United States Court of Appeals, District of Columbia Circuit
GSS GROUP LTD., ALSO KNOWN AS GLOBAL SECURITY SEALS GROUP LTD., APPELLANT
NATIONAL PORT AUTHORITY OF LIBERIA AND REPUBLIC OF LIBERIA, APPELLEES
March 9, 2016
from the United States District Court for the District of
Columbia. (No. 1:12--cv--00332).
McDermott III, pro hac vice, argued the cause for the
appellant. Charles B. Wayne was with him on brief.
E. Roh Sinzdak argued the cause for the appellees. Jessica L.
Ellsworth was with her on brief.
HENDERSON, ROGERS and KAVANAUGH, Circuit Judges.
LeCraft Henderson, Circuit Judge
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.
resolution of this case is ultimately straightforward, the
history leading to our disposition is not. Three district
court orders and one opinion from this
Court have set out the relevant background
but a refresher is nonetheless needed for completeness.
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.
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.
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
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.
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.
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
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]. The GSS shall be free to
submit an offer at that time.
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.
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. 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).
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--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 ...