United States District Court, District of Columbia
TURAN PETROLEUM, INC., a Delaware corporation, et al., Plaintiffs,
MINISTRY OF OIL AND GAS OF KAZAKHSTAN, et al., Defendants. and TURAN PETROLEUM, INC., a Nevada Corporation, Intervenor-Plaintiff,
B. WALTON UNITED STATES DISTRICT JUDGE
plaintiffs, Turan Petroleum, Inc. (a Delaware corporation),
Energyfund, Inc., and Trustees for Trek Resources, Inc.
(collectively, the “plaintiffs”), bring this
civil action seeking compensatory and punitive damages
against the Ministry of Oil and Gas of Kazakhstan (the
“Ministry”) and Does from 1 to 100,
pursuant to the Foreign Sovereign Immunities Act
(“FSIA”), 28 U.S.C. § 1605 (2018), alleging
breach of contract, violation of the plaintiffs' rights
under the Treaty Between the United States of America and the
Republic of Kazakhstan Concerning the Reciprocal
Encouragement and Protection of Investment (the
“Bilateral Investment Treaty”), breach of
fiduciary duties, unjust enrichment, misrepresentation,
negligence, and also seeking declaratory relief. See
Complaint (“Compl.”) ¶¶ 6, 87-123. On
August 15, 2011, the Court provisionally granted a motion to
intervene nunc pro tunc, filed by Turan Petroleum,
Inc. (a Nevada corporation) (“Turan Nevada”), for
the sole purpose of allowing it to file a motion to dismiss.
See Order at 1 (Aug. 15, 2011), ECF No. 36. The
subjects of this Memorandum Opinion are (1) Intervenor
Plaintiff Turan Petroleum, Inc.'s Motion To Dismiss
Pursuant to Fed.[ ]R.[ ]Civ.[ ]P. 12(b)(1), 12(b)(3), and
12(b)(6) (“Int. Pl.'s Mot.”), ECF No. 35; (2)
the Plaintiffs' Motion to File Supplemental Complaint
Under Rule 15(d) (“Pls.' 1st Mot. to Supp.
Compl.”), ECF No. 55; (3) the Plaintiffs' Motion to
Consolidate Considerations of Briefing on Motion to Dismiss,
Brought by Turan Petroleum, Inc. (Nevada), and on
Plaintiffs' Motion to File Supplemental Complaint
(“Pls.' Mot. to Consolidate”), ECF No. 60;
(4) the Plaintiffs' Motion to Amend and Supplement
Complaint (“Pls.' 2d Mot. to Am. and Supp.
Compl.”), ECF No. 108; (5) the Plaintiffs' Request
for Judicial Notice or in the Alternative for Admitting Into
Evidence in Support of Supplemental Memorandum
(“Pls.' Req. for Judicial Notice”), ECF No.
115; and (6) the Intervenor Plaintiff's Request for
Status Conference (“Int. Pl.'s Req. for
Hr'g”), ECF No. 141. Upon consideration of the
parties' submissions,  the Court concludes that it must (1)
grant Turan Nevada's motion to dismiss the complaint for
lack of subject-matter jurisdiction, (2) deny as futile the
plaintiffs' first motion to file a supplemental complaint
and the plaintiffs' second motion to amend and supplement
the Complaint, and (3) deny as moot the plaintiffs'
motion to consolidate the Court's consideration of Turan
Nevada's motion to dismiss and the plaintiffs' first
motion to file a supplemental complaint, the plaintiffs'
request for judicial notice, and Turan Nevada's request
for a hearing.
following factual allegations are taken from the
plaintiffs' Complaint and are accepted as true for the
purposes of resolving Turan Nevada's motion to dismiss as
required by Federal Rule of Civil Procedure 12(b)(1).
gaining independence in 1992, the Republic of Kazakhstan
(“Kazakhstan”) sought investments from foreign
sources into its economy. See Compl. ¶ 13. As
part of this endeavor, Kazakhstan offered “western
investors concessions for exploration of oil and gas
reserves, ” which entitled investors “to explore
the subsurface reserves [and] to produce . . . and [
]export the oil and gas products extracted within the
concession territories.” Id. ¶ 16.
“In the course of that promotional campaign to attract
western investments, the Ministry made various public offers
and announced biddings for those oil and gas
concessions.” Id. ¶ 18. At issue in this
case is the Ministry's repudiation of two agreements,
which the parties refer to as the Aral and Arys concessions.
See id. ¶ 23.
2001, the Ministry solicited bids “for the exploration
and development of the oil and gas resources” located
in the Kyzlorda and Shymkent regions in Kazakhstan.
Id. ¶ 44; see also id. ¶ 29. The
Aral concession agreement was consummated with Ai Dan LLC
(“Ai Dan”), a Kazakh entity, on June 29, 2002.
See id. ¶ 31. Later that year, the agreement
was amended to transfer the rights granted under the
concession to Kok Aral Munai LLC (“KAM”), a
subsidiary of Ai Dan. See id. ¶ 32-33. In 2003,
the “Ministry concluded the initial agreement on the
Arys [c]oncession with a Kazakh entity[, ] Aral Petroleum
LLC.” Id. ¶ 48.
February 18, 2005, “the Ministry issued an Order, by
which it suspended the Aral [c]oncession for one month,
claiming a non-performance by KAM.” Id. ¶
37. Thereafter, on July 5, 2005, “the Ministry issued [
] Order No. 979, by which it terminated the June 2002
agreement on the Aral [c]oncession altogether.”
Id. ¶ 38. In September 2010, “the
Ministry made a unilateral decision to terminate the Arys
[c]oncession.” Id. ¶ 75.
December 9, 2010, the plaintiffs instituted this civil
action. See id. at 1. On March 30, 2011, Turan
Nevada filed its motion to intervene, see generally
Int. Pl.'s Mot., which, as noted earlier, the Court
“provisionally [granted nunc pro
tunc] for the sole purpose of allowing it to
file a motion to dismiss.” Order at 1 (Aug. 15, 2011),
ECF No. 36 (emphasis in original). On August 8, 2011, Turan
Nevada filed its motion to dismiss. See generally
Int. Pl.'s Mot. Thereafter, on November 4, 2011, the
plaintiffs requested leave to file a supplemental complaint,
see Pls.' 1st Mot. to Supp. Compl. at 1, and on
June 12, 2015, the plaintiffs filed their second motion to
amend and supplement their complaint, see Pls.'
2d Mot. to Am. and Supp. Compl. at 1. These motions are the
subjects of this Memorandum Opinion.
STANDARDS OF REVIEW
A. Motion to Dismiss for Lack of Subject-Matter
[district] courts are courts of limited jurisdiction, ”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994), and “[a] motion for dismissal under
[Federal Rule of Civil Procedure] 12(b)(1) ‘presents a
threshold challenge to the court's jurisdiction,
'” Morrow v. United States, 723 F.Supp.2d
71, 75 (D.D.C. 2010) (Walton, J.) (quoting Haase v.
Sessions, 835 F.2d 902, 906 (D.C. Cir. 1987)). Thus,
“the Court is obligated to determine whether it has
subject-matter jurisdiction in the first instance, ”
Curran v. Holder, 626 F.Supp.2d 30, 32 (D.D.C.
2009), and must dismiss a claim if it “lack[s] 
subject-matter jurisdiction, ” Fed.R.Civ.P. 12(b)(1).
deciding a motion to dismiss based upon lack of
subject-matter jurisdiction, “the [C]ourt need not
limit itself to the allegations of the complaint.”
Grand Lodge of the Fraternal Order of Police v.
Ashcroft, 185 F.Supp.2d 9, 14 (D.D.C. 2001). Rather, the
“[C]ourt may consider such materials outside the
pleadings as it deems appropriate to resolve the question
[of] whether it has jurisdiction to hear the case.”
Scolaro v. D.C. Bd. of Elections and Ethics, 104
F.Supp.2d 18, 22 (D.D.C. 2000); see also Jerome Stevens
Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir.
2005). Additionally, the Court must “assume the truth
of all material factual allegations in the complaint and
‘construe the complaint liberally, granting [a]
plaintiff the benefit of all inferences that can be derived
from the facts alleged.'” Am. Nat'l Ins.
Co. v. Fed. Deposit Ins. Corp, 642 F.3d 1137, 1139 (D.C.
Cir. 2011) (alteration in original) (quoting Thomas v.
Principi, 394 F.3d 970, 972 (D.C. Cir. 2005)). However,
a “[p]laintiff's factual allegations in the
complaint . . . will bear closer scrutiny in resolving a
12(b)(1) motion than resolving a 12(b)(6) motion for failure
to state a claim.” Grand Lodge, 185 F.Supp.2d
at 13-14 (citation and internal quotation marks omitted);
see also Macharia v. United States, 334 F.3d 61, 64,
69 (D.C. Cir. 2003).
Motion to Amend Pleadings
Federal Rule of Civil Procedure 15(a), the Court
“should freely give leave” to a party to amend
its pleading “when justice so requires.”
Fed.R.Civ.P. 15(a)(2). While the Court has sole discretion to
grant or deny leave to amend, “[l]eave to amend a
[pleading] should be freely given in the absence of undue
delay, bad faith, undue prejudice to the opposing party,
repeated failure to cure deficiencies, or futility.”
Richardson v. United States, 193 F.3d 545, 548-49
(D.C. Cir. 1999) (citing Foman v. Davis, 371 U.S.
178, 182 (1962)). The rationale for this perspective is that
“[i]f the underlying facts or circumstances relied upon
by a plaintiff may be a proper subject of relief, [it] ought
to be afforded an opportunity to test [its] claim on the
merits.” Foman, 371 U.S. at 182. Nevertheless,
the “[C]ourt may properly deny a motion to amend if the
amended pleading would not survive a motion to dismiss,
” i.e., if it is futile to permit the proposed
amendment. In re Interbank Funding Corp. Sec.
Litig., 629 F.3d 213, 218 (D.C. Cir. 2010); see also
James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C.
Cir. 1996) (“Courts may deny a motion to amend a
complaint as futile . . . if the proposed claim would not
survive a motion to dismiss.”).
Nevada argues that this case must be dismissed for lack of
subject-matter jurisdiction because “as an agency of a
foreign sovereign, the “[M]inistry is immune from suit
under the . . . FSIA, ” and that “allegations
of [the p]laintiffs' Complaint are insufficient . . . to
establish that any of the exceptions to immunity under the
FSIA applies.” Int. Pl.'s Mot. at 2 (emphasis
removed). Turan Nevada also claims that the
allegations in the plaintiffs' proposed amended pleadings
“are insufficient to confer subject-matter jurisdiction
upon [ ] this Court.” Int. Pl.'s Resp. to Pls.'
Mot. to Am. at 7. The Court will address each in turn.
the FSIA, a foreign state, its political subdivisions,
agencies, and instrumentalities are presumed to be immune
from the jurisdiction of the United States courts. See
TMR Energy Ltd. v. State Prop. Fund of Ukr., 411 F.3d
296, 299 (D.C. Cir. 2005) (citing Saudi Arabia v.
Nelson, 507 U.S. 349, 355 (1993)); see also 28
U.S.C. § 1604; S.K. Innovation, Inc. v. Finpol,
854 F.Supp.2d 99, 107 (D.D.C. 2012). The “presumption
is overcome only if the plaintiff shows that one of the
exceptions to immunity provided in 28 U.S.C. §§
1605-07 applies.” TMR Energy, 411 F.3d at
As Turan Nevada correctly notes, the FSIA “provides the
exclusive basis for a court to obtain subject-matter
jurisdiction over a foreign state, ” Int. Pl.'s
Resp. to Pls.' Mot. to Am. at 5; see also
Nelson, 507 U.S. at 355, and “unless a specific
FSIA exception applies, this Court lacks subject-matter
jurisdiction to hear the claims asserted by the
[p]laintiffs because the Ministry is an agency of
Kazakhstan, a foreign state, ” Int. Pl.'s Mot. at
The plaintiffs claim that “[t]he statutory [FSIA]
exceptions . . . apply, ” Compl. ¶ 6, specifically
the waiver exception, the commercial activity exception, and
the expropriation exception, see id. The Court will
address in turn each of the statutory exceptions to
jurisdictional immunity of a foreign state asserted by the