International -- 2014

Republic of Argentina v. NML Capital, Ltd.   (U.S. Supreme Court)

Contract enforcement with sovereign nations

On April 3, 2014, the NAM filed an amicus brief in the Supreme Court advocating the necessity of contract enforcement with sovereign nations in emerging markets. On April 21, the Supreme Court heard oral arguments over whether post-judgment discovery in aid of enforcing a judgment against a foreign state can be ordered with respect to all assets of a foreign state regardless of their location or use, as held by the Second Circuit, or is limited to assets located in the United States that are potentially subject to execution under the Foreign Sovereign Immunities Act of 1976 (FSIA). The NAM brief argues that limiting discovery against foreign states would undermine the enforcement of valid commercial contracts. Further, extending FSIA immunity to post-judgment discovery against foreign states would necessarily impede discovery against state-run companies. This would hurt all U.S. manufacturers attempting to enforce contracts with foreign sovereign nations.

The Court ruled that no provision of the FSIA immunizes a foreign-sovereign judgment debtor from post-judgment discovery or information concerning its extraterritorial assets. The FSIA only provides two types of immunity: the first is jurisdictional immunity, which Argentina waived, and the second prohibits the seizure of assets, but says nothing about discovering what they are. The Court clearly stated that there is no prohibition of post-judgment discovery. Although Argentina and the United States raised concerns that affirming the discovery order would strain foreign relations, the Court determined that such concerns should be addressed by the legislative branch and not the judicial branch.

Related Documents:
NAM brief  (April 3, 2014)


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