FG HEMISPHERE v. DEMOCRATIC REPUBLIC OF CONGO
637 F.3d 373 (2011)
FG HEMISPHERE ASSOCIATES, LLC, Appellee
DEMOCRATIC REPUBLIC OF CONGO, Appellant
Societe Nationale D'Electricite, Appellee.
Nos. 10-7040, 10-7046.
United States Court of Appeals, District of Columbia Circuit.
Argued February 4, 2011.
Decided March 15, 2011.
Sharon Swingle, Attorney, U.S. Department of Justice, argued the cause for amicus curiae United States for appellant. With her on the brief were Tony West, Assistant Attorney General, Ronald C. Machen Jr., U.S. Attorney, Douglas N. Letter, Attorney, and Harold Hongju Koh, Legal Adviser, U.S. State Department.
Before: GINSBURG and GARLAND, Circuit Judges, and SILBERMAN, Senior Circuit Judge.
Opinion for the court filed by SILBERMAN, Senior Circuit Judge.
SILBERMAN, Senior Circuit Judge:
This case, once pared down, is really less than meets the eye. To be sure, we encounter for the first time a contempt sanction imposed on a foreign sovereign in a proceeding brought under the Foreign Sovereign Immunities Act ("FSIA"). But there has been as yet no attempt to enforce the sanction (which could prove problematic).
FG Hemisphere's predecessor-in-interest (which we will refer to along with FG Hemisphere as "Hemisphere"), brought suit against the Democratic Republic of Congo ("DRC") under a provision of the FSIA permitting a plaintiff to confirm an arbitration award secured against a foreign sovereign. Following entry of a default judgment, and after the DRC began participating in the litigation, the district court sanctioned the DRC for failing to respond to court-ordered discovery. The DRC, supported by the United States as amicus, argues that such contempt sanctions are unavailable under the FSIA, and, in any event, are an abuse of discretion. We disagree.I
In 1980, the DRC and its state-owned electric company entered into a credit agreement with Hemisphere to finance construction of an electric power transmission facility. The DRC failed to make the payments required of it under the agreement, and in 2003 Hemisphere began arbitration proceedings for those delinquent payments, obtaining two awards against the DRC. The DRC did not participate in arbitration.
Hemisphere sought judicial recognition of the arbitration awards against the DRC in 2004. Although foreign states are generally immune from the jurisdiction of U.S. courts, 28 U.S.C. § 1604, the FSIA contains several exceptions to this rule. One permits a plaintiff to bring suit against a sovereign "to confirm an award made pursuant to . . . an agreement to arbitrate," 28 U.S.C. § 1605(a)(6). Proceeding under this exception, Hemisphere sued the DRC. The DRC did not appear before the district court either to contest the court's jurisdiction or to litigate the merits of the arbitration award. Accordingly, the district court entered two default judgments against the DRC.
Hemisphere then sought to execute on the judgments. The FSIA limits the assets that are available to satisfy a judgment against a foreign sovereign. Where "the judgment is based on an order confirming an arbitration award," a plaintiff may only execute on "[t]he property in the United States of a foreign state . . . used for a commercial activity in the United
States." Id. § 1610(a)(6). In 2005, Hemisphere propounded post-judgment discovery requests to identify the DRC's commercial property in the United States available for execution. The DRC, by now participating in the litigation, failed to respond to these discovery requests, and in 2006 the district court, with the consent of both parties, imposed a two-part discovery plan. In part one, the court required the DRC to turn over information regarding any real property it owned located in the District of Columbia. In part two, the court required the DRC to provide information on any DRC assets valued over $10,000 and located outside the District of Columbia, both within the United States and in other countries where Hemisphere might seek to execute on its judgments.