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EAGLET CORP. v. BANCO CENT. DE NICARAGUA

December 7, 1993

EAGLET CORPORATION LIMITED, Plaintiff,
v.
BANCO CENTRAL DE NICARAGUA, Defendant.



The opinion of the court was delivered by: SHIRLEY WOHL KRAM

 SHIRLEY WOHL KRAM, U.S.D.J.

 On August 4, 1992, plaintiff Eaglet Corporation Limited ("Eaglet") obtained a default judgment against defendant Banco Central De Nicaragua ("Banco Central" or "BCN") in the High Court of London. On March 18, 1993, plaintiff brought this action, seeking an American judgment on the English default, apparently to execute on Banco Central's property in the United States. Banco Central now moves to dismiss the complaint, pursuant to Rules 12(b)(1) and 12(b)(2) of the Federal Rules of Civil Procedure, on the grounds that this Court does not have either subject matter jurisdiction over the action or personal jurisdiction over the defendant, pursuant to the Federal Sovereign Immunity Act of 1976 (the "FSIA" or the "Act"), 28 U.S.C. § 1603 et seq. For the reasons set forth below, defendant's motion is granted, and this action is dismissed with prejudice.

 BACKGROUND *fn1"

 On August 27, 1990, Eaglet, a corporation organized under the laws of Guernsey in the Channel Islands, and Banco Central, the Central Bank of Nicaragua, entered into a debt restructuring agreement pursuant to which Banco Central acknowledged a debt to Eaglet and agreed to make seventeen monthly payments to Eaglet, beginning in August 1990 and ending in December 1991 (the "Agreement"). The Agreement provided that (1) all payments by Banco Central were to be made to Eaglet's account in Madrid, Spain, see Agreement at P 4; (2) the Agreement would be "governed by English law," id. at P 5; and (3) "[Banco Central] submits to the nonexclusive jurisdiction of the English High Court of Justice with respect to any proceeding presented by Eaglet Corporation Ltd. arising from or in connection with this Agreement," id.

 Eaglet claims that Banco Central breached the Agreement by failing to make all of the required payments. Specifically, Eaglet contends that Banco Central made only five payments, up to and including December 24, 1990. As of February 24, 1991, Banco Central allegedly owed Eaglet $ 20,273,860.00 principal plus accrued interest.

 Accordingly, on June 4, 1992, Eaglet brought suit for breach of contract in the English High Court. Process was served on Banco Central by the Nicaraguan judicial authorities pursuant to letters rogatory. Banco Central failed to appear, however, and, on August 4, 1992, Eaglet obtained a default judgment against Banco Central in the amount of $ 22,750,114.20, plus $: 248.00 in costs. *fn2" Subsequently, on March 18, 1993, Eaglet brought suit in this Court, seeking to obtain an American judgment on the English default. Presently before the Court is defendant's motion to dismiss the complaint, pursuant to 12(b)(1) and 12(b)(2) of the Federal Rules of Civil Procedure, on the grounds that (1) this Court lacks subject matter jurisdiction over the claims of Eaglet; and (2) this Court lacks personal jurisdiction over Banco Central.

 DISCUSSION

 The FSIA is the exclusive means by which United States courts may exercise subject matter jurisdiction over suits involving foreign states and their instrumentalities. Saudi Arabia v. Nelson, 123 L. Ed. 2d 47, 113 S. Ct. 1471, 1476 (1993); Kao Hwa Shipping Co., S.A., v. China Steel Corp., 816 F. Supp. 910, 913 (S.D.N.Y. 1993). *fn3" The Act provides that "a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 and 1607 of this chapter." 28 U.S.C. § 1604. Therefore, any exercise of this Court's jurisdiction must fall within a specific statutory exception set forth in the Act.

 This Court need not, however, examine the applicability of each of the enumerated exceptions set forth in Sections 1605 and 1607 of the FSIA. In fact, the issue presented to this Court by defendant's motion to dismiss is considerably narrow, as the parties have already agreed on the following: (1) defendant Banco Central is a "foreign state," as defined by 28 U.S.C. § 1603(a); (2) Banco Central is entitled to sovereign immunity from suits in the United States under the provisions of the FSIA unless one of the exceptions to such immunity, set forth in 28 U.S.C. § 1605(a), is applicable; (3) Section 1605(a)(1) of the FSIA is the only section which has any applicability to this case; and (4) any waiver of sovereign immunity by Banco Central is found in the language of Article 5 of the Agreement. *fn4" Accordingly, the Court need only examine the applicability of the exception to immunity enumerated in Section 1605(a)(1).

 Section 1605(a)(1) of the FSIA provides that:

 
A foreign state shall not be immune from the jurisdiction of courts of the United States or States in any case . . . in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver.

 Pursuant to this section, a foreign state may waive its immunity either explicitly or implicitly. Explicit waiver is generally found when the contract language itself clearly and unambiguously states that the parties intended waiver, and therefore, adjudication in the United States. See, e.g., Proyecfin de Venezuela, S.A. v. Banco Indus. de Venezuela, S.A., 760 F.2d 390, 393 (2d Cir. 1985). In Proyecfin, for example, the Second Circuit held that the parties expressly waived immunity to suit in New York where the unambiguous language of the contract stated that, "Borrower . . . hereby waives such immunity to the full extent permitted by the laws of such jurisdiction and, in particular, to the intent [sic] that in any proceedings taken in New York the foregoing waiver of immunity shall have effect . . ." Id.

 In this case, the parties agree that, if Banco Central waived its immunity to suit in the United States, it did so in the language of ...


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