contract & Monopolies Commission (Commission) to combat the corruption and mismanagement that had plagued the nation. The Peace Agreement authorized the Commission to ensure that " all public financial and budgetary commitments entered into by the" National Transitional Government are " transparent, non-monopolistic and in accordance with the laws of Liberia and internationally accepted norms of commercial practice." Comprehensive Peace Agreement, art. XVII(2)(a). To accomplish its goal, the Commission promulgated Liberia's Interim Public Procurement Policy and Procedures (Interim Procedures), which set out ground rules for, inter alia, state procurement of contracts for goods and services.

         During Liberia's transition period, revitalizing the war-ravaged Monrovian Port (Port) became a priority. The responsibility of doing so fell to the Port Authority, a wholly Liberian-owned corporation that manages, operates and maintains all Liberian ports. Created as " a distinct juridical entity with the capacity to enter into contracts and to sue and be sued in its own name," GSS Grp. IV, 31 F.Supp.3d at 55, the Port Authority functions " at some remove from the government itself," GSS Grp. III, 680 F.3d at 808. For instance, it enjoys expansive financial and administrative authority and has exclusive control over all funds it generates. Its Board of Directors is primarily comprised of Liberian government officials and individuals appointed by Liberia's president.

         On June 9, 2005, the Port Authority awarded GSS a multi-million-dollar contract to build a container park at the Port. Although the Interim Procedures mandated that the Port Authority award such contracts through " open competitive bidding," Interim Procedures 3 (Joint App'x (J.A.) 535), the Port Authority did not do so. As a result, on June 23, 2005, the Commission informed the Port Authority that the GSS contract was invalid and reminded it that all contracts must result from competitive bidding.

         Instead of conducting a bid, the Port Authority petitioned the Commission for a single-source exemption, which allows a Liberian entity to dispense with competitive bidding if, inter alia, " there is an urgent need" for the contract and " engaging in bid proceedings . . . is impractical due to unforeseeable circumstances." Id. at 12-13 (J.A. 544-45). The Port Authority urged the Commission that any further delay in construction of the container park could result in the Port's closure and that the contract would help the Port comply with the International Ship and Port Facility Security Code. The Commission granted the exemption on August 12, 2005, and the parties re-negotiated the contract 10 days later.

         The GSS contract aroused the international community's interest. The ICGL reviewed the contract and came away with " deep concerns" about its validity and monetary value. Letter from ICGL to Charles Gyude Bryant, Chairman of Nat'l Transitional Gov't of Liber., at 1 (Oct. 19, 2005) (J.A. 220). It notified the National Transitional Government by letter dated October 19, 2005, stating that, in its view, the Commission should not have granted the Port Authority the exemption and that the contract represented poor value for money. Aware of the scrutiny, GSS and the Port Authority amended the contract again on October 28, 2005. Their efforts failed. On December 30, 2005, the National Transitional Government's Chairman directed the Port Authority to cancel the GSS contract. The letter stated:

I have taken off considerable time to carefully review the analysis of my technical team regarding equitable benefits to all parties resulting from the contract entered into between the [Port Authority] and the GSS. Our evaluation shows that the contract as negotiated and concluded places the Port Authority in a grossly disadvantageous position for more than a decade. Additionally, the contract does not contribute in any material way to compliance with the [International Ship and Port Facility Security] regulations and as such Security Qualification of the Free Port of Monrovia still remains.
I am therefore directing that the GSS contract be cancelled and the Port Authority work[] toward a more holistic management contract that will improve operational, financial and security efficiency levels. The sourcing of any managing team must be done through a competitive bidding process after proper terms of reference are agreed upon and approved by the . . . Commission and the technical committee of the [Economic Governance Steering Committee].[3] The GSS shall be free to submit an offer at that time.

         Letter from Charles Gyude Bryant, Chairman of Nat'l Transitional Gov't of Liber., to D. Masuleng Coop, Chairman of Nat'l Port Auth. (Dec. 30, 2005) (J.A. 977). On January 3, 2006, the Port Authority sought reconsideration from the National Transitional Government. The record does not reflect whether the Port Authority's request prompted a response. On January 16, 2006, the National Transitional Government abdicated its power and Liberia's newly elected government assumed control.

         On January 26, 2006, the Port Authority informed GSS, via letter, that it was cancelling the contract. A rapid volley of correspondence between GSS and the Port Authority ensued, culminating in a February 16, 2006 letter from the Port Authority explaining that the Interim Procedures demand complete transparency and adherence to open bidding and concluding that the GSS contract fell well short of those standards. It further explained that the Commission only granted the single-source exemption because it mistakenly thought the contract was necessary to comply with international obligations and to avoid the Port's closure.[4] Because the exemption was mistakenly granted, the Port Authority considered the contract " null and void ab initio." GSS Grp. IV, 31 F.Supp.3d at 56 (citation omitted).

         On March 15, 2006, GSS invoked the contract's arbitration clause (which provided that disputes arising under the agreement were to be arbitrated in London and in accordance with the laws of England and Wales) against the Port Authority, but not against Liberia. Meanwhile, a separate Liberian governmental organization--the Liberian Public Procurement and Concession Commission[5]--sought a Liberian-court declaration that the contract, including the arbitration provision, was invalid. Because of the Liberian judicial proceedings, the Port Authority declined to participate in the London arbitration and GSS appointed the sole arbitrator. On February 8, 2008, the Liberian court found the relevant portions of the contract unenforceable. Notwithstanding the Liberian court's decision, one month later, the arbitrator ...

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