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Valambhia v. United Republic of Tanzania

United States District Court, District of Columbia

March 31, 2019

VIPULA D. VALAMBHIA, et al., Plaintiffs,
v.
UNITED REPUBLIC OF TANZANIA, et al., Defendants.

          MEMORANDUM OPINION

          TANYA S. CHUTKAN UNITED STATES DISTRICT JUDGE.

         Plaintiffs Vipula D. Valambhia, Priscilla D. Valambhia, Bhavna D. Valambhia, Punita D. Valambhia, and Krishnakant D. Valambhia, bring this action under the District of Columbia's Uniform Foreign-Country Money Judgments Recognition Act, D.C. Code §§ 15-361 to 15-371, against Defendants United Republic of Tanzania, the Bank of Tanzania, and the Ministry of Defence and National Service, for recognition and enforcement of a foreign money judgment rendered in Tanzania against Defendants. Currently pending before the court is Defendants' Motion to Dismiss, ECF No. 13, pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.

         For the reasons explained below, the court will GRANT Defendants' motion. Because the court finds that it does not have subject matter jurisdiction, it need not reach Defendants' Rule 12(b)(6) argument.

         I.BACKGROUND

         In 1985, the Tanzanian Ministry of Defence, on behalf of Tanzania, ordered troop carriers, tanks, and other military equipment as part of a contract with Transport Equipment Ltd. (“TEL”), an Irish corporation. Plaintiffs' First Amended Complaint ¶ 12, ECF No. 12 (“Am. Compl.”). The Plaintiffs' decedent, Devram Valambhia (“Valambhia”), was the Director General of TEL. Id. Valambhia's family has lived in the United States since 1981. Id.

         Tanzania paid the amounts due under the military equipment contract through the Bank of Tanzania (“the Bank”) from 1986 to 1989. Id. ¶ 13. After some dispute, TEL and Valambhia entered into an Irrevocable Agreement on January 4, 1989, stating that Valambhia should receive 45% of the total amount due under the contract. Id. ¶¶ 13-14. On June 10, 1989, Tanzania signed a new contract acknowledging the Irrevocable Agreement between TEL and Valambhia and pledging to pay Valambhia in U.S. dollars the amount due to him under the initial contract. Id. ¶ 15. Tanzania began to make payments to Valambhia from its Federal Reserve Bank of New York account in the United States. Id.

         Tanzania then tried to challenge the validity of these agreements through a long, highly-publicized series of court cases that lasted over fourteen years. See Id. ¶¶ 17-23; Decl. of Meredith B. Parenti, Ex. F, ECF No. 12-1, Richard Mgamba, “Revealed: The most expensive legal suit in Dar's history, ” The Guardian, June 28, 2009, at 1-2. In 1991, the High Court of Tanzania entered a High Court Decree which stated that Valambhia and his family were entitled to 45% of the amount unpaid on the contract between Tanzania and TEL. Am. Compl. ¶ 18. In 2001, after roughly a decade of further litigation, the High Court of Tanzania entered a Garnishee Order that required the Bank of Tanzania to pay Valambhia the amount owed under the High Court Decree. Id. ¶ 19. The Bank challenged the validity of the Garnishee Order, but the High Court found it to be proper. Id. ¶ 20. The Bank then appealed this ruling in the Court of Appeal of Tanzania, the country's highest court. Id. ¶ 20. In 2003, the Court of Appeal held that the Garnishee Order was “final and conclusive” and denied the Bank any right to appeal. Id.

         Nonetheless, the Bank continued to refuse to comply with the Garnishee Order, and the High Court issued against the Bank of Tanzania an order to show cause why it should not be held in contempt. Id. ¶ 21. After rejecting the Bank's argument regarding its inability to pay the amounts due to Valambhia and his family, the High Court held the Bank's Governor in contempt and ordered him to pay a fine or serve a term of imprisonment. Id. Valambhia died in Tanzania in 2005, id. ¶ 24, and the Bank has never paid his family, id. ¶ 23.

         The Valambhia family, Devram Valambhia's sole heirs, now files this suit under the D.C. Uniform Foreign-Country Money Judgments Recognition Act, D.C. Code §§ 15-361 to 15-371, to recognize and enforce the foreign money judgment rendered in Tanzania. Id. ¶ 1.

         II. LEGAL STANDARD FOR RULE 12(B)(1)

         A defendant may move to dismiss a complaint for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1). “It is the burden of the party claiming subject matter jurisdiction to demonstrate that it exists.” Georgiades v. Martin-Trigona, 729 F.2d 831, 833 n.4 (D.C. Cir. 1984) (citation omitted). The court “assume[s] the truth of all material factual allegations in the complaint and construe[s] the complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the facts alleged, and upon such facts determine[s] jurisdictional questions.” American National Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (quotations marks and citations omitted). A court “may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction.” Jerome Stevens Pharm., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005) (citation omitted).

         III. ANALYSIS

         The Foreign Sovereign Immunities Act, 28 U.S.C. § 1602 et seq. (“FSIA”) “entitles foreign states to immunity from the jurisdiction of courts in the United States, subject to certain enumerated exceptions.” Saudi Arabia v. Nelson, 507 U.S. 349, 351 (1993) (citations omitted). The FSIA provides the “sole basis for obtaining jurisdiction over a foreign state in the courts of this country.” Id. at 355. “Courts may hear a case only if one of the [FSIA] exceptions applies because subject-matter jurisdiction in any such action depends on that application.” Simon v. Republic of Hungary, 911 F.3d 1172, 1177 (D.C. Cir. 2018) (quotation marks and citations omitted).

         Plaintiffs concede that Defendants are foreign sovereigns. Am. Compl. ¶¶ 5-7. Therefore, to establish this court's subject matter jurisdiction over Defendants, Plaintiffs must demonstrate that one of the FSIA exceptions to immunity applies. Relevant to this case is the so-called “commercial activities exception.” See 28 U.S.C. ...


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