Case of the Day: Nanko Shipping v. Alcoa
Posted on March 22, 2017
The case of the day is Nanko Shipping, USA v. Alcoa, Inc. (D.C. Cir. 2017). It’s our second FSIA-themed case from the DC Circuit in two days, and it’s the appeal from the case of the day in June 2015. Here was my description of the facts:
The Republic of Guinea is a major source of bauxite, the world’s main source of aluminum. In the past 50 years, the Compagnie des Bauxites de Guinee, owned by Guinea and by Halco Mining, Inc., has produced more than 600 tons of bauxite for export. The bauxite has been used to produce 150 million tons of aluminum, worth more than $400 billion. Guinea, which had the right to ship half of the bauxite CBG mined under a contract with Halco, had a contract with Nanko Shipping Guinea, under which Nanko would exercise Guinea’s right to ship the bauxite. Nanko and its parent company, Nanko Shipping USA, as well as its principal, Mori Diane, sued Halco and Alcoa, which it claimed was an alter ego of Halco (and, with Rio Tinto, majority owner of Halco), alleging that Nanko was a third-party beneficiary of the contract and that Halco and Alcoa had refused to allow Nanko to ship the bauxite. Alcoa moved to dismiss for failure to join an indispensable party, namely Guinea.
If Guinea is indeed indispensable, and if it is immune from suit under the FSIA, well, you see the point. Nanko didn’t join Guinea in the suit because it believed that Guinea was indeed immune, and the district court held that Guinea was indispensable, because Guinea could be prejudiced by the outcome of the case.
On appeal, the court reversed, holding Guinea was not a necessary party. Because Guinea was not a party, any decision about the contract meant would be merely persuasive precedent as to Guinea—there would be no preclusive effect. The court held that “the requirements of Rule 19(a) are not satisfied simply because a judgment against Defendants in this action might set a persuasive precedent in any potential future action.”