Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-98-07063/USCOURTS-caDC-98-07063-0/pdf.json

Parties Involved:
Creighton Limited
Appellant
Government of the State of Qatar
Appellee

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 7, 1998 Decided July 2, 1999

No. 98-7063

Creighton Limited,

Appellant

v.

Government of the State of Qatar,

Appellee

Appeal from the United States District Court

for the District of Columbia

(No. 97cv00191)

Joseph P. Hornyak argued the cause and filed the briefs

for appellant.

Eugene D. Gulland argued the cause and filed the brief for

appellee.

Before: Ginsburg, Henderson, and Rogers, Circuit Judges.

Opinion for the court filed by Circuit Judge Ginsburg.

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Ginsburg, Circuit Judge: Creighton Limited, a Cayman

Islands corporation with offices in Tennessee, contracted with

the Government of the State of Qatar to build a hospital in

Doha, the Qatari capital. Following a dispute over its performance, Creighton obtained an arbitral award against Qatar

from the International Chamber of Commerce in Paris.

Creighton now seeks to enforce the award in the United

States District Court for the District of Columbia. Qatar

claims the court lacks subject matter jurisdiction over the

action pursuant to the Foreign Sovereign Immunities Act of

1976, 28 U.S.C. ss 1330, 1602-1611, and lacks personal jurisdiction over Qatar pursuant to the Due Process Clause of the

Fifth Amendment to the Constitution of the United States.

We hold that the district court has subject matter jurisdiction

but affirm its dismissal of Creighton's suit for lack of personal

jurisdiction.

I. Background

In the late 1970s the Government of Qatar decided to build

a new hospital in Doha. Creighton obtained the necessary

Qatari sponsor, submitted the low bid, and in 1982 contracted

with Qatar to build the hospital. The contract required

Creighton to obtain a performance bond from a Qatari issuer

and to maintain an office in Qatar, to which notices under the

contract would be sent. Qatar was to pay Creighton in Qatar,

and in fact all payments were made there in Qatari riyals.

The contract provided that it was to be performed and

interpreted under Qatari law and that all disputes were to "be

finally settled under the Rules of Conciliation and Arbitration

of the International Chamber of Commerce."

In 1986 Qatar expelled Creighton from the construction site

for unsatisfactory performance. Creighton contested its expulsion by commencing arbitration before the ICC in 1987.

Because the contract did not specify a place for arbitration,

the ICC decided to conduct the arbitration in Paris. Qatar

willingly participated in the arbitration, which resulted in an

order for Qatar to pay Creighton damages, interest, and

attorney's fees totaling over $8 million. Qatar then filed a

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court action in France to set aside the award as invalid under

French law, which the Supreme Court of France ultimately

rejected. Nonetheless, Creighton has been unable to enforce

the award in France. It attempted to attach Qatari assets

located there but the Superior Court of Paris held the

particular assets in question were immune from attachment

under French law. Creighton's appeal of that decision is now

pending before the Supreme Court of France.

Meanwhile, Creighton filed this action seeking enforcement

of the award in the United States District Court for the

District of Columbia; Qatar moved to dismiss on a number of

grounds. The district court granted the motion on the

ground that it lacks personal jurisdiction over Qatar because

Qatar does not have sufficient contact with the United States

to make it amenable to suit here consistent with the due

process requirement of the fifth amendment.

II. Analysis

Qatar claims the district court lacks both subject matter

jurisdiction over this action, pursuant to the Foreign Sovereign Immunities Act, and personal jurisdiction over Qatar,

pursuant to the due process clause. Under the FSIA, the

district court has subject matter jurisdiction of a civil action

against a foreign state only if "the foreign state is not entitled

to immunity either under [the immunity provisions of the

FSIA itself, 28 U.S.C. ss 1605-1607] or under any applicable

international agreement." 28 U.S.C. s 1330(a).

Creighton claims that by agreeing to arbitrate in France

Qatar impliedly waived both its sovereign immunity, thereby

conferring subject matter jurisdiction upon the court, see id.

s 1605(a)(1) & (6), and its due process objection, thereby

conferring personal jurisdiction upon the court. Alternatively, Creighton claims that Qatar's agreement to arbitrate in

France confers subject matter jurisdiction, see id.

s 1605(a)(6), and its contacts with the United States are

sufficient to satisfy the constitutional requirements of personal jurisdiction. Although we hold below (in Part II.A.2.b) that

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the court has subject matter jurisdiction pursuant to

s 1605(a)(6), we find it necessary also to discuss s 1605(a)(1)

because one of Creighton's due process arguments (see Part

II.B.1) presupposes that Qatar, by agreeing to arbitrate in

France, waived its immunity pursuant to s 1605(a)(1). We

cannot resolve that due process argument without addressing

the claim about s 1605(a)(1) upon which it is predicated.

A. Subject Matter Jurisdiction

There are two prerequisites to the district court having

subject matter jurisdiction over this case. First, there must

be a basis upon which a court in the United States may

enforce a foreign arbitral award; and second, Qatar must not

enjoy sovereign immunity from such an enforcement action.

We discuss each requirement separately.

1. The New York Convention

Both France and the United States, but not Qatar, are

parties to the so-called New York Convention, a multilateral

treaty providing for "the recognition and enforcement of

arbitral awards made in the territory of a State other than

the State where the recognition and enforcement of such

awards are sought." Convention on the Recognition and

Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, art. I.1, 21 U.S.T. 2517, reprinted in 9

U.S.C.A. s 201 (historical and statutory note). The U.S.

legislation implementing the Convention declares that

[a]n action or proceeding falling under the Convention

shall be deemed to arise under the laws and treaties of

the United States. The district courts of the United

States ... shall have original jurisdiction over such an

action or proceeding, regardless of the amount in controversy.

9 U.S.C. s 203.

That the New York Convention applies to the arbitral

award Creighton obtained against Qatar in France, and that

the award is therefore enforceable in United States courts, is

undisputed. See Restatement (Third) of Foreign Relations

Law s 487 comment b (1987) ("the critical element is the

place of the award: if that place is in the territory of a party

to the Convention, all other Convention states are required to

recognize and enforce the award, regardless of the citizenship

or domicile of the parties to the arbitration"). If Qatar were

a private party, then there could be no doubt about the

subject matter jurisdiction of the district court; because it is

a foreign state, however, we must consider the effect of the

FSIA upon the court's power to hear this case.

2. Sovereign Immunity

The FSIA is "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). A foreign

state is "presumptively immune from the jurisdiction of United States courts," Saudi Arabia v. Nelson, 507 U.S. 349, 355

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(1993), that is, the state is immune unless the particular

lawsuit comes within an exception in the FSIA. See 28

U.S.C. s 1604. Creighton claims that the exceptions for an

implied waiver and for arbitration, see id. s 1605(a)(1), (6),

apply to this case.

a. Implied Waiver

The former exception provides:

(a) A foreign state shall not be immune from the

jurisdiction of courts of the United States or of the

States in any case--

(1) in which the foreign state has waived its immunity ... by implication.

Id. s 1605(a)(1). Creighton claims that Qatar, by agreeing to

arbitrate in France, implicitly waived its sovereign immunity

in the United States for, by virtue of the New York Convention, Qatar was "on notice" that an arbitral award rendered in

France would be enforceable in this country. Qatar responds

that "the FSIA and decisions applying it make clear that a

sovereign's agreement to arbitrate in a New York Convention

state is not a waiver of immunity to suit in the U.S. unless the

foreign sovereign is also party to the New York Convention."

The FSIA does not define an implied waiver. We have,

however, followed the "virtually unanimous" precedents construing the implied waiver provision narrowly. Shapiro v.

Republic of Bolivia, 930 F.2d 1013, 1017 (2d Cir. 1991). In

particular, we have held that implicit in s 1605(a)(1) is the

requirement that the foreign state have intended to waive its

sovereign immunity. See Princz v. Federal Republic of Germany, 26 F.3d 1166, 1174 (1994) ("[A]n implied waiver depends upon the foreign government's having at some point

indicated its amenability to suit"); Foremost-McKesson, Inc.

v. Islamic Republic of Iran, 905 F.2d 438, 444 (D.C. Cir.

1990) ("courts rarely find that a nation has waived its sovereign immunity ... without strong evidence that this is what

the foreign state intended").

The closest Creighton comes to arguing that Qatar intended to waive its sovereign immunity is in pointing to this

statement in the House Report accompanying the FSIA: "the

courts have found [implicit] waivers in cases where a foreign

state has agreed to arbitration in another country." H.R.

Rep. No. 94-1487, at 18 (1976), reprinted in 1976

U.S.C.C.A.N. 6604, 6617. Creighton claims Qatar's agreement to arbitrate in France should be deemed an implicit

waiver of its sovereign immunity in U.S. courts. Cf. id.

(explaining courts have also found such waivers "where a

foreign state has agreed that the law of a particular country

should govern a contract").

We follow the Second Circuit in rejecting such a broad

reading of the "implicit waiver" exception.

[I]f the language of the legislative history [were] applied

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literally, a foreign government would be subject to the

United States's jurisdiction simply because it agreed to

have the contract governed by another country's laws, or

agreed to arbitrate in a country other than itself, even

though the agreement made no reference to the United

States. Such an interpretation of s 1605(a)(1)'s "implicit

waiver" exception would vastly increase the jurisdiction

of the federal courts over matters involving sensitive

foreign relations.

Seetransport Wiking Trader v. Navimpex Centrala, 989 F.2d

572, 577 (2d Cir. 1993); see also Frolova v. Union of Soviet

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Socialist Republics, 761 F.2d 370, 377 (7th Cir. 1985) ("[M]ost

courts have refused to find an implicit waiver of immunity to

suit in American courts from a contract clause providing for

arbitration in a country other than the United States");

Maritime Int'l Nominees Estab. v. Republic of Guinea, 693

F.2d 1094, 1102 n.13 (D.C. Cir. 1982) (courts "have generally

assumed ... that Congress did not endorse the literal wording of the House Report"). Indeed, the intentionality "requirement is also reflected in the examples of implied waiver

set forth in the legislative history of s 1605(a)(1), all of which

arise either from the foreign state's agreement (to arbitration

or to a particular choice of law) or from its filing a responsive

pleading without raising the defense of sovereign immunity."

Princz, 26 F.3d at 1174; see also Shapiro, 930 F.2d at 1017

(explaining that legislative history lists examples of implicit

waiver "in which the waiver was unmistakable, and courts

have been reluctant to find an implied waiver where the

circumstances were not similarly unambiguous"); Maritime

Int'l, 693 F.2d at 1103 ("A key reason why pre-FSIA cases

[referred to in the legislative history] found that an agreement to arbitrate in the United States waived immunity from

suit was that such agreements could only be effective if

deemed to contemplate a role for United States courts").

The Supreme Court has also read s 1605(a)(1) to require

an intention to waive immunity in the United States, though

concededly upon facts rather different from those present

here. Argentina was sued in the United States for allegedly

sinking a Liberian tanker owned by U.S. interests during the

war between Great Britain and Argentina over the Falkland

Islands. Although Argentina had signed international treaties setting forth substantive rules of conduct and stating that

compensation would be paid for certain wrongs, the Court

held "we [do not] see how a foreign state can waive its

immunity under s 1605(a)(1) by signing an international

agreement that contains no mention of a waiver of immunity

to suit in United States courts or even the availability of a

cause of action in the United States." Argentine Republic,

488 U.S. at 442-43.

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Creighton seeks support in three cases in which the court

found an implied waiver where a foreign government had

agreed (like Qatar) to arbitrate in the territory of a state that

had signed the New York Convention. See Seetransport, 989

F.2d at 578-79; M.B.L. Int'l Contractors v. Republic of

Trinidad & Tobago, 725 F. Supp. 52, 54-55 (D.D.C. 1989);

Ipitrade Int'l S.A. v. Federal Republic of Nigeria, 465

F. Supp. 824, 826 (D.D.C. 1978). In each of these cases,

however, the defendant sovereign was (unlike Qatar) a signatory to the Convention. In Seetransport the Second Circuit

reasoned, correctly we think, that "when a country becomes a

signatory to the Convention, by the very provisions of the

Convention, the signatory state must have contemplated enforcement actions in other signatory states." 989 F.2d at 578.

Qatar not having signed the Convention, we do not think

that its agreement to arbitrate in a signatory country, without

more, demonstrates the requisite intent to waive its sovereign

immunity in the United States. As Creighton directs us to no

other evidence of such an intent, we hold that s 1605(a)(1)

does not confer subject matter jurisdiction upon the district

court.

b. Arbitration

The Congress added the following exception to the FSIA in

1988:

A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any

case ... in which the action is brought ... to confirm an

award made pursuant to ... an agreement to arbitrate,

if ... the agreement or award is or may be governed by

a treaty or other international agreement in force for the

United States calling for the recognition and enforcement

of arbitral awards.

28 U.S.C. s 1605(a)(6). Qatar does not contest Creighton's

assertion that because the New York Convention calls for

enforcement of any arbitral award rendered within the jurisdiction of a signatory country, the quoted exception applies by

its terms to this action. Indeed, it has been said with

authority that the New York Convention "is exactly the sort

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of treaty Congress intended to include in the arbitration

exception." Cargill Int'l S.A. v. M/T Pavel Dybenko, 991

F.2d 1012, 1018 (2d Cir. 1993); see also Chromalloy Aeroservices v. Arab Republic of Egypt, 939 F. Supp. 907, 909

(D.D.C. 1996).

Qatar's sole defense is that application of the arbitral

exception here would be impermissibly retroactive because it

was added to the statute after the contract was signed, indeed

after the Paris arbitration was commenced. In reply, Creighton suggests that because the FSIA is a jurisdictional statute,

its application to events that occurred before it was enacted

would not be retroactive, for the FSIA speaks not to the

primary conduct of the parties but rather to the question of

which tribunal may enforce the arbitral award.

As the Supreme Court has pointed out, it

regularly applie[s] intervening statutes conferring or

ousting jurisdiction, whether or not jurisdiction lay when

the underlying conduct occurred or when the suit was

filed. ... Application of a new jurisdictional rule usually takes away no substantive right but simply changes

the tribunal that is to hear the case. Present law

normally governs in such situations because jurisdictional

statutes speak to the power of the court rather than to

the rights or obligations of the parties.

Landgraf v. USI Film Prods., 511 U.S. 244, 274 (1994). So it

is in this case, for s 1605(a)(6) does not affect the contractual

right of the parties to arbitration but only the tribunal that

may hear a dispute concerning the enforcement of an arbitral

award. See McGee v. International Life Ins. Co., 355 U.S.

220, 224 (1957) (holding long-arm statute enacted after parties

entered into contract "did nothing more than to provide

petitioner with a California forum to enforce whatever substantive rights she might have against respondent"). Under

established principles, therefore, application of s 1605(a)(6) is

not retroactive, let alone impermissibly retroactive, and Qatar

does not claim that a different result should obtain simply

because a foreign state is affected by the change in a jurisdictional statute. See Princz, 26 F.3d at 1171 (postulating,

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though not deciding, that application of 1976 version of FSIA

to acts committed before 1952 would not be retroactive

because it "would not alter Germany's liability under the

applicable substantive law in force at the time, i.e. it would

just remove the bar of sovereign immunity to the plaintiff's

vindicating his rights under that law"). Accordingly, we hold

that the district court has subject matter jurisdiction over this

case pursuant to the arbitration exception in s 1605(a)(6).

B. Personal Jurisdiction

Not long ago we determined that the requirements of the

FSIA for personal jurisdiction, see 28 U.S.C. s 1330(b),* "do

not affect the constitutional in personam jurisdiction requirement [of] the due process clause of the Fifth Amendment."

Foremost-McKesson, 905 F.2d at 442 n.10; see also Maritime

Int'l, 693 F.2d at 1105 n.18 ("Of course, a finding of FSIA

personal jurisdiction, which would rest in part on a finding of

non-immunity, must comport with the demands of due process, and Congress intended that the Act satisfy those demands"); Gilson v. Republic of Ireland, 682 F.2d 1022, 1028

(D.C. Cir. 1982) ("a statute cannot grant personal jurisdiction

where the Constitution forbids it"). More recently, however,

the Supreme Court questioned whether the personal jurisdiction requirement of the due process clause applies at all to

foreign states, citing its prior holding that a State of the

Union is not a "person" for purposes of that clause. See

Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 619

(1992) (citing South Carolina v. Katzenbach, 383 U.S. 301,

323-24 (1966)). And the district court in turn has held that

the requirement of personal jurisdiction does not apply to a

foreign state. See Flatova v. Islamic Republic of Iran, 999

F. Supp. 1, 19-21 (D.D.C. 1998).

Nonetheless, Creighton does not argue the point. Rather,

Creighton claims that Qatar's entitlement to due process is

__________

* "Personal jurisdiction over a foreign state shall exist as to every

claim for relief over which the district courts have jurisdiction under

subsection (a) where service has been made under section 1608 of

this title."

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satisfied because Qatar waived its objections to personal

jurisdiction by agreeing to arbitrate in France or, in the

alternative, because Qatar has the requisite minimum contacts with the United States. We take the dispute as the

parties frame it, of course. See United Transp. UnionIllinois Legis. Bd. v. STB, 175 F.3d 163, 1999 WL 279754, at

*4 (D.C. Cir. May 7, 1999); cf. Afram Export Corp. v.

Metallurgiki Halyps, S.A., 772 F.2d 1358, 1362 (7th Cir. 1985)

("Countless cases assume that foreign companies have all the

rights of U.S. citizens to object to extraterritorial assertions

of personal jurisdiction. The assumption has never to our

knowledge actually been examined"). Accordingly, we proceed upon the unchallenged assumption that Qatar must be

afforded the protection it claims under the due process clause.

1. Waiver

For a court to assert personal jurisdiction over a defendant

not physically present in the forum, the defendant normally

must "have certain minimum contacts with [the forum] such

that the maintenance of the suit does not offend traditional

notions of fair play and substantial justice." International

Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Because

this "personal jurisdiction requirement recognizes and protects an individual liberty interest," however, like other individual rights it may be waived--for example, if the defendant

agrees "to submit to the jurisdiction of a given court." Insurance Corp. of Ireland, Ltd. v. Compagnie Des Bauxites,

456 U.S. 694, 702, 704 (1982).

Relying upon the legislative history of the FSIA, Creighton

claims that we need not engage in a separate due process

analysis of Qatar's contacts with the United States because

the Congress designed all the exceptions to sovereign immunity in the FSIA to comport with due process. The House

Report explains:

The requirements of minimum jurisdictional contacts and

adequate notice are embodied in the provision [namely,

28 U.S.C. s 1605(a)(1)-(5)]. Cf. International Shoe Co. v.

Washington, 326 U.S. 310 (1945), and McGee v. International Life Insurance Co., 355 U.S. 220, 223 (1957). ...

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Significantly, each of the immunity provisions in the bill

... requires some connection between the lawsuit and

the United States, or an express or implied waiver by the

foreign state of its immunity from jurisdiction. These

immunity provisions, therefore, prescribe the necessary

contacts which must exist before our courts can exercise

personal jurisdiction.

H.R. Rep. No. 94-1487, at 13, reprinted in 1976 U.S.C.C.A.N.

at 6612. Creighton reasons that because Qatar impliedly

waived its sovereign immunity under s 1605(a)(1), and alternatively because subject matter jurisdiction is proper under

what it terms the "arbitral waiver" provision of s 1605(a)(6),

Qatar has necessarily waived its objection to personal jurisdiction. The predicate for the first of these arguments we

rejected when we held (in Part II.A.2.a) that Qatar did not

impliedly waive its sovereign immunity under s 1605(a)(1).

We now consider the second argument.

The House Report upon which Creighton relies accompanied the original 1976 legislation. As noted above,

s 1605(a)(6) was added to the FSIA only in 1988. The 1976

legislative history, whatever it might be worth as a guide to

the original Act, has little if any bearing upon the later

amendment. Cf. Rein v. Socialist People's Libyan Arab

Jamahiriya, 162 F.3d 748, 761 (2d Cir. 1998) ("The elements

of s 1605(a)(7) [enacted in 1996], unlike those of the commercial activities exception [in s 1605(a)(2), which was enacted in

1976], do not entail any finding of minimum contacts").

In any event, Creighton's argument proceeds from a mistaken premise, for unlike s 1605(a)(1), s 1605(a)(6) deals not

with waiver but with forfeiture. Cf. United States v. Olano,

507 U.S. 725, 733 (1993) ("Waiver is different from forfeiture.

Whereas forfeiture is the failure to make the timely assertion

of a right, waiver is the intentional relinquishment or abandonment of a known right"). Section 1605(a)(6) reflects the

decision of the Congress to deny a foreign state immunity

from suit in the United States if that state has agreed to

arbitrate in any country that is party to a treaty (such as the

New York Convention) calling for the enforcement of an

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arbitral award. Unlike subsection (a)(1), subsection (a)(6)

contains no intentionality requirement. Therefore, although

subsection (a)(6) confers subject matter jurisdiction upon the

court, it does not follow that Qatar waived its objection to

personal jurisdiction.

Although we have held that Qatar did not, by agreeing to

arbitrate in France, waive its sovereign immunity under

s 1605(a)(1), it is conceivable (though as we shall see, unlikely) that a different conclusion could follow with regard to

whether Qatar waived its objection to personal jurisdiction

under the due process clause. Creighton, however, has not

cited, nor are we aware of, any authority for the proposition

that an agreement to arbitrate in one forum constitutes a

waiver of the right to challenge personal jurisdiction in another. On the contrary, the decisions of which we are aware

have held that an implicit waiver of personal jurisdiction in a

defendant's agreement to litigate or to arbitrate in a particular jurisdiction is applicable only within that jurisdiction. See

Victory Transport Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F.2d 354, 363 (2d Cir. 1964) ("By

agreeing to arbitrate in New York, where the United States

Arbitration Act makes such agreements specifically enforceable, the [government of Spain] must be deemed to have

consented to the jurisdiction of the court that could compel

the arbitration proceeding in New York. To hold otherwise

would be to render the arbitration clause a nullity"); Microfibres, Inc. v. McDevitt-Askew, 20 F. Supp. 2d 316, 322 (D.R.I.

1998) (holding agreement to litigate contractual disputes in

Rhode Island implicitly waived right to challenge personal

jurisdiction there); Inso Corp. v. Dekotec Handelsges, 999

F. Supp. 165, 167 (D. Mass. 1998) (holding "contractual

stipulation to a particular forum implies consent to personal

jurisdiction in that forum").

While the analogy is imperfect, we think it instructive to

compare the New York Convention to the Full Faith and

Credit Clause of the United States Constitution: "Full Faith

and Credit shall be given in each State to the ... judicial

Proceedings of every other State." Art. IV, s 1; see also 28

U.S.C. s 1738. It is implausible that a defendant in ConnectUSCA Case #98-7063 Document #446815 Filed: 07/02/1999 Page 13 of 17
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icut who had agreed to arbitrate all disputes in New York,

and thereby implicitly waived any objection to personal jurisdiction in a suit brought in New York to enforce the resulting

arbitral award, also waived its objection to personal jurisdiction in such an action brought in California merely because

the full faith and credit clause would make a valid New York

judgment enforceable in the courts of California. Indeed, to

accept such a bootstrap argument, under which the courts in

every state would have personal jurisdiction over a defendant

who had waived its objection in any one state, would in this

context eviscerate an important limitation upon the principle

of full faith and credit--that "a judgment need not be honored if it was entered by a court that lacked personal ...

jurisdiction." 18 Charles A. Wright et al., Federal Practice

and Procedure s 4467, at 634 (2d ed. 1981); see also Baker v.

General Motors Corp., 522 U.S. 222, 233 (1998); Pennoyer v.

Neff, 95 U.S. 714, 729-33 (1877); D'Arcy v. Ketchum, 52 U.S.

(11 How.) 165, 175-76 (1850). It seems to us likewise implausible that Qatar, by agreeing to arbitrate in France, a signatory to a treaty containing a similar reciprocal "recognition

and enforcement" clause, should be deemed thereby to have

waived its right to challenge personal jurisdiction in the

United States.

For these reasons we hold that Qatar did not waive its

objection to personal jurisdiction in the United States by

agreeing to arbitrate in France.

2. Minimum Contacts

As noted above, when lack of personal jurisdiction is raised

as a defense, due process requires that for the case to go

forward the absent defendant must "have [had] certain minimum contacts with [the forum] such that the maintenance of

the suit does not offend traditional notions of fair play and

substantial justice." International Shoe, 326 U.S. at 316.

The defendant's contacts with the forum must be of a quality

that it "should reasonably anticipate being haled into court"

there. World-Wide Volkswagen Corp. v. Woodson, 444 U.S.

286, 297 (1980). It is "essential in each case that there be

some act by which the defendant purposefully avails itself of

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the privilege of conducting activities within the forum State,

thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958).*

Creighton claims that Qatar has the requisite minimum

contacts mainly because Qatar entered into a contract with a

company based in the United States. Because that contract

provided for ICC arbitration of all disputes and (according to

Creighton) Qatari law does not recognize or enforce arbitral

awards, "it was certainly foreseeable that Creighton would

seek to enforce any award in its favor ... in the United

States." In addition Creighton asserts that Qatar contacted

Creighton in Tennessee during the negotiations leading to the

contract in order to clarify an apparent error in Creighton's

bid, Creighton signed a modification to the contract in Tennessee, and during construction Qatar telexed weekly status

reports to Creighton's offices in Tennessee.

These contacts, however, do not demonstrate that Qatar

purposefully availed itself of the laws of the United States

and hence should reasonably have anticipated the risk of

being haled into court here. Creighton's reliance upon the

mere fact that Qatar contracted with a United States company (and the concomitant foreseeability that the company

might try to bring suit in the United States) is misplaced, for

the Supreme Court has squarely rejected the proposition that

"an individual's contract with an out-of-state party alone can

automatically establish sufficient minimum contacts in the

other party's home forum." Burger King v. Rudzewicz, 471

U.S. 462, 478 (1985) (emphasis in original).

Our doubt about the adequacy of Qatar's contacts with the

United States is increased when we consider "prior negotiations and contemplated future consequences, along with the

terms of the contract and the parties' actual course of dealing." Id. at 479. As Qatar notes, the contract was offered,

__________

* We note that Qatar does not argue that due process requires

that a foreign state have contacts with the forum state as opposed

to the United States in general. See SEC v. Vision Communications, Inc., 74 F.3d 287, 289 (D.C. Cir. 1996) (suggesting the latter).

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accepted, and performed in Qatar pursuant to a sponsorship

arrangement between Creighton and a Qatari contractor.

The contract was made subject to the laws of Qatar, payment

was made in Qatari riyals to Creighton's bank account in

Qatar, and the alleged breach occurred in Qatar.

Overall, it seems Qatar's contacts with Creighton in Tennessee were necessitated by Creighton's decision to base

itself there, and are not instances of Qatar purposefully

availing itself of the benefits of the laws of Tennessee or of

the United States. See id. at 475 ("Th[e] purposeful availment requirement ensures that a defendant will not be haled

into a jurisdiction solely as a result of random, fortuitous, or

attenuated contacts, or of the unilateral activity of another

party or a third person"). As we explained in an analogous--

indeed, controlling--case, Creighton

seems to confuse a distant purchaser "reaching out" to a

seller in the forum state with a seller "reaching out" to a

distant state in order to do business there. At least if it

circulates its wares there, the seller purposefully avails

itself of forum state law. By contrast, a purchaser who

selects an out-of-state seller's goods or services based on

their economic merit does not thereby purposefully avail

itself of the seller's state law, and does not merely by

purchasing from the seller submit to the laws of the

jurisdiction in which the seller is located or from which it

ships merchandise. Of course, a seller suing in its home

state might argue that an out-of-state buyer has availed

itself of that forum's laws in the sense that the buyer

typically could have sued the seller in the forum state for

breach of contract had the need arisen. In light of

Burger King, however, this contingent type of "contact"

is plainly not enough, as it would alone and automatically

extend personal jurisdiction over all buyers in interstate

contract actions, without regard to the parties' actual

course of dealing and its relation to the forum.

Health Communications, Inc. v. Mariner Corp., 860 F.2d

460, 464-65 (D.C. Cir. 1988). We therefore conclude that

Qatar lacks the minimum contacts with the United States that

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would make it amenable to suit here consistent with due

process.

III. Conclusion

For the foregoing reasons, we hold that the district court

had subject matter jurisdiction over this suit but lacked

personal jurisdiction over Qatar. The judgment of the district court is therefore

Affirmed.

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