Opinion ID: 2502147
Heading Depth: 2
Heading Rank: 6

Heading: Assets of China's Agencies or Instrumentalities

Text: Petitioners submit that under § 1610(a) and (b) they are entitled to collect assets in satisfaction of the Missouri default judgment from China's agencies and instrumentalities, as well as from the sovereign itself. To the extent petitioners failed to raise this argument in the district court, it is not properly preserved for appellate review. See Poupore v. Astrue, 566 F.3d 303, 306 (2d Cir.2009). Moreover, petitioners have made no effort to satisfy the requirements of § 1610(c) by identifying specific assets held by a Chinese agency or instrumentality that fall within § 1610's exceptions to immunity. See Part II.E, supra. In any event, to support their position, petitioners renew their argument that China has waived its immunity, a contention that we have already rejected for the reasons stated in Part II.D, supra. Petitioners' contention fails for two further reasons. First, relying on § 1603's broad definition of foreign state to include an agency or instrumentality of a foreign state, petitioners appear to assume that they are entitled to execute the Missouri default judgment upon the full scope of sovereign assets potentially subject to execution under the FSIA. The default judgment, however, was entered against China only. While that judgment references one alleged instrumentality of China, it does so only to state that [a]ll of Plaintiffs' claims against this entity are dismissed without prejudice. Final Judgment at 7, Walters v. Century Int'l Arms, Inc., No. 93-5118-CV-SW-1 (W.D.Mo. Oct. 22, 1996). There is a presumption that a foreign government's determination that its instrumentality is to be accorded separate legal status will be honored. First Nat'l City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 628, 103 S.Ct. 2591, 77 L.Ed.2d 46 (1983). We have accordingly recognized a further presumption that assets of a foreign government instrumentality could not be executed upon to satisfy a judgment against a parent foreign government, which can be overcome only if the party seeking attachment carrie[s] its burden of demonstrating that the instrumentality's separate juridical status [i]s not entitled to recognition. EM Ltd. v. Republic of Argentina, 473 F.3d at 477; see also De Letelier v. Republic of Chile, 748 F.2d at 795 (holding that judgment creditor was not entitled to collect assets of entity owned by foreign sovereign because it had not met burden of showing that corporate separateness of entity was not entitled to recognition). The record in this case is bereft of any reason to conclude that the separate legal status of any agency or instrumentality of China should be disregarded for purposes of allowing petitioners to execute the judgment against assets of such entities. The Missouri default judgment thus provides no basis for collecting from any entity other than China itself. Second, petitioners' alternative argument that they are entitled to collect from China's agencies or instrumentalities pursuant to § 1610(b) is not supported by the terms of that provision. Section 1610(b)(1) provides, [i]n addition to subsection (a), that any property in the United States of an agency or instrumentality of a foreign state engaged in commercial activity in the United States shall not be immune from ... execution ... if... the agency or instrumentality has waived its immunity from ... execution. This exception to immunity applies only if the immunity of the agency or instrumentality  rather than that of the foreign state itself  has been waived. Petitioners have made no showing of such a waiver. Section 1610(b)(2) states that the property of an agency or instrumentality engaged in commercial activity in the United States is not immune if the underlying judgment relates to a claim for which the agency or instrumentality is not immune by virtue of section 1605(a)(2) [commercial activity] ... or (5) [tortious act or omission]... regardless of whether the property is or was involved in the act upon which the claim is based. Again, because petitioners' default judgment is against China itself, rather than an agency or instrumentality, the judgment does not relate to a claim for which the agency or instrumentality is not immune from jurisdiction. Petitioners, therefore, cannot avail themselves of either of § 1610(b)'s exceptions to execution immunity. We need not here decide whether petitioners might ever be in a position to execute judgment against a specified Chinese agency or instrumentality that was an alter ego of China itself. See, e.g., Zappia Middle East Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 252 (2d Cir.2000) (identifying circumstances under which presumption of separateness between government entities may be overcome). We conclude only that the record in this case supports no exception to execution immunity.