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Themis Capital v. Democratic Republic of Congo

United States District Court, S.D. New York

September 22, 2014

THEMIS CAPITAL and DES MOINES INVESTMENTS LTD., Plaintiffs,
v.
DEMOCRATIC REPUBLIC OF CONGO and CENTRAL BANK OF THE DEMOCRATIC REPUBLIC OF CONGO, Defendants.

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge.

On July 9, 2014, the Court ruled in favor of Themis Capital, LLC ("Themis") and Des Moines Investments, Ltd. ("Des Moines") (collectively, "plaintiffs") in this breach-of-contract lawsuit against the Democratic Republic of the Congo (the "DRC") and the Central Bank of the Democratic Republic of the Congo ("Central Bank of the DRC") (collectively, "defendants"). See Themis Capital, LLC v. Democratic Republic of Congo, No. 09 Civ. 1652 (PAE), 2014 WL 3360709 (S.D.N.Y. July 9, 2014); see also Dkt. 213. The Court held that plaintiffs were entitled to recover the principal, interest, and certain compound interest on debt that had been restructured in 19802014pursuant to a Restructuring Credit Agreement ("Credit Agreement")2014and which had gone unpaid since 1990.

On August 8, 2014, plaintiffs, as the prevailing party to the lawsuit, moved for attorneys' fees and costs, pursuant to Credit Agreement § 12.05(a). Dkt. 218. Defendants' opposition brief was filed on August 15, 2014. Dkt. 223. Defendants did not dispute plaintiffs' right to recover fees and costs, but they disputed the amount requested. On September 4, 2014, the Court issued an Opinion & Order, awarding plaintiffs the sum of $3, 469, 940.68 in attorneys' fees and costs, less those fees and costs billed between October 3 and October 22, 2013, which the Court directed the parties to tabulate. See Themis Capital v. Democratic Republic of Congo, No. 09 Civ. 1652 (PAE), 2014 WL 4379100, at *13 (S.D.N.Y. Sept. 4, 2014) (Dkt. 224). Construing the Credit Agreement, the Court also held that this amount was "recoverable solely from the DRC." Id.

On September 10, 2014, plaintiffs moved for partial reconsideration. Although plaintiffs did not ask the Court to reconsider its determination of the amount of fees and costs to which they are entitled, plaintiffs argued that they were entitled to recover the award of fees and costs from both defendants-the DRC and the Central Bank of the DRC. Dkt. 227, 228 ("Pl. Br."). On September 19, 2014, defendants opposed plaintiffs' motion, Dkt. 232 ("Def. Br."), both on the grounds that reconsideration is unjustified and on the merits.

As an initial matter, the Court declines to analyze plaintiffs' motion under the District's strict standards for reconsideration. See S.D.N.Y. Local Civil Rule 6.3. This is an instance in which a party validly seeks reconsideration because it did not have a realistic opportunity earlier to litigate the issue whose resolution it challenges. Plaintiffs moved globally for fees and costs against both defendants, implicitly treating the Credit Agreement's fee provision, § 12.05(a), as applicable to both the DRC and the Central Bank. The argument that § 12.05(a) imposes a fee obligation only on the DRC was first made in defendants' opposition brief, and the Court accepted that argument. The Court, however, had not invited plaintiffs to file a reply brief, and thus plaintiffs-at least without seeking leave to file such a brief-did not have an opportunity to refute defendants' argument. The core policy limiting bids for reconsideration-that a party not get an unwarranted second bite at the apple-does not apply here. Basic fairness instead favors allowing plaintiffs to argue, at least once, why the construction of § 12.05(a) advocated by defendants and accepted by the Court was in error. The Court has, therefore, carefully reconsidered that question, in light of plaintiffs' arguments.

However, plaintiffs' motion for reconsideration fails on the merits. Having carefully examined the Credit Agreement, the Court reaffirms its previous holding that the duty to pay attorneys' fees and costs contained § 12.05(a) of the Credit Agreement runs only against the DRC. Section 12.05(a) reads, in pertinent part:

The Obligor agrees to pay, in the currency in which incurred:

...
(iv) to each Bank and Agent upon its demand all out-of-pocket expenses (including, without limitation, all counsel fees and court costs, stamp taxes, duties and fees) incurred in connection with investigating any Event of Default or enforcing this Agreement or suing for or collecting any overdue amount payable by the Obligor hereunder or otherwise protecting its rights in the event of any failure by the Obligor or Bank of Zaire to comply with the provisions [of the Credit Agreement.]

Credit Agreement § 12.05(a) (emphasis added). Under the Agreement, the DRC alone is the "Obligor, " see Credit Agreement at R-1; the Central Bank of the DRC is not.

Notwithstanding this plain text, plaintiffs argue that the DRC and the Central Bank of the DRC are jointly liable for attorneys' fees and costs. Plaintiffs argue that the same reasoning underlying the Court's holding that the two defendants are jointly liable for the principal, interest, and compound interest due on the outstanding debt, see 2014 WL 3360709, at *30-31, applies to the duty to pay fees and costs. That holding rested on two provisions of the Credit Agreement-§§ 9.01 and 8.03-that expressly make "the Central Bank of the DRC legally responsible for paying plaintiffs the principal and interest owed them." Id. at *30. Properly analyzed, however, these two provisions do not make the Central Bank of the DRC legally responsible for paying a post-hoc award of the fees and costs owed under § 12.05(a).

Section 9.01 of the Credit Agreement states:

The Bank of Zaire irrevocably and unconditional states and agrees for the benefit of each Bank that: (a) All payments of principal, interest and other amounts required under this Agreement are irrevocably authorized by all action required in the Republic of Zaire so that such payments can be made in ...

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