Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

COMMERCIAL CORP. SOVRYBFLOT v. DE FOMENTO DE LA PR

October 14, 1997

COMMERCIAL CORPORATION SOVRYBFLOT, Plaintiff, against CORPORACION DE FOMENTO DE LA PRODUCCION, Defendant.


The opinion of the court was delivered by: MOTLEY

 Defendant Corporacion de Fomento de la Produccion ("CORFO") has moved to dismiss this case on the grounds that the court lacks subject matter jurisdiction under the Foreign Sovereign Immunities Act or, in the alternative, under the doctrine of forum non conveniens. The court grants the motion as to the Foreign Sovereign Immunities Act and dismisses the case for lack of subject matter jurisdiction. Because the court lacks jurisdiction, it does not address the forum non conveniens claim.

 BACKGROUND

 This is a breach of contract case in which plaintiff Commercial Corporation Sovrybflot ("Sovrybflot"), a privately-owned Russian corporation which controls many of Russia's fishing ship owners, has alleged that defendant CORFO has contrived to avoid payment on amounts allegedly due on contracts for the leasing of Soviet fishing vessels for fishing expeditions off the coast of Chile in the early 1970s. Defendant CORFO is a quasi-governmental Chilean entity which is charged with investing in and developing key industries in Chile.

 In 1971, the governments of Chile and the former Union of Soviet Socialist Republics ("USSR") entered into a Treaty of Cooperation for the Development of Chilean Fisheries. As part of that agreement, Sovrybflot leased fishing vessels to Arauco, a private Chilean corporation allegedly owned and controlled by CORFO which has since become bankrupt. Plaintiff alleges that it was never reimbursed for the leasing of the ships. In 1973, Sovrybflot and Arauco made a supplemental agreement that extended Arauco's time to repay the debt in exchange for CORFO's willingness to guarantee the debt and which provided for the delivery of fishmeals to plaintiff as payment-in-kind. In addition, Sovrybflot and Arauco made a separate leasing agreement in 1973. Once again, however, Sovrybflot was allegedly never paid. Following the right-wing military coup in Chile in September 1973, the relations between the two countries broke down. Plaintiff alleges that because of the severed international relationship, an anticipated Joint Chilean-Soviet Commission never came into existence, an omission which plaintiff alleges deprived it of its forum in which to press its claims. However, a 1980 agreement between representatives of plaintiff and defendant allegedly acknowledged the debt owed from Arauco to Sovrybflot.

 DISCUSSION

 I. The Foreign Sovereign Immunities Act

 The Foreign Sovereign Immunities Act "establishes a comprehensive framework for determining whether a court in this country, state or federal, may exercise jurisdiction over a foreign state. . . . under the Act, a 'foreign state shall be immune from the jurisdiction of the courts unless one of several statutory exceptions applies.'" Republic of Argentina v. Weltover, 504 U.S. 607, 610-611, 119 L. Ed. 2d 394, 112 S. Ct. 2160 (1992) (quoting 28 U.S.C. § 1604); see also NYSA-ILA Pension Trust Fund v. Garuda Indonesia, 7 F.3d 35, 38 (2d. Cir. 1993) (a federal court is divested of subject matter jurisdiction if the foreign sovereign immunity provisions of the FSIA are applicable); Cargill Int'l S.A. v. M/T Pavel Dybenko, 991 F.2d 1012, 1016 (2d Cir. 1993) (federal courts lack personal or subject matter jurisdiction if no exception applies). "Once the defendant presents a prima facie case that it is a foreign sovereign, the plaintiff has the burden of going forward with showing that, under the exceptions to the FSIA, immunity should not be granted, although the ultimate burden of persuasion remains with the alleged foreign sovereign." Drexel Burnham Lambert Group, Inc. v. Committee of Receivers for A.W. Galadari et al., 12 F.3d 317, 325 (2d. Cir. 1993) (citations omitted).

 II. The Explicit Waiver Exception

 The parties do not dispute that defendant CORFO, as a quasi-governmental Chilean entity, is a foreign sovereign. They disagree over whether Chile has waived its immunity in commercial contracts such as the one before the court. Under 28 U.S.C. § 1605(a)(1), a foreign state shall not be immune from the jurisdiction of the courts if "the foreign state has waived its immunity either explicitly or by implication *fn1" , notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver." Drexel Burnham Lambert Group, Inc., 12 F.3d at 324. "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." Eaglet Corp. Ltd. v. Banco Central de Nicaragua, 839 F. Supp. 232, 234 (S.D.N.Y. 1993).

 According to plaintiff Sovrybflot, "no immunity defense exists here [because] the Republic of Chile explicitly waived immunity from jurisdiction [ ] in disputes . . . arising from commercial contracts in which the parties agreed to submit to the jurisdiction of a foreign tribunal." Pl.'s Mem. of Law in Opp'n to Def.'s Mot. to Dismiss the Compl., 2 (emphasis added). Plaintiff argues that the Chilean Decree Law No. 2,349 of 1978 ("the Decree") amounts to an explicit waiver. The Decree purported to establish regulations in international agreements for the public sector. See Etcheberry Aff., Ex. B. The relevant language of the Decree reads as follows:

 
Stipulations intended to subject to foreign law international contracts whose main objective concerns transactions or operations of an economic or financial nature, executed or to be executed by international or foreign agencies, institutions, or enterprises whose main center of operations is located abroad with the Chilean State or with its agencies, institutions or enterprises, are declared to be valid.
 
Stipulations by which disputes arising out of such contracts have been or are submitted to the jurisdiction of foreign courts including courts of arbitration contemplated in pre-established mechanisms of arbitration or in the respective contract, as well as stipulations by which special domiciles have been or are established and agents abroad have been or are designated for purposes of the contract, are likewise valid.
 
By the submission to the jurisdiction of a foreign court, the right to invoke immunity from jurisdiction will cease, except in cases of express ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.