The Supreme Court recently confirmed in a unanimous decision the requirements for personal jurisdiction over foreign states when parties seek to confirm international arbitration awards, but important questions remain.
In CC/Devas (Mauritius) Ltd. v. Antrix Corp. Ltd., after nearly fifteen years of litigation, the Supreme Court held that personal jurisdiction exists over a foreign state under the Foreign Sovereign Immunities Act of 1976 ("FSIA") when at least one of FSIA's sovereign immunity exceptions applies and service is proper.In reaching that conclusion, the Court reversed the Ninth Circuit's earlier determination that, based onInternational Shoe Co. v. Washington, 326 U.S. 310 (1945), personal jurisdiction cannot exist under FSIA absent "minimum contacts" with the United States.
This case, like many others, "began with two companies and a contract." Antrix Corporation Ltd. ("Antrix")—a company owned by the Republic of India—and Devas Multimedia Private Ltd. ("Devas") entered into a satellite-leasing agreement.Under the agreement, Antrix agreed to build a satellite network and lease a portion of it to Devas. After several years, and right before the satellites were scheduled to launch, Antrix terminated the agreement, at the government's request, invoking the contract's force majeureclause.
Devas initiated arbitration, and the arbitral panel unanimously concluded Antrix breached the contract and awarded Devas $562.5 million in damages, plus interest. After successfully confirming the arbitration award in France and the United Kingdom, Devas sought to do the same in the Western District of Washington, resulting in a $1.29 billion judgment. On appeal, however, the Ninth Circuit, relying on circuit precedent, concluded the district court lacked personal jurisdiction over Antrix because it did not have sufficient "minimum contacts" with the United States underInternational Shoe.
The Supreme Court reversed.Starting with FSIA's plain text, the Supreme Court explained that personal jurisdiction "shall exist" if (1) one of the Act's enumerated exceptions applies and (2) service was proper.By importing the requirements of International Shoe, the Ninth Circuit created a third requirement divorced from the plain text and not otherwise supported by the FSIA's structure or history.
While the Court's holding confirms that the FSIA does not itself require minimum contacts, it left open whether such a nexus remains necessary to comport with the requirements of the Due Process Clause of the Fifth Amendment. The Court also declined to decide whether the FSIA's arbitration exception to foreign sovereign immunity applies only to arbitration agreements that concern commerce within or with the United States; and whether this case, which involves parties located in a foreign country (India) engaged in commerce in a foreign country under the laws of that country, should be dismissed under forum non conveniens. These questions will likely need to be sorted on remand to the District Court.
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