United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 10, 2021 Decided March 11, 2022
No. 21-7003
PROCESS AND INDUSTRIAL DEVELOPMENTS LIMITED,
APPELLEE
v.
FEDERAL REPUBLIC OF NIGERIA AND MINISTRY OF
PETROLEUM RESOURCES OF THE FEDERAL REPUBLIC OF
NIGERIA,
APPELLANTS
Appeal from the United States District Court
for the District of Columbia
(No. 1:18-cv-00594)
Christopher J. Major argued the cause for appellants.
With him on the briefs were David F. Geneson and Alexander
Pencu.
Josef M. Klazen argued the cause for appellee. With him
on the brief were Darryl G. Stein and Michael S. Kim.
Brian M. Boynton, Acting Assistant Attorney General,
U.S. Department of Justice, Sharon Swingle and Sarah Clark,
Attorneys, were on the brief for amicus curiae the United
States.
2
Before: HENDERSON, MILLETT and WALKER, Circuit
Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: Process and
Industrial Developments Limited (“P&ID”) petitioned for
confirmation of an arbitral award against the Federal Republic
of Nigeria and its Ministry of Petroleum Resources
(collectively, “Nigeria”) that today stands at roughly
$10 billion. Nigeria moved to dismiss for lack of jurisdiction
and asserted sovereign immunity under the Foreign Sovereign
Immunities Act (“FSIA”). 28 U.S.C. § 1602 et seq. The district
court denied the motion on the ground that Nigeria impliedly
waived sovereign immunity by joining The Convention on the
Recognition and Enforcement of Foreign Arbitral Awards
(“New York Convention”), June 10, 1958, 21 U.S.T. 2517—
an international treaty obligating member states to recognize
and enforce arbitral awards issued in other member states—and
agreeing to arbitrate its dispute with P&ID in a Convention
state. See 28 U.S.C. § 1605(a)(1). We affirm but rely instead
on the arbitration exception to the FSIA. See id. § 1605(a)(6).
We conclude that a foreign court’s order ostensibly setting
aside an arbitral award has no bearing on the district court’s
jurisdiction and is instead an affirmative defense properly
suited for consideration at the merits stage.
I.
P&ID is an engineering and project management company
started by two Irish nationals in 2006 to implement an energy
project in Nigeria. In January 2010, P&ID and Nigeria entered
a 20-year natural gas supply and processing agreement. Nigeria
supplied P&ID with agreed-upon quantities of natural gas,
which P&ID refined for Nigeria’s use to power its national
3
electric grid. In exchange, P&ID stripped away certain valuable
by-products in the refining process for its own use. The
agreement was “governed by, and construed in accordance
with[,] the laws of the Federal Republic of Nigeria,” disputes
arising under the agreement were subject to arbitration under
the rules of the Nigerian Arbitration and Conciliation Act and,
unless the parties agreed otherwise, the arbitration venue was
London, England.
In August 2012, P&ID initiated arbitration proceedings in
London, alleging that Nigeria failed both to supply the agreed-
upon quantity of natural gas to P&ID and to construct the
necessary pipeline infrastructure. In July 2014, the arbitral
tribunal first ruled that it had jurisdiction of the dispute and
then, addressing the issue of liability in July 2015, determined
that Nigeria had breached the agreement.
Nigeria first sought relief in England’s courts, requesting
that the arbitral tribunal’s liability determination be set aside,
but in February 2016 the High Court of Justice in London
denied Nigeria’s application on the ground that Nigeria had
filed it more than four months past the deadline and an
extension was not warranted. Soon thereafter, Nigeria sought a
set-aside order in its own courts and the Federal High Court of
Nigeria in May 2016 issued an order “setting aside and/or
remitting for further consideration all or part of the arbitration
Award.” The Nigerian court’s set-aside order offered no
reasoning or explanation for its decision.
Meanwhile, the arbitration proceedings continued in
London. After the tribunal concluded that the Nigerian court
lacked jurisdiction to set aside the liability determination, it
awarded P&ID nearly $6.6 billion plus interest in damages for
lost profits. Including accrued interest, the arbitral award now
amounts to more than $10 billion.
4
P&ID first sought to enforce the award in England and, in
August 2019, the English High Court of Justice concluded that
the award was enforceable. In the meantime, Nigeria had
commenced a criminal investigation into P&ID’s procurement
of the natural gas agreement and subsequently applied in
December 2019 to the High Court of Justice to extend the
deadline to challenge the award based on what it characterized
as new evidence of fraud in the arbitration and underlying
contract negotiations. The English court granted the request on
the ground that Nigeria had “established a strong prima facie
case” of P&ID’s fraud and bribery in procuring the agreement
and during the arbitration proceedings. To date, the English
court has not set aside the arbitral award and a trial on these
issues is scheduled to begin in January 2023.
In 2018, P&ID petitioned the district court to confirm the
arbitral award and reduce the award to a judgment pursuant to
the Federal Arbitration Act (“FAA”), 9 U.S.C. § 201 et seq.
The FAA provides that the New York Convention is
enforceable in the courts of the United States, to which courts
a party may apply for an order confirming an arbitral award
issued under the Convention. Id. §§ 201, 207. Nigeria moved
to dismiss for lack of subject matter jurisdiction under the
FSIA, to which P&ID responded with a motion of its own,
seeking an order requiring Nigeria to present both its
jurisdictional and merits defenses in a single response to
P&ID’s petition to confirm the award. The district court
granted P&ID’s motion and ordered Nigeria to file a response
presenting its “merits arguments” as well as its immunity and
other jurisdictional defenses. Process & Indus. Devs. Ltd. v.
Fed. Republic of Nigeria, No. 18-cv-594, 2018 WL 8997443,
at *3 (D.D.C. Oct. 1, 2018).
Nigeria pursued an interlocutory appeal, arguing that it
was entitled to a ruling on its sovereign-immunity defense
5
before being required to present its merits defenses. This court
agreed, reversing the order granting P&ID’s motion and
remanding to the district court because it “impermissibly
ordered Nigeria to brief the merits while its colorable immunity
assertion remains pending.” Process & Indus. Devs. Ltd. v.
Fed. Republic of Nigeria, 962 F.3d 576, 586–87 (D.C. Cir.
2020). We held that “[b]ecause the immunity protects foreign
sovereigns from suit, it must be decided at the threshold of
every action in which it is asserted.” Id. at 584 (internal
quotation marks and citation omitted). We declined to
determine whether Nigeria would prevail on its immunity
defense but we noted that Nigeria’s arguments with respect to
two exceptions to sovereign immunity—the waiver exception
and the arbitration exception—were at least colorable. Id. at
583–84.
On remand, Nigeria again moved to dismiss for lack of
subject matter jurisdiction under the FSIA and requested a stay
pending the outcome of the litigation in England. P&ID argued
that the district court had jurisdiction under the waiver
exception, 28 U.S.C. § 1605(a)(1), and the arbitration
exception, id. § 1605(a)(6), to FSIA immunity and that a stay
would be inefficient and prejudicial to its interests. First, the
district court “decline[d] to stay the case, without prejudice to
any future request for a stay.”1 Process & Indus. Devs. Ltd. v.
Fed. Republic of Nigeria, 506 F. Supp. 3d 1, 5–6 (D.D.C.
2020). It then concluded that it had subject matter jurisdiction
because Nigeria’s sovereign immunity had been abrogated by
the FSIA’s waiver exception. Id. at 6. The district court
reasoned that Nigeria impliedly waived its sovereign immunity
to the confirmation action by becoming a party to the New
1
Nigeria does not challenge this portion of the district court’s
ruling. Its challenge is limited to the denial of its motion to dismiss
for lack of subject matter jurisdiction based on sovereign immunity.
6
York Convention and agreeing to arbitrate its dispute with
P&ID in a Convention state. Id. at 6–10. Finding our Circuit
law on this application of the waiver exception unsettled, it
followed the Second Circuit’s leading case on the issue. Id. at
7–8 (citing Seetransport Wiking Trader Schiffarhtsgesellschaft
MBH & Co., Kommanditgesellschaft v. Navimpex Centrala
Navala, 989 F.2d 572 (2d Cir. 1993)). Although we have
favorably cited Seetransport and its reasoning in dicta and in
an unpublished opinion, we have not formally adopted it. See
Tatneft v. Ukraine, 771 F. App’x 9, 9–10 (D.C. Cir. 2019)
(holding that the waiver exception applies if the foreign
sovereign is a party to the New York Convention and has
agreed to arbitrate in a Convention state), cert. denied
140 S. Ct. 901 (2020); Creighton Ltd. v. Gov’t of State of
Qatar, 181 F.3d 118, 123 (D.C. Cir. 1999) (noting that the
Second Circuit’s reasoning in Seetransport is likely correct).
The district court declined to address the arbitration exception
and Nigeria’s argument that it is inapplicable because the
Nigerian High Court had set aside the liability award. Id. at 6
n.1. It noted that, notwithstanding the Nigerian court’s likely
supervisory power to set aside the award, the implications of
the set-aside order were arguably irrelevant to the jurisdictional
analysis and properly suited for consideration at the merits
stage. Id. Nigeria again seeks an interlocutory appeal.
II.
The district court’s subject matter jurisdiction vel non is
the crux of Nigeria’s appeal. We have appellate jurisdiction
pursuant to the collateral order doctrine. El-Hadad v. United
Arab Emirates, 216 F.3d 29, 21 (D.C. Cir. 2000) (“The denial
of a foreign state’s motion to dismiss on the ground of
sovereign immunity is subject to interlocutory appeal under the
collateral order doctrine.”). We review de novo a district
court’s denial of a motion to dismiss on the sovereign immunity
7
ground. Kirkham v. Société Air France, 429 F.3d 288, 291
(D.C. Cir. 2005).
III.
The New York Convention applies “to the recognition and
enforcement of arbitral awards made in the territory of a State
other than the State where the recognition and enforcement of
such awards are sought.” New York Convention, art. I(1). It
further provides that signatory states “shall recognize arbitral
awards as binding and enforce them in accordance with the
rules of procedure of the territory where the award is relied
upon, under the conditions laid down in the . . . articles [of the
Convention].” Id. at art. III. There is no dispute that the Federal
Republic of Nigeria, the United States and the United
Kingdom—the location of the arbitration proceedings—are
signatories to the New York Convention.2 The Congress
declared in the legislation implementing the Convention:
An action or proceeding falling under the
Convention shall be deemed to arise under the
laws and treaties of the United States. The
district courts of the United States . . . shall have
original jurisdiction over such an action or
2
Nigeria and the United States acceded to the New York
Convention in 1970 and the United Kingdom became a party to the
Convention in 1975. See Contracting States, New York Arbitration
Convention, available at https://www.newyorkconvention.org/
countries (last visited Feb. 8, 2022).
8
proceeding, regardless of the amount in
controversy.
9 U.S.C. § 203.
It is settled law that “[t]he FSIA is ‘the sole basis for
obtaining jurisdiction over a foreign state in our courts’” in
civil cases. Creighton, 181 F.3d at 121 (quoting Argentine
Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434
(1989)). In civil cases, a foreign state is “presumptively
immune from the jurisdiction of United States courts,” Saudi
Arabia v. Nelson, 507 U.S. 349, 355 (1993), and that immunity
is preserved unless one of the FSIA’s exceptions to sovereign
immunity applies, see 28 U.S.C. § 1604 (“Subject to existing
international agreements to which the United States is a party
at the time of the enactment of this Act[,] a foreign state shall
be immune from the jurisdiction of the courts of the United
States and of the States except as provided in sections 1605 to
1607.”).
Two FSIA exceptions are relevant here: the waiver
exception, id. § 1605(a)(1), and the arbitration exception, id.
§ 1605(a)(6). The district court grounded its ruling in the
waiver exception, P&ID, 506 F. Supp. 3d at 6–11, and declined
to resolve whether the arbitration exception applies, id. at 6 n.1.
Because “as an appellate court, we can ‘affirm the District
Court on any valid ground, and need not follow the same mode
of analysis,’” we take a different approach. Baird v. Gotbaum,
792 F.3d 166, 171 (D.C. Cir. 2015) (quoting Molerio v. FBI,
749 F.2d 815, 820 (D.C. Cir. 1984)); see also de Csepel v.
Republic of Hungary, 714 F.3d 591, 598 (D.C. Cir. 2013) (an
appellate court may affirm the district court “on any basis
supported by the record” (quoting Carney v. Am. Univ.,
151 F.3d 1090, 1096 (D.C. Cir. 1998)). We decline to address
the district court’s interpretation and application of the waiver
9
exception and instead find Nigeria’s sovereign immunity
abrogated by the arbitration exception.3
The FSIA’s arbitration exception provides:
A foreign state shall not be immune from the
jurisdiction of the courts of the United States or
of the States in any case . . . in which the action
is brought . . . to confirm an award made
pursuant to . . . an agreement to arbitrate, if . . .
the agreement or award is or may be governed
by a treaty or other international agreement in
force . . . calling for the recognition and
enforcement of arbitral awards.
28 U.S.C. § 1605(a), (a)(6). We have recognized that “the New
York Convention ‘is exactly the sort of treaty Congress
intended to include in the arbitration exception.’” Creighton,
3
After oral argument, we requested additional briefing by the
United States as amicus curiae, inviting it to provide its views on
whether the United States, as a party to the New York Convention,
impliedly waives sovereign immunity from actions seeking
recognition and enforcement of foreign arbitral awards in the courts
of other New York Convention states by becoming a party to the
Convention and agreeing to arbitrate a dispute in a Convention state.
As the United States explained, our application of the waiver
exception to the FSIA “may have implications for the treatment of
the United States in foreign courts and for our relations with foreign
states.” Br. for United States 1, 14–16. Given these significant policy
concerns and the ready applicability of the arbitration exception, we
find it unnecessary to wade into the murky waters of the waiver
exception. We thank the United States for submitting its views.
10
181 F.3d at 123–24 (quoting Cargill Int’l S.A. v. M/T Pavel
Dybenko, 991 F.2d 1012, 1018 (2d Cir. 1993)).
The application of the arbitration exception here is
straightforward, as all of the jurisdictional facts required by the
statute exist. 28 U.S.C. § 1605(a)(6); see LLC SPC Stileks v.
Republic of Moldova, 985 F.3d 871, 877 (D.C. Cir. 2021)
(“[T]he existence of an arbitration agreement, an arbitration
award and a treaty governing the award are all jurisdictional
facts that must be established.”). P&ID’s contract with Nigeria
included an agreement to arbitrate. The arbitral tribunal issued
an award to P&ID. And the New York Convention governs the
award, as Nigeria, the United States and the United Kingdom
are all member states.
Nigeria contends that the arbitration exception does not
apply because P&ID lacks a valid and enforceable arbitral
award. Nigeria argues that the award is not valid and
enforceable because, in its view, the Federal High Court of
Nigeria set aside the arbitral tribunal’s liability award. For
support, it cites Article V of the New York Convention, which
states that “enforcement of the award may be refused” if it “has
been set aside or suspended by a competent authority of the
country in which, or under the law of which that award was
made.”4 New York Convention, art. V(1)(e). As we have made
clear, the validity or enforceability of an arbitral award is a
merits question. See Diag Human, S.E. v. Czech Republic–
Ministry of Health, 824 F.3d 131, 137–38 (D.C. Cir. 2016)
(legitimacy of award reversed by appellate arbitration panel did
not affect district court’s subject matter jurisdiction because
“[w]hether the arbitration award is final will be a question
going to the merits of the case”). Thus, Nigeria’s argument is
4
We need not decide at this stage whether the Nigerian court
possessed authority to set aside the arbitral tribunal’s liability award
to P&ID.
11
foreclosed by our precedent on the arbitration exception and
the district court need not determine the validity of the arbitral
award as part of its jurisdictional inquiry.
Because the requirements of the arbitration exception
under § 1605(a)(6) are satisfied, Nigeria’s sovereign immunity
has been abrogated. The district court possesses subject matter
jurisdiction. Accordingly, we affirm.
So ordered.