Opinion ID: 605536
Heading Depth: 3
Heading Rank: 1

Heading: The Waiver Argument

Text: 24 The waiver exception permits federal courts to assert jurisdiction over any foreign sovereign that waives its immunity either explicitly or by implication. 28 U.S.C. § 1605(a)(1). The House Report which accompanied the FSIA listed three examples of implicit waivers: when (1) a foreign state has agreed to arbitrate in another country; (2) a foreign state has agreed that the law of a particular country shall govern; or (3) a foreign state has filed a responsive pleading but has failed to raise the defense of sovereign immunity. See House Report at 18, reprinted in U.S.C.C.A.N. at 6617. 25 In Zernicek v. Petroleos Mexicanos, 614 F.Supp. 407, 411 (S.D.Tex.1985), aff'd, 826 F.2d 415 (5th Cir.1987), cert. denied, 484 U.S. 1043, 108 S.Ct. 775, 98 L.Ed.2d 862 (1988), the court noted that courts have interpreted the waiver provision narrowly: 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. Moreover, it is rare for a court to find that a country's waiver of immunity extends to third parties not privy to the contract. Id. (citing cases). When the case involves an implied waiver, we think that a court should be even more hesitant to extend the waiver in favor of third parties. We agree with these courts that such a waiver will not be implied absent strong evidence of the sovereign's intent. In Maritime Ventures Int'l, Inc. v. Caribbean Trading & Fidelity, Ltd., 689 F.Supp. 1340, 1351 (S.D.N.Y.1988), the court warned that a broader interpretation would result in a vast increase in the jurisdiction of the federal courts over matters involving sensitive foreign relations. Because of these concerns, an agreement to arbitrate in a foreign country, without more, ought not to operate as a waiver of sovereign immunity in United States courts, especially in favor of a non-party to the agreement. Thus, CBV may not depend on Novorossiysk's agreement to arbitrate with CISA in London to show that the Soviet entity had impliedly waived its immunity to jurisdiction in the United States.