morning bowman for the republican ok so just so it's clear there's twelve minutes total that has been allotted for the two of you and you've split it up so that seven minutes mr cry record you got you've got twelve minutes that we don't have to split up in any way shape or form so very good mr cry will hear from you thank you your honors may please the court's moldova gas is not an alter ego of the republic the republic does not exercise significant and repeated control over the company's day to day operations and there was no abuse of the corporate form i'm actually going to take those two prongs in reverse order because the district court's ruling on the nd prong was totally irreconcilable with this court's precedents the court made clear in yemen limited that the common thread in fraud or injustice cases is that the sovereign state has abused the corporate form the fact that moldovan courts may have made procedural errors in moldova recognition proceedings is not an abuse of the corporate form the claim that bills is simply not an abuse of the corporate form gater argues that moldova gas would have been more profitable if the republic's utility rate regulator had allowed it to charge more for gas there's two problems that argument st no court has ever held that a foreign sovereigns regulatory decisions about what its natural gas utility can charge amounts to an abuse of the corporate form but beyond that gaiters own evidence shows that at most two percent of moldova gases losses stem from great regulation decisions while ninety percent of those losses stem from the fact that transnistria simply doesn't pay its gas bills so the facts don't support that argument even if it had any legal merits joined in the turning back to the st prong now the republic does not exercise significant and repeated control over the company's day to day operations the decision below is unprecedented no court has ever held that a company was an alter ego of the state where a majority of the company's shares were owned and a majority of its board appointed by a different company in a completely different jurisdiction ditter points out that moldova that the republic nominates moldova gaza's chairman who has some broad management powers that there are certain votes from which gazprom is recused by conflict of interest rules and that there are some votes subject to a supermajority requirement none of that matters under this court's precedents subsidiaries are presumed to be separate entities even where the parents owns one hundred percent of the shares cast one hundred percent of the votes appoints one hundred percent of the board that exercise is one hundred percent of the company's management authority under e m ltd gaiter had to show that the republicans used its authority to appoint board members to interfere with the company's day to day operations there's simply no evidence of that at all good or points to the republic's regulation  prices and technical service saying your honors those are regulatory decisions they are not the type of domination by a shareholder that amounts to alter ego status besides moldova gets has sued its regulator more than eighty times that history is hard to explain if its entire corporate existence is a sham gator points to one supply agreement from twenty years ago where the republic and russia agreed on gas prices and certain related terms two responses to that st that supply agreement was not an interference in the company's day to day operations it was a high level trade agreement that explicitly left the details of implementation up to the companies but seconds that agreement expired fifteen years ago ten years before the relevant date before determining jurisdiction in the renewal action and every agreement since then has been agreed upon by the companies not by their governments ditter point so that one government official helped negotiate the two thousand and six agreement but she expressed we disavowed any decision making authority in her own words the price was mutually agreed between moldova gas and gas prom under my auspices because i wasn't a go shooter but the decisions were not taken by me that's at page one thousand two hundred and two of the appendix and gaiter has literally terms is not alter ego evidence because it doesn't address the day to day operations of the companies it's a very high level trade agreement that sets price but that's no different from many other trade agreements where you have a cross border transaction but there is an alternative basis even if the court doesn't agree with that it's just not timely because that agreement expired in two thousand and six every night is a lie it's certainly more specific  a typical trade agreement and i will grant you that our bar point is simply that it's still a high level transaction because it doesn't address day to day operations it only sets the price which is a term that applies during the entire five year term of that contract and in some of that agreement expired ten years before the relevant date for jurisdiction and every agreement since then was agreed by the parties and the only evidence they cite to the contrary was that a single government official was involved in those discussions as a negotiator but she herself said she had no decision making authority and if the government official that shows up for negotiations has no decision making authority there's simply no evidence of day to day control and it discourse arch trading case in that case two government somehow supports alter ego status but combining a bunch of irrelevant facts does not somehow make them relevant zero plus zero plus zero is still zero at the end of the day vale piercing is supposed to be a rare exception playable only in exceptional circumstances and this court's extremely reluctant to disregard corporate form does not meet that demanding standard discourse of diverse if i can reserve the rest of my time all right yes that's  of the events or missions have to occur in this district the district court found that the substantial parts of the event was the default judgment that is the only basis on which the  always going to be the case when the renewal application pertains to what default judgment it seems to me that are concerned here is that you're saying that a court does not have venue to basically act on its own judgment now i understand you're also challenging the venue on the original judgment but you just faulted on that and now you're telling us that a court does not have then you to basically act with out the rules to i don't believe that there's necessarily an issue with it but to the extent there was that's congress that's you know the drafters that that's the issue that relates to there but more importantly this is  defaulted in this district he fails to appear why isn't that appropriate way to look at this because you're on it for two reasons the st reason is is that the issue is not the default the you know beat the action n sort of characterizes that well this is just kind of a continuation of the earlier proceeding it's not it's a pleasure really actually the subject matter of that action is the original judgment that has to be renewed but the right yes so this all this other conduct that did not have connection with new york has never been something that the court's going to consider in real life and i think that's correct your honor but also the the judgment itself doesn't have anything to do with the defendant's conduct the question is not conduct in general the question relates to if you look at the cases they all talk about the activities what activities those activities have to be is this court is is  of maneuvers that only further conform confirm the validity of the award and the fact that most of the gas qualifies as both an alter ego and it we're going to moldova judge precipice to thorough opinions and the extensive record amply demonstrate that there was jurisdiction for the two thousand judgment and the renewal action and that s d n y is a proper venue for the renewal action here on appeal defendants attempt attack attack those rulings largely by quibbling with certain facts in isolation and by emphasizing ownership do not control the analysis but instead the actual facts on extensive control and fraud are and justice are what matter i write today i see a difference is usually means maybe only nominally you have thirty percent of the shares but you that still is not controlling you know the st thing i think that needs to be emphasized is what why was moldova gas created well delivered as was created largely to service an already crushing amount of sovereign debt that moldova owed to gazprom through sure i'm not sure that your honor and certainly you know we don't say that that's the only evidence of alter ego sad to say i think when you look at to express his opinion obviously there are quite a number of factual findings that all add up to it on extensive control we would point out that moldova has the power to appoint the mr bott nari who went on to become the directorate to the head of the directorate of intelligence and security the other thing that i would point out your honor is that in the one instance that defendants point to where there was any kind of tension between the chairman and the government that person was run out of the company and run out of the country on threat of criminal prosecution so i think that's pretty clear evidence to me didn't we see in prior cases or in the prior case that if the way that the country is exercising influence over a corporate entity is by appointing people and has to exercise influence through those people as opposed to directly it still is a separate corporate entity right and if i'm understanding your question correctly judgment actually that you're asking does the country still have to exercise some storm of influence over its white mary to get to get to appoint people to the board but the only way they exercise influence of the corporate entity is that they point ward members who are going to be sympathetic to the country and so on that's not extensive control by the country right alone that it's not extensive control but i think that's the importance of the factual point that the one person who deigned to stand up to the state was run out of the company run out of the country on threat of criminal prosecution i think that pretty clearly shows imply this but i guess what i was thinking is maybe issues that the way they're exercising control is through the individuals who were appointed to the leadership of muldoon the gas because they were not able to just tell him to do something else so they were able to tell the entity what to do they had to affect behavior of a separate individual no i think i was wondering whether that might cut in favor of the idea is another another example where the defendants effort to sort of isolate facts and then claim that they don't all alone add up to alter ego is somewhat deceptive here and you know what what is going on with the rate setting is that moldova has created this company for the a valid purpose of both servicing sovereign debt but but providing affordable natural gas to its citizens and that it's through the rate setting has forced the company to operate at a substantial loss for many years and in many many instances has exerted political control to make sure that rebates are are paid in a certain fashion at a certain time it's required most of the gas to service the natural gas pipeline that blocks the country including at the day to day level of mandating certain actions with respect to one point five kilometers of a certain piece of pipeline so this isn't just run of the mill con edison style regulation this is heavy control because all along from the very beginning this company has merely just been an agent was created as a bridge positon area of preexisting debt including that debt at issue in this case and so the defendant's argument that there's no abuse of the corporate form with any nexus of this case is simply fanciful the whole reason why we're here is because they've government incurs a debt and in that case it also has an arbitrary award then creates a new entity that from the outside it under capitalized is and then says to us courts oh sorry you can't collect against that the plaintiff can't collect against anyone because the debt is to his predecessor entity that no longer exists and now there's this new entity that exists and you can't collect against them and and under corporate formalities you can't come against the state in that case the th circuit had no problem saying that  use the corporate form would have would be committing a fraud or injustice if it if it allowed if the court were to allow them to take advantage of that we'd say the same is true  over whether that's legitimate isn't that a very odd thing that you know foreign sovereigns who have a sovereign immunity and are entitled to all sorts of respects it would be easier to exercise through section over than trading and did so in a very thorough and well reasoned manner i think you know as you know they are now to spare with that it would be for foreign states to be treated differently than u s states and i think that that you know that has held true i think you know doing it for alter ego also makes sense there's a suggestion that somehow bank check has no role to play here i don't think that makes sense because bank checks whole purpose is to help courts decide when something that doesn't otherwise called by the foreign state does qualify as a foreign state so i don't think there's any reason to reconsider french air or pemex the other point that i would make your honor is that you know we think there's grounds even if you don't find alter ego to still exercise for a personal address diction here under the question that was expressly left open in front tara and then the other point that i would make your honor is that meaning that it's not an alter ego of the country it's just a agency arrangement telling of the country we should treat it like the country as opposed to like a private or an corporation corrected and i think it's important here that to remember that the basis on which judge prescott found instrumentality status was that it's an organ and i think the reason i think that that's relevant is that you know it's one thing to say it's a company that's over fifty percent owned you know should be treated as the state but that we're going to house this requires you know the filler factors of five pretty and intense factors that come someone close to the bank check it out so i don't think that it's that odd to say that an organ of a foreign state that has sovereign immunity under the f s a also has to live with the trade off which is that their sovereign immunity but personal jurisdiction rises and falls with respect to the the right yes but there's a provision in the f s a that says if the f s a its requirements are met that person jurisdiction excess it's going to ask you counsel where you would draw the line between the decisions the judge prescott made her on fact that we might be reviewing more deferentially than her ultimate conclusions of law where would you draw the line on that the judge obviously that's somewhat qualitative question and it's always a hard question to draw that line but i would say is that when you look through one hundred and twenty pages of the decision there are a number of places where she resolves disputes of fact and i would say by and large the arguments by the defendants on appeal are quibbles with those question the fact for example that the executive board through the chairman extensively controls the day to day operations of a company that's all i ask ninety three that's a finding of fact that when the  of extensive control and both problems of the altria analysis as a whole and what judge press to emphasize as well is that all true analysis ultimately is an equitable decision and so you know it's really important not to isolate these facts on their own but to say taken as a whole what's the picture here and the picture here is that from its very beginning the whole purpose of modern the gas was to serve as a debt instrument for massive sovereign debt but nobody disputes with sovereign debt from the  echo only now through assertion of the corporate form to the defendant's claim that it's no longer sovereign debt even though in every other instance other than here the leaders of moldova are happy to say that it's their debt and to go in negotiating on behalf of most of the gas for service for further contracts involving that and then you also have an instance where you have a former soviet country that is trying to provide natural gas to its citizens and it just strains credulity to say that it's just any run of the mill energy company would provide an entire region with free natural gas you know i think ultimately what that shows you is that transnistria is a separatist region that there's a dispute as to whether most of the russian ultimately controls it and it's obviously in moldova's interest to continue providing natural gas through its state natural gas company in order to say that that's still part of moldova so all but most of it can provide natural gas to within this country the gas points out that in the other treaties that it claims are just run of the military piece like agreements like the moldova russia an agreement one of them is the turkmenistan russia agreement and i think you know it's worth mentioning the fact that in turkmenistan was the alter ego of its state gas company because that's what's happening in these cases is that it's a country is using its gas company to do its bidding and to do the things that are important to that country and for them to then come into court in the united states and invade a twenty three year old debt on the claim that oh well you know look you really can't pierce the corporate form you can't treat this as an organ this is all just an arm's length company just maybe maybe i missed it but why obviously there's not there's not it a large record on that because of course the defendants didn't show up and so things went pretty quickly but what we would say is that you know just just to spend a minute or two on the other issues with  respect to venue completely agree with the questions that your honour's asked of mr baldwin that venue plainly applies in the renewal of judgment action because the default judgment that's being renewed occurred in the same court in fact it was the same judge and action is not a rests nor does it constitute the transaction of business in the state for purposes of venue so i'm wondering whether you can maintain that th events that allows the renewal action so i think you can your honor that commentary might go to our alternative argument about property but i think that with respect to whether the substantial events occurred as as your honor pointed out the you know one of the substantial events was that defendants didn't show up and so therefore the default judgment was entered and i think it would be somewhat odd to suggest that a judgment that's entered in one corner can't be renewed because there's not venue in the same court and so if there's you know to the extent that that the republic wants to argue that venue wasn't proper in the st instance clearly they forfeited that because they didn't bring that argument in sufficient time under rule sixty the st thing i would point out is that defendants didn't raise that argument below and therefore they forfeited it it goes to sovereign immunity so it's clearly a way of a boy issue the fact nd thing i would point out is that what our argument is that it's not a pure confirmation action the same way that and it looks to the things that happened lead to that judgment that's being enforced and then the final thing i would say is that the arbitration exception is not the only avenue that we argue there's jurisdiction here we also argued implicit waiver the district  didn't address that with respect to moldova it did with respect to most of the gas through the direct benefits of stoppel doctrine and i would point out that the republic of moldova has literally not challenge the direct benefits stop a conclusion at all on appeal and so here you've got direct benefits to stop which binds them to the arbitration award and then through this court's decision and see transport that means that they've implicitly waived sovereign immunity in a court where that are virtual work can be enforced  a say does not say someone who signed an agreement to arbitrate and so be equitable doctrines work in order to say who's bound by the agreements such that the arbitration exception or the implicit waiver exception under sea transport can apply and here you know the republic doesn't contest the fact that they were subject to direct benefits stubble and i think particularly in the context of a state run natural gas company where the contract is being negotiated by the government it makes perfect sense to say that direct benefits stop applies and you know the way that the direct benefit to stop applies here is that moldova had an obligation to russia in order to make sure that the contract was implemented if it did so the direct benefit therefore of the contract w enforced against that country and it didn't it didn't happen through direct benefits stoppel there it happen through alter ego of course we argue both in this context and this court's decision in thompson plainly establishes that you can enforce against a non signatory or any of the five various avenues that that the court laid out there two of which are alter ego and direct benefits of stoppel i'd also point out that because of that because of this argument here that we're talking about this analysis that means that you know even if th were to disagree on alter ego and award and certainly we don't encourage you to do so we think that the record is quite clear on both the court could still affirm with respect to moldova all let's end it there we've gone way over isolation the problem is that once you remove all the facts be quibble with there's simply nothing left to support the district court's judgment because every fact she relied on falls into one of three buckets either an ordinary exercise of shareholder fact could have found the facts that the judge found your honor i want to be clear on this because the parties actually agree on what the standards are the underlying historical facts are definitely clear the question about whether facts add up to alter ego status that is it's over but you just said this is why i want to understand it that when you remove the facts that the district court found you're left with nothing that can support its legal conclusion but we less you can show us clear our don't we have to accept the judge's findings of fact now we have to decide whether there are enough to support the legal conclusion but i don't think you've tried to argue the individual facts findings are clear hours so that we would just sweep them off the table your honor i apologize i probably did not express my point very well yeah what i meant to say was the facts that the district court found are not relevant to alter ego status so once you remove all the factual findings that are not relevant there's nothing left we are not disputing underlying fact findings as far as ninety nine percent of our cases concerns and it's telling that the two things they point to as disputed of twenty year old high level financial transactions like that one supply agreement that just don't relate to the company's day to day affairs turning then to what they claim are the disputed facts the st one they point to is the chairman has brought authority to manage the company but there's no dispute over that fact at all we absolutely agree that the chairman the foldover gas has broad management authority the problem is under limited the government is allowed to appoint somebody who exercises broad authority over the the basic principle and am limited is that appointments of board members it's not enough the plaintiff has to show that the sovereign is using those appointments to interfere in the day to day operations of the company and that's what's not secure about your the the b independent valuation of the capital contributions and nd the claim that there was a one year delay in contributing about a rd of the capital the problem is neither of those has any support in the record and the other side concedes that they didn't argue anything in their that but it also had substantial assets and actually if you look at page nine hundred and sixty three dollars of the appendix it reproduces the capital table that documents the capital that was contributed to the company upon formation which includes the debts on the one but it also includes substantial assets major enterprises in moldova that had substantial value and the net difference assets versus debt was two hundred and ninety million dollars u s dollars and there was no evidence to the contrary that initial claiming that the problem is that now the company owes six and a half one billion dollars to gazprom but that's not relevant you know post formation operating losses do not show an abuse of the corporate form especially on the record in this case which makes clear that those losses have nothing to do with shareholders trying to defraud creditors but instead have to do with the fact that transnistria don't pay their gas bills the there isn't a suggestion that the government had improperly influenced the company by trying to run one of the board chairman out of the country for disagreeing with the party line st of all i want to make clear what the basis for that finding was because at the time mr goose have left the company in two thousand and five that was three years after the complaints about rates that gators were lying on and prosecutors investigating the case at the time said that they had discovered evidence of currency in accounting fraud at the company the only evidence suggesting that that was a pretext a newspaper article that quoted not of a source who speculated that the government was trying to get the chairman sacked so i guess this is the one other example where were disputing a fact but i'm perfectly comfortable doing that because a single newspaper article quoting an anonymous source claiming that a foreign governments justification for a criminal investigation is a pretext that's an extraordinary finding and it really needs to be based on something a little more than that but even if you think it was a pretext at the think this is the point you made earlier menasha which i think was right on if the government actually dominated the company's day to day affairs they would not need to concoct some sort of pretext to a criminal investigation to run somebody out of the country they would just remove him the fact that they had to go to those those lengths as speculated by gator in this case to accomplish that proves that the company has a separate status and it's not an exercise by a dominant shareholder it's an exercise of the government's sovereign authority to also their original judgement is more than twenty years old now so as far as practicalities are concerned there's nothing left that you know in any country in the world as far as i that's far as i'm aware these would be time for our debts at this point what they're trying to do is get around the statute of limitations by taking advantage of this new york statute that allows them to get a renewal judgments based on a debt that's now twenty five years old nearly in order to do that they have to show there is a basis for that necessarily true i think you'd have to look at the satchel limitations for each jurisdiction might my general sense of things is that the twenty year statute for enforcing prior judgments in new york is pretty long by global standards address that issue as we read pemex central front tara those cases say that the test for whether you have personal jurisdiction rights is the bank extenders so i think having held that twice now in two different decisions i don't see how they can still be arguing that we are clear in our favor but even if you think that question is still open in this court i would direct the court's attention to the d c circuits decision in the g s s case the th circuit decision in the st investment case both those have very lengthy discussions of this topic came along discussed that specific footnote at length and definitively resolved this precise issue in the d c circuit so so the footnote from another case that led t m r to have a let's find tara to have some doubts about this has now been conclusively resolved against peter in the circuit that originally decided that case and we think that decisions persuasive and should be should be followed here that this is clearly the majority rule followed throughout the country except for this seventeen circuit decision that didn't really therefore if you have an action that predates the judgment you are seeking to renew that judgment the court said that the default judgment is the action not anything that occurred before the default judgment that it seems like they're seeking to really get the original judgment