Appeal from an order entered in the Southern District of New York, Constance Baker Motley, District Judge, granting defendant's motion to vacate an attachment on the ground that defendant had not waived its immunity from prejudgment attachment under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602-1611 (1976). Reversed.
Before Timbers, Newman and Winter, Circuit Judges.
This is an appeal from an order entered in the Southern District of New York, Constance Baker Motley, District Judge, granting defendant's motion to vacate a prejudgment attachment of its property pursuant to the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1602-1611 (1976) ("the Act"). The essential issue is whether defendant "explicitly" waived its immunity from prejudgment attachment within the meaning of § 1610(d)(1) of the Act, 28 U.S.C. § 1610(d)(1).*fn1 The district court held that it did not. We hold that it did. Accordingly, we reverse and vacate the order of the district court.
The instant action arises out of the making of a $40 million loan to defendant Banco Nacional de Costa Rica ("Banco Nacional") by sixteen banks, including plaintiffs herein. The complaint alleges that Banco Nacional defaulted in the payment of the loan and on the promissory notes evidencing the loan.
In September 1981, plaintiffs obtained in the New York County Supreme Court an order to show cause requiring Banco Nacional to show cause why an order should not be granted attaching its property in New York State. Banco Nacional defaulted on the return day of the order to show cause. An order of attachment was entered on default in November 1981.
After the sheriff had levied upon the property of Banco Nacional held by several banks in New York City, Banco Nacional decided to defend the action. On December 1, 1981, it appeared and demanded a copy of the complaint. On December 8, it removed the action to the District Court for the Southern District of New York. At the same time it moved to dismiss the action for lack of in personam jurisdiction and to vacate the order of attachment.
Plaintiffs moved in the district court to remand the case to the state court on the ground that the district court lacked subject matter jurisdiction. Plaintiffs also sought a stay of consideration of defendant's motions to dismiss the action and to vacate the attachment. In an opinion dated December 18, 1981, the district court denied plaintiffs' motion to remand and scheduled a hearing on defendant's motions for January 6, 1982. On December, 21, 1981, Banco Nacional moved, by order to show cause, for expedited consideration of its motions to vacate the attachment and to dismiss the action.
On December 22, 1981, the district court heard argument on defendant's motion to expedite. On the same day the district court filed its opinion and order which are the subject of the instant appeal. The district court held that the defendant's waiver of prejudgment attachment was not "explicit" within the meaning of § 1610(d)(1) and vacated the attachment.*fn2 From the order vacating the attachment, plaintiffs appealed. We reverse.
It is undisputed that Banco Nacional is an instrumentality of the government of Costa Rica and therefore is a "foreign state" within the meaning of the Act. 28 U.S.C. § 1603. Banco Nacional's assets in New York in general are immune from attachment. 28 U.S.C. § 1609. Section 1610(d), however, provides by way of exception that such property will not be immune from prejudgment attachment where there is an "explicit" waiver. The question presented, therefore, is whether, under the circumstances of this case, there was an "explicit" waiver within the meaning of § 1603(d)(1).
In obtaining the $40 million loan, Banco Nacional entered into a letter agreement with plaintiffs, paragraph 11(d) of which provides:
"The Borrower can sue and be sued in its own name and does not have any right of immunity from suit with respect to the Borrower's obligations under this Letter or the Notes."
In compliance with the terms of this letter of agreement, Banco Nacional made four promissory notes in favor of each plaintiff ...