United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 4, 2011 Decided April 26, 2011

No. 10-7068

PAN AM FLIGHT 73 LIAISON GROUP,

APPELLEE

v.

GIATRI DAVE AND GARGI DAVE,

APPELLANTS

Appeal from the United States District Court

for the District of Columbia

(No. 1:10-mc-00077)

Kathryn Lee Boyd argued the cause and filed the briefs for

appellants. 

Edward J. Shapiro argued the cause for appellee. With him

on the brief were Gabriel K. Bell and Abid R. Qureshi. 

Before: GARLAND and BROWN, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

RANDOLPH.
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RANDOLPH, Senior Circuit Judge: The issue in this appeal

is whether the district court properly granted a motion to compel

arbitration under § 4 of the Federal Arbitration Act. The issue

arises in the following setting.

Sisters Giatri and Gargi Davé are United States citizens,

residing in California. In September 1986, when they were

children, they were traveling together aboard Pan Am Airways

Flight 73. Libyan terrorists hijacked the plane and held it for

sixteen hours on the tarmac in Karachi, Pakistan. The hijackers

killed twenty of the passengers; 120 others, including the Davés,

suffered injuries.

Nearly twenty years later, in an effort to normalize relations

with the United States, the Libyan government admitted

responsibility for sponsoring several acts of international

terrorism. On September 20, 2004, President George W. Bush

lifted sanctions against Libya. Libya was later removed from

the State Department’s list of state sponsors of terrorism.

While this normalization process was ongoing, a group of

passengers from Flight 73, including the Davés, signed what

they termed a “Joint Prosecution Agreement.” The Agreement

declared that the parties to it had a common interest in pursuing

legal remedies against Libya and the individuals responsible for

the hijacking. Five of the passengers—the “Liaison

Group”—were designated “managing agents” of the litigation,

with the law firm of Crowell & Moring LLP serving as litigation

counsel. The Agreement set up a pooling mechanism for

recovered funds and contained an arbitration clause providing

that “[i]n the event a dispute arises under this Agreement

between any Parties either regarding the construction and

enforceability of the Agreement or any actions or disputes

arising under or in connection with the Agreement, the Parties

agree that any such dispute shall be submitted for confidential
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arbitration under the provisions of the American Arbitration

Association (‘AAA’) and shall be venued in the District of

Columbia.”

In 2006, the parties to the Agreement filed a lawsuit against

the Libyan government. While the lawsuit was pending, the

United States and Libya reached a diplomatic settlement relating

to claims against the Libyan government for acts of terrorism. 

Under the settlement, the United States agreed to bring about the

termination of all then-pending terrorism-related litigation

against Libya in American courts and to preclude all such future

suits. In return, Libya agreed to deposit $1.5 billion into a

settlement fund for distribution by the United States to U.S.

national victims of Libyan terrorism.

Congress provided for the implementation of the settlement

through legislation. The Libyan Claims Resolution Act granted

immunity to Libya from terrorism-related suits brought in

United States’ courts. See Pub. L. No. 110-301, § 5, 122 Stat.

2999 (2008) (codified at 28 U.S.C. § 1605A). The Act gave the

Secretary of State authority “to designate 1 or more entities to

assist in providing compensation to nationals of the United

States,” pursuant to the settlement agreement. Id. § 4(a)(1). 

Section 4 also contained an immunity provision, central to the

Davés’ appeal:

(b) IMMUNITY.—

(1) PROPERTY.—

(A) IN GENERAL.—Notwithstanding any

other provision of law, if the Secretary

designates any entity under subsection

(a)(1), any property described in subparagraph (B) of this paragraph shall be immune from attachment or any other judi-
4

cial process. Such immunity shall be in

addition to any other applicable immunity.

(B) PROPERTY DESCRIBED.—The property

described in this subparagraph is any

property that—

(i) relates to the claims agreement; and

(ii) for the purpose of implementing

the claims agreement, is—

(I) held by an entity designated

by the Secretary under subsection

(a)(1);

(II) transferred to the entity; or

(III) transferred from the entity.

(2) OTHER ACTS.—An entity designated by the

Secretary under subsection (a)(1), and any

person acting through or on behalf of such

entity, shall not be liable in any Federal or

State court for any action taken to implement a

claims agreement.

 Pursuant to the Act and to Executive Order No. 13477, 73

Fed. Reg. 65,965 (Nov. 5, 2008), which implemented it, the

lawsuit by the parties to the Joint Prosecution Agreement was

dismissed.

The Davés timely submitted their claims against Libya to a

commission the State Department established for administering

the settlement. Before receiving settlement funds, the Davés

brought an action in California state court against Crowell &

Moring and the Liaison Group. Their suit asked for a declaration that the Joint Prosecution Agreement did not cover money

obtained under the settlement agreement and was otherwise

invalid. It also alleged that the Joint Prosecution Agreement

was in conflict with the federal policies embodied in the
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settlement agreement, the Claims Resolution Act and the related

Executive Order.

The Liaison Group filed this action in the United States

District Court for the District of Columbia seeking to compel

arbitration under § 4 of the Federal Arbitration Act, 9 U.S.C.

§ 4. Section 4 provides that “a party ‘aggrieved’ by the failure

of another party ‘to arbitrate under a written agreement for

arbitration’ may petition a federal court ‘for an order directing

that such arbitration proceed in the manner provided for in such

agreement.’” Rent-a-Center, W., Inc. v. Jackson, 130 S. Ct.

2772, 2776 (2010) (quoting 9 U.S.C. § 4). The Liaison Group

argued that the Davés’ California claims should be submitted to

arbitration under the Joint Prosecution Agreement’s arbitration

clause. The district court agreed and granted the motion to

compel arbitration.

The Davés’ main argument on appeal is that the Libyan

Claims Resolution Act grants them immunity from an arbitration

order in the circumstances presented here. The immunity

provision they rely upon, § 4(b)(1)(A), states that “any property

described in subparagraph (B) of this paragraph shall be immune

from attachment or any other judicial process.” Whatever the

precise scope of the immunity thus granted, it protects only

“property.” An order compelling arbitration under the Federal

Arbitration Act does not work against property held by the

Davés or anyone else. The order requires only that the Davés

submit their dispute with the Liaison Group to arbitration. The

district court’s order compelling arbitration therefore did not

violate the terms of the Libyan Claims Resolution Act’s grant of

immunity.

The Davés raise other arguments against the Joint Prosecution Agreement. These go to the validity of the underlying

contract, not to the enforceability of the arbitration clause. As
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such, they are properly left to the arbitrator, at least in the first

instance. See Rent-a-Center, 130 S. Ct. at 2778. We decide

only that the Libyan Claims Resolution Act did not prevent the

district court from ordering arbitration of the underlying dispute. 

On these grounds, the order is

Affirmed.