Opinion ID: 186237
Heading Depth: 2
Heading Rank: 2

Heading: The Nature of the Waiver Provided by Article 10.1(j)

Text: 32 The various agreements at issue here make clear that Gulf is covered by the amended Purchase Agreement. The only remaining question is whether Gulf's claims fit within the contours of the waiver contained in Article 10.1(j) of the amended Purchase Agreement. They do. Article 10.1(j) states: 33 The transactions contemplated by this Agreement are commercial transactions, and the Government shall not, by legislative or executive act or proceeding, or otherwise, (i) take any action which would alter or impair the rights of Occidental under this Agreement, (ii) contest or defend or assert defenses against ... claims, if any, made by Occidental, based in whole or in part upon the Government's status as a sovereign, or (iii) in any manner avail itself of ... any other benefits or protections of any nature whatsoever which might otherwise be available to the Government connected with the Government's status as a sovereign state in relation to this Agreement. 34 Purchase Agreement Art. 10.1(j), at 10, J.A. 130. The parties agree that, under subsection (ii), Congo waived sovereign immunity with respect to Occidental. The dispute here turns on the meaning of subsection (iii). Gulf argues that the plain terms of subsection (iii) cover Gulf's claims, because Gulf's claims against Congo arise in relation to the Purchase Agreement. Gulf Br. at 57-59; Reply Br. at 17-20. We agree. 35 Subsection (iii) contains a waiver of sovereign immunity, not, as Congo suggests, a waiver of some other, unspecified and unidentifiable, defense. We cannot imagine a benefit[] or protection[] that is connected with [Congo's] status as a sovereign state  that is not an assertion of sovereign immunity. Indeed, that is precisely the meaning that Congo gives the phrase the Government's status as a sovereign state in subsection (ii). Congo Br. at 29. More significantly, Congo suggests no other benefit[] or protection[] that is connected with the Government's status as a sovereign state to which subsection (iii) might refer other than sovereign immunity. 36 Congo asserts that subsection (ii), which waives sovereign immunity with respect to Occidental, is superfluous if subsection (iii) waives sovereign immunity more generally. Consequently, Congo argues, subsection (iii) cannot be read as a waiver of Congo's sovereign immunity with respect to Gulf's claims here. Congo Br. at 34. This argument proves too much. Congo and Occidental were the original parties to the Purchase Agreement. Therefore, as Gulf argues, subsection (ii) logically, and not surprisingly, refers to these two parties alone. See Reply Br. at 20. However, as the original Purchase Agreement makes clear in explicitly providing for the assignment of Occidental's oil interests, Purchase Agreement Art. 9, at 8, J.A. 128, Congo and Occidental contemplated that other parties might later be brought into the Agreement. Subsection (iii) anticipates the addition of other investors, such as Gulf, to the arrangement and affords these other investors the same waiver of sovereign immunity given to Occidental in subsection (ii). As Gulf argues, one can view subsections (ii) and (iii) as covering, without overlap, two different groups — Occidental and the rest of the universe, respectively. Reply Br. at 19-20. In that case, subsection (ii) is not superfluous. 37 Even if subsection (ii) is seen as a subset of subsection (iii), this is not fatal to the extension of Congo's waiver to Gulf. Though the parties need not have written subsection (ii) as a subset of subsection (iii), a decision to do so in order to give the benefit of a waiver to contemplated but as yet unidentified participants in the purchase of Congo's royalty oil is plausible. Congo explicitly acknowledges that the transactions contemplated by the Purchase Agreement are commercial. Purchase Agreement Art. 10.1(j), at 10, J.A. 130. This being the case, it is hard to imagine any business entity entering into a commercial agreement with a sovereign state for millions of dollars if the state is unwilling to make itself amenable to suit for breach of contract. In any event, the main point is that Congo's suggestion that subsection (iii) refers to defenses other than sovereign immunity is specious. Congo offers nothing to support this claim, the District Court found nothing, and we can think of nothing. Subsection (iii) must have meaning, and the only plausible meaning that has been offered is the interpretation pressed by Gulf. 38 Finally, Congo argues that Gulf will gain more than was given to Occidental under subsection (ii) if subsection (iii) is read as a waiver of sovereign immunity. In particular, Congo says that Occidental was required to arbitrate any disputes under the Purchase Agreement before the International Chamber of Commerce in France and that Gulf seeks to avoid this duty. See Congo Br. at 31. It is true that most 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. Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370, 377 (7th Cir.1985), quoted in Creighton, Ltd. v. Gov't of Qatar, 181 F.3d 118, 122 (D.C.Cir.1999) (emphasis added). But in those cases the relevant contract contained only an arbitration provision. There was not, as there is here, a separate, explicit waiver provision. Congo's position seems to be that the waiver provision should be read, in conjunction with the arbitration provision, as waiving immunity to suit only in France, but we reject that view for two reasons. First, unlike the arbitration provision, the waiver provision makes no reference to any country, thus indicating a broader scope. Second, Congo's initial contract partner, Occidental, was an American company. We cannot accept that Congo never contemplated being sued in an American court even though it explicitly waived sovereign immunity in a contract that it signed with an American company. Our rejection of Congo's immunity claim does not, of course, address its argument that Gulf is bound by the Purchase Agreement's arbitration provision. Whether Gulf is obligated to arbitrate any claims against Congo under the amended Purchase Agreement is a matter the District Court can, in the first instance, resolve.