Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-07041/USCOURTS-caDC-14-07041-0/pdf.json

Parties Involved:
GSS Group Ltd.
Appellant
National Port Authority of Liberia
Appellee
Republic of Liberia
Appellee

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 9, 2016 Decided May 17, 2016

No. 14–7041

GSS GROUP LTD., ALSO KNOWN AS 

GLOBAL SECURITY SEALS GROUP LTD.,

APPELLANT

v.

NATIONAL PORT AUTHORITY OF LIBERIA 

AND REPUBLIC OF LIBERIA,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:12–cv–00332)

Stanley McDermott III, pro hac vice, argued the cause for 

the appellant. Charles B. Wayne was with him on brief.

Colleen E. Roh Sinzdak argued the cause for the 

appellees. Jessica L. Ellsworth was with her on brief. 

Before: HENDERSON, ROGERS and KAVANAUGH, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

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KAREN LECRAFT HENDERSON, Circuit Judge: GSS 

Group, Ltd. (GSS), a construction company incorporated in 

the British Virgin Islands and headquartered in Israel, appeals 

the district court’s dismissal of its second attempt to confirm a 

$44 million arbitral award entered against the National Port 

Authority of Liberia (Port Authority) for breach of a 

construction contract. When GSS first tried to confirm the 

award, the district court found, and we affirmed, that it had no 

personal jurisdiction over the Port Authority. When GSS 

filed its second petition, it named not only the Port Authority 

but also the Republic of Liberia, which owns the Port 

Authority, as respondents. The district court again dismissed 

GSS’s petition, finding that issue preclusion barred relitigating its personal jurisdiction over the Port Authority and 

that GSS failed to demonstrate that Liberia was liable for the 

Port Authority’s alleged breach. For the reasons stated below, 

we affirm. 

I. BACKGROUND

Although resolution of this case is ultimately 

straightforward, the history leading to our disposition is not. 

Three district court orders1 and one opinion from this Court2

have set out the relevant background but a refresher is 

nonetheless needed for completeness. 

 1 See GSS Grp. Ltd. v. Nat’l Port Auth. (GSS Grp. I), 774 F. Supp. 2d 

134 (D.D.C. 2011) (order dismissing first petition); GSS Grp. Ltd. v. Nat’l 

Port Auth. (GSS Grp. II), No. 09-cv-1322 (D.D.C. Aug. 10, 2011) (order 

denying GSS’s motion to alter or amend judgment); GSS Grp. Ltd. v. 

Republic of Liber. (GSS Grp. IV), 31 F. Supp. 3d 50 (D.D.C. 2014) (order 

dismissing second petition).

2 See GSS Grp. Ltd v. Nat’l Port Auth. (GSS Grp. III), 680 F.3d 805 

(D.C. Cir. 2012).

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A. FACTUAL BACKGROUND

The contract dispute at issue has its genesis in the turmoil 

following Liberia’s Second Civil War. After four years of 

conflict, two separate rebel groups besieged Monrovia, 

Liberia’s capital, in 2003. Within months, Liberian President 

Charles Taylor was exiled and the separate political factions 

signed a Comprehensive Peace Agreement. The Peace 

Agreement created the National Transitional Government of 

Liberia, a power-sharing entity designed to govern the 

recovering nation until it could hold democratic elections. 

Monitoring and enforcing the Peace Agreement became the 

responsibility of the International Contact Group on Liberia 

(ICGL), a multi-national advisory board led by the United 

States and including members of the United Nations, the 

European Union, the Economic Community of West African 

States and the World Bank. 

The Peace Agreement also created the Liberian Contract 

& Monopolies Commission (Commission) to combat the 

corruption and mismanagement that had plagued the nation. 

The Peace Agreement authorized the Commission to ensure

that “all public financial and budgetary commitments entered 

into by the” National Transitional Government are

“transparent, non-monopolistic and in accordance with the 

laws of Liberia and internationally accepted norms of 

commercial practice.” Comprehensive Peace Agreement, art. 

XVII(2)(a). To accomplish its goal, the Commission 

promulgated Liberia’s Interim Public Procurement Policy and 

Procedures (Interim Procedures), which set out ground rules 

for, inter alia, state procurement of contracts for goods and 

services. 

During Liberia’s transition period, revitalizing the warravaged Monrovian Port (Port) became a priority. The 

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responsibility of doing so fell to the Port Authority, a wholly 

Liberian-owned corporation that manages, operates and 

maintains all Liberian ports. Created as “a distinct juridical 

entity with the capacity to enter into contracts and to sue and 

be sued in its own name,” GSS Grp. IV, 31 F. Supp. 3d at 55, 

the Port Authority functions “at some remove from the 

government itself,” GSS Grp. III, 680 F.3d at 808. For 

instance, it enjoys expansive financial and administrative 

authority and has exclusive control over all funds it generates. 

Its Board of Directors is primarily comprised of Liberian 

government officials and individuals appointed by Liberia’s 

president. 

On June 9, 2005, the Port Authority awarded GSS a

multi-million-dollar contract to build a container park at the 

Port. Although the Interim Procedures mandated that the Port 

Authority award such contracts through “open competitive 

bidding,” Interim Procedures 3 (Joint App’x (J.A.) 535), the 

Port Authority did not do so. As a result, on June 23, 2005, 

the Commission informed the Port Authority that the GSS 

contract was invalid and reminded it that all contracts must 

result from competitive bidding. 

Instead of conducting a bid, the Port Authority petitioned

the Commission for a single-source exemption, which allows 

a Liberian entity to dispense with competitive bidding if, inter 

alia, “there is an urgent need” for the contract and “engaging 

in bid proceedings . . . is impractical due to unforeseeable 

circumstances.” Id. at 12–13 (J.A. 544–45). The Port 

Authority urged the Commission that any further delay in 

construction of the container park could result in the Port’s 

closure and that the contract would help the Port comply with 

the International Ship and Port Facility Security Code. The 

Commission granted the exemption on August 12, 2005, and 

the parties re-negotiated the contract 10 days later. 

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The GSS contract aroused the international community’s 

interest. The ICGL reviewed the contract and came away 

with “deep concerns” about its validity and monetary value. 

Letter from ICGL to Charles Gyude Bryant, Chairman of 

Nat’l Transitional Gov’t of Liber., at 1 (Oct. 19, 2005) (J.A. 

220). It notified the National Transitional Government by 

letter dated October 19, 2005, stating that, in its view, the 

Commission should not have granted the Port Authority the

exemption and that the contract represented poor value for 

money. Aware of the scrutiny, GSS and the Port Authority 

amended the contract again on October 28, 2005. Their

efforts failed. On December 30, 2005, the National 

Transitional Government’s Chairman directed the Port 

Authority to cancel the GSS contract. The letter stated:

I have taken off considerable time to carefully 

review the analysis of my technical team 

regarding equitable benefits to all parties 

resulting from the contract entered into 

between the [Port Authority] and the GSS. 

Our evaluation shows that the contract as 

negotiated and concluded places the Port 

Authority in a grossly disadvantageous 

position for more than a decade. Additionally, 

the contract does not contribute in any material 

way to compliance with the [International Ship 

and Port Facility Security] regulations and as 

such Security Qualification of the Free Port of 

Monrovia still remains. 

I am therefore directing that the GSS contract 

be cancelled and the Port Authority work[]

toward a more holistic management contract 

that will improve operational, financial and 

security efficiency levels. The sourcing of any 

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managing team must be done through a 

competitive bidding process after proper terms 

of reference are agreed upon and approved by 

the . . . Commission and the technical 

committee of the [Economic Governance 

Steering Committee].[3] The GSS shall be free 

to submit an offer at that time.

Letter from Charles Gyude Bryant, Chairman of Nat’l 

Transitional Gov’t of Liber., to D. Masuleng Coop, Chairman 

of Nat’l Port Auth. (Dec. 30, 2005) (J.A. 977). On January 3, 

2006, the Port Authority sought reconsideration from the

National Transitional Government. The record does not 

reflect whether the Port Authority’s request prompted a 

response. On January 16, 2006, the National Transitional 

Government abdicated its power and Liberia’s newly elected 

government assumed control. 

On January 26, 2006, the Port Authority informed GSS, 

via letter, that it was cancelling the contract. A rapid volley 

of correspondence between GSS and the Port Authority 

ensued, culminating in a February 16, 2006 letter from the 

 3 The Economic Governance Steering Committee (EGSC) was one 

of two organizations created in 2005 as part of an agreement between the 

ICGL and the National Transitional Government called the “Governance 

and Economic Management Assistance Program” (GEMAP). The 

GEMAP’s goal “was to promote accountability and transparency in fiscal 

management by setting in place internal governmental controls and 

providing for international involvement, all while recognizing and 

preserving Liberian sovereignty.” Aff. of O. Natty B. Davis II, Republic 

of Liber.’s Minister of State, ¶ 12 (J.A. 244). The EGSC, whose 

membership consisted of Liberian government officials as well as

representatives from the United States (including the United States 

Ambassador to Liberia), the EU, the World Bank and other international 

stakeholders, was the body designed to provide the international 

involvement contemplated by the GEMAP. 

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Port Authority explaining that the Interim Procedures demand 

complete transparency and adherence to open bidding and 

concluding that the GSS contract fell well short of those 

standards. It further explained that the Commission only 

granted the single-source exemption because it mistakenly 

thought the contract was necessary to comply with 

international obligations and to avoid the Port’s closure.4

 

Because the exemption was mistakenly granted, the Port 

Authority considered the contract “null and void ab initio.” 

GSS Grp. IV, 31 F. Supp. 3d at 56 (citation omitted). 

On March 15, 2006, GSS invoked the contract’s 

arbitration clause (which provided that disputes arising under 

the agreement were to be arbitrated in London and in 

accordance with the laws of England and Wales) against the 

Port Authority, but not against Liberia. Meanwhile, a 

separate Liberian governmental organization—the Liberian 

Public Procurement and Concession Commission5

—sought a 

Liberian-court declaration that the contract, including the

arbitration provision, was invalid. Because of the Liberian 

judicial proceedings, the Port Authority declined to participate 

in the London arbitration and GSS appointed the sole 

arbitrator. On February 8, 2008, the Liberian court found the 

 4 According to the Port Authority, the Commission’s mistake was 

caused by a $30,000 bribe that GSS paid the Port Authority’s thenmanaging director to convince the Commission that an urgent need for the 

requested single-source exemption existed. 

5 Formed in 2005, the Liberian Public Procurement and Concession 

Commission’s mission is “to ensure the economic and efficient use of 

public funds in public procurement and to ensure that public procurement 

and concession processes are conducted in a fair, transparent and nondiscriminatory manner.” Frequently Asked Questions about PPCC, Public 

Procurement & Concessions Commission, Gov. of the Republic of Liber., 

http://www.ppcc.gov.lr/content.php?sub=67&related=1&third=67&pg=sp 

(last visited May 9, 2016).

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relevant portions of the contract unenforceable. 

Notwithstanding the Liberian court’s decision, one month 

later, the arbitrator determined that he had jurisdiction of the 

dispute; in June 2008, he concluded that the Port Authority 

was liable for the cancellation and in May 2009, he found that 

GSS suffered damages in the amount of $44,347,260.00. 

B. GSS’S FIRST PETITION TO CONFIRM 

LONDON ARBITRAL AWARD

On June 16, 2009, GSS filed a petition in the United 

States District Court for the District of Columbia to confirm 

the London arbitral award.6 The Port Authority moved to 

dismiss the petition on the ground that, inter alia, it had no 

contact whatsoever with the United States (much less the 

District of Columbia) and therefore the district court lacked 

personal jurisdiction. GSS responded that the Port Authority, 

a wholly state-owned enterprise, was not a “person” within 

the meaning of the Due Process Clause and, accordingly, had 

no right to assert a personal-jurisdiction defense. GSS Grp. I, 

774 F. Supp. 2d at 138.

The district court rejected GSS’s argument, finding that, 

although a foreign sovereign is not a person under the Due 

Process Clause, the Port Authority “functions more like a 

 6 Statutory subject matter jurisdiction of GSS’s petition is based on

the Federal Arbitration Act (FAA), 9 U.S.C. §§ 201 et seq, which codifies 

the 1958 Convention on the Recognition and Enforcement of Foreign 

Arbitral Awards (Convention), June 10, 1958, 21 U.S.T. 2517, 330 

U.N.T.S. 3. The Convention, in turn, obligates each contracting nation 

(including the United States) to “recognize [foreign] arbitral awards as 

binding and enforce them in accordance with” local law. Id. art. III. 

Because the United Kingdom is also a party to the Convention, the FAA 

provides U.S. courts with authority to enforce the London arbitral award

(notwithstanding neither the arbitral award nor the GSS contract has any

United States connection).

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private corporation” and, accordingly, has due process rights. 

Id. at 141. Because GSS made no attempt to show that the 

Port Authority had any United States contacts, the district 

court dismissed GSS’s petition for lack of personal 

jurisdiction. In so doing, the district court observed that, 

“[f]or unknown reasons,” GSS declined to argue that the Port 

Authority and Liberia “are legally indistinguishable.” Id. at 

138–39.

GSS moved for reconsideration under Rule 59(e). In its 

motion, GSS argued for the first time that the Port Authority

was Liberia’s agent and that it was entitled to discovery to 

demonstrate the same. The district court found that GSS had 

waived the arguments by failing to raise them earlier.

GSS appealed the dismissal and, on May 25, 2012, we

affirmed in toto. As a threshold matter, we agreed that GSS 

had waived its agency and jurisdictional-discovery arguments.

We then rejected the only argument GSS had preserved—that 

a foreign, state-owned entity has no due process rights—and 

affirmed the district court’s dismissal because GSS had failed 

to identify “any connection” between the United States and 

the Port Authority. GSS Grp. III, 680 F.3d at 817 (emphasis 

in original).

C. GSS’S SECOND PETITION TO CONFIRM 

LONDON ARBITRAL AWARD

On March 1, 2012 (one day before oral argument here in 

GSS’s appeal of the dismissal of its initial petition), GSS filed 

in district court a second petition to confirm the award. This 

time, however, GSS named Liberia as the sole respondent;

7

 7 As noted above, see supra n.6, the FAA provided the subject matter 

jurisdiction for GSS’s first position, which named the Port Authority as 

the sole respondent. Because GSS named Liberia, a foreign sovereign, as 

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three weeks later, it amended the petition to add the Port 

Authority. The thrust of GSS’s second petition was that the 

Port Authority was Liberia’s agent and, accordingly, Liberia 

was liable for the $44 million London award. Because 

Liberia, as a sovereign, may not assert a personal-jurisdiction 

defense, GSS believed that its second petition cleared the 

hurdle that blocked its first. It also served both the Port 

Authority and Liberia with discovery requests to clarify their 

inter se connection. 

The district court was not persuaded. It began with the 

Port Authority’s amenability to suit, concluding that its 

dismissal of GSS’s first petition on the “no personal 

jurisdiction” ground precluded GSS’s second attempt to sue

the Port Authority in federal court. Despite GSS’s contention

that the district court did not resolve its agency argument 

when it dismissed GSS’s first petition, the district court 

concluded that collateral estoppel barred issues—not simply

specific arguments—that had been necessarily decided in 

earlier proceedings. And because “GSS enjoyed every 

 

the respondent in its second petition, GSS argued that the district court had 

subject matter jurisdiction under the Foreign Sovereign Immunities Act 

(FSIA), 28 U.S.C. §§ 1330 et seq. Under the FSIA, a foreign state, as well 

as its agencies and instrumentalities, is presumed to enjoy sovereign 

immunity from suit in U.S. courts unless one of several statutory 

exceptions applies. See id. § 1604. One exception—the only one 

applicable here—is the “arbitration exception,” which provides that “[a] 

foreign state shall not be immune from the jurisdiction of courts of the 

United States . . . in any case . . . in which the action is brought [to enforce 

an arbitration agreement or award that] 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.” Id. § 1605(a)(6)(B); 

see also 28 U.S.C. § 1330(a) (district court has subject matter jurisdiction 

of “any nonjury civil action against a foreign state . . . as to any claim for 

relief in personam with respect to which the foreign state is not entitled to 

immunity”).

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opportunity to rely on a theory of agency when it earlier 

litigated the issue of personal jurisdiction,” GSS Grp. IV, 31 

F. Supp. 3d at 61, the district court applied the issue 

preclusion bar.

The district court also held that it had no subject matter 

jurisdiction of Liberia. It noted that GSS had to overcome the 

presumption that “government instrumentalities established as 

juridical entities distinct and independent from their 

sovereign”—like the Port Authority—“should normally be 

treated as such.” Id. at 62 (quoting First Nat’l City Bank v. 

Banco Para El Comercio Exterior de Cuba (Bancec), 462 

U.S. 611, 626–27 (1983)). To do so, GSS had to demonstrate 

either that the Port Authority was Liberia’s agent or that 

treating the Port Authority as distinct from Liberia would 

perpetuate fraud or injustice. The district court found that 

GSS had demonstrated neither. 

To support its agency argument, GSS proffered that 

Liberia controlled the Port Authority’s board of directors; that 

Liberia had assumed a portion of the Port Authority’s 

outstanding debt; that, when the Port Authority contracted 

with a third party to replace the GSS contract in 2010, several 

Liberian government officials, including the Liberian 

president, executed the new agreement; and that Liberia 

forced the Port Authority to cancel the contract. The district 

court found that GSS’s first three arguments were either 

foreclosed by Transamerica Leasing, Inc. v. La Republica de 

Venezuela, 200 F.3d 843 (D.C. Cir. 2000), or not probative of 

Liberia’s control over the Port Authority in 2005–06. It also 

rejected the argument that the directive to the Port Authority 

to cancel the contract created an agency relationship. In so 

doing, it noted that the Port Authority independently 

negotiated and executed the contract and that Liberia’s 

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cancellation order was an act of government regulation, not 

commandeering. 

Having found that the Port Authority was not Liberia’s 

agent, the district court made quick work of GSS’s fraud or 

injustice argument. It first recognized that the requisite 

injustice occurs if, for example, a sovereign uses an 

instrumentality to shield itself from costs or risks, to unjustly 

enrich itself or to defeat a statutory policy. It then concluded

that the “single sentence” GSS offered in support of its 

argument did not suffice to demonstrate injustice. GSS Grp. 

IV, 31 F. Supp. 3d at 68. 

The district court dismissed GSS’s petition in its entirety

but did not address GSS’s discovery requests before it did so. 

GSS timely appealed.8

 Our review of the district court’s issue 

preclusion determination, see Hall v. Clinton, 285 F.3d 74, 80 

(D.C. Cir. 2002), and its dismissal for lack of subject matter 

jurisdiction, see Transamerica Leasing, Inc., 200 F.3d at 847, 

is de novo. We review its denial of jurisdictional discovery 

for abuse of discretion. See Caribbean Broad. Sys., Ltd. v. 

Cable & Wireless P.L.C., 148 F.3d 1080, 1089 (D.C. Cir. 

1998).

 8 On February 21, 2015, we held this case in abeyance pending the 

United States Supreme Court’s disposition of OBB Personenverkehr AG v. 

Sachs, 136 S. Ct. 390 (2015). When the Supreme Court granted certiorari 

in OBB Personenverkehr AG, a potential issue was “[w]hether, for 

purposes of determining when an entity is an ‘agent’ of a ‘foreign state,’ ” 

the FSIA’s definition of “agency,” the factors set out in Bancec “or 

common law principles of agency” govern. Pet. for Writ of Cert. at i, 

OBB Personenverkehr AG v. Sachs (No. 13-1067), 2014 WL 890906 at *i 

(Mar. 5, 2014). The Supreme Court ultimately failed to reach the issue. 

See OBB Personenverkehr AG, 136 S. Ct. at 395.

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II. ANALYSIS

On appeal, GSS argues that: (1) the district court had 

subject matter jurisdiction of Liberia: the Port Authority was 

Liberia’s agent and failure to hold Liberia liable for the Port 

Authority’s contract cancellation would permit a miscarriage 

of justice; (2) the district court had personal jurisdiction of the 

Port Authority by virtue of its jurisdiction of Liberia and the 

district court erred by finding that issue preclusion barred the

claim and (3) the district court abused its discretion by 

dismissing GSS’s petition before allowing GSS to conduct 

jurisdictional discovery. GSS’s appeal turns on whether the

National Transitional Government’s December 30, 2005 

cancellation order justifies setting aside our general rule that 

“agencies and instrumentalities of a foreign nation are 

presumed to be separate from each other and from the foreign 

state.” Foremost-McKesson, Inc. v. Islamic Republic of Iran, 

905 F.2d 438, 440 (D.C. Cir. 1990). 

A. REPUBLIC OF LIBERIA

GSS’s primary argument is that Liberia is liable for the 

Port Authority’s cancellation of the contract and, accordingly, 

the district court had subject matter jurisdiction of it pursuant 

to the FSIA’s arbitration exception. To satisfy its burden,9

GSS must demonstrate either that Liberia controlled the Port 

Authority “so extensively” that the Port Authority became 

Liberia’s agent or that treating the Port Authority as legally 

separate from Liberia would allow fraud or injustice. 

Transamerica Leasing, Inc., 200 F.3d at 848. GSS argues 

that it satisfies both exceptions, relying almost exclusively on 

 9 See Foremost-McKesson, Inc., 905 F.2d at 447 (“It is . . . clear that 

the plaintiff bears the burden of asserting facts sufficient to withstand a 

motion to dismiss regarding the agency relationship.” (emphasis in 

original)). 

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the National Transitional Government’s instruction to cancel 

the contract. 

1. Principal/Agency Relationship

Our resolution of GSS’s agency argument begins and 

ends with our Transamerica Leasing, Inc. opinion. In that 

case, we explained that a plaintiff may demonstrate that an

agency relationship exists in one of two ways. The first 

occurs if a sovereign asserts “complete domination” of a

subsidiary. Id. The second results from “ordinary agency 

principles,” which do not require a showing of “complete

dominion.” Id. at 849 (emphasis added). GSS makes no real 

attempt to demonstrate that it satisfies the former, instead 

focusing its efforts on the latter.

In Transamerica Leasing, Inc., we recognized that

explaining the degree of control necessary to find agency is

challenging. See id. Despite the caselaw’s 

“often . . . confusing results,” we discerned four prerequisites. 

Id. We held that no agency relationship arises unless (1) the 

sovereign makes plain its desire for the instrumentality to act 

on the sovereign’s behalf; (2) the instrumentality agrees to so 

act; (3) the sovereign has final say over matters delegated to 

the instrumentality and (4) the sovereign wields its power 

more directly than voting a majority of the instrumentality’s 

stock or choosing the instrumentality’s board of directors.10 

Id. at 849–50. Based on these factors, GSS’s argument 

reduces to the following: Liberia ordered the Port Authority

to cancel the contract and the Port Authority obliged; 

 10 See also RESTATEMENT (SECOND) OF AGENCY § 1 (“Agency is the 

fiduciary relation which results from the manifestation of consent by one 

person to another that the other shall act on his behalf and subject to his 

control, and consent by the other so to act.”).

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therefore, Liberia had the requisite authority over the Port 

Authority to make the latter its agent.

11 

Superficially, GSS has a point—the National Transitional 

Government’s directive left the Port Authority with no 

discretion to ignore the cancellation order. But in 

Transamerica Leasing, Inc., we recognized that a government

can wield power not only “as shareholder” but also as 

“regulator.” 200 F.3d at 851.

12 And read in context, it is 

plain that the National Transitional Government was 

exercising its regulatory authority when it ordered the Port 

Authority to cancel the GSS contract—not commandeering 

the Port Authority in a way that erased the separate juridical 

boundaries between it and Liberia. 

Recall the situation in Liberia during which the contract

emerged. Between 2003 and 2006, Liberia (and, especially,

Monrovia) was struggling to recover not only from a fouryear civil war but also from a history of government 

corruption and financial mismanagement. To aid the 

recovery, the Commission promulgated Interim Procedures,

which required state-owned corporations to obtain goods and 

services through competitive bidding. When the Port 

Authority failed to do so, the Commission immediately 

advised the Port Authority that the procedural violation 

 11 See also Appellant’s Br. 9 (“In short, when Liberia directed the 

[Port Authority] to cancel the Project Agreement, Liberia acted as 

principal, the [Port Authority] was its agent, and that principal-agent 

relationship—manifest in the cancellation of the Project Agreement—

satisfies the Bancec standard.”).

12 See also Transamerica Leasing, Inc., 200 F.3d at 851 (“[W]e 

cannot say that requiring a shipping company to obtain governmental 

approval for the sale of vessels represents the exercise of Venezuela’s 

authority as shareholder rather than its exercise of governmental power in 

the ordinary course of regulation.”).

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rendered the contract invalid; in addition, the ICGL undertook 

its own review. The Commission’s grant of a single-source 

exemption did not erase the ICGL’s “deep concerns” about 

the contract’s validity and worth and these concerns prompted 

the ICGL to inform the National Transitional Government 

that the Commission should not have granted the exemption 

and that the contract as a whole disproportionately favored 

GSS at the Port Authority’s expense. Letter from ICGL to 

Charles Gyude Bryant, Chairman of Nat’l Transitional Gov’t 

of Liber., at 1 (Oct. 19, 2005) (J.A. 220). With the ICGL’s 

guidance in mind, the National Transitional Government then 

instructed the Port Authority to cancel the contract. 

The National Transitional Government’s December 30, 

2005 letter informed the Port Authority that it had not 

complied with a legal obligation, that it had not satisfied the 

requirement for an exemption therefrom and that it was to 

cancel the contract. This action is the quintessential function 

of a government regulator. Granted, one of the criticisms of 

the contract was “commercial,” Appellant’s Br. 20, but in our 

view, the concern that the contract placed “the Port Authority 

in a grossly disadvantageous position” was an outgrowth of

Liberia’s broader regulatory goal of remedying past financial 

mismanagement. Letter from Charles Gyude Bryant,

Chairman of Nat’l Transitional Gov’t of Liber., to D. 

Masuleng Coop, Chairman of Nat’l Port Auth. (Dec. 30, 

2005) (J.A. 977). In any event, the National Transitional 

Government also ordered the contract’s cancellation because 

it did “not contribute in any material way to compliance with” 

the Port’s international responsibilities. Id. Ensuring 

compliance with international obligations, and correcting a 

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state-owned instrumentality when it fails to do so, is a 

hallmark of a sovereign acting in its regulatory capacity.13 

The National Transitional Government’s directive to the 

Port Authority to “work[] toward a more holistic management 

contract that will improve operational, financial and security 

efficiency levels” emphasized the importance of revitalizing 

the Port in a cost-effective manner, id.; moreover, its 

instruction that “[t]he sourcing of any managing team must be 

done through a competitive bidding process after proper terms 

of reference are agreed upon and approved by 

the . . . Commission and the technical committee of the 

EGSC” reminded the Port Authority of its responsibility to 

follow the Interim Procedures, id. Critically, the National 

Transitional Government noted that GSS remained free to 

submit a bid for the contract so long as it complied with all 

applicable procedures. Allowing GSS the opportunity to 

secure the contract (through a competitive bid) underscores 

that Liberia’s interest was in ensuring that the Port Authority

procured goods and services in accordance with the Interim 

 13 See, e.g., 46 U.S.C. § 42101 (“[T]he Federal Maritime 

Commission shall prescribe regulations affecting shipping in foreign 

trade, . . . to adjust or meet general or special conditions unfavorable to 

shipping in foreign trade, . . . which arise out of or result from laws or 

regulations of a foreign country or competitive methods, pricing practices, 

or other practices employed by owners, operators, agents, or masters of 

vessels of a foreign country.”); id. § 42106(5) (“If the Federal Maritime 

Commission finds that conditions unfavorable to shipping in foreign trade 

as described in section 42101 of this title exist, the Commission 

may . . . take any [remedial] action the Commission finds necessary and 

appropriate to adjust or meet any condition unfavorable to shipping in the 

foreign trade of the United States.”).

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Procedures and not in “wresting control of the . . . contract 

from the” Port Authority. Appellant’s Br. 21.14 

GSS discusses (but does not emphasize) other factors 

that, in its view, demonstrate Liberia’s control of the Port 

Authority. None changes our conclusion. First, GSS argues

that the Port Authority’s board of directors was controlled by 

Liberia but we have held that state stock ownership and board 

control is an inherent part of state-owned instrumentalities 

and, standing alone, does not create an agency relationship. 

See Transamerica Leasing, Inc., 200 F.3d at 851. Next, GSS 

points out that Liberia absorbed $32.2 million of the Port 

Authority’s debt burden but we have held that a sovereign’s 

financial aid to an instrumentality is part and parcel of normal

state ownership. Id. at 852. Finally, GSS points to a 2010 

agreement that replaced the cancelled GSS contract, which 

agreement was executed by several Liberian government 

officials, including the Liberian president. But the 2010 

agreement sheds no light on the degree to which Liberia 

controlled the Port Authority when the Port Authority entered 

into and then cancelled the GSS contract in 2005–06.

 14 GSS argues that “the principal Liberian regulator, 

the . . . Commission . . . had approved the Project Agreement before 

Liberia cancelled it, indicating that Liberia was not acting in any 

regulatory capacity when it did so.” Appellant’s Br. 10. But the 

Commission initially advised the Port Authority that the contract was 

invalid because it was not awarded through competitive bidding. The 

National Transitional Government also cited the Port Authority’s failure to 

comply with the competitive-bidding requirement when it ordered the 

contract’s cancellation; the only difference between its position and the 

Commission’s earlier position was that the National Transitional 

Government also concluded that the contract did not qualify for a singlesource exemption.

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2. Fraud or Injustice

GSS also argues that respecting the boundaries between 

Liberia and the Port Authority would perpetuate fraud or 

injustice. It relies on the Fifth Circuit’s opinion in Bridas 

S.A.P.I.C. v. Government of Turkmenistan (Bridas I), which 

held that a sovereign can be liable for its instrumentality’s 

acts if the sovereign completely controlled the instrumentality 

“with respect to the transaction at issue” and exercised its 

dominion to commit a “fraud or wrong.” 345 F.3d 347, 359 

(5th Cir. 2003). In GSS’s view, Liberia dominated the Port 

Authority “with respect to” the contract and the Port 

Authority’s cancellation was a “remediable wrong.” 

Appellant’s Br. 31–32. This argument is without merit. The 

Fifth Circuit explained that the requisite “wrong” must 

constitute either “fraud” or “misuse of the corporate form to 

promote injustice,” Bridas S.A.P.I.C. v. Gov’t of Turkm.

(Bridas II), 447 F.3d 411, 416–17 (5th Cir. 2006), and not 

simply a run of the mill alleged contractual breach. This case 

is not the “exceptional case[]” to which Bridas I may apply. 

Bridas II, 447 F.3d. at 416.

For the foregoing reasons, we affirm the district court’s 

dismissal of the claims against Liberia for lack of subject 

matter jurisdiction under the FSIA. 

B. PORT AUTHORITY

GSS also argues that issue preclusion does not bar its 

claims against the Port Authority because its claims against 

Liberia differ from its claims against the Port Authority and 

jurisdiction over Liberia necessarily confers jurisdiction over 

the Port Authority. Based on our conclusion that Liberia is 

not subject to suit in a United States court, GSS’s argument 

regarding the Port Authority fails. We note, however, that the 

district court’s issue preclusion analysis is plainly correct. 

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Preclusion applies if a later argument “is related to the 

subject-matter and relevant to the issues that were litigated 

and adjudicated previously, so that it could have been raised.” 

Hall, 285 F.3d at 81 (quoting Yamaha Corp. of Am. v. United 

States, 961 F.2d 245, 257–58 (D.C. Cir. 1992) (emphasis 

omitted)); see also Yamaha Corp., 961 F.2d at 254 (“[O]nce 

an issue is raised and determined, it is the entire issue that is 

precluded, not just the particular arguments raised in support 

of it in the first case.” (emphases in original)). GSS could 

have raised the agency argument in its first petition; it 

eventually did raise the argument but too late to avoid waiver. 

Accordingly, we again affirm the district court’s dismissal of 

GSS’s petition against the Port Authority. 

C. JURISDICTIONAL DISCOVERY

Finally, GSS offers two sentences in support of its 

argument that the district court erred by dismissing its petition 

before allowing jurisdictional discovery. We are

correspondingly brief in concluding that, without more, 

GSS’s two-sentence claim does not suffice and, thus, the

district court committed no abuse of its wide discretion. 

For the foregoing reasons, we affirm the district court’s 

dismissal of GSS’s petition.

So ordered.

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