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Continental Transfert Technique, Ltd. v. Federal Government of Nigeria

United States District Court, District of Columbia

August 6, 2019

CONTINENTAL TRANSFERT TECHNIQUE, LIMITED, Plaintiff,
v.
THE FEDERAL GOVERNMENT OF NIGERIA, ATTORNEY GENERAL OF THE FEDERATION, and MINISTER OF THE INTERIOR, Defendants.

          OPINION

          PAUL L. FRIEDMAN, UNITED STATES DISTRICT JUDGE.

         Pending before the Court is a motion from plaintiff Continental Transfert Technique, Limited (“Continental”) for a writ of attachment [Dkt. Nos. 123 (sealed) and 134 (redacted)] seeking to attach a bank account registered to the Central Bank of Nigeria (“CBN”) at JPMorgan Chase Bank in New York. Also pending before the Court are a motion filed by CBN seeking leave to intervene in this matter and to file an opposition to Continental's motion for writ of attachment [Dkt. Nos. 126-1 (sealed) and 137 (redacted)], as well as CBN's motion for leave to file a surreply to Continental's motion for writ of attachment [Dkt. Nos. 138 (sealed) and 139 (redacted)]. Defendants - the Federal Government of Nigeria (“FGN”), the Attorney General of the Federation, and the Minister of the Interior - have not responded to any of these motions. Continental does not oppose CBN's motion for leave to intervene, but does oppose CBN's motion for leave to file a surreply.

         Upon careful consideration of the briefs, the relevant authorities, and the extensive record in this case, the Court will grant CBN's motion for leave to intervene and to file an opposition to the motion for writ of attachment [Dkt. Nos. 126-1 (sealed) and 137 (redacted)]; the Court will accept CBN's opposition [Dkt. Nos. 126-2 (sealed) and 137-1 (redacted)] as filed.[1] The Court will also grant CBN's motion for leave to file a surreply [Dkt. Nos. 138 (sealed) and 139 (redacted)], and will accept as filed CBN's surreply [Dkt. Nos. 138-2 (sealed) and 139-2 (redacted)], Continental's opposition to the motion for leave to file a surreply and proposed response to the surreply [Dkt. Nos. 140 (sealed) and 141 (redacted)], and CBN's reply in support of its motion to file a surreply [Dkt. Nos. 142 (sealed) and 143 (redacted)]. The Court will deny Continental's motion for writ of attachment [Dkt. Nos. 123 (sealed) and 134 (redacted)]. A separate order giving effect to this opinion will issue this same day.

         I. BACKGROUND

         A. Factual and Procedural Background

         The Court has discussed the lengthy and complex history of this case in earlier opinions in this matter, and there is no need to repeat it here. See Cont'l Transfert Technique Ltd. V. Fed. Gov't of Nigeria, 697 F.Supp.2d 46 (D.D.C. 2011) (denying Continental's motion for default judgment and Nigeria's motion to dismiss); Cont'l Transfert Technique Ltd. v. Fed. Gov't of Nigeria, 800 F.Supp.2d 161 (D.D.C. 2011) (granting Continental's motion for summary judgment). The instant motions concern Continental's attempts to obtain a writ of attachment on a bank account to satisfy this Court's judgment confirming a substantial arbitral award in favor of Continental against the Federal Government of Nigeria. The Central Bank of Nigeria - which has not previously been involved in this litigation - opposes Continental's motion for writ of attachment and claims to own the bank account that is the subject of the motion.

         Continental initiated arbitration proceedings in the United Kingdom against FGN in November of 2007, alleging that FGN failed to meet its obligations to Continental under a 1999 commercial contract. In August of 2008, the U.K. arbitral tribunal issued an award requiring FGN to pay substantial damages and interest to Continental. CBN was not a party to the underlying contract or the arbitration. In November of 2008, Continental filed this lawsuit seeking confirmation of the August 2008 arbitral award under the Federal Arbitration Act, 9 U.S.C. §§ 201-08.[2] When FGN failed to respond to the complaint, Continental sought and obtained an entry of default from the Clerk of Court in February of 2009. See Affidavit for Default, Dkt. No. 8; Default, Dkt. No. 9. Immediately thereafter, Continental filed a motion for default judgment. See Dkt. No. 10.

         The motion for default judgment prompted counsel for FGN to enter an appearance in May of 2009, and thereafter to file a motion to vacate the default and dismiss the complaint. See Dkt. No. 24. In March 2010, this Court vacated the entry of default and denied Continental's motion for default judgment, but also denied Nigeria's motion to dismiss. See Cont'l Transfert Technique Ltd. v. Fed. Gov't of Nigeria, 697 F.Supp.2d 46. Shortly thereafter, Nigeria filed an answer to the amended complaint, see Dkt. No. 39, and Continental moved for summary judgment. See Dkt. No. 40. The Court granted Continental's motion for summary judgment in August 2011. See Cont'l Transfert Technique Ltd. v. Fed. Gov't of Nigeria, 800 F.Supp.2d 161. Following supplementary briefing on how to calculate the amount of the award in U.S. dollars, this Court entered an Amended Order and Judgment in March 2013 requiring FGN to pay Continental $276, 111, 640 plus post-judgment interest. See Cont'l Transfert Technique Ltd. v. Fed. Gov't of Nigeria, 932 F.Supp.2d 153 (D.D.C. 2013). The U.S. Court of Appeals for the District of Columbia Circuit affirmed the judgment in January 2015. Cont'l Transfert Technique Ltd. v. Fed. Gov't of Nigeria, 603 Fed.Appx. 1 (D.C. Cir. 2015).

         The instant motions are the latest of Continental's many attempts to identify and obtain assets in satisfaction of its judgment against defendants. Nigeria has resisted and delayed post-judgment discovery for several years. This Court granted the motion of FGN's counsel to withdraw from the case in February 2017. See Dkt. No. 119. Since then, no counsel has entered an appearance for any defendant, and no defendant has participated in this litigation. Nevertheless, Continental has been able to obtain some post-judgment discovery. In March of 2015, a federal district court in the Southern District of New York denied CBN's motion to quash a subpoena that Continental had served on JPMorgan Chase Bank, with whom FGN has a banking relationship. See Cent. Bank of Nigeria et al. v. Cont'l Transfert Technique Ltd., No. 1:14-mc-00066, Dkt. No. 12. (S.D.N.Y. May 5, 2014); see also Mot. at 12. JPMorgan Chase provided two tranches of records to Continental in response to the subpoena, including an inventory of 52 bank accounts associated with Nigeria and data on the wire transfer activity for those accounts in the period of January 2014 to June 2017.

         B. The Writ of Attachment and CBN's Response

         On May 29, 2018, Continental filed a motion for a writ of attachment [Dkt. No. 123], seeking to attach an account at JPMorgan Chase Bank that is titled “Central Bank of Nigeria Main Account” (“the Account”) and is identified by the account number located in the parties' sealed filings. See Mot. at 1; Hankin Decl. at 2. Relying on subpoenaed records from JPMorgan Chase, Continental alleges that the Account has been funded with at least one $100 million deposit from an account at the Federal Reserve Bank of New York at the direction of defendant FGN. See Reply at 4, 17. CBN disputes this characterization. See Surreply at 8-9. Of the 21, 065 wire transfers in the records produced by JPMorgan Chase, Continental has identified dozens of payments from the Account to U.S. entities that, it argues, constitute commercial and non-sovereign activities: aircraft and military equipment and services, tuition payments to U.S. institutions, legal and consulting expenses, technology services and research subscriptions, and professional training costs. See Mot. at 13-19; Hankin Decl. at 3.

         On this basis, Continental argues that the Account is subject to attachment under the Foreign Sovereign Immunities Act (“FSIA”). Although the property of a foreign state in the United States is generally immune from attachment under the FSIA, Continental asserts that the Account falls within the exception to sovereign immunity established by 28 U.S.C. § 1610(a), because Nigeria used the funds in the Account for commercial activity. See Mot. at 21. Continental also argues that the Account does not qualify for the immunity created by 28 U.S.C. § 1611, because the Account is not the property of a central bank held for its own account. See id. at 25.

         On July 17, 2018, the Central Bank of Nigeria filed a motion [Dkt. No. 126] for leave to file two documents under seal, each attached as exhibits: a motion for leave to intervene and for leave to file a response in opposition to Continental's motion for writ of attachment [Dkt. No. 126-1], and the proffered response in opposition [Dkt. No. 126-2].[3] The motion to intervene characterizes CBN as a “separate and distinct entity from the government defendants.” See Mot. Intervene at 2. CBN asserts that it is an instrumentality of the government of Nigeria, chartered by statute to serve as Nigeria's designated central bank. See Ukitetu Decl. at ¶¶ 6, 9. Accordingly, CBN's proffered response in opposition gives only brief attention to one of the primary arguments from Continental's motion for writ of attachment: that the Account may be attached pursuant to the commercial activity exceptions to immunity under 28 U.S.C. § 1610. CBN's primary argument is that “these immunities will not apply” because the Account is owned by the Central Bank of Nigeria, and is thus independently immune from attachment under 28 U.S.C. § 1611, a separate provision of the FSIA. See Opp'n at 15. Other than Continental's first filing, most of the briefing on the motion for writ of attachment - and, thus, the Court's own analysis - concerns the availability of immunity under Section 1611, rather than the commercial activity exception of Section 1610.[4]

         In its reply in support of the motion for writ of attachment [Dkt. No. 132], Continental contests CBN's interpretation of the scope of central bank immunity under 28 U.S.C. § 1611. Continental argues that the Account contains the property of Nigeria, not the property of CBN. See Reply at 14-15. Furthermore, Continental says that the Account does not constitute protected central bank property under Section 1611 because the funds in the Account are “used to finance the commercial transactions of other entities” rather than those of the central bank itself. See id. at 19. In the alternative, Continental argues that the Account may be attached even if Section 1611 does immunize some limited property used for third party commercial activity because the particular commercial activities for which the Account is used do not constitute central banking activities as they are normally understood. See id. at 20.

         CBN filed a motion for leave to file a surreply [Dkt. No. 138], seeking an opportunity to respond after Continental allegedly raised three new arguments and claims and had cited additional authorities that did not appear in Continental's initial brief. See Surreply Mot. at 1. Continental has opposed CBN's motion to file a surreply. See Surreply Mot. Opp'n.

         II. RIGHT TO INTERVENE AND TO FILE SURREPLY

         A. CBN may Intervene as of Right under the Federal Rules

         CBN seeks leave to intervene in this matter to defend against Continental's motion for writ of attachment. See Mot. Intervene at 2. Continental does not oppose CBN's motion for leave to intervene, “for the limited purpose of opposing Continental's motion.” See Reply at 1, n.1. The Court will grant CBN's motion to intervene.

         Rule 24 of the Federal Rules of Civil Procedure provides that, on timely motion, the Court:

must permit anyone to intervene who . . . claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.

Fed. R. Civ. P. 24(a)(2). In this circuit, Rule 24(a) requires would-be intervenors to demonstrate four things: “(1) the application to intervene must be timely; (2) the applicant must demonstrate a legally protected interest in the action; (3) the action must threaten to impair that interest; and (4) no party to the action can be an adequate representative of the applicant's interests.” Deutsche Bank Nat'l Tr. Co. v. FDIC, 717 F.3d 189, 192 (D.C. Cir. 2013).

         CBN easily satisfies each of these requirements. First, the filing is timely. CBN filed its motion for leave to intervene only a month after Continental filed its writ of attachment, by which point counsel had already submitted a joint status report notifying the Court of the forthcoming intervention motion. Cf. Karsner v. Lothian, 532 F.3d 876, 885 (D.C. Cir. 2008) (finding motion timely where petitioner sought intervention less than one month after intervenor's interest in the dispute ripened).

         Second, CBN has a legally protected interest in this action because it appears to own and control the asset that Continental seeks to attach. See Deutsche Bank Nat'l Trust. Co. v. Fed. Deposit Insurance Corp., 717 F.3d at 193 (“[Would-be intervenors] point to their economic interest in the receivership funds as a legally protected interest. That much is clearly correct.”); Friends of Animals v. Kempthorne, 452 F.Supp.2d 64, 69 (D.D.C. 2006) (proposed intervenor needs only an interest in the litigation, not a cause of action).

         Third, the attachment proceedings pose a clear risk to CBN's legally protected interest in the Account. In determining whether “disposing of the action may as a practical matter impair or impede” the intervening petitioner's interest, Fed.R.Civ.P. 24(a), the “practical consequences of denying intervention” are dispositive. See Fund for Animals, Inc. v. Norton, 322 F.3d 728, 735 (D.C. Cir. 2003). Here, the practical consequence of denying CBN's motion to intervene is that no one will oppose Continental's motion for a writ of attachment. Furthermore, if the Court grants the attachment motion, it will imperil any legal interest CBN may have in holding and controlling funds in the Account.

         Fourth, the existing parties cannot adequately represent CBN's interests. This requirement sets a low bar. See Public Citizen v. FEC, 788 F.3d 312, 321 (D.C. Cir. 2015). The intervenor “need only show that representation of his interests may be inadequate . . . .” Dimond v. Dist. of Columbia, 792 F.2d 179, 192 (D.C. Cir. 1986). Here, that inadequacy is manifest: defendants have all but disappeared from this litigation and are not protecting CBN's interest in the Account.[5]

         B. CBN Has Standing to Intervene

         In addition, CBN has demonstrated that it has standing under Article III of the United States Constitution. See Roeder v. Islamic Republic of Iran, 333 F.3d 228, 233 (D.C. Cir. 2003) (“[A]n intervenor must also establish its standing under Article III of the Constitution.”); Ctr. for Biological Diversity v. U.S. Envtl. Prot. Agency, 274 F.R.D. 305, 309 (D.D.C. 2011) (noting that constitutional standing requires injury-in-fact, causation, and redressability). In the circumstances presented here, the facts that enable CBN to intervene as of right under Rule 24(a) also establish its constitutional standing. CBN timely filed a motion to intervene that demonstrated a legal interest in the asset that is the subject of the pending attachment motion. For the purpose of standing, these facts also establish an imminent, concrete, and particularized injury to CBN's interest in the Account; that injury is “fairly traceable to the challenged action” (Continental's attempt to attach the Account). See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-64 (1992); cf. United States v. All Assets Held at Bank Julius Baer & Co., 959 F.Supp.2d 81, 104 (D.D.C. 2013) (“[T]he inquiry into a claimant's ownership interests is often a surrogate for an inquiry into whether there is injury direct enough and sufficient enough to sustain standing.”) (quotations and citations omitted). Here, it is clear that “the injury will be redressed by a favorable decision” from this Court - that is, CBN will not lose access to the Account if this Court grants leave to intervene and denies the writ of attachment. See Lujan v. Defenders of Wildlife, 504 U.S. at 561.

         C. CBN May File a Surreply

         CBN has also filed a motion for leave to file a surreply in opposition to Continental's motion for writ of attachment. See Dkt. No. 138. Continental opposes the motion, and also took the liberty of filing a response to CBN's surreply. See Dkt. No. 140. CBN replied in support of its motion to file a surreply. See Dkt. No. 142. “The standard for granting a leave to file a surreply is whether the party making the motion would be unable to contest matters presented to the court for the first time in the opposing party's reply.” Lewis v. Rumsfeld, 154 F.Supp.2d 56, 61 (D.D.C. 2001). Some of the propositions in Continental's reply arguably may be regarded as “matters presented to the court for the first time” insofar as they characterize the Account in ways that the motion itself did not. The Court finds that it is in the interest of justice to allow the filing of CBN's surreply, Continental's response in opposition to the surreply, and CBN's reply in support of the surreply. The questions of law and fact involved in resolving the attachment motion are complex and benefit from full explication. Furthermore, Continental is not prejudiced by the Court's acceptance of the surreply because it has already responded to the substance of the arguments in the surreply. See United States v. All Assets Held at Bank Julius Baer & Co., Ltd., 307 F.R.D. 249, 251 n. 5 (D.D.C. 2014).

         III. SECTION 1611 OF THE FOREIGN SOVEREIGN IMMUNITIES ACT

         A. 28 U.S.C. § 1611 Provides Immunity to Certain Central Bank Property

         The Foreign Sovereign Immunities Act is the sole basis for obtaining jurisdiction over a foreign state in the courts of the United States. See Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993); GSS Grp. Ltd. v. Republic of Liberia, 31 F.Supp.3d 50, 57 (D.D.C. 2014), aff'd sub nom., GSS Grp. Ltd. v. Nat'l Port Auth. of Liberia, 822 F.3d 598 (D.C. Cir. 2016) (citing Nemariam v. Fed. Dem. Rep. of Ethiopia, 491 F.3d 470, 474 (D.C. Cir. 2007)). The FSIA sets out the circumstances under which foreign sovereigns, their agencies and instrumentalities, and their property are immune from suit, attachment, and execution in the courts of the United States. The Act provides broad immunity for property of a foreign state, with certain enumerated exceptions:

Subject to existing international agreements to which the United States is a party at the time of enactment of this Act, the property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611 of this chapter.

28 U.S.C. § 1609. See also Jacobsen v. Oliver, 451 F.Supp.2d 181, 195 (D.D.C. 2006) (“The FSIA grants blanket immunity to foreign states . . . and then waives it pursuant to the exceptions enumerated therein.”). The analysis of whether an exception to immunity applies is fundamentally jurisdictional. See Elbasir v. Kingdom of Saudi Arabia, 468 F.Supp.2d 155, 160 (D.D.C. 2007) (“At the threshold of every action in a district court against a foreign state . . . the court must satisfy itself that one of the exceptions applies, as subject-matter jurisdiction in any such action depends on that application.”).

         One of those exceptions is Section 1610, which establishes that, inter alia, “[t]he property in the United States of a foreign state . . . used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from execution, upon a judgment entered by a court of the United States . . . if . . . the foreign state has waived its immunity from attachment . . . [or] the property is or was used for the commercial activity upon which the claim is based.” 28 U.S.C. § 1610(a)(1), (3). Section 1611, however, contains an exception to the rule that property used for commercial activity is not immune. The scope of that exception lies at the root of the parties' disputes. Section 1611 provides, in relevant part:

(b) Notwithstanding the provisions of section 1610 of this chapter, the property of a foreign state shall be immune from attachment and from execution, if-
(1) the property is that of a foreign central bank or monetary authority held for its own account, unless such bank or authority, or its parent foreign government, has explicitly waived its immunity from attachment in aid of execution, or from execution, notwithstanding any withdrawal of the waiver which the bank, authority or ...

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