Opinion ID: 3040536
Heading Depth: 4
Heading Rank: 1

Heading: Af-Cap’s Global Argument Regarding The

Text: Obligations At Issue. [8] Af-Cap first argues that all the obligations at issue were used for a commercial activity in the United States because the Congo and SNPC pledged the obligations as security for the 1984 Loan Agreement. However, Af-Cap’s reliance on the 1984 Loan Agreement is misplaced. That Loan Agreement was between the Congo and a bank located in the Bahamas for the financing and construction of a highway in the Congo, to be managed by an English contractor. None of the obligations presently at issue and purportedly used for a commercial activity in the United States was in existence in 1984. For these reasons, Atwood, 875 F.2d 1174, is inapposite. In Atwood, Petrobras, a Brazilian entity and foreign sovereign under the FSIA, entered into a contract with Atwood, a United States company, for Atwood to drill oil wells off the coast of Brazil. Id. at 1175-76. As security for the money due Atwood under the contract, Petrobras provided a letter of credit issued by a United States bank. Id. at 1175. Examining Atwood, the CBC court noted that “[a]lthough Atwood did not explicitly consider the ‘used for’ requirement, Petrobras plainly used the AF-CAP v. CHEVRONTEXACO 999 letter of credit for a commercial purpose within the ordinary meaning of the phrase ‘used for.’ Petrobras used the letter of credit to secure the services of an American corporation to do drilling work . . . . Petrobas put the letter of credit in service of the commercial activity, it ‘spent’ the letter of credit on that activity.” 309 F.3d at 258. The facts of Atwood — a United States party to the contract, a contract requiring services to be provided by the United States company, services secured by a letter of credit from a United States bank, and a letter of credit in existence at the time of the contract — are far different from the details pertinent to the 1984 Loan Agreement in this case.