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Nanko Shipping v. Alcoa, Inc.

United States District Court, District of Columbia

September 14, 2018

NANKO SHIPPING, GUINEA, Plaintiff,
v.
ALCOA, INC., et al., Defendants.

          MEMORANDUM OPINION

          ROSEMARY M. COLLYER United States District Judge.

         Nanko Shipping, Guinea brought this suit to enforce shipping rights as an alleged third-party beneficiary of certain contractual rights held by the Republic of Guinea. Defendants Alcoa, Inc., Alcoa World Alumina LLC, and Harvey Aluminum Company of Delaware move to dismiss; they argue that all claims are subject to mandatory arbitration and that Nanko Shipping has failed to state a claim on which relief may be granted. The Court finds that Nanko Shipping is not subject to the arbitration provision in the contract between the Republic of Guinea and Harvey Aluminum Company and, therefore, its contract claims are properly brought in court. As a result, Nanko Shipping may complain of racial discrimination under 42 U.S.C. §§ 1981 and 1985. However, Nanko Shipping's claims for tortious interference with contract and civil conspiracy will be dismissed for failure to state a claim.

         I. FACTS

         In 1963, the Republic of Guinea (Guinea) and Harvey Aluminum Company of Delaware (Halco)[1] executed the Compagnie des Bauxites de Guinée Convention to develop bauxite mining and processing in Guinea. Third Am. Compl. (TAC) [Dkt. 35] ¶ 1; see also Ex. A, Halco Mot. to Dismiss, Agreement Between The Republic of Guinea and Harvey Aluminum Co. (CBG Convention) [Dkt. 47-2].[2] The Compagnie des Bauxites de Guinee (the Bauxite Company of Guinea) (CBG or Corporation) is a corporation owned 49% by Guinea and 51% by Halco. TAC ¶ 1. Article 9 of the CBG Convention gave Guinea a qualified right to ship 50% of the bauxite produced:

The Government [of Guinea] reserves the right, inasmuch as it does not adversely affect the sale of bauxite, to have the exported tonnage load[illegible] a proportion [of] which shall not exceed fifty percent on ships operating under [illegible] Guinean flag or an assimilated flag, or on ships chartered by the Government on the international shipping market, the above being, however, under the express condition that the freight tariffs practiced are lower or equal to those which are quoted at that particular time on the international shipping market for identical conditions for the freight and the shipping routes considered.

CBG Convention, Art. 9 at 33-34; see also TAC ¶¶ 1, 19.[3] Over the past 50 years, the Corporation has produced and exported over 600 million tons of bauxite from Guinea; the bauxite has been used to produce approximately 150 million tons of aluminum valued at over $400 billion. TAC ¶ 14.

         On August 17, 2011, Guinea entered into a Technical Assistance Agreement (TAA) with Nanko Shipping, Guinea (Nanko Shipping). Id. ¶ 25; see also Ex. 1, TAC, Technical Assistance Agreement [Dkt. 35-1]. Under the terms of the Technical Assistance Agreement, Guinea authorized Nanko Shipping to exercise Guinea's shipping rights under Article 9 of the CBG Convention, thereby making Nanko Shipping a third-party beneficiary to the CBG Convention. TAC ¶¶ 3, 4, 25, 77. In this lawsuit, Nanko Shipping asserts a right to control bauxite shipments from Guinea for the benefit of the Guinean government and people. Id. ¶ 4.

         Nanko Shipping, Nanko Shipping USA, and owner Mori Diane originally brought this suit against Alcoa, Inc. and its affiliate, Alcoa World Alumina, LLC (collectively Alcoa Defendants). See Compl. [Dkt. 1]. This Court dismissed Nanko Shipping USA and Mr. Diane for lack of standing and that holding was not appealed. See Nanko Shipping, USA v. Alcoa, Inc., 107 F.Supp.3d 174, 179-80 (D.D.C. 2015) (Nanko Shipping I); Nanko Shipping, USA v. Alcoa, Inc., 850 F.3d 461, 462 (D.C. Cir. 2017) (Nanko Shipping II). The Court also dismissed all claims brought by Nanko Shipping for failure to join a necessary party, the Republic of Guinea, and, in the alternative, dismissed Nanko Shipping's § 1981, tortious interference, and civil conspiracy claims for failure to state a claim upon which relief may be granted. See Nanko Shipping I, 107 F.Supp.3d at 182-83. On appeal, the United States Court of Appeals for the District of Columbia Circuit held that the Republic of Guinea is not an indispensable party to this suit and that Nanko Shipping had adequately alleged a § 1981 claim; it otherwise sustained this Court's initial decision. See Nanko Shipping II, 850 F.3d at 467.

         On remand, Nanko Shipping filed a Third Amended Complaint adding Defendant Halco to the Alcoa Defendants and advancing four counts:

Count I: Breach of Third-Party Beneficiary Contract (against Halco);
Count II: Race Discrimination in Violation of 42 U.S.C. §§ 1981 and 1985 (against all Defendants);
Count III: Tortious Interference with Business/Contractual Relations and/or Prospective Advantage (against all Defendants); and
Count IV: Civil Conspiracy (against all Defendants).

TAC ¶¶ 74-109. The Alcoa Defendants move to dismiss, arguing that the CBG Convention requires all claims to be submitted to arbitration and, in the alternative, the tortious interference and civil conspiracy claims fail because Nanko Shipping failed to allege affirmative and intentional interference by Alcoa. Halco moves to dismiss as well; it argues that (1) the CBG Convention requires arbitration; (2) Nanko Shipping failed to allege any duty under the CBG Convention that Halco may have breached, so its breach of contract and §§ 1981 and 1985 claims must fail; and (3) the Third Amended Complaint fails adequately to plead claims of tortious interference and civil conspiracy. After Nanko Shipping opposed the motions, both Defendants replied. The motions are ripe for review.[4]

         II. LEGAL STANDARDS

         A. Federal Arbitration Act

         The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., was passed by Congress “to establish an alternative to the complications of litigation.” Revere Copper & Brass Inc. v. Overseas Private Inv. Corp., 628 F.2d 81, 83 (D.C. Cir. 1980). The FAA provides that “[a] written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. When arbitration clauses arise in the context of international agreements, a court applies Chapter Two of the FAA, which codifies the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3 (New York Convention); see also 9 U.S.C. §§ 201-208. The FAA declares that “[a]n action or proceeding falling under the [New York] Convention shall be deemed to arise under the laws and treaties of the United States. The district courts . . . shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.” 9 U.S.C. § 203. The New York Convention itself obligates contracting nations to “recognize [foreign] arbitral awards as binding and enforce them in accordance with” local procedural law. New York Convention, Art. III. As a party to the New York Convention, the United States has reserved the right to recognize and enforce only those awards made “in the territory of another Contracting State, ” i.e., a signatory foreign nation. Id. Art. I(3) (allowing such reservations).

         “[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Atkinson v. Sinclair Ref. Co., 370 U.S. 238, 241 (1962) (quoting United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960)). “[A]rbitration is simply a matter of contract between the parties.” First Options of Chicago, Inc. v. Kaplan,514 U.S. 938, 943 (1995). When a party seeks arbitration that another party opposes, the question arises whether a court or an arbitrator decides whether the dispute is arbitrable. The answer depends on whether the parties agreed to submit that opening question to an arbitrator; if so, a court defers to the arbitrator but if not, the court decides that question independently. Id. at 943-44. “When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary state-law principles that govern the formation of contracts.” Id. at 944. In this ...


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