Tag Archives: Ghana

Updates on Lago Agrio and Argentina

So as not to get too far into the week without some cases of the day, I am going to cover some recent happenings in two of our favorite cases in a single post. First is an update on the hearing on Chevron’s motion to dismiss in Toronto; second, the hearing on the Liberdad case in the Hague.

Chevron’s Motion to Dismiss

There has been a fair amount of coverage of Chevron’s motion to dismiss in Yaiguaje v. Chevron Corp., the Lago Agrio plaintiffs’ effort at recognition and enforcement in Ontario. According to Bloomberg, the judge seemed to favor Chevron’s jurisdictional arguments, which focus on the lack of connection between the case and Ontario, or rather the Chevron subsidiaries with a presence in Ontario. We will, of course, have full coverage of the judge’s decision once it is announced, but that may not be for several weeks or even a few months.

The Liberdad

The International Tribunal on the Law of the Sea held hearing in the Liberdad case on November 29 and 30. I have previously linked to Argentina’s application; here now is Ghana’s written statement, which focuses on jurisdictional and procedural issues and not on the main substantive question of the vessel’s immunity from arrest under international law. However, the substantive question and other aspects of the case are discussed in the verbatim records of the hearing, which are available at the ITLOS website. One particularly interesting tidbit came from the second day of the hearing, when Ghana’s advocate, Philippe Sands QC, pointed to an internal memorandum from the Argentine ministry of foreign affairs indicating that the government of Argentina had appreciated for months the risk that the Liberdad might be seized:

The frigate Liberdad enjoys the immunities provided for the State’s public property. However, bearing in mind the existence of judicial proceedings against the Republic in various foreign jurisdictions, it is not possible to guarantee that its training voyage might not result in potential claims, precautionary measures or enforcement measures during its stay in foreign ports.

The Tribunal’s decision is expected on December 15, though that date may change.

Argentina Takes the Liberdad Case to the ITLOS

[box type="note"]Update: Here is Argentina’s request to the Tribunal.[/box]

As I briefly noted a few weeks ago, a Ghanaian court, on the motion of NML Capital, arrested an Argentine naval vessel, the ARA Liberdad, while it was in port. NML, of course, is one of Argentina’s creditors on its sovereign debt. A coup for NML and its lawyers, and highly embarrassing for Argentina.

I assume that the arrest was legal under Ghanaian law, though for comparison note that it would almost certainly not have been legal under § 1611(b)(2) of the FSIA. But Argentina asserts that it was illegal under international law. I assume the case is that international law makes the Liberdad immune from arrest and that either Argentina has not waived its immunity or the immunity is not waivable.

Argentina has now taken its case to the International Tribunal for the Law of the Sea in Hamburg. It seeks the unconditional release of the Liberdad as a provisional measure.

Question: is the FSIA’s apparently absolute immunity for military property evidence of the customary international law here?

I’ll keep you posted!

Case of Interest: Government of Ghana v. ProEnergy Services, LLC

The case of the day is Government of Ghana v. ProEnergy Services, LLC (8th Cir. 2012). I first reported on the case in my post of July 14, 2011. To recap the facts:

Ghana had entered into a contract with Balkan Energy Limited for the refurbishment of a power plant in Ghana. ProEnergy Services, LLC was the prime subcontractor.

Balkan claimed that Ghana had breached the contract by failing to provide a connection to the national electricity grid and by failing to pay certain fees. Balkan commenced an arbitration against Ghana in the Hague, and Ghana responded with a lawsuit in the High Court of Ghana, alleging fraud.

Meanwhile, ProEnergy had sued Balkan in the federal court in Missouri. Ghana applied to the federal court for judicial assistance in obtaining evidence from ProEnergy for use in the arbitration and the High Court litigation. The court granted the application and, in the decision I reported on July 14, it refused to reconsider it after Balkan intervened in the case to challenge the decision.

Today’s decision sheds some light on subsequent developments. Shortly after the District Court granted Ghana’s application for judicial assistance, Balkan and ProEnergy settled their disputes with each other. In light of the District Court’s refusal to reconsider its decision to grant judicial assistance, Balkan turned over some documents, but it refused to turn over the settlement agreement between it and ProEnergy. 1 The district court refused to compel the production, and Ghana appealed.

Can A Sovereign Apply For Judicial Assistance?

I would first like to focus on one of my pet issues, which I’ve written about a few times and which I’ll keep writing about until a court agrees with me. 2 Can Ghana seek judicial assistance under the statute? The request did not come from the Ghanaian court itself, or from the arbitral tribunal, but from the Government of Ghana in its capacity as litigant. The statute permits a US court to grant judicial assistance

pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person …

So Ghana must be proceeding as an “interested person.” But the presumption is that the word “person”, when used in a statute, does not include a sovereign. This is why the government cannot be the target of a discovery request brought under the statute (which permits the court to order a “person” to testify or produce documents). See Al Fayed v. CIA, 229 F.3d 272 (D.C. Cir. 2000). The reasoning in Al Fayed is all about statutory construction of the word “person”, and it seems to me highly desirable to give the same word the same meaning when it appears in the preceding sentence.

This may just be a technicality. I think that a state could make an application through its attorney general or another officer. Still, I would like to see a court adopt this view, which means, I guess, that a party has to argue it.

The Decision

On to the decision itself. Although the parties and the court tangentially raised the issue of a “settlement privilege”, the court decided the case not on those grounds (which likely would have been a loser for Balkan), but rather on grounds of relevance to the foreign proceedings. This is very odd. Receptivity to the evidence is one of the factors the court, when performing the Intel analysis, should consider. But the Intel analysis goes to whether the court should grant the application for judicial assistance, not to whether a subpoena issued pursuant to a request for judicial assistance should be quashed or modified. Here, the court had already decided to grant judicial assistance, but the Eighth Circuit nevertheless focused on the use that Ghana could or could not make of the settlement documents in the foreign proceedings. Even more oddly, the court focused on the admissibility of the settlement agreement in light of FRE 408, 3 without a real explanation of why that question is relevant given that the proceedings are taking place abroad. In short, this is a very odd decision. It is perhaps best explained by the standard of review. The court—properly, I think—reviewed the district court’s decision for abuse of discretion only. Appellate courts are rightly hesitant to second-guess discovery decisions, particularly where there is no issue of evidentiary privilege or any constitutional issue.

Notes:

  1. The Eighth Circuit decision does not suggest that a subpoena issued after the court granted the application for judicial assistance, and so the procedural posture of the case is a little muddled. In my view the best practice is to ask, in your request for judicial assistance, for leave to issue a subpoena, and then once the court grants your application, to actually issue the subpoena. This helps, I think, to clarify things. A § 1782 proceeding is really a two-step process. First, you ask the court for permission to invoke the mechanisms of US discovery. If you’re unsuccessful, you can appeal. If you’re successful, you issue your subpoena, and if the target objects, then the objections follow the ordinary course of discovery motion practice under the FRCP. That didn’t (apparently) happen here, though I think it’s not crucial to the outcome.
  2. My most detailed post about this issue was my post on Republic of Ecuador v. Bjorkman, one of the § 1782 proceedings Chevron brought in the Lago Agrio affair, though I also discussed it briefly in my post on Thai-Lao Lignite v. Laos.
  3. Rule 408 makes settlement offers and agreements, and statements made during settlement negotiations, inapplicable to prove liability or the amount of a claim