Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-13-07100/USCOURTS-caDC-13-07100-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 8, 2014 Decided August 29, 2014 

No. 13-7100 

PETER GEORGE ODHIAMBO, 

APPELLANT

v. 

REPUBLIC OF KENYA, A FOREIGN STATE, ET AL., 

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(No. 1:12-cv-00441) 

Robert W. Ludwig argued the cause and filed the briefs 

for appellant. With him on the briefs were W. Clifton Holmes

and Thomas K. Kirui. 

David I. Ackerman argued the cause for appellees. With 

him on the brief was Daniel D. Barnowski. 

Before: GRIFFITH, KAVANAUGH, and PILLARD, Circuit 

Judges. 

Opinion for the Court filed by Circuit Judge

KAVANAUGH, with whom Circuit Judge GRIFFITH joins. 

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Opinion concurring in part and dissenting in part filed by 

Circuit Judge PILLARD. 

 KAVANAUGH, Circuit Judge: Kenya wanted to crack 

down on tax evasion. So it enlisted help from the Kenyan 

public. The Kenya Revenue Authority issued an ad promising 

monetary rewards in exchange for information about 

undisclosed taxes. Enticed by that offer, Kenyan private bank 

employee Peter Odhiambo blew the whistle on hundreds of 

accountholders with potential tax deficiencies. Kenya 

responded by making some rewards payments to Odhiambo. 

But Odhiambo claimed that he was entitled to more – millions 

more. When word got out that he was an informant, 

Odhiambo feared for his safety, and Kenyan officials helped 

him ultimately move to the United States as a refugee. 

Odhiambo then sued Kenya in federal district court in 

Washington, D.C., for breach of contract based on Kenya’s 

alleged underpayment of rewards to Odhiambo. 

 Under the Foreign Sovereign Immunities Act, foreign 

governments are immune from suit in U.S. courts unless the 

plaintiff’s claim falls into one of the statute’s enumerated 

exceptions. See 28 U.S.C. § 1604. Odhiambo argues that his 

claims satisfy the FSIA’s waiver and commercial activity 

exceptions. But Kenya has not waived its immunity in U.S. 

courts “either explicitly or by implication.” Id. § 1605(a)(1). 

And Kenya’s alleged breach of contract – a contract that was 

offered, accepted, and performed in Kenya – lacks the 

connection to the United States required by the commercial 

activity exception to the FSIA. See id. § 1605(a)(2). We 

therefore conclude, as did the District Court, that the FSIA 

bars Odhiambo’s suit. We affirm. 

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I 

 For most of our Nation’s history, foreign sovereigns 

enjoyed virtually absolute immunity from suit in U.S. courts. 

See Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 

486 (1983); The Schooner Exchange v. M’Faddon, 11 U.S. 

116, 136-46 (1812) (Marshall, C.J.). That changed in 1952, 

when the State Department and then the courts adopted the 

“restrictive theory” of sovereign immunity. Under the 

restrictive theory, foreign states retain immunity for sovereign 

public acts but not for private commercial acts. See Republic 

of Austria v. Altmann, 541 U.S. 677, 689-91 (2004); 

Verlinden, 461 U.S. at 486-88. In the Foreign Sovereign 

Immunities Act of 1976, Congress codified the restrictive 

theory and further defined the scope of foreign sovereign 

immunity. See Pub. L. No. 94-583, 90 Stat. 2891. Since then, 

the FSIA has provided “the sole basis for obtaining 

jurisdiction over a foreign state in our courts.” Argentine 

Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 

(1989); see Peterson v. Royal Kingdom of Saudi Arabia, 416 

F.3d 83, 86 (D.C. Cir. 2005). As the Supreme Court recently 

reiterated, the FSIA supplies a “comprehensive set of legal 

standards governing claims of immunity in every civil action 

against a foreign state.” Republic of Argentina v. NML 

Capital, Ltd., 134 S. Ct. 2250, 2255 (2014) (quoting 

Verlinden, 461 U.S. at 488). 

 Under the FSIA, a district court has subject matter 

jurisdiction over a suit against a foreign state if – and only if –

the plaintiff’s claim falls within a statutorily enumerated 

exception. See 28 U.S.C. §§ 1330(a), 1604, 1605. In other 

words, the FSIA exceptions are exhaustive; if no exception 

applies, the district court has no jurisdiction. See Saudi 

Arabia v. Nelson, 507 U.S. 349, 355 (1993); Peterson, 416 

F.3d at 86. 

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 Two FSIA exceptions are relevant to this case. The first 

is the waiver exception, which permits a suit when “the 

foreign state has waived its immunity either explicitly or by 

implication.” Id. § 1605(a)(1). The second is the commercial 

activity exception, which permits a suit when “the action is 

based [1] upon a commercial activity carried on in the United 

States by the foreign state; or [2] upon an act performed in the 

United States in connection with a commercial activity of the 

foreign state elsewhere; or [3] upon an act outside the territory 

of the United States in connection with a commercial activity 

of the foreign state elsewhere and that act causes a direct 

effect in the United States.” Id. § 1605(a)(2). 

 The dispute here arises from an “Information Reward 

Scheme” developed by the Kenya Revenue Authority to enlist 

public cooperation in enforcing Kenya’s tax laws. The 

scheme “rewards persons who provide information as below:

x Information leading to the identification of 

hitherto undisclosed taxes – a reward amounting 

to 1% of the tax identified [up to] a maximum of 

[100,000 Kenyan shillings]. 

x Information leading to the recovery of hitherto 

undisclosed taxes – a reward amounting to 3% of 

the taxes collected.”

J.A. 16. In essence, the rewards program encouraged 

whistleblowers to come forward with information about tax 

evasion by offering them a share of the proceeds – not unlike 

our country’s False Claims Act or the common law qui tam

action. See 31 U.S.C. §§ 3729-3733; Vermont Agency of 

Natural Resources v. United States ex rel. Stevens, 529 U.S. 

765, 768 & n.1, 774-77 (2000). 

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 The rewards program had its intended effect on Peter 

Odhiambo, an auditor at a private Kenyan bank called 

Charterhouse Bank. In April 2004, Odhiambo turned over 

records implicating more than 800 accountholders in possible 

tax evasion. The Kenya Revenue Authority rewarded 

Odhiambo with an initial payment of 200,000 Kenyan 

shillings (about $2,600). A year later, the Authority made an 

additional payment of roughly 250,000 Kenyan shillings 

(about $3,300). 

 

 At some point, Charterhouse apparently learned that 

Odhiambo was the informant behind the investigation. 

Odhiambo then reported receiving disquieting phone calls 

telling him to leave Kenya. He was also the victim of alleged 

police harassment, which he reported to the Kenya National 

Commission on Human Rights. Believing Odhiambo’s safety 

at risk, Kenyan officials supported his application for asylum 

in the United States. He was granted asylum and arrived here 

as a refugee in September 2006. 

 Before and after his relocation, Odhiambo insisted that 

Kenya owed him more money for the tips that he had 

provided about tax evasion at Charterhouse. Odhiambo 

pressed his claims through written correspondence and in 

face-to-face meetings with Kenyan officials in the United 

States. Still unsatisfied, Odhiambo sued Kenya for breach of 

contract in federal district court in Washington, D.C. He 

sought approximately $24.5 million in damages to 

compensate him for Kenya’s alleged underpayment of 

rewards. See Odhiambo v. Republic of Kenya, 930 F. Supp. 

2d 17, 20-24 (D.D.C. 2013) (Odhiambo I). 

Kenya moved to dismiss Odhiambo’s complaint based on 

its sovereign immunity to suit in U.S. courts. The District 

Court agreed with Kenya that the FSIA bars the suit. See id.

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at 23-35. We review the District Court’s sovereign immunity 

determination de novo. See Cruise Connections Charter 

Management 1, LP v. Attorney General of Canada, 600 F.3d 

661, 664 (D.C. Cir. 2010). 

II 

 Odhiambo invokes two FSIA exceptions to establish 

district court jurisdiction over his suit: the waiver and 

commercial activity exceptions. We consider each in turn. 

A 

 Odhiambo first contends that the FSIA does not bar his 

suit because the waiver exception applies. The waiver 

exception provides in relevant part that sovereign immunity 

will not apply when a “foreign state has waived its immunity 

either explicitly or by implication.” 28 U.S.C. § 1605(a)(1). 

 In the district court, Odhiambo argued that Kenya had 

implicitly waived its sovereign immunity to suit in the United 

States by facilitating his asylum here. In essence, 

Odhiambo’s claim was that Kenya should not be allowed to 

collect both the benefits of his performance on the contract 

and the benefits of sovereign immunity while simultaneously 

reneging on its bargain and creating an environment in which 

he had to flee the country. The District Court rejected that 

conception of implicit waiver as inconsistent with the case 

law, which has found implicit waiver only where the foreign 

state had “at some point indicated its amenability to suit.” 

Odhiambo v. Republic of Kenya, 930 F. Supp. 2d 17, 24 

(D.D.C. 2013) (Odhiambo I) (quoting Princz v. Federal 

Republic of Germany, 26 F.3d 1166, 1174 (D.C. Cir. 1994)). 

Odhiambo does not renew this argument on appeal, so we do 

not consider it. 

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 Odhiambo now claims that Kenya waived its sovereign 

immunity with respect to claims like his when it acceded to 

the 1951 Convention Relating to the Status of Refugees. We 

disagree for two alternative and independent reasons. First, in 

his submissions to the district court, Odhiambo did not 

mention the Refugee Convention, much less contend that 

Kenya’s accession constituted a waiver of sovereign 

immunity in U.S. courts. Odhiambo has therefore forfeited 

this argument. See World Wide Minerals, Ltd. v. Republic of 

Kazakhstan, 296 F.3d 1154, 1161 & n.10 (D.C. Cir. 2002). 

Second, even if we were to overlook Odhiambo’s failure to 

timely raise this argument, it would have little merit. The 

ambiguous and generic language of the Refugee Convention 

falls far short of the exacting showing required for waivers of 

foreign sovereign immunity. See id. at 1162. Indeed, the 

Supreme Court has explained that it cannot “see how a 

foreign state can waive its immunity under § 1605(a)(1) by 

signing an international agreement that contains no mention 

of a waiver of immunity to suit in United States courts.” 

Argentine Republic v. Amerada Hess Shipping Corp., 488 

U.S. 428, 442 (1989). The waiver exception to the FSIA does 

not permit Odhiambo’s suit. 

B 

 Odhiambo next relies on the commercial activity 

exception. That exception applies when 

the action is based [1] upon a commercial activity 

carried on in the United States by the foreign state; or 

[2] upon an act performed in the United States in 

connection with a commercial activity of the foreign 

state elsewhere; or [3] upon an act outside the territory 

of the United States in connection with a commercial 

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activity of the foreign state elsewhere and that act 

causes a direct effect in the United States. 

28 U.S.C. § 1605(a)(2). 

1 

 Clause one of the commercial activity exception permits 

a suit against a foreign sovereign when the plaintiff’s “action 

is based upon a commercial activity carried on in the United 

States by the foreign state.” Id. § 1605(a)(2). The FSIA in 

turn defines the phrase “commercial activity carried on in the 

United States by a foreign state” to mean “commercial 

activity carried on by such state and having substantial 

contact with the United States.” Id. § 1603(e). Thus, to 

invoke the district court’s jurisdiction under clause one, the 

plaintiff’s claim must be “based upon some commercial 

activity by” the foreign state “that had substantial contact with 

the United States.” Saudi Arabia v. Nelson, 507 U.S. 349, 

356 (1993) (internal quotation marks omitted). 

 In the district court, Odhiambo alleged several instances 

of commercial activity by Kenya that had substantial contact 

with the United States, including the meetings that Kenyan 

officials held with him in the United States to discuss the 

disputed rewards. The problem for Odhiambo is that his 

breach-of-contract claim is not “based upon” that activity. 28 

U.S.C. § 1605(a)(2) (emphasis added). As the Supreme Court 

has explained, a claim is “based upon” commercial activity if 

the activity establishes one of the “elements of a claim that, if 

proven, would entitle a plaintiff to relief under his theory of 

the case.” Nelson, 507 U.S. at 357. In other words, the 

alleged commercial activity must establish “a fact without 

which the plaintiff will lose.” Kirkham v. Société Air France, 

429 F.3d 288, 292 (D.C. Cir. 2005); see Goodman Holdings v. 

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Rafidain Bank, 26 F.3d 1143, 1146 (D.C. Cir. 1994) 

(commercial activity unrelated to elements of claim is “legally 

irrelevant”). Odhiambo does not seriously contend that his 

meetings with Kenyan officials in the United States establish 

any fact without which his breach-of-contract claim will fail. 

He therefore cannot proceed under clause one. 

 On appeal, Odhiambo asserts a new twist. He contends 

that (i) Kenya’s rewards offer constitutes a commercial 

activity by a foreign state on which his claim is based, and (ii) 

the asserted commercial activity had substantial contact with 

the United States because of his meetings with Kenyan 

officials in the United States.1

 As an initial matter, Odhiambo 

failed to raise this argument in the district court and therefore 

has forfeited it. But even if we consider Odhiambo’s new 

theory, his interpretation of clause one is doubly flawed under 

our case law. First, our cases have held that mere business 

meetings in the United States do not suffice to create 

substantial contact with the United States for these purposes. 

See Zedan v. Kingdom of Saudi Arabia, 849 F.2d 1511, 1513 

(D.C. Cir. 1988); Maritime International Nominees 

Establishment v. Republic of Guinea, 693 F.2d 1094, 1109 

(D.C. Cir. 1982). Second, our cases make clear that clause 

one requires a plaintiff’s claim to be “based upon” the aspect 

of the foreign state’s commercial activity that establishes 

substantial contact with the United States. Our decision in 

Kirkham illustrates that rule. There, we considered a claim by 

an airline passenger who had purchased a ticket in the United 

States and alleged an injury negligently caused by an Air 

France employee in France. We did not, as Odhiambo 

 1

 The District Court assumed without deciding that the rewards 

offer was a commercial activity. See Odhiambo v. Republic of 

Kenya, 930 F. Supp. 2d 17, 26 (D.D.C. 2013) (Odhiambo I). 

Kenya appears to accept that premise on appeal. 

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proposes here, ask first whether her claim was based on 

commercial activity by France and then ask independently 

whether that commercial activity had substantial contact with 

the United States. Instead, reasoning from the Supreme 

Court’s decision in Nelson, we explained that the “sole 

question before us” was whether the plaintiff’s negligence 

claim was based upon her ticket purchase in the United States 

– that is, whether her claim was based upon the aspect of the 

foreign state’s commercial activity that establishes substantial 

contact with the United States. Kirkham, 429 F.3d at 291; see 

Nelson, 507 U.S. at 356-58. That is precisely the approach to 

clause one that Justice White articulated in his concurring 

opinion in Nelson. See Nelson, 507 U.S. at 364-65, 370 

(White, J., concurring). 

Kirkham’s interpretation of Nelson is fatal to Odhiambo’s 

argument. As explained above, the only aspect of Kenya’s 

commercial activity that allegedly established substantial 

contact with the United States – his meetings with Kenyan 

officials in the United States – is not necessary to make out 

any element of his breach-of-contract claim. Recognizing as 

much, Odhiambo essentially concedes that Kirkham

forecloses his argument. See Odhiambo Reply Br. 13, 16, 21-

22. Odhiambo suggests that Kirkham was “implicitly 

overruled” by Permanent Mission of India to the United 

Nations v. New York, 551 U.S. 193 (2007). Id. at 21. But that 

case had nothing to do with the commercial activity 

exception. This panel must follow Kirkham. And in any 

event, Kirkham is correct. Clause one of the commercial 

activity exception does not permit Odhiambo’s suit. 

2 

 Clause two of the commercial activity exception allows a 

suit against a foreign sovereign when the plaintiff’s claim is 

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based “upon an act performed in the United States in 

connection with a commercial activity of the foreign state 

elsewhere.” 28 U.S.C. § 1605(a)(2). Even assuming that 

Odhiambo alleged an act that fits that definition, Odhiambo’s 

clause two argument falters on the same grounds as his clause 

one argument: His breach-of-contract claim is not based 

upon any alleged “act performed in the United States in 

connection with” Kenya’s commercial activity. Cf. Nelson, 

507 U.S. at 357; Kirkham, 429 F.3d at 292; Goodman, 26 

F.3d at 1145-46. 

 To be sure, Nelson, Kirkham, and Goodman interpreted 

the phrase “based upon” in clause one, not clause two. But 

the virtually identical statutory text and structure of clauses 

one and two lead us to conclude that “based upon” means the 

same thing in both clauses. See Powerex Corp. v. Reliant 

Energy Services, Inc., 551 U.S. 224, 232 (2007); IBP, Inc. v. 

Alvarez, 546 U.S. 21, 34 (2005). Indeed, although Odhiambo 

disagrees with our interpretation of “based upon” in clause 

one, he does not argue that those same words mean something 

different in clause two. And to the degree that the text leaves 

any ambiguity, the legislative history is “crystal clear” that 

clause two’s reference to acts “performed in the United States 

in connection with a commercial activity of the foreign state 

elsewhere” is “limited to those” acts “which in and of 

themselves are sufficient to form the basis of a cause of 

action.” Zedan, 849 F.2d at 1514 (quoting H.R. REP. NO. 94-

1487, at 19 (1976)); see S. REP. NO. 94-1310, at 18 (1976) 

(same). 

 In sum, a suit against a foreign sovereign may proceed 

under clause two only if the “act performed in the United 

States in connection with a commercial activity of the foreign 

state elsewhere” establishes a fact without which the plaintiff 

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will lose. See Nelson, 507 U.S. at 357; Kirkham, 429 F.3d at 

292. None of the acts cited by Odhiambo satisfies that test. 

3 

 The closest question in this case arises from clause three 

of the commercial activity exception. Clause three permits a 

suit against a foreign sovereign when the plaintiff’s claim is 

based “upon an act outside the territory of the United States in 

connection with a commercial activity of the foreign state 

elsewhere and that act causes a direct effect in the United 

States.” 28 U.S.C. § 1605(a)(2). We agree with Odhiambo 

that his suit satisfies the first part of clause three: His claim is 

based upon the “act” of Kenya’s alleged breach of contract, 

which happened outside the United States in connection with 

the rewards offer – a presumptively commercial activity of 

the Kenyan government. The question remaining is whether 

Kenya’s alleged breach of the rewards offer caused a “direct 

effect in the United States” given that Odhiambo now resides 

in the United States. 

 The leading Supreme Court case on the meaning of 

“direct effect” is Republic of Argentina v. Weltover, Inc., 504 

U.S. 607 (1992). In Weltover, the Supreme Court considered 

whether Argentina’s decision to delay payments on certain 

bonds caused a direct effect in the United States. The Court 

explained that “an effect is ‘direct’ if it follows as an 

immediate consequence of the defendant’s” activity. 

Weltover, 504 U.S. at 618 (internal quotation marks omitted). 

The Court reasoned that Argentina’s delay of the bond 

payments caused a direct effect in the United States because 

the bond contract had established the United States as a “place 

of performance.” Id. at 619. More specifically, the contract 

provided for payment in U.S. dollars and directed investors to 

elect one of four payment locations, including New York. 

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Thus, at the moment the contract was formed, Argentina 

assumed “contractual obligations” to pay the bondholders in 

New York (or one of the three other designated locations). Id. 

The investors in Weltover chose New York as their place of 

payment, and Argentina made payments to their New York 

accounts. See id. When Argentina breached its contractual 

obligations by failing to make bond payments that were 

“supposed to have been delivered to a New York bank,” its 

breach had a direct effect in the United States. Id.

 

 Like Weltover, this Court’s direct effect cases involving 

alleged breaches of contract have turned on whether the 

contract in question established the United States as a place of 

performance. That approach follows from the text and 

purpose of the FSIA. By definition, breaching a contract that 

establishes the United States as a place of performance will 

have a direct effect here, whereas breaching a contract that 

establishes a different or unspecified place of performance 

can affect the United States only indirectly, as the result of 

some intervening event such as the plaintiff’s move to this 

country. See Princz v. Federal Republic of Germany, 26 F.3d 

1166, 1172 (D.C. Cir. 1994). Construing clause three to 

permit suits in that latter category would create an incentive 

for every breach of contract victim in the world to move to the 

United States, demand payment here, and then sue alleging a 

direct effect of nonpayment in the United States. That result 

would contradict the statutory term “direct” and undermine 

Congress’s objective of avoiding turning U.S. courts into 

“small international courts of claims.” Verlinden B.V. v. 

Central Bank of Nigeria, 461 U.S. 480, 490 (1983) (internal 

quotation marks omitted). 

This Court’s decision in Peterson v. Royal Kingdom of 

Saudi Arabia, 416 F.3d 83 (D.C. Cir. 2005), illustrates our 

place of performance rule and dictates our result here. In that 

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case, an American who had worked in Saudi Arabia but 

resided in the United States claimed that he was contractually 

entitled to a refund of employee contributions that he had paid 

to the Saudi government. We held that Saudi Arabia’s 

alleged breach of the contract did not create a direct effect in 

the United States. Even though Peterson was in the United 

States at the time of the asserted breach, and even though the 

Court assumed that Saudi government “understood” as much, 

the contract included “no agreement – implied or express –

that Peterson was to be paid in the United States.” Peterson, 

416 F.3d at 90-91. On the contrary, the contract envisioned 

that the Saudi government would refund the employee’s 

money to him wherever he was when the payment came due. 

Of critical importance to our case, the Court in Peterson held 

that such a “pay wherever you are” arrangement does not 

suffice to create a direct effect in the United States. See id. 

 Likewise, in Goodman, this Court concluded that there 

was no direct effect where the foreign sovereign “might well 

have paid” its contract partner through a bank account in the 

United States but “might just as well have done so” outside 

the United States. Goodman, 26 F.3d at 1146-47. Similarly, 

in Zedan, the Court held that there was no direct effect when 

the allegedly breached contract required the foreign sovereign 

to “forward the money to” the other party “wherever he chose 

to travel.” Zedan, 849 F.2d at 1514. 

 In Cruise Connections Charter Management 1, LP v. 

Attorney General of Canada, 600 F.3d 661 (D.C. Cir. 2010), 

this Court again observed that “harm to a U.S. citizen, in and 

of itself, cannot satisfy the direct effect requirement.” Cruise 

Connections, 600 F.3d at 665 (citing Zedan, 849 F.2d at 

1515). The Court in that case went on to find a direct effect 

based on Canada’s alleged breach of a contract that required a 

U.S. company “to subcontract with two U.S.-based cruise 

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lines” to provide ships during the Vancouver Olympics. Id. at 

662. Because “the contract itself required the ships to come 

from” U.S.-based cruise lines, Canada’s alleged breach “led 

inexorably to the loss of revenues” by the U.S. company in 

the United States, just as Argentina’s breach of the bond 

contract led to a loss of revenues for the investors who had 

designated New York as a place of payment in Weltover. Id.

at 665. 

 Applying that same place of performance rule, this Court 

in De Csepel v. Republic of Hungary, 714 F.3d 591 (D.C. Cir. 

2013), found that the plaintiffs had adequately alleged a direct 

effect in the United States by asserting that Hungary had 

breached a bailment contract obligating it to return artwork to 

individuals in the United States. The key to the Court’s 

reasoning was that Hungary had, in forming the bailment 

contract, “promised to perform specific obligations in the 

United States.” De Csepel, 714 F.3d at 600-01. Thus, from 

the moment of contract formation, the United States was a 

contractually designated place of performance. The Court 

emphasized twice that Hungary “knew” the owners of the 

borrowed artwork “to be residing in the United States” at the 

time Hungary formed the bailment agreement. Id. at 601; see 

id. (Hungary “knew at all relevant times that the Herzog Heirs 

owned the Herzog Collection and that certain of the Herzog 

Heirs resided in the United States”) (quoting Complaint ¶ 36) 

(emphasis added); De Csepel Br. 50 (“United States residents 

owned portions of the Herzog Collection” “at the time the 

bailments were created” and Hungarian officials “knew that 

to be the case when they created bailment agreements”) 

(emphases added). And the Court expressly contrasted 

Hungary’s promise to perform specific obligations in the 

United States with the facts of a case in which the Sixth 

Circuit declined to find a direct effect in the United States 

because the plaintiffs had not alleged that the foreign state 

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“ever promised to deliver the art collection to the United 

States.” De Csepel, 714 F.3d at 601 (quoting Westfield v. 

Federal Republic of Germany, 633 F.3d 409, 415 (6th Cir. 

2011)) (alteration omitted). 

 In short, Hungary’s knowledge – from the moment the 

bailment agreement was formed – that performing its 

contractual obligations would require it to return the artwork 

to owners in the United States was crucial to the Court’s 

finding of a “direct effect in the United States” and to its 

explanation of why the case was not covered by precedents 

such as Peterson. Indeed, the De Csepel Court cited Peterson

immediately before explaining the relevance of Hungary’s 

knowledge at the time it formed that contract that the owners 

of the artwork were residing in the United States. See id.

(quoting Peterson, 416 F.3d at 90). We see no indication that 

the De Csepel Court intended to (or did) depart from Peterson

or our other “direct effect” precedents in any way. 

 To summarize, this Court’s cases draw a very clear line: 

For purposes of clause three of the FSIA commercial activity 

exception, breaching a contract that establishes or necessarily 

contemplates the United States as a place of performance 

causes a direct effect in the United States, while breaching a 

contract that does not establish or necessarily contemplate the 

United States as a place of performance does not cause a 

direct effect in the United States. 

 In presenting his case for a direct effect, Odhiambo does 

not argue that his U.S. presence or U.S. citizenship alone 

suffices to create a direct effect in the United States. As 

explained above, the relevant precedents would foreclose any 

such contention. See, e.g., Cruise Connections, 600 F.3d at 

665 (citing Zedan, 849 F.2d at 1515); Peterson, 416 F.3d at 

90-91. Instead, Odhiambo tries to model his claim on De 

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Csepel by suggesting that the contract established or 

necessarily contemplated the United States as a place of 

performance. But nothing in Kenya’s rewards offer suggested 

that the United States might be a place of performance. If the 

contract designated any place of performance, that place 

would be Kenya, because the contract expressly provided that 

rewards would be paid in Kenyan shillings. See J.A. 16; cf. 

Weltover, 504 U.S. at 609, 619 (noting that Argentine bond 

contract that created direct effect in the United States 

provided for payment in U.S. dollars). Otherwise, the 

contract simply established the kind of “pay wherever you 

are” arrangement that we have repeatedly held – particularly 

in cases like Peterson – insufficient to cause a direct effect in 

the United States. Put another way, no one could look at 

Kenya’s rewards offer and reasonably conclude that Kenya 

“promised to perform specific obligations in the United 

States” or was “supposed to” pay recipients in the United 

States. De Csepel, 714 F.3d at 600-01; Weltover, 504 U.S. at 

619; Peterson, 416 F.3d at 90; Goodman, 26 F.3d at 1146. 

Kenya’s alleged breach of its obligations therefore did not 

create a direct effect in the United States. On the contrary, as 

the District Court found, the effect in the United States arose 

only after a variety of intervening events, including the 

unveiling of Odhiambo’s role as a whistleblower, Odhiambo’s 

phone call to a Kenyan newspaper and the subsequently 

published story, Odhiambo’s outreach to Kenya’s Human 

Rights Commission, and Odhiambo’s move to the United 

States as a refugee. See Odhiambo I, 930 F. Supp. 2d at 32. 

In our view, we could not rule for Odhiambo on this point 

without departing substantially from our precedents. See 

Princz, 26 F.3d at 1172 (a direct effect “has no intervening 

element, but, rather, flows in a straight line without deviation 

or interruption”) (internal quotation marks omitted).

USCA Case #13-7100 Document #1509948 Filed: 08/29/2014 Page 17 of 37
18 

 In reaching that conclusion, we also note an Eleventh 

Circuit precedent on a factually similar question. See

Guevara v. Republic of Peru, 608 F.3d 1297 (11th Cir. 2010) 

(Guevara II). In Guevara II, Peru issued a public reward 

offer in return for information that would directly enable the 

locating and capture of a high-profile fugitive. During a trip 

to Miami, one of the fugitive’s associates, Guevara, gave up 

the fugitive’s location to the FBI and demanded the reward. 

When the Peruvian government refused to pay, Guevara sued 

for breach of contract in South Florida’s federal court. The 

Eleventh Circuit concluded that Peru’s alleged breach of the 

reward offer did not cause a direct effect in the United States. 

See id. at 1300-02, 1309-10. In short, Guevara’s mere 

presence in the United States and demand for payment here 

did not suffice to create an effect arising directly from the 

breach of a contract offered in Peru that never established or 

contemplated the United States as a place of performance. So 

too here.2

 Odhiambo alternatively contends that Kenya modified 

the contractual place of performance by helping him resettle 

in the United States and knowingly making payments that 

reached him here. That contention falters on multiple fronts. 

 2

 Odhiambo relies on the Ninth Circuit’s decision finding a 

direct effect in Adler v. Federal Republic of Nigeria, 107 F.3d 720 

(9th Cir. 1997). But in Adler, the contract expressly required the 

investors to designate an out-of-country location of payment. See 

Adler, 107 F.3d at 727. Here, by contrast, nothing in Kenya’s 

rewards offer allowed – much less required – claimants to demand 

payment in particular locations. So even if we agreed with the 

Ninth Circuit’s looser approach to the direct effect prong of the 

analysis, we would still conclude that Odhiambo’s suit does not fall 

within clause three under Adler. 

USCA Case #13-7100 Document #1509948 Filed: 08/29/2014 Page 18 of 37
19 

 First, Odhiambo failed to allege any payments in the 

United States in his first amended complaint – or at any time 

prior to the District Court’s judgment – even though he 

apparently received those payments years before he filed his 

complaint. The District Court therefore did not need to 

consider those allegations. See Exxon Shipping Co. v. Baker, 

554 U.S. 471, 485 n.5 (2008). 

 Second, even if we were to consider Odhiambo’s 

allegations, they do not demonstrate that Kenya manifested 

the consent necessary to modify the contract. Odhiambo 

offers no reason to believe that Kenya’s assistance in his 

asylum application had any impact on the place of 

performance designated in the rewards offer. Although 

Kenya knows that Odhiambo is in the United States, that 

alone does not suffice. Kenya has not, in the words of De 

Csepel, “promised to perform specific obligations in the 

United States.” De Csepel, 714 F.3d at 600-01. Indeed, far 

from agreeing with Odhiambo that the contract designates the 

United States as a place of performance, Kenya has 

continually refused to issue any payments outside Kenya. 

Odhiambo has therefore received the payments in the United 

States only through an intermediary in Kenya who obtained 

the payments in Kenya and then sent them to Odhiambo. 

Again, that is a far cry from De Csepel, in which the contract 

never envisioned performance anywhere other than the 

United States. See id.

 Third, Odhiambo’s allegation that he received a payment 

from the Kenyan government through the Kenyan 

intermediary while he was in Tanzania further undercuts his 

claim that the United States was a contractually designated 

place of performance. In short, the evidence shows this: 

When Odhiambo was in Kenya, Kenya made payment in 

Kenya. When Odhiambo was in Tanzania, Kenya made 

USCA Case #13-7100 Document #1509948 Filed: 08/29/2014 Page 19 of 37
20 

payment to an intermediary in Kenya, and that intermediary 

later transferred the money to Odhiambo in Tanzania. When 

Odhiambo was in the United States, Kenya made payment to 

an intermediary in Kenya, and that intermediary later 

transferred the money to Odhiambo in the United States. If 

Odhiambo were to move somewhere else, we see no reason to 

doubt that Kenya would make any further payments in Kenya, 

and that the money would be transferred by an intermediary to 

Odhiambo in his new locale. That record further buttresses 

the conclusion that the contract operated precisely as the kind 

of “pay wherever you are” arrangement that we rejected as a 

basis for jurisdiction over foreign states in Peterson and 

Goodman. 

 Odhiambo nonetheless suggests that our direct effect 

analysis should apply differently here because Kenya 

arranged for him to seek asylum in the United States. See

Odhiambo Br. 50; Odhiambo Reply Br. 25-26. Under his 

theory, refugees would be allowed to bring suits in U.S. 

courts against their former sovereigns if those sovereigns 

played a role in the refugees’ relocation to the United States. 

Whatever the wisdom of that proposed refugee exception as a 

policy matter, the FSIA does not recognize it. So neither can 

we. We must adhere to the text of the statute, especially in 

FSIA cases. See Republic of Argentina v. NML Capital, Ltd., 

134 S. Ct. 2250, 2255-56 (2014). As we explained above, the 

FSIA is the sole way for a plaintiff suing a foreign sovereign 

to invoke the jurisdiction of U.S. courts, and the exceptions 

enumerated by the FSIA are exhaustive. See Nelson, 507 U.S. 

at 355; Peterson, 416 F.3d at 86; cf. Law v. Siegel, 134 S. Ct. 

1188, 1196 (2014) (enumeration of exemptions “confirms that 

courts are not authorized to create additional exceptions”). In 

other words, any claim to a FSIA exception “must stand on 

the Act’s text. Or it must fall.” NML Capital, 134 S. Ct. at 

USCA Case #13-7100 Document #1509948 Filed: 08/29/2014 Page 20 of 37
21 

2256. Odhiambo’s proposed refugee exception cannot stand 

on the FSIA’s text. So it must fall.

 To be sure, Congress and the President of course may 

enact new legislation to amend the FSIA and include an 

exception of the kind that Odhiambo proposes. But until then, 

the role of this Court “is to apply the statute as it is written –

even if we think some other approach might accord with good 

policy.” Burrage v. United States, 134 S. Ct. 881, 892 (2014) 

(internal quotation marks and alterations omitted); see NML 

Capital, 134 S. Ct. at 2258 (“[t]he question . . . is not what 

Congress ‘would have wanted’ but what Congress enacted in 

the FSIA”) (quoting Weltover, 504 U.S. at 618). 

* * * 

 None of the FSIA exceptions asserted by Odhiambo 

applies to this case. His suit therefore cannot proceed. We 

affirm the judgment of the District Court.3

So ordered. 

 3

 The District Court did not abuse its discretion in denying 

Odhiambo’s motion for reconsideration and leave to file a second 

amended complaint. Odhiambo’s only plausible argument was that 

he had new evidence, but the District Court reasonably concluded 

that the evidence was not new. See Odhiambo v. Republic of 

Kenya, 947 F. Supp. 2d 30 (D.D.C. 2013) (Odhiambo II); see also 

Ciralsky v. CIA, 355 F.3d 661, 668, 671-73 (D.C. Cir. 2004). 

USCA Case #13-7100 Document #1509948 Filed: 08/29/2014 Page 21 of 37
PILLARD, Circuit Judge, concurring in part and dissenting

in part: I agree with the majority that this case involves 

commercial activity under the Foreign Sovereign Immunities

Act, and that neither the waiver exception to the Act nor 

either of the first two clauses of the FSIA’s commercial 

activity exception applies to permit Peter Odhiambo’s suit. I 

write separately to explain why I believe that this case should 

have been allowed to proceed under the third clause of the 

commercial activity exception. 

Odhiambo’s claim is based on “an act outside the 

territory of the United States in connection with a commercial 

activity of the foreign state elsewhere . . . that . . . cause[d] a

direct effect in the United States.” 28 U.S.C. § 1605(a)(2).

An effect in the United States in connection with a 

sovereign’s commercial activity abroad is “direct” under the 

third clause of the FSIA’s commercial activities exception “if 

it follows as an immediate consequence of the defendant’s 

activity.” Republic of Arg. v. Weltover, Inc., 504 U.S. 607, 

618 (1992) (internal quotation marks and ellipsis omitted).

To be “direct,” the effect need be neither “substantial” nor 

“foreseeable,” so long as it is more than “purely trivial.” Id.

The facts that Odhiambo alleges, and the reasonable 

inferences drawn in his favor from those facts, support the 

conclusion that there is a direct effect in the United States 

caused by actions of Kenya in connection with a commercial 

activity. Various of Kenya’s actions in connection with the 

reward contract that forms the basis of Odhiambo’s claim

constitute “direct effects,” including:

x Kenya offered rewards to members of the public for 

information about tax evasion, without limiting the 

offer to Kenyan nationals or residents, and without 

specifying the place of performance of such contract;

USCA Case #13-7100 Document #1509948 Filed: 08/29/2014 Page 22 of 37
2

x The offer contained the promise that the Kenyan 

government would keep informants’ identities secret 

in order to protect them from reprisals, but Kenya 

failed to keep Odhiambo’s whistle blowing secret, 

thereby exposing him to threats against his life and 

those of his family members, in response to which 

Kenyan government officials actively assisted in 

resettling Odhiambo as a refugee in the United States;

x Exiled in the United States, Odhimabo necessarily 

experiences here the direct effect of Kenya’s 

continued failure to pay. 

In sum, Odhiambo is present here, cannot safely return to 

Kenya, and experiences Kenya’s non-payment here in the 

United States as the “immediate consequence” of Kenya’s 

actions. 

The FSIA requires that we consider all facts relevant to 

whether the unlawful conduct of a foreign sovereign acting in 

its commercial capacity had a “direct effect” in the United 

States. We are bound to do so by the statute’s terms, the 

Supreme Court’s decision in Weltover, 504 U.S. 607, and our 

own court’s FSIA precedents, see, e.g., De Csepel v. Republic 

of Hung., 714 F.3d 591 (D.C. Cir. 2013); Cruise Connections 

Charter Mgmt. 1, LP v. Att’y Gen. of Can., 600 F.3d 661 

(D.C. Cir. 2010). 

The majority’s determination that the lack of a place-ofperformance clause defeats Odhiambo’s claim misconstrues 

the FSIA’s direct-effects analysis. The court’s opinion 

misreads the prior cases to “turn[] on whether the contract in 

question established the United States as a place of 

performance.” Slip Op. at 13. But our decision in Cruise 

Connections explicitly held to the contrary, that “[t]he 

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3

FSIA . . . requires only that [the] effect [in the United States] 

be ‘direct,’ not that the foreign sovereign agree that the effect 

would occur” in the United States. 600 F.3d at 665 (emphasis 

added). In conflict with Cruise Connections, the majority 

insists that, unless the plaintiff can point to a contract term 

explicitly or implicitly designating the United States as the 

place of performance, any claim arising from foreign 

commercial activity affects the U.S. “only indirectly” and thus 

is barred by the FSIA. Slip Op. at 13. I disagree. 

Not every claim that relates to a foreign sovereign’s 

commercial activity must be governed by a place-ofperformance clause, such as one might expect to find in a 

commercial contract, before the claim may proceed under our 

FSIA direct-effect clause precedents. Indeed, claims based on 

actions “in connection with” commercial activity need not 

even be contract claims. See, e.g., Princz v. Fed. Republic of 

Ger., 26 F.3d 1166, 1168 (D.C. Cir. 1994) (claiming false 

imprisonment, assault and battery, negligent and intentional 

infliction of emotional distress, and quantum meruit). But see

28 U.S.C. § 1605(a)(5)(B) (recognizing immunity for 

noncommercial torts with respect to “any claim arising out of 

malicious prosecution, abuse of process, libel, slander, 

misrepresentation, deceit, or interference with contract 

rights”). Even where the claim does arise out of a contract,

specification of the anticipated place of performance is

especially unlikely in a case such as this one, involving a 

unilateral contract drafted by the foreign government whose 

own inability to protect the plaintiff accounts for his having to 

flee, cf. De Csepel, 714 F.3d 591, especially when that 

government’s own officials helped to direct the plaintiff to the 

United States. It is common ground that, in cases in which 

parties engage in commercial activities abroad and a plaintiff 

thereafter unilaterally decides to relocate to the United States 

where he then seeks to enforce claims relating to the foreign 

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4

commercial activity, the direct-effects requirement is not 

satisfied. See, e.g., Peterson v. Royal Kingdom of Saudi 

Arabia, 416 F.3d 83 (D.C. Cir. 2005); Zedan v. Kingdom of 

Saudi Arabia, 849 F.2d 1511 (D.C. Cir. 1988). But the result 

should be different where, for example, a foreign government 

hires an American employee or firm abroad without 

specifying place of performance, and, once the work is 

complete, reneges on payment and deports the employee to 

the United States. Where a foreign government causes a 

plaintiff to leave its country and helps direct him to the United 

States, as is alleged here, the FSIA should not bar suit against 

it in United States courts. 

To the extent that the majority opinion is simply a factspecific application of Weltover and our precedents, I believe 

it is in error for the reasons I explain. But the majority 

opinion appears to go further, to create a new legal rule for 

FSIA direct-effect clause claims, requiring an express or 

implied place-of-performance clause specifying the United 

States. Any such rule is in conflict with Weltover and our 

own decisions, so cannot have binding effect. See United 

States v. Old Dominion Boat Club, 630 F.3d 1039, 1045 (D.C. 

Cir. 2011) (“[W]hen a conflict exists within our own 

precedent, we are bound by the earlier decision.” (citing 

Indep. Cmty. Bankers of Am. v. Bd. of Governors of the Fed. 

Reserve Sys., 195 F.3d 28, 34 (D.C. Cir. 1999))).

I.

Odhiambo, a professional auditor at a private commercial 

bank in Kenya, accepted his government’s unilateral offer of a 

reward for information revealing tax fraud. The “Information 

Reward Scheme” promised a 1% bounty for information 

leading to the identification of “hitherto undisclosed taxes,” 

and 3% for information leading to their recovery. J.A. 16. 

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5

The published offer called on the public to share such 

information, and promised that “volunteers are assured of 

strict confidentiality to safeguard identities.” Id. The offer 

included e-mail addresses as well as other contact 

information, and did not geographically place any limit on the 

sources from whence whistleblowers might provide the 

needed information. 

Odhiambo responded to the Kenyan government’s offer 

by providing reliable information about a widespread scheme 

of criminal tax evasion that was being operated through the 

private commercial bank at which he worked. The scheme 

was so extensive that, once the government learned of it and 

appointed a task force to investigate, the bank was placed 

under statutory management and ultimately forced to close. 

(By that time, Odhiambo had left its employ and was working 

at the Central Bank of Kenya.) The information Odhiambo 

submitted led to detection of hundreds of millions of dollars 

in unpaid taxes and the recovery of a large part of that figure. 

Kenya began to fulfill its end of the bargain by giving 

Odhiambo initial payment of a token sum to show its 

appreciation, followed by a percentage payment relating to 

only a small fraction of the fraud he identified. 

Kenya failed to keep Odhiambo’s identity secret, despite 

its promise. He received anonymous phone calls telling him 

to leave Kenya. As the bank investigation intensified, police 

officers with “a bogus warrant” confronted Odhiambo at work 

and sought to search his home—an effort that Odhiambo 

managed to deflect with the help of the Central Bank’s 

governor and that the police did not then pursue. J.A. 7. 

Odhiambo received more threatening phone calls and 

“suspicious people were seen lurking around his house.” Id.

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6

Odhiambo’s performance under the reward contract and 

leaks regarding his identity as the whistleblower led directly 

to death threats against him and forced Odhiambo into exile in 

the United States. Before he left the country, Odhiambo 

moved his residence twice and changed his phone number. It 

was the Kenyan government that facilitated Odhiambo’s 

flight as a refugee, and that helped to select the United States 

as his destination. Various Kenyan governmental agencies 

and officials sought to help Odhiambo relocate abroad, 

including the Kenyan National Commission on Human Rights 

and the Kenyan Minister for Justice. The Kenyan Human 

Rights Commissioner facilitated Odhiambo’s meeting with 

the United States embassy, and helped to arrange for 

Odhiambo to leave the country as a refugee. 

Kenya actively facilitated Odhiambo becoming a refugee 

in the United States because it recognized that it could not 

protect his life in Kenya in the face of the threats against him 

triggered by his performance under its reward contract. Now 

that it is clear that Odhiambo cannot return to Kenya to sue, 

Kenya has reneged on millions it owes, instead raising the 

FSIA as a jurisdictional bar. 

II.

The FSIA’s authorization of suit based on a foreign 

sovereign’s “commercial activities” codifies the “restrictive 

theory” of sovereign immunity ascendant in international law 

at the time of the FSIA’s enactment. That theory recognizes 

that foreign governments are not immune from suit when they 

act in their commercial, as distinct from sovereign, mode. 

Permanent Mission of India to the United Nations v. City of 

New York, 551 U.S. 193, 199 (2007); Weltover, 504 U.S. at 

612-14. The limitations in the commercial activities 

exception—including, as relevant here, the direct-effects 

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7

requirement—fulfill the additional purpose of ensuring 

sufficient connection to the United States to warrant resort to 

our courts. See 28 U.S.C. § 1605(a)(2); see also id. § 1330(b)

(establishing personal jurisdiction over any claim not subject 

to immunity under sections 1605-1607 in which the foreign 

sovereign has been served with process). As the FSIA cases 

consistently demonstrate, there is no single factual sine qua 

non of a United States direct effect. Where the facts, taken 

together, show that a foreign government’s commercial 

activity has a direct effect in the United States, claims in 

United States court relating to that commercial activity are not 

barred by the FSIA. 

In Weltover, the Supreme Court held that, under the 

direct-effect prong of the commercial activities exception, “an 

effect is ‘direct’ if it follows ‘as an immediate consequence of 

the defendant’s activity.’” 504 U.S. at 618 (ellipsis omitted). 

Weltover requires consideration of all facts relevant to that 

inquiry. In that case, the Court’s conclusion that the 

rescheduling of Argentina’s currency-stabilizing bond had a 

direct effect in the United States was supported by various 

facts: the Swiss and Panamanian creditors’ preference for 

payment in New York; Argentina’s prior interest payments 

there; the debt’s designation in U.S. dollars; and, principally, 

the fact that money the creditors insisted be paid to their New 

York bank “was not forthcoming.” Id. at 619. Weltover did 

not turn on any ex ante contractual specification of the United 

States as the sole place of performance. The contract 

contemplated that the money could be paid in any one of 

several international financial centers, at the election of the

creditor, and plaintiffs only later chose New York as the 

payment locale. Id. at 609-10. Instead of requiring an ex ante 

place-of-performance clause, the Court considered a range of 

facts it deemed relevant to the connection between the 

commercial activity, the plaintiffs’ claim, and the United 

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8

States. A handful of relevant facts sufficed to demonstrate 

that the effect of Argentina’s rescheduling of its bonds was 

directly felt in the United States, so that foreign sovereign 

immunity did not bar the suit. Id. at 618-19.

Weltover overruled the precedents of this and other 

circuits that had limited the effects that could qualify as 

“direct” under the FSIA’s commercial activities exception to 

those that were “substantial” and “foreseeable.” Id. at 618.

To the extent the majority adopts a requirement of a place-ofperformance clause designating the United States, its analysis 

conflicts with Weltover by effectively “engraft[ing] on

§ 1605(a)(2)’s commercial activity exception” the 

requirement of “foreseeability” that Weltover rejected. 

McKesson Corp. v. Islamic Republic of Iran, 52 F.3d 346, 350

(D.C. Cir. 1995). Indeed, to require ex ante contractual 

designation of the United States as the place of performance 

imposes a particularly restrictive form of the overruled 

“foreseeability” condition, demanding not only an objectively 

“foreseeable” effect, as this court’s overruled precedent had, 

but a contract term memorializing that the parties actually 

contemplated an effect in the United States. Cf. Maritime 

Int’l Nominees Establishment v. Republic of Guinea, 693 F.2d 

1094, 1111 & n.28 (D.C. Cir. 1982) (noting, under overruled 

foreseeability requirement, that inquiry did “not require intent 

in the subjective sense,” but only must have been “reasonably

contemplated”). 

Following Weltover, our sister circuits have rejected the 

restrictive contention that a contract must explicitly specify 

the United States as a place of performance for its breach to 

cause a direct effect. See DRFP L.L.C. v. Republica

Bolivariana de Venez., 622 F.3d 513, 517 (6th Cir. 2010) 

(“We do not read Weltover as creating an additional 

requirement that the United States be specifically mentioned 

USCA Case #13-7100 Document #1509948 Filed: 08/29/2014 Page 29 of 37
9

in the terms of the notes, as suggested by Venezuela.”); Hanil 

Bank v. PT. Bank Negara Indon. (Persero), 148 F.3d 127, 133 

(2d Cir. 1998) (“Even assuming that Indonesia is the place of 

performance under letter of credit law, Weltover does not 

insist the ‘place of performance’ be in the United States in 

order for a financial transaction to cause a direct effect in this 

country. Rather, it only requires an effect in the United States 

that follows as an immediate consequence of the defendant’s

actions overseas.”); see also Callejo v. Bancomer, S.A., 764 

F.2d 1101, 1110-12 (5th Cir. 1985) (finding a direct effect in 

case involving a claim for payment on Mexican Certificates 

of Deposit despite an express clause specifying payment in 

Mexico, even under pre-Weltover analysis requiring that a 

direct effect be substantial and foreseeable). Because the 

majority opinion’s narrowing approach to our FSIA directeffects precedent, which requires a U.S. place-of-performance 

clause, conflicts with Weltover and the decisions of this and 

other circuits, I decline to join it.

It is not the foreseeability or the bargained-for character 

of an effect that matters. Weltover rejected a requirement of 

foreseeability and, a fortiori, any requirement of a place-ofperformance clause. Instead, the animating rationale of the 

direct-effect requirement is to assure that a foreign 

sovereign’s commercial activity abroad has a sufficient 

connection to the United States to warrant suit here. That is 

why the decisions of the Supreme Court and our court have 

stressed the need of an “immediate consequence” in the 

United States relating to the foreign sovereign’s commercial 

activity. See, e.g., Weltover, 504 U.S. at 618. It is also why 

we have denied jurisdiction in cases in which plaintiffs 

unilaterally, fortuitously, or after a long period of time and 

intervening events move to the United States, and, without 

any other effect here, invoke the jurisdiction of our courts.

See, e.g., Princz, 26 F.3d at 1172-73. The connection must not 

USCA Case #13-7100 Document #1509948 Filed: 08/29/2014 Page 30 of 37
10

be one created unilaterally by the plaintiff, but must be a 

direct effect of an act in connection with the sovereign’s 

commercial activity. That requirement prevents opportunistic 

plaintiffs from unilaterally haling foreign sovereigns into 

United States courts, but it also ensures that private parties are 

not disadvantaged in commercial dealings with foreign state 

entities by such entities’ inappropriate assertion of an 

immunity designed to apply only to actions in the 

government’s sovereign capacity.1

The majority arbitrarily shrinks the class of contract 

claims that may survive the FSIA sovereign-immunity bar to 

those in which there is a United States place-of-performance 

clause—most likely cases in which a foreign sovereign offers 

or negotiates such a term to induce agreement from parties 

who want to keep their money in the United States. Needless 

to say, Kenya’s unilateral offer of reward for information 

about tax evasion, accepted by a Kenyan national who at the 

time had no intention of becoming a refugee from his home 

country, was not such a case. 

An ex ante contractual choice of the United States as the 

place of performance would, of course, typically support a 

finding of direct effect, but Weltover makes clear that such a 

clause is not necessary. Indeed, even in those cases in which 

the United States was contractually specified as the place of 

performance, this court has not ended its inquiry once it 

1 The “immediate consequence” inquiry does not hinge on the nonexistence of any arguably intervening event. It is always possible 

to identify some “intervening event” if one parses finely enough, be 

it changed economic or political conditions affecting commercial 

activities, or the purchase of a plane ticket for travel with a 

stopover. The focus of the inquiry is, instead, on whether the 

actions of both parties create a sufficient nexus to the United States 

for a breach to cause a non-trivial consequence here.

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11

identified such a clause—as it presumably would, were a 

place-of-performance clause to be the lynchpin the majority 

makes it. Instead, following Weltover, our decisions have 

taken account of all facts tending to show whether there is a 

genuine nexus to the United States or, conversely, a plaintiff’s 

unilateral or gratuitous choice of a U.S. forum.

In Cruise Connections, for example, we found a direct 

effect in the absence of a U.S. place-of-performance clause.

The contract in that case directed “payments to an account of 

Cruise Connections’ choosing rather than specifically to an 

account in the United States.” 600 F.3d at 663-64 (internal 

quotation marks omitted). This court declined to consider 

whether “the contract required [the defendant] to pay via wire 

transfer to a U.S. bank” or whether its “failure to do so 

qualifie[d] as a direct effect.” Id. at 666. We instead found a 

direct effect because Canada’s breach meant that “revenues 

that would otherwise have been generated in the United States 

were ‘not forthcoming.’” Id. at 665.

In Goodman Holdings v. Rafidain Bank, 26 F.3d 1143 

(D.C. Cir. 1994), we also looked to all facts relevant to 

discerning any potential “direct effect,” not restricting our 

consideration to whether the United States was the 

contractually designated place of payment or other contract 

performance. The overarching question remained whether 

there was an “‘immediate consequence’ in the United States” 

of the defendant’s breach. Id. at 1146. In that case, past 

practice was relevant to our conclusion that the defendant

“might well have paid [the plaintiffs] from funds in United 

States banks but it might just as well have done so from 

accounts located outside of the United States, as it had 

apparently done before.” Id. at 1146-47. We accordingly 

found no direct effect.

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12

Odhiambo’s circumstances are in certain ways most 

analogous to those of De Csepel, 714 F.3d 591. The bailment 

contract in that case, like the unilateral contract here, arose in 

circumstances in which it would be unrealistic to expect an 

explicit place-of-performance clause, let alone one selecting 

the United States as that place. The contract in De Csepel 

was not written. The complaint alleged that the Hungarian 

government and Nazi collaborators confiscated the Herzog 

family’s art collection, and that Hungary’s “possession or repossession” of the collection “constituted an express or 

implied-in-fact bailment contract.” Id. at 598 (internal

quotation marks omitted). The contract was formed as a 

“bailment” following the collection’s emphatically nonnegotiated expropriation during World War II. 

Hungary kept and used the confiscated artwork for 

decades until the Herzog family sought its return. The 

complaint did not clearly allege when the bailment arose, and 

we noted that plaintiffs “never expressly allege[d] that the 

return of the artwork was to occur in the United States.” Id. at 

601. By the time the parties began their unsuccessful 

negotiation for the return of the artwork, however, Hungary 

was well aware that some of the family lived in the United 

States (with others living in Italy), and we held that 

Hungary’s commercial activity caused a direct effect in the 

United States because “Hungary promised to return the 

artwork to members of the Herzog family it knew to be 

residing in the United States.” Id. The continued deprivation 

of that artwork thus impinged on the rights of the Herzogs in 

the United States, in a manner analogous to the effect on 

Odhiambo of Kenya’s continued failure to pay him here. 

The majority strives to fit De Csepel into its place-ofperformance clause rubric by describing the case as one in 

which, “from the moment of contract formation, the United 

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States was a contractually designated place of performance.” 

Slip Op. at 15. No contract clause in fact required 

performance in the United States. See 714 F.3d at 601 (noting 

that complaint did not specify any agreement that artwork was 

to be returned to the United States). Rather, the reason this 

court had little difficulty finding a direct effect was because in 

that case, actions in relation to the commercial activity created 

a genuine nexus between the claim and the United States.

The majority points to Peterson as support for its 

requirement of a place-of-performance clause. In Peterson,

however, factors not present here tilted the scale against any 

finding of a direct effect: most prominently, the underlying 

transaction occurred entirely in Saudi Arabia, and the 

defendant played no role in the plaintiff’s unilateral decision 

to relocate to the United States. Peterson had worked in Saudi 

Arabia for over a decade before he moved to the United States 

and sued for the refund of retirement contributions to which 

he was entitled once the Saudi government decided to exclude 

foreigners from its retirement benefit program. In finding no 

direct effect, we emphasized that “the entire transaction took 

place outside the United States.” 416 F.3d at 91. The Saudi 

government had paid Peterson his refund in Saudi Arabia, and 

Peterson had previously deposited those funds in a Saudi 

bank. Id. Peterson simply later chose to move to the United 

States, and his desire for payment here was entirely of his 

own making. Odhimabo’s move to the United States was not 

unilateral like Peterson’s, but was necessitated by Kenya’s 

failure to keep secret Odhiambo’s whistle blowing. 

The place-of-payment contract term in Peterson (in 

which we found no direct effect) was materially identical to 

that in Cruise Connections (in which we did). In each case, 

the contract permitted the plaintiff to elect where payment 

would be made. See Peterson, 416 F.3d at 91 (“Saudi Arabia 

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‘represented’ to non-Saudi employees that it would refund 

[their retirement] contributions ‘wherever the workers 

lived.’”); Cruise Connections, 600 F.3d at 663, 666

(recounting district court’s finding that contract provided for 

“payment to an account of [the plaintiffs’] choosing,” an issue 

the court of appeals did not reach because it concluded that “it 

makes no difference where [defendant] would have paid 

Cruise Connections”). And, in each case, the plaintiff elected 

payment in the United States. But in both cases, we looked 

beyond the simple inquiry of whether a contract clause 

designated the United States as the place of payment. See 

also Weltover, 504 U.S. at 609-10 (contract provided for 

payment “at the election of the creditor” in any of several 

contractually permitted destinations, and creditor chose New 

York only after Argentina unilaterally rescheduled the debt). 

Taken together, the cases show that a place-of-performance 

clause, which for the majority is conclusive, is correctly 

considered to be neither the sole nor the determining factor. 

Under the holistic analysis the precedents require, the 

direct-effects test is readily met here, as it was in Weltover,

Cruise Connections, and De Csepel. At his own 

government’s invitation, Odhiambo risked his life to help 

Kenya recover a large amount of stolen money. Kenya’s 

invitation placed no restrictions on where a whistleblower 

such as Odhiambo could come from, nor on where he could 

demand payment. And, given the serious risks he faced in 

coming forward as a whistleblower, Kenya promised him 

confidentiality. Odhiambo is in the United States and 

experiencing the effect of Kenya’s nonpayment here as the 

direct consequence of accepting Kenya’s offer of reward for 

information, and Kenya’s failure to fulfill its part of the 

bargain by keeping Odhiambo’s identity secret and paying 

him what it owes. Odhiambo moved to the United States, 

instead of some other locale, not merely with Kenya’s 

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knowledge, but with its guidance and help. Under these 

circumstances, Odhiambo’s presence in the United States and 

the financial loss he suffers here are a direct effect of actions 

in connection with the commercial activity of the reward 

contract. Those effects suffice to provide a non-trivial nexus 

between the parties’ commercial activity and the United 

States adequate to support jurisdiction here under the FSIA. 

Odhiambo is no opportunistic forum shopper. He did not 

unilaterally opt to come to the United States to experience the 

effects of Kenya’s non-payment of the money it owes him. 

As Kenya acknowledges, Odhiambo—unlike the plaintiffs in 

any of the cases on which the majority relies—is unable to 

return to sue in the foreign country that now asserts its 

immunity. The United States may not have been the chosen 

place of performance at the time Odhiambo accepted Kenya’s 

offer, but Weltover expressly eschews any foreseeability 

requirement. The absence of a United States place-ofperformance clause in Kenya’s reward scheme cannot negate 

the fact that Kenya’s nonpayment is felt here, as the direct 

effect in the United States of Kenya’s commercial activities 

with Odhiambo. I would thus hold that Kenya is not entitled 

under the FSIA to sovereign immunity from Odhiambo’s suit. 

U.S. courts have enforced rewards-based contracts 

against foreign sovereigns as far back as 1798. See Ellison v. 

The Bellona, 8 F. Cas. 559, 559 (D.S.C. 1798). That is 

because, as the Eleventh Circuit aptly explained, “[a]nything 

that makes it easier for countries to welch on their promises to 

pay for information decreases the real value of any reward 

they offer and makes it less likely that an offer will be 

accepted” and so “jeopardize[s] . . . [the] vital interests . . . of 

every country that offers rewards for information, including 

this country.” Guevara v. Republic of Peru, 468 F.3d 1289, 

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1303-04 (11th Cir. 2006).2 Failing to recognize jurisdiction 

here rewards Kenya’s decision to default on its promise to pay 

Odhiambo for the valuable information he provided at great 

risk to himself. It thereby threatens the interests of all 

countries, including our own, to encourage disclosure of 

information that may be critical to effective enforcement of 

the law against threats ranging from tax evasion to terrorism.3

I believe finding a direct effect on these facts is 

warranted and so, respectfully, dissent.

2 The court eventually found no “direct effect” in the United States of the 

reward contract in Guevara, but did so, not for lack of contractual 

designation of the United States as the place of performance, but because 

Guevara was in the United States as “‘an immediate consequence’ of his 

criminal activity, not of Peru’s offer of a reward for Montesinos’s 

capture.” Guevara v. Republic of Peru, 608 F.3d 1297, 1310 (11th Cir.

2010).

3 Reward contracts are an important source of valuable information for 

governments around the world, and there are strong reasons to believe that 

they should be enforceable, and be understood as such by people who 

might respond to them. The U.S. Department of State, for example, runs a 

“Rewards for Justice” program that currently offers a reward of up to $25 

million for Ayman al-Zawahiri (the current head of al-Qaeda), among 

others. See Rewards for Justice, Most Wanted, 

http://www.rewardsforjustice.net/english/most-wanted/all-regions.html 

(last visited Aug. 12, 2014). The United States additionally offers rewards 

pursuant to the False Claims Act, and the Internal Revenue Service,

Securities and Exchange Commission, and Commodity Futures Trading 

Commission also administer rewards programs. According to a 2012 

news report, the biggest reward paid at that point was $104 million by the 

IRS for to a bank employee who, like Odhiambo, provided information on 

tax evasion. See David Kocieniewski, Whistle-Blower Awarded $104 

Million by I.R.S., N.Y. Times, Sept. 12, 2012, at A1.

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