IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 08-50857 

Consolidated with No. 08-51103

UNC LEAR SERVICES, INC., and

LEAR SIEGLER SERVICES, INC.,

Plaintiffs - Appellees

v.

KINGDOM OF SAUDI ARABIA, and

MINISTRY OF DEFENSE AND AVIATION 

OF THE KINGDOM OF SAUDI ARABIA

Defendants - Appellants

Appeals from the United States District Court

for the Western District of Texas

Before DAVIS, OWEN, and HAYNES, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

The dispute before us is between the Kingdom of Saudi Arabia and the

Ministry of Defense and Aviation of the Kingdom of Saudi Arabia (Defendants -

Appellants, collectively the “Kingdom”) and UNC Lear Services, Inc., a domestic

corporation, and its subsidiary, Lear Siegler Services, Inc. (Plaintiffs - Appellees,

collectively “Lear”). The Kingdom appeals the following rulings by the district

court: (1) denial of the Kingdom’s motion to dismiss based on its claim of

immunity under the Foreign Sovereign Immunities Act, (2) denial of the

Kingdom’s motion to dismiss based on its argument that the contracts between

United States Court of Appeals

Fifth Circuit

F I L E D

August 18, 2009

Charles R. Fulbruge III

Clerk
No. 08-50857 consolidated with No. 08-51103

2

the parties contain a mandatory forum-selection clause naming Saudi Arabia as

the only available forum, and (3) denial of the Kingdom’s motion to dismiss for

forum non conveniens. For the following reasons, we reverse the district court’s

order denying the Kingdom’s motion to dismiss based on sovereign immunity

with regard to claims brought by Lear under one of the contracts (the TSP), and

we affirm all other orders appealed from. 

I. Facts and Procedural Background

A. Facts

The Kingdom maintains a fleet of F-5 aircraft as part of its air defense

systems. It purchased these aircraft from the United States under the Peace

Hawk Foreign Military Sales Program. Initially, the United States contracted

directly with the Kingdom to provide support and maintenance for the fleet. The

United States then contracted with third-party service providers such as Lear

to fulfill the terms of those support agreements. In the mid-1990s, the Kingdom

began entering into agreements directly with the third-party service providers

to obtain maintenance and support for the fleet of aircraft. 

In 1995, Lear and the Kingdom entered into the F-5 Spare Parts and

Ground Equipment contract (“SPAGE”). Under this contract, F-5 parts and

components that needed repair were shipped from Saudi Arabia to Lear in San

Antonio. Lear inspected the parts to determine what repairs were necessary,

and communicated the expected cost to the Kingdom. If the Kingdom approved

the repairs at that cost, Lear solicited bids for the repairs, and once the repairs

were complete returned the parts to Saudi Arabia. To pay for the repairs, the

Kingdom funded an irrevocable letter of credit (“LOC”). The SPAGE contract

required Lear to provide monthly updates to the Kingdom ofthe current amount

available through the LOC. If the amount was below the amount necessary to

cover expected shipments of parts, Lear was to promptly notify the Kingdom, at

which time the Kingdom, at its discretion, could replenish the LOC. Lear in
No. 08-50857 consolidated with No. 08-51103

1 Lear also contends that the Kingdom coerced it into renting housing at the Al Bilad

complex from a friend of the royal family at an exorbitant price. Lear seeks to recover the

difference in amounts paid and the cost of other available housing. The Kingdom defends its

nonpayment under the TSP contract by pointing to the failure by Lear to pay Saudi taxes that

were due, and failure to deliver a certificate evidencing such payment. 

3

turn was required to provide a performance bond to the Kingdom, also in the

form of an LOC, equal to 5% of the contract value, or $1.2 million. 

In 1996, the Kingdom awarded Lear a service contract, the F-5 Technical

Support Program contract (“TSP”). Under the TSP, Lear sent hundreds of

personnel to Saudi Arabia to provide training and support services to the Royal

Saudi Air Force (“RSAF”). These employees were integrated with RSAF

personnel, and provided training and support in post-ejection survival, photo

reconnaissance, flight operations, tactics and weapons to the RSAF. They

worked directly for and under the control of the RSAF. Lear employees were

responsible for developing and coordinating emergency action procedures for the

pilots of the F-5 aircraft. Others provided training to the RSAF in fighter

weapons and tactics. As with the SPAGE contract, Lear was required to put up

a performance guarantee bond for $5.6 million which represented 5% ofthe total

cost of the contract. The Kingdom had the right to retain the bond until the

contract was completed, and had the right to withhold the last payment due

under the contract (to be no less than 10% of the total contract cost) until the

contract was closed out. The final payment amount under the TSP was

approximately $12.2 million, and Lear alleges the Kingdom has unjustifiably

refused to pay this amount.1

Lear also alleges that in 1998, the Kingdom’s LOC funding the SPAGE

contract was depleted due to the Kingdom’s failure to fund the LOC, and Lear

had no mechanism to obtain payment for its services. After 1998, Lear alleges

it worked with the Kingdom to prioritize repairs that needed to be made and

that the Kingdom provided additional funds for these repairs. Lear also
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4

cancelled some outstanding repairs and continued to store other parts. Lear

accepted at least one additional shipment of parts after the LOC was depleted.

The Kingdom maintains that Lear should have rejected all shipments after the

LOC funds were insufficient to cover repairs. 

When the SPAGE contract expired in 1999, Lear had a number of F-5

parts in storage in its San Antonio facility and continues to store these. Lear

has received no payment for the storage costs. The Kingdom argues that Lear

retained these parts as a gesture of goodwill,that Lear had no obligation to store

the parts, and that the Kingdom has no obligation to pay for the storage. The

Kingdom states that it instructed Lear to return the parts and Lear refused.

Lear argues that the United States Air Force instructed the Kingdom that the

parts could not be returned until the contract was properly terminated. Lear

communicated this in a letter to the Kingdom in 2002. 

In 2003 and 2004, Lear met with the Kingdom in an attempt to resolve

their contractual disputes and close out both contracts. In particular, Lear

complained of the following:

• The Kingdom improperly withheld the final payment due under the

TSPcontract, approximately $12.2 million, due to the alleged failure

by Lear to pay taxes. Lear claims the Kingdom’s argument that

back taxes have not been paid is the result of the Kingdom’s

misrepresentation of Lear’s income under the TSP contract to the

taxing authority.

• The Kingdom improperly extended and eventually drew down Lear’s

$5.6 million performance bond under the TSP contract. 

• The Kingdom’s order that Lear rent an expensive housing complex

shifted inordinate and unjustified expense to Lear. Lear was forced

to comply or risk losing the TSP contract. 
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5

• Under the SPAGE contract, Lear has incurred significant

uncompensated storage costs for storing the F-5 parts in its San

Antonio warehouse. 

The meetings between Lear and the Kingdom did not resolve any ofthese issues.

B. Procedural Background

In 2004, Lear filed this suit against the Kingdom in the Western District

of Texas. Lear made claims under both the TSP and SPAGE contracts, alleging

that the Kingdom breached both contracts in the manner stated above. The

Kingdom moved to dismiss the suit on grounds that the contracts contained

forum-selection clauses that required any litigation to take place in Saudi

Arabia. The district court denied the motion, and determined that these clauses

were permissive rather than mandatory forum-selection clauses. The Kingdom

then moved to dismiss on the grounds of (l) sovereign immunity under the

Foreign Sovereign Immunities Act (“FSIA”), (2) for forum non conveniens, and

(3) the act of state doctrine. The district court allowed jurisdictional discovery

on the FSIA and forum non conveniens issues. After conducting a hearing and

reviewing the evidence presented, the district court found that the Kingdom’s

actions under both contracts fell within the commercial activities exception of

the FSIA, therefore subjecting the Kingdom to the jurisdiction of the district

court. The district court also denied the motion to dismiss on grounds of forum

non conveniens. It found that Saudi Arabia was an available and adequate

forum, but determined that the public and private factors weighed in favor of

Texas. 

At the Kingdom’s request, the district court certified for appeal to this

court under 28 U.S.C. § 1292(b)the orders denying the Kingdom’s motions based

on the forum-selection clauses and for forum non conveniens. The Kingdom also

appeals the district court’s order denying its motion to dismiss based on its

claims of sovereign immunity under the FSIA. The denial of immunity under
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6

the FSIA is immediately appealable to this court and that issue is before us as

well. The Kingdom also argues that the act of state doctrine bars American

courts from considering the actions of the Saudi taxing authority and the

Kingdom’s actions related to the Al Bilad housing complex. 

II. Discussion

We consider below 1) whether the FSIA permits us to exercise jurisdiction

over the Kingdom; 2) whether the forum-selection clauses in the contracts

require us to yield to the Saudi forum; and 3) whether the district court abused

its discretion in denying the Kingdom’s motion to dismiss for forum non

conveniens. For the reasons stated, we do not consider the Kingdom’s act of

state defense.

The issue of jurisdiction under the FSIA “is a question of law which this

Court reviews de novo.” Stena Rederi AB v. Comisión de Contrators del Comité

Ejecutivo General del Sindicato Revolucionario de Trabajadores Petroleros de

law República Mexicana, S.C., 923 F.2d 380, 386 (5th Cir. 1991). Lear argues

that the district court’s decision to treat the TSP and SPAGE contracts as

related is a finding of fact and as such must be reviewed for clear error, however,

“[c]ontract interpretation is a question of law which we review de novo.” Kona

Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 609 (5th Cir. 2000). The district

court’s denial of the motion to dismiss for forum non conveniens is reviewed for

an abuse of discretion. Dtex, LLC v. BBVA Bancomer, S.A., 508 F.3d 785, 787

(5th Cir. 2007). 

A. Foreign Sovereign Immunities Act

The Kingdom argues that the FSIA precludes a United States court from

exercising jurisdiction over these actions against it. 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). Under the FSIA, “a

foreign state is presumptively immune from jurisdiction of the United States
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7

courts; unless a specified exception applies, a federal court lacks subject-matter

jurisdiction over a claim against a foreign state.” Saudi Arabia v. Nelson, 507

U.S. 349, 355 (1993). Lear contends that it is entitled to bring this action

against the Kingdom under the “commercial activity” exception to the FSIA.

This exception is recognized under subsection §1605(a)(2) of the FSIA which

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– . . .

(2) in which the action is based upon a commercial activity carried

on in the United States by the foreign state; or upon an act

performed in the United States in connection with a commercial

activity of the foreign state elsewhere; or 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). Lear contends that both the TSP and SPAGE contracts

involved the purchase and sale of goods and services, and that they are

commercial. Although Lear does not contend that the Kingdom acted in the

United States, they argue that its purchase of goods and services under the

contracts had a direct effect in the United States.

Commercial activity is defined by the FSIA as: 

(d) A “commercial activity” means either a regular course of commercial

conduct or a particular commercial transaction or act. The commercial

character of an activity shall be determined by reference to the nature of

the course of conduct or particular transaction or act, rather than by

reference to its purpose. 

§1603(d). The Supreme Court provided a helpful explanation of the commercial

activity exception in Republic of Argentina v. Weltover, 504 U.S. 607 (1992).

There, it said:

[W]e conclude that when a foreign government acts, not as regulator of a

market, but in the manner of a private player within it, the foreign
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8

sovereign's actions are “commercial” within the meaning of the FSIA.

Moreover, because the Act provides that the commercial character of an

act is to be determined by reference to its “nature” rather than its

“purpose,” 28 U.S.C. § 1603(d), the question is not whether the foreign

government is acting with a profit motive or instead with the aim of

fulfilling uniquely sovereign objectives. Rather, the issue is whether the

particular actions that the foreign state performs (whatever the motive

behind them) are the type of actions by which a private party engages in

“trade and traffic or commerce,” Black'sLaw Dictionary 270 (6th ed. 1990).

Thus, a foreign government's issuance of regulations limiting foreign

currency exchange is a sovereign activity, because such authoritative

control of commerce cannot be exercised by a private party; whereas a

contract to buy army boots or even bullets is a “commercial” activity,

because private companies can similarly use sales contracts to acquire

goods. . . .

504 U.S. at 614-15. 

In reviewing the district court’s denial of the Kingdom’s motion to dismiss

under the FSIA, we must first consider Lear’s argument that the SPAGE and

TSP contracts must be read together as a single contract. We interpret a

contract de novo, or as a question of law. Alliance Health Group, LLC v.

Bridging Health Options, LLC, 553 F.3d 397, 399 (5th Cir. 2008). The district

court concluded that the contracts were for the performance of closely related

services and should be read together. We disagree. 

In instances where documents are “executed at the same time, with the

same purpose, and in the course of the same transaction, we construe the

agreements together.” Calpetco 1981 v. Marshall Exploration, Inc., 989 F.2d

1408, 1412 (5th Cir. 1993). Here, the contracts were entered into a year apart

as the result of separate bidding processes. The two contracts are for the

purchase of different goods and services and do not refer to each other.

Moreover, the TSP contract contains a merger clause that states “This Contract

embodies the entire agreement between the Government and Contractor relating

to the Work, and the parties will not be bound by or be liable for any statement,
No. 08-50857 consolidated with No. 08-51103

9

representation, promise, inducement or understanding of any kind or nature

relating to the Work which is not set forth or provided for herein.” Although

performance under the two contracts may be related,the contracts were distinct

and separate. Therefore, based on the language of the contracts, we decline to

read the contracts together.

Turning to the Kingdom’s contention that the TSP contract does not fall

within the commercial activity exception, we agree. Employees under the TSP

contract performed their work in Saudi Arabia and were integrated with the

RSAF. Some of these employees provided flight operations services and training

to the RSAF. Others trained the pilots in survival skills, including escape and

evasion, and ejection over sea, desert, or mountain terrain. Employees also

performed maintenance on the F-5 aircraft, minimizing the time the aircraft

were unavailable for defense. Unlike a contract to buy army boots or bullets, as

the Supreme Court discussed above,theTSP was a contractto provide personnel

that were vital to the operation of a national air defense system. While the

purpose oftheTSPcontract was undeniably sovereign,the nature ofthe contract

was also sovereign. The TSP employees were integrated into the RSAF and can

be considered military personnel. The legislative history from the FSIA

instructs “the employment of diplomatic, civil service, or military personnel” is

not commercial in nature. H.R. REP. NO. 94-1487, at 16 (1976), as reprinted in

1976 U.S.C.C.A.N. 6604, 6614, see Kato v. Ishihara, 360 F.3d 106, 111 (2nd Cir.

2004) (holding that employment of a public servant in the promotion of

commerce was not in itself a commercial activity), Holden v. Canadian

Consulate, 92F.3d 918, 921 (9th Cir. 1996) (“Because private parties cannot hire

diplomatic, civil service or military personnel, such hiring is necessarily

governmental.”). 

In Butters v. Vance International, Inc., 225 F.3d 462 (4th Cir. 2000), the

Fourth Circuit was called upon to determine whether the employment of a
No. 08-50857 consolidated with No. 08-51103

10

security guard to protect a head of state constituted a commercial activity under

the FSIA. There, the Saudi military did not allow the plaintiff to fill a particular

guard position it deemed improper for a female. Id. at 464. The Fourth Circuit

determined that guarding a head of state is a sovereign act, not one a private

party could undertake. Id. at 465. “Indeed it is difficult to imagine an act closer

to the core of a nation’s sovereignty.” Id. Maintaining an air defense system is

a similarly sovereign act. Therefore, the subject matter of the TSP contract does

not fall within the commercial activity exception of FSIA and we do not have

jurisdiction over Lear’s claim for breach of the TSP contract.

With respect to the SPAGE contract, however, we agree with Lear that it

falls within the commercial activity exception to the FSIA. A foreign state

undertakes commercial activity when it enters the marketplace and exercises

“the same powers that a private citizen might exercise.” Hond. Aircraft Registry,

Ltd. v. Gov't of Hond., 129 F.3d 543, 548 (11th Cir. 1997). As the Supreme

Court noted in Weltover, the purchase of army boots or bullets is a commercial

activity. Here, the Kingdom entered the marketplace to obtain repair services

for parts and components for its F-5 aircraft. Under this contract, damaged or

defective aircraft parts were shipped from Saudi Arabia to San Antonio, where

they were evaluated, repaired, and stored before being shipped back to Saudi

Arabia. This is similar to the situation in McDonnell Douglas Corp. v. Islamic

Republic of Iran, 758 F.2d 341 (8th Cir. 1985). There, Iran contracted to buy

parts from McDonnell Douglas for its F-4 aircraft. The Eighth Circuit stated

that“a contract by a foreign governmentto buy equipmentfor its armed services

constitutes a commercial activity to which sovereign immunity does not apply.”

Id. at 349. In determining that the contract to purchase F-4 parts was

commercial activity, the Eighth Circuit concluded “that the intent of the

purchasing sovereign to use the goods for military purposes does not take the

transaction outside of the ‘commercial’ exception to sovereign immunity.” Id.
No. 08-50857 consolidated with No. 08-51103

11

We agree. The SPAGE contract for the repair and replacement of goods is a

commercial activity, regardless of the product’s end use for a military purpose.

The SPAGE employees were notintegrated with the RSAF, and therefore unlike

the personnel working under the TSP contract, they cannot be considered

military personnel.

The SPAGE contract is precisely the type of transaction the Supreme

Court discussed in Weltover. There, it said “that the commercial character of an

act is to be determined by reference to its ‘nature’ rather than its ‘purpose,’. . .

a contract to buy army boots or even bullets is a ‘commercial’ activity.” Weltover,

504 U.S. at 614. “[C]ourts typically hold that contracts for procurement of goods

and services are commercial rather than governmental in nature.” Walter Fuller

Aircraft Sales, Inc. v. Republic of the Phil., 965 F.2d 1375, 1384 (5th Cir. 1992).

In Texas Trading & Mill Corp. v. Federal Republic of Nigeria, 647 F.2d 300,

(2nd Cir. 1981), the Second Circuit determined that a contract for the sale of

cementfrom American companies to the Nigerian government was a commercial

activity. Id. at 310. “Its purpose to build roads, army barracks, whatever [with

the cement] is irrelevant.” Id. Regardless of the end use of the F-5 components

in aircraft that were used for national defense, the SPAGE contract was for

goods and services and is properly construed as commercial activity. 

But commercial activity by a sovereign alone is not enough to establish

jurisdiction - the activity must also have a direct effect in the United States.

“[A]n effect is ‘direct’ if it follows ‘as an immediate consequence of the

defendant’s . . . activity.” Weltover, 504 U.S. at 607. An effect of a contract is

also direct when it is to be primarily performed in the United States. In Walpex

Trading Co. v. Yacimentos Petroliferos Fiscales Bolivianos, 712 F. Supp. 383

(S.D.N.Y. 1989), an American company contracted with an instrumentality of

Bolivia for the export of steel tubing and accessories. After partial performance,

the Bolivian entity repudiated the contract, and the American company brought
No. 08-50857 consolidated with No. 08-51103

12

suit. Id. at 385. The court concluded that where “[t]he performance of the

contract was to occur primarily in [the United States], and the foreign defendant

utilized United States banking resources to facilitate payment,” there is a direct

effect for purposes of the commercial activity exception. Id. at 390-91. On the

other hand, where an American company sued the Federal Republic of Nigeria

for the unlawful detention of and damage to its aircraft, the Second Circuit

found there was no direct effect in the United States. Antares Aircraft, L.P. v.

Fed. Republic of Nig., 999 F.2d 33, 36 (2nd Cir. 1993). 

However, in the instant matter, all legally significant acts took place in

Nigeria. The aircraft was registered in Nigeria. There is no evidence that

the use of the aircraft was related to substantial commerce with the

United States. The detention of, and physical damage to, the plane

happened in Nigeria. The alleged conversion thus occurred in Nigeria.

Moreover, the negotiations over, and the payment of, the outstanding fees

occurred in Nigeria and utilized Nigerian currency.

Id. The plaintiff argued that it paid the Nigerian fees from its bank account in

New York, but the court determined this fact was “without legal significance.”

Id.

This court has held that significant financial harm suffered by an

American company when a foreign government refuses to remitfunds due under

a commercial contract is a sufficient direct effect to meet this exception. In

Voerst-Alpine Trading Corp. v. Bank of China, 142 F.3d 887 (5th Cir. 1998), this

court found that an American company’s “nontrivial financial loss in the United

States in the form of funds not remitted to its account at a Texas bank” was a

direct effect. Id. at 896. There, the Bank of China refused to honor a letter of

credit that had been posted to pay for a shipment of goods. Id. at 890. Similarly

in Byrd v. Corporacion Forestal y Industrial de Olancho S.A., 182 F.3d 380 (5th

Cir. 1999), an American company suffered financial harm after a Honduran

public entity allegedly ousted its consultant from a sawmill operating in
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2 The Kingdom argues for the first time on appeal that the law of Saudi Arabia should

be applied to interpretthe forum-selection clause. Because this argument was not made to the

district court, we decline to consider it on appeal. Moreover, the Kingdom cites no Saudi law

regarding contract interpretation that is different from United States law.

13

Honduras in violation of a contract. While the court acknowledged the potential

danger in treating the direct effect test expansively, it found the public entity’s

actions did have a direct effect in the United States as the entity “foresaw and

perhaps even helped to plan the financial harms which occurred to appellees.”

Id. at 391. 

The SPAGE contract was primarily performed in the United States. The

Kingdom shipped parts to Lear in San Antonio, where Lear employees in Texas

arranged for their evaluation, repair, and return. The place of payment was

Houston, Texas. This is similar to the situation in Walpex Trading, where

performance and payment under the contract both occurred in the United States

and the contract was therefore considered to have a direct effect in the United

States. Lear also suffered financial losses when the LOC was depleted and the

Kingdom refused to pay for the repair or storage of the F-5 parts. When the

LOC was depleted, Lear already had parts in its San Antonio facility and had

repairs outstanding. It suffered additional financial harm when it continued to

store (whether properly or not) the parts in its warehouse. Therefore, it is clear

to us that the SPAGE contract had a sufficient direct effect in the United States

so as to fall within the commercial activity exception of the FSIA. 

B. Forum-Selection Clause

The Kingdom argues next that the SPAGE contract contains a forumselection clause that requires this dispute to be heard in Saudi Arabia.2

Mandatory forum-selection clauses that require all litigation to be conducted in

a specified forum are enforceable if their language is clear. City of New Orleans

v. Mun. Admin. Servs., Inc., 376 F.3d 501, 504 (5th Cir. 2004) (“For a forum

selection clause to be exclusive, it must go beyond establishing that a particular
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3 The contract goes on:

3.2 The Contractor may not, because of such dispute, suspend work or any part

thereof including the disputed part and it is always required to perform all work

according to the Government’s instructions until settlement ofthe dispute or the

issue of a final decision by the Board of Grievances which shall be final and

binding on the two parties.

3.3 The Contractor shall maintain full knowledge of the provisions of the Saudi

Arabian Government Procurement Law and its executive by-law instructions

which shall be applied to this Contract and its documents. These provisions are

considered to take precedence whenever a contradiction occurs or when not

specified, or if there is a contradiction between the implementation of the rules

and the texts of the Contract and its documents. Ambiguity or confusion in the

contract and its documents will be interpreted according to the terms of the law

and implementation regulations. 

14

forum will have jurisdiction and must clearly demonstrate the parties’ intent to

make that jurisdiction exclusive.”). The Kingdom argues that the SPAGE

contract contains a mandatory forum-selection clause establishing the Board of

Grievances (the “Board”) in Saudi Arabia as the only forum available to settle

disputes. Lear argues that the forum-selection clause is permissive, and the

district court agreed with this interpretation. “We review conclusions of law -

including contractual interpretations - de novo.” Id. at 506. The clause in

question from the SPAGE contract provides:

3.1 Any disputes that may arise from the application or interpretation

of any of the provisions of this Contract or from any matter relating

to the execution of any work entrusted to the Contractor and not

resolved amicably by and between the Government and the

Contractor, the Contractor, after being notified of the final decision

of the Government regarding the subject under dispute, shall have

the right to appeal to the Board of Grievances within thirty (30)

days from the receipt of the Government’s decision, otherwise it

shall be considered as accepting said decision.3

Lear argues that this language does not clearly demonstrate the parties’

intent to bind themselves to Saudi Arabia as the only available forum. Instead,

it argues that the clause is permissive and allows jurisdiction to be exercised in
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15

Saudi Arabia, but does not rule out other possible forums. Assuming without

deciding that the provision here is sufficiently clear to be mandatory, it is only

applicable in situations where the Kingdom has issued a final decision. The

Kingdom did not render a final decision on the issues of final payment and close

out of the SPAGE contract. Lear contacted the Kingdom by letter in 2002

informing the Kingdom that the F-5 parts being stored could not be turned over

until the contract was properly terminated as per instructions from the United

States Air Force. The Kingdom did not respond to this letter and now argues

that its lack of response should be construed as a final decision. It did not make

this argument to Lear prior to this litigation, and Lear received no notice or

indication that the Kingdom’s silence constituted a final decision that triggered

the thirty day appeal period. With no final decision of the Kingdom, the Board

never became available as a forum. Moreover, if we accept the Kingdom’s

argument that the Board is the exclusive forum to resolve this dispute, Lear

would be denied a remedy because the remedy the Kingdom points to in the

SPAGE contract was never triggered. 

C. Forum Non Conveniens

The district court also denied the Kingdom’s motion to dismiss the case on

the basis of forum non conveniens. We review this ruling for an abuse of

discretion. Dtex, LLC, 508 F.3d at 787. In order for a case to be dismissed for

forum non conveniens, there must be another forum that could hear the case,

and therefore the first step in evaluating the motion is to “determine whether

there exists an alternate forum.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254

n.22 (1981). This determination turns on the availability and adequacy of the

forum:

A foreign forum is available when the entire case and all parties can come

within the jurisdiction of that forum. A foreign forum is adequate when

the parties will not be deprived of all remedies or treated unfairly, even
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16

though they may not enjoy the same benefits as they might receive in an

American court. 

In re Air Crash Disaster near New Orleans, La., 821 F.2d 1147, 1165 (5th Cir.

1987) (en banc) (citations omitted), vacated on other grounds sub nom., Pan Am.

World Airways, Inc. v. Lopez, 490 U.S. 1032 (1989), reinstated except as to

damages by In re Air Crash Disaster near New Orleans, La., 883 F.2d 17 (5th

Cir. 1989)(en banc). 

The district court found that the Board was an available and adequate

forum. Lear did not dispute that the Board was an available forum, and the

district court focused its analysis on whether it was adequate. The district court

had concerns regarding the fairness of the Board. Experts from both parties

agreed thatthe Board does not give full weightto testimony given by women and

non-Muslims, and considers testimony of Saudi nationals to be more credible

than non-nationals. Despite these concerns, the district court did not find that

the Board was an inadequate forum, and proceeded to the next step of the forum

non conveniens analysis.

The district court determined that the private and public interest factors

weighed in favor of Texas as a forum. 

The factors pertaining to the private interests ofthe litigants included the

“relative ease of access to sources of proof; availability of compulsory

process for attendance of unwilling, and the cost of obtaining attendance

of willing, witnesses; possibility of view of premises, if view would be

appropriate to the action; and all other practical problems that make trial

of a case easy, expeditious and inexpensive.”[Gulf Oil Corp. v. Gilbert, 330

U.S. 501, 508 (1947)].

Piper Aircraft, 454 U.S. at 241 n.6. The district court determined that witnesses

were located in both forums, and that translation of documents was unavoidable,

regardless of forum. It also noted that many of the Kingdom’s witnesses were

fluent in English, while Lear’s witnesses were not fluent in Arabic, making the

United States a preferable forum. The district court acknowledged that Lear’s
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17

choice of forum was due some degree of deference. See Gilbert, 330 U.S. at 508

(“Unless the balance is strongly in favor of the defendant, the plaintiff’s choice

of forum should rarely be disturbed.”) In viewing these factors as a whole, the

district court concluded that they weighed in favor of Texas as the forum.

The district court next considered the public interest factors.

The public factors bearing on the question included the administrative

difficulties flowing from court congestion; the “local interest in having

localized controversies decided at home”; the interest in having the trial

of a diversity case in a forum that is at home with the law that must

govern the action; the avoidance of unnecessary problems in conflict of

laws, or in the application of foreign law; and the unfairness of burdening

citizens in an unrelated forum with jury duty. [Gilbert, 330 U.S. at 509].

Piper Aircraft, 454 U.S. at 241 n.6. The district court acknowledged that neither

forum was ideal for both parties and that some inconvenience was unavoidable.

It also acknowledged that while both countries had an interest in trying the

case, the United States, and Texas in particular, had a stronger interest. 

We find no abuse of discretion in the district court’s reasoning and

conclusions, particularly with regard to the controversy regarding the SPAGE

contract which is all that remains. The majority of activity under that contract

took place in San Antonio, where the parts were evaluated and repaired by Lear

employees, and continue to be stored there. The activity in Saudi Arabia was

limited to Lear technicians employed under the TSP contract who removed the

parts in need of repair and prepared them to ship. 

The application of foreign law is another factor to consider, and while it

has not yet been determined whether Saudi or American law is to apply to this

dispute, the district court noted that federal courts have ably applied Saudi law

in other cases. Based on these determinations, the district court concluded that

the public interest factors weigh in favor of Texas as a more convenient forum.

The district court applied the proper law in evaluating the Kingdom’s

motion to dismiss for forum non conveniens. It first determined that Saudi
No. 08-50857 consolidated with No. 08-51103

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Arabia was an available and adequate forum, and then weighed the private and

public interest factors and concluded that Texas was an appropriate forum. 

The forum non conveniens determination is committed to the sound

discretion of the trial court. It may be reversed only when there has been

a clear abuse of discretion; where the court has considered all relevant

public and private interestfactors, and where its balancing of these factors

is reasonable, its decision deserves substantial deference.

Piper Aircraft, 454 U.S at 257. Here, the district court considered the relevant

factors and acknowledged the difficulties presented by both possible forums. The

focus of the analysis is on convenience, and the district court did not abuse its

discretion in determining that Texas was a more convenientforum. See Dickson

Marine, Inc. v. Panalpina, Inc., 179 F.3d 331, 342 (5th Cir. 1999).

III. Conclusion

For the reasons setforth above,the district court erred in refusing to grant

the Kingdom's motion to dismiss Lear's claims under the TSP contract. This

makes it unnecessary for us to consider the Kingdom's act of state argument

which relates to Lear's failure to furnish the tax certificates and Lear's claims

for additional housing expenses caused by orders of the royal family. With

regard to the claims related to breach of the SPAGE contract, the commercial

nature of the contract and the direct effect of the contract in the United States

bring it within the FSIA's commercial activity exception. The district court

therefore correctly denied the motion to dismiss Lear's claims under the FSIA

with regard to this contract. The grievance procedure outlined by the SPAGE

contract was never triggered and did not become available to Lear so the district

court correctly denied the Kingdom's motion to dismiss based on the

forum-selection clause. The SPAGE contract's considerable connection with

Texas and its continuing effects in that state, along with the other private and

public interest factors demonstrate that Texas is an appropriate forum, and the
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district court did not abuse its discretion in denying the Kingdom's motion to

dismiss based on forum non conveniens. 

We therefore AFFIRM the denial of the Kingdom’s motions to dismiss

Lear’s claims with respect to the SPAGE contract. However, we REVERSE the

district court’s order denying the Kingdom’s motion to dismiss Lear’s claims

under the TSP contract. We REMAND this case to the district court for further

proceedings consistent with this opinion. 

AFFIRMED in part.

REVERSED in part and

REMANDED.