The case of the day is Kaiser Group Int’l, Inc. v. World Bank (D.C. Cir. 2011). It has an interesting procedural history. Kaiser contracted to build a steel mill for Nova Hut, a firm partially owned by the Czech Republic. The project was financed by the International Finance Corporation, a member of the World Bank Group. Kaiser filed a bankruptcy petition in the U.S. Bankruptcy Court for the District of Delaware. IFC and Nova Hut filed proofs of claim. Kaiser commenced an adversary proceeding against IFC and Nova Hut. IFC asserted that under the International Organizations Immunity Act, 22 U.S.C. § 288a(b), it was immune from suit on Kaiser’s claim. But the Bankruptcy Court held that IFC had waived its immunity by filing its proof of claim, and the Court of Appeals for the Third Circuit ultimately agreed. Int’l Fin. Corp. v. Kaiser Group Int’l, Inc. (In re Kaiser Group Int’l, Inc.), 399 F.3d 558 (3d Cir. 2005). On remand, the Bankruptcy Court granted a motion to compel arbitration, and Kaiser then initiated an arbitration against the IFC before the ICC in Vienna. The claim was for tortious interference in Kaiser’s contract with Nova Hut.
Kaiser applied to the District Court for the District of Columbia under the judicial assistance statute for issuance of subpoenas to the World Bank (IFC’s parent) in aid of the arbitration. The District Court denied the application on the grounds that the World Bank was immune from all process, including subpoenas, under the IOIA. On appeal, Kaiser argued that the World Bank had waived immunity, either expressly (in its charter) or indirectly (in connection with IFC’s submission of a proof of claim in the bankruptcy case). The court did not consider the World Bank’s charter in the appeal, holding that Kaiser had waived that issue by failing to raise it below. While in a dictum the court suggested that the IOIA allowed the district courts to exercise jurisdiction only where there had been an express waiver, the court did not need to make a holding on that point, because it found that Kaiser had not alleged that the IFC was acting as the World Bank’s agent, so as to permit a finding that IFC’s waiver should be imputed to the World Bank.
Even if the World Bank had waived its immunity, in my opinion the court still would have been right to deny the application, since, as I have noted before (e.g., here), I think the better reading of the judicial assistance statute does not extend to private international arbitrations (though I suppose there could be an argument that this arbitration was quasi-public given that the IFC was a party).
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