Opinion ID: 6498714
Heading Depth: 3
Heading Rank: 3

Heading: U.S. district court action

Text: Esso commenced this action in the district court in 2014, before expiration of the three-year statute of limitations established by the FAA. See 9 U.S.C. § 207. It asked the district court to enforce the Award pursuant to the New York Convention. 9 NNPC responded by moving to dismiss Esso’s petition for lack of personal jurisdiction or based on forum non conveniens. NNPC also asked the district court to dismiss Esso’s petition on the merits, citing the Nigerian courts’ decisions nullifying the Award. As described above, after due consideration, the district court rejected NNPC’s personal jurisdiction and forum non conveniens arguments, but granted its request to deny Esso’s petition to enforce the Award. 10 As to personal jurisdiction, the parties agreed that NNPC was properly served and that the Foreign Sovereign Immunities Act (“FSIA”) provided the statutory basis for personal jurisdiction over NNPC. See Esso Expl. and Prod. Nigeria Ltd. v. Nigerian Nat’l Petroleum Corp., 397 F. Supp. 3d 323, 332–33 (S.D.N.Y. 2019). The FSIA provides that “[p]ersonal jurisdiction over a foreign state,” including “an agency or instrumentality of a foreign state,” exists “as to every claim for relief over which the district courts have subject matter jurisdiction . . . where service has been made.” 28 U.S.C. §§ 1330(b), 1603(a). NNPC conceded that it is an instrumentality of Nigeria. The only questions before the district court, therefore, were whether NNPC was entitled to 9The applicability of the New York Convention is not in dispute here, where the Award was rendered in the signatory state of Nigeria, under Nigerian law, and involves parties that are not citizens of the United States. See N.Y. Convention art. I(1); 9 U.S.C. § 202. 10The district court framed its denial of Esso’s petition for enforcement as a grant of NNPC’s motion to dismiss under Rule 12(b)(6). As we discuss further below, the determination of a petition to enforce an arbitral award under the New York Convention is a summary proceeding and is not properly evaluated under ordinary Rule 12(b)(6) pleading standards. 13 constitutional due process and, if so, whether those due process requirements had been satisfied. In addressing these questions, the court first engaged in a thorough analysis of the relationship between NNPC and the Nigerian government according to the factors set forth in EM Ltd. v. Banco Central de la República Argentina, 800 F.3d 78, 90–91 (2d Cir. 2015). Based on its extensive factual findings, the court concluded that NNPC is an alter ego of Nigeria and thus Esso need not establish that NNPC has the minimum contacts with the United States ordinarily required to ensure due process. The court went on to determine that, even if NNPC were not an alter ego of Nigeria, constitutional due process requirements were met for the independent reason that NNPC had sufficient contacts with the United States to support the court’s exercise of specific jurisdiction over it and that the exercise of jurisdiction would be reasonable under the circumstances. As to forum non conveniens, the district court conducted the three-step analysis established in Iragorri v. United Technologies Corp., 274 F.3d 65 (2d Cir. 2001) (en banc), and concluded, in its discretion, that the Iragorri factors favored Esso’s choice of forum. In reaching that conclusion, the district court determined that, although the courts of Nigeria would generally provide an adequate alternative forum, it owed deference to Esso’s choice of forum, and both private and public interests weighed in favor of the district court in New York sitting as a secondary jurisdiction under the New York Convention. On the merits, the district court emphasized that the parties did “not dispute that the Award ha[d] been set aside in Nigeria” and that the decision whether to enforce the Award was therefore committed to its discretion. Esso, 397 F. Supp. 3d at 349–50. In then evaluating whether the Nigerian Court of Appeal’s judgments partially setting aside the Award “offend[] notions of justice” in the United States, the district court 14 looked to the considerations identified by the Pemex court: “(1) the vindication of contractual undertakings and the waiver of sovereign immunity; (2) the repugnancy of retroactive legislation that disrupts contractual expectations; (3) the need to ensure legal claims find a forum; and (4) the prohibition against government expropriation without compensation.” Id. at 351 (quoting Pemex, 832 F.3d at 107). The district court concluded that, although it was a “close call” because the Nigerian court’s rulings were “seemingly anomalous,” the four Pemex considerations overall favored extending comity to the Nigerian judgments partially setting aside the Award. Id. at 354. After a brief analysis, the district court also rejected Esso’s assertion that it would not receive due process in Nigeria because of litigation delays and difficulties it may face in collecting damages from a state entity in Nigeria even if the Nigerian courts ultimately rule in Esso’s favor. The court reasoned that Esso’s prediction of “a lengthy appeals process” in Nigeria provided an insufficient basis for denying comity to these foreign judgments. Id. at 355. And it dismissed as “meritless” Esso’s contention that it would have difficulty collecting on a Nigerian judgment in its favor, explaining that Esso (which entered into the PSC with a Nigerian corporation subject to Nigerian law, of its own accord) is “free to convert” a future Nigerian judgment to a U.S. judgment. Id. Following these determinations, the district court denied in full Esso’s petition to enforce the Award.