United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 5, 2000 Decided June 30, 2000
No. 99-7180
Rosemarie Marra and
Marrecon Enterprises, S.A.,
Appellants/Cross-Appellees
v.
Vaso Papandreou, et al.,
Appellees/Cross-Appellants
Consolidated with
99-7191
Appeals from the United States District Court
for the District of Columbia
(96cv01535)
David G. Leitch argued the cause for appellants/cross-
appellees. With him on the briefs were John G. Roberts, Jr.
and Catherine E. Stetson.
Joseph L. Barloon argued the cause for appellees/cross-
appellants. With him on the brief were Richard L. Brusca
and Rachel Mariner.
Before: Silberman and Rogers, Circuit Judges, and
Buckley, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge Silberman.
Silberman, Circuit Judge: The district court dismissed
Rosemarie Marra's breach of contract action against the
Greek government, concluding that a forum-selection clause
in the contract compelled her to sue in Greece. Marra
appeals, arguing that the Greek government's actions official-
ly "revoking" the contract as a whole bar it from relying on
the forum-selection provision. We affirm.
I.
In 1994 the Greek Ministry of Tourism announced an
international tender for licenses to operate ten casinos in
specified locations throughout Greece. A group of investors,
including appellant, formed a consortium that submitted a $44
million bid for a license to operate a casino in Flisvos, a
location just outside of Athens. The consortium submitted
the highest bid for the Flisvos site, and then-Minister of
Tourism Dionyssis Livanos issued an official resolution grant-
ing the license to the consortium. The license gave the
consortium the right to construct and operate a luxury casino
complex in partnership with the Greek government, which
would receive in exchange both an annual fee and a percent-
age of the casino's profits each year; after thirty years,
ownership of the complex would pass from the consortium to
the Greek government. The license also contained a forum-
selection clause which (according to the translation offered by
Marra and accepted by the district court) provided as follows:
[A]ny dispute or disagreement between the State or the
National Tourism Organization and the [consortium] aris-
ing from the application of this license, the interpretation
or performance of its terms, the extent of the rights and
obligations of the State and the holder of the license, and in
general any matter that may occur concerning a license,
shall be settled by the Greek courts.
Marra v. Papandreou, 59 F. Supp. 2d 65, 76 (D.D.C. 1999)
("Papandreou II").
Shortly after the consortium secured the license, matters
began to go awry. According to Marra, local political opposi-
tion against the construction of a casino at Flisvos developed,
prompting Minister Livanos to resign and the Greek govern-
ment to begin negotiations with the consortium towards
relocating the planned casino complex to a different site near
Athens. These political complexities were compounded when
Prime Minister Andreas Papandreou resigned because of
illness, and a new administration took office while relocation
negotiations were underway. For reasons that are not en-
tirely clear from the record, the new administration was
unfavorably disposed to the consortium's project, and began
exploring avenues for "recalling" the license. These efforts
resulted in Minister Livanos's successor, appellee Vaso Pa-
pandreou, issuing a resolution identifying legal defects in the
licensing process, and accordingly "revok[ing], from the time
it came into effect" the Ministry of Tourism's earlier action
granting the Flisvos license to Marra and her partners.
While most of the partners in the consortium began legal
proceedings in Greece challenging the legality of the license
revocation, Marra--who owned a nine percent interest in the
consortium--pursued a different strategy. She sued in the
district court, seeking $1.6 billion in damages from Vaso
Papandreou and other Greek government entities ("the Greek
government") for breach of contract and unlawful expropria-
tion of property. The Greek government moved to dismiss
Marra's claim, arguing, among several alternative grounds for
dismissal, that it was immune from suit under the Foreign
Sovereign Immunities Act, 28 U.S.C. ss 1330, 1602-1611.
Marra responded that the Greek government's attempts to
secure American investment in its casinos brought it within
the "commercial activity" exception to the FSIA. See id. at
s 1605(a)(2). The district court permitted Marra limited
jurisdictional discovery--including the right to depose senior
Greek government officials--to determine whether the FSIA
exception was applicable. The Greek government filed a
petition for a writ of mandamus in this court, asking us to
vacate the district court's discovery order.
We granted the Greek government's petition. See In re
Papandreou, 139 F.3d 247 (D.C. Cir. 1998) ("Papandreou I").
While we agreed with the district court that the information
sought from the Greek officials was potentially relevant to
determining the validity of the Greek government's FSIA
defense, see id. at 252-53, we noted that a "district court
authorizing discovery to determine whether [FSIA] immunity
bars jurisdiction must proceed with circumspection, lest the
evaluation of the immunity itself encroach unduly on the
benefits the immunity was to ensure." Id. at 253. Since the
Greek government had asserted several other defenses that
were either "jurisdictional or ha[d] jurisdictional overtones,"
id. at 254, we directed the district court to consider such
"alternative non-merits routes to dismissal" before reaching
the FSIA issue. Id. at 256. We also observed that, if the
district court were to dismiss Marra's suit on forum non
conveniens grounds, any such dismissal "could not ... be
subject to conditions, e.g., a condition that defendants promise
to submit to the jurisdiction of another court." Id. at 256 n.6.
Following our decision in Papandreou I, the Greek govern-
ment moved to dismiss Marra's complaint on the grounds that
her suit was barred by the license's forum-selection clause,
and that the District of Columbia was a forum non conveniens
for Marra's action. Applying the standard set forth in The
Bremen v. Zapata Off-Shore Oil Co., 407 U.S. 1 (1972), the
district court concluded that the forum-selection provision
was enforceable, and that its terms compelled Marra to file
her suit in Greece. See Papandreou II, 59 F. Supp. 2d at 77.
The court also rejected Marra's argument that the Greek
government's revocation of the Flisvos license "estopped" it
from relying on a forum-selection clause within that license.
The district court observed that Marra's position, if accepted,
would "put[ ] the cart before the horse," requiring it to
adjudicate the merits of the Greek government's substantive
defense in order to determine whether the Greek government
could rely on the forum-selection clause. Id. at 70. Accord-
ingly, the district court dismissed Marra's suit, but added two
conditions to the dismissal to ensure that its decision did not
prejudice Marra's ability to refile her suit in Greece: the
Greek government would have to waive any applicable statute
of limitations if Marra filed suit in Greece within six months
of the dismissal, and would have to appoint an agent in the
United States to receive service of process in the suit. See
id. at 77. Marra appeals the district court's dismissal of her
case. The Greek government cross-appeals, arguing that the
conditions imposed by the district court violated our mandate
in Papandreou I.
II.
A.
We have a threshold question: did the district court have
jurisdiction to dismiss the case based on the forum-selection
clause? In Papandreou I we directed the district court to
consider alternative defenses before adjudicating the Greek
government's FSIA defense. But we recognized the district
court's discretion to do so was limited by Steel Co. v. Citizens
for a Better Environment, 523 U.S. 83 (1998), in which the
Supreme Court held that a federal court must establish its
jurisdiction to hear a case before adjudicating its merits. We
concluded that Steel Company compelled the district court to
address only "non-merits routes to dismissal," Papandreou I,
139 F.3d at 256; see also Ruhrgas AG v. Marathon Oil Co.,
526 U.S. 574, 585 (1999) (courts have discretion to "choose
among threshold grounds for denying audience to a case on
the merits"), and considered whether four alternative defens-
es advanced by the Greek government met that definition.
We thought that three of these defenses--standing, personal
jurisdiction, and forum non conveniens--were "jurisdictional"
in the Steel Company sense, while the fourth--the Act of
State doctrine--was not. See Papandreou I, 139 F.3d at
255-56.
So we now must decide whether the district court's disposi-
tion of the case on forum-selection clause grounds was such a
"non-merits route to dismissal." To be sure, we did not state
that the three threshold defenses discussed in Papandreou I
were the only options available to the district court. But it
could be argued that a forum-selection clause inquiry requires
a court to make "an assumption of law-declaring power," id.
at 255, in a manner that, for instance, a forum non conveniens
inquiry does not. For while the validity of a forum-selection
clause can turn on factors traditionally associated with forum
non conveniens--such as whether the chosen forum is "seri-
ously inconvenient for the trial of the action," see The Bre-
men, 407 U.S. at 16--a court must also address issues that
would be conventionally understood as going to the "merits"
of a contract dispute. Indeed, in the decision under review
the district court examined whether Marra had entered into
the license's forum-selection clause voluntarily.1 See Papan-
dreou II, 59 F. Supp. 2d at 70-71; see also The Bremen, 407
U.S. at 15 (forum-selection clause is valid unless opposing
party can show "that enforcement would be unreasonable and
unjust, or that the clause was invalid for such reasons as
fraud or overreaching").
But there is considerable weight on the other side of the
scale as well. A forum-selection clause is understood not
merely as a contract provision, but as a distinct contract in
and of itself--that is, an agreement between the parties to
settle disputes in a particular forum--that is separate from
the obligations the parties owe to each other under the
remainder of the contract. See Northwestern Nat'l Ins. Co.
v. Donovan, 916 F.2d 372, 376 (7th Cir. 1990).2 Thus when a
court determines that a forum-selection clause is enforceable,
it is not making "an assumption of law-declaring power" vis-a-
__________
1 The district court concluded that Marra had voluntarily entered
into the forum-selection provision, a conclusion that she does not
challenge in this appeal.
2 This notion of "severability," first endorsed by the Supreme
Court in the arbitration clause context, see Prima Paint Corp. v.
Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), was extended to
forum-selection provisions in Scherk v. Alberto-Culver Co., 417 U.S.
506, 519 n.14 (1974). See also Haynsworth v. The Corporation, 121
F.3d 956, 963 (5th Cir. 1997).
vis other provisions of the contract. While this does not
resolve the Steel Company inquiry--it could still be said that
a court exercising a law-declaring power with respect to the
forum-selection provision is problematic--it focuses the ques-
tion on the clause itself, removing any implication that the
district court in assessing the forum-selection clause neces-
sarily also is reaching the "merits" of the parties' substantive
claims about the Flisvos license as a whole. Moreover, while
the forum-selection clause defense is a creature that has
evaded precise classification,3 most courts and commentators
have characterized it as a venue objection analogous to a
forum non conveniens motion or motion for transfer of venue
under 28 U.S.C. s 1404(a). See 15 Wright, Miller & Cooper,
Federal Practice and Procedure s 3803.1 (2d ed. 1986); cf.
Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988)
(forum-selection clause considered as a factor in a section
1404(a) motion); Commerce Consultants Int'l, Inc. v. Vetrerie
Riunite S.p.A., 867 F.2d 697 (D.C. Cir. 1989) (affirming
district court's dismissal of a case for improper venue under
Fed. R. Civ. P. 12(b)(3) after defendants raised forum-
selection clause defense). This analogy to venue is sensible
enough; as Judge Posner has observed, a forum-selection
clause is best understood as a potential defendant's ex ante
agreement to waive venue objections to a particular forum.
See Donovan, 916 F.2d at 375-76. Accordingly while the
district court's inquiry into the enforceability of the license's
forum-selection clause resembled in certain respects a "mer-
__________
3 Indeed, there is some doubt concerning the appropriate proce-
dural vehicle for giving effect to a forum-selection provision. See,
e.g., Haynsworth, 121 F.3d at 961 (noting the "enigmatic question of
whether motions to dismiss on the basis of forum-selection clauses
are properly brought as motions under Fed. R. Civ. P. 12(b)(1),
12(b)(3), or 12(b)(6), or 28 U.S.C. s 1406(a)"); Frietsch v. Refco,
Inc., 56 F.3d 825, 830-31 (7th Cir. 1995); Leandra Lederman, Note,
Viva Zapata! Toward a Rational System of Forum-Selection
Clause Enforcement in Diversity Cases, 66 N.Y.U. L. Rev. 422,
432-35 (1991) (observing that defendants "invoke an assortment of
rules and concepts"--including subject matter jurisdiction, personal
jurisdiction, and venue--to transfer or dismiss cases on forum-
selection clause grounds).
its" determination of the sort proscribed by Steel Company,
there are sound reasons for taking the contrary view.
We need not resolve this question, however, because of the
Greek government's clarification of its position at oral argu-
ment. Counsel explained that the Greek government's reli-
ance on the forum-selection clause in the district court should
properly be understood as a waiver of its FSIA defense with
respect to the clause. We agree, and reject Marra's descrip-
tion of this as an impermissible "selective waiver" of the
Greek government's sovereign immunity prerogatives. If the
Greek government were sued by Marra for breach of two
different contracts, it certainly would have the prerogative to
waive a sovereign immunity defense with respect to one of
the contracts and invoke that defense for the other. As we
discussed above, a similar situation is presented here, since a
forum-selection clause, properly understood, is a separate
contract in which the parties agree to venue; we therefore
see no reason why the Greek government should not be able
to waive its FSIA defense with respect to the forum-selection
clause, but retain that immunity with respect to the remain-
der of the license. Therefore the district court had jurisdic-
tion to address the Greek government's forum-selection
clause defense.
B.
It is clear to us that the forum-selection clause, if enforce-
able, requires Marra to file her suit in Greece. The clause is
broadly written, encompassing (even according to Marra's
translation) "any dispute or disagreement" between the par-
ties "arising from the application of this license, the interpre-
tation or performance of its terms ... and in general any
matter that may occur concerning a license." Marra points to
language later in the clause stating that the licensee agrees to
"submit himself to the jurisdiction of the Greek courts," and
argues that this sentence "indicates that the parties anticipat-
ed the forum-selection clause to apply to actions brought by
the Greek State against the licensee for breach of the terms of
the license," and not to suits by Marra against the Greek
government. We simply cannot accept that interpretation;
nothing in this sentence in any way modifies the broad
language that precedes it.4
This brings us to the more difficult issue of the clause's
enforceability. In The Bremen, the Supreme Court an-
nounced that forum-selection provisions are presumptively
enforceable, jettisoning the longstanding American judicial
hostility to forum-selection clauses as founded in the "parochi-
al concept that all disputes must be resolved under our laws
and in our courts." 407 U.S. at 9; see also Vimar Seguros y
Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 537-38
(1995). Marra does not point to factors typically relied on by
litigants seeking to avoid enforcement of forum-selection
clauses-for instance, that the clause is the product of fraud or
that its enforcement would contravene a strong public policy
of the forum in which suit is brought, see The Bremen 407
U.S. at 10, 15-19-to overcome The Bremen's presumption of
validity. Rather, she argues that the Greek government
should be estopped from availing itself of a forum-selection
clause that is part of a contract that it professes to have
"revoked."
Each party's position produces an anomaly. Marra notes
that the Greek government's resolution revoking the Flisvos
license was retroactive in effect, legally "extinguishing" the
license as of the date it issued; if that is so, she asks, how can
the Greek government now seek refuge in a provision of a
nonexistent license? The Greek government responds that it
__________
4 As noted above, Marra's suit also includes an expropriation
count. This count, however, simply realleges and incorporates the
paragraphs of her complaint pertaining to her breach of contract
claim, and adds the following sentence: "By means of their arbi-
trary, capricious, unjustified and unlawful revocation of plaintiff's
license, defendants have expropriated plaintiffs' valuable property
rights without providing prompt, adequate or effective compensa-
tion and therefore in violation of international law." Since Marra's
expropriation claim is wholly derivative of the Greek government's
alleged breach of the Flisvos license, it certainly presents a dispute
"concerning a license" that is covered by the forum-selection provi-
sion.
is no less illogical to allow someone to sue under a contract
while at the same time claiming not to be bound by a
provision within that contract. Moreover, in the Greek gov-
ernment's view, Marra is trapped in a lose-lose situation in
her attempt to pursue litigation in the United States: either
the license was indeed lawfully revoked and she has no cause
of action, or the license is valid and she is bound by the
license's terms to pursue her case in the Greek courts.
While there is no entirely satisfactory answer to this conun-
drum, we think that the Greek government has the stronger
position. Marra relies heavily on the implications that flow,
under well-settled principles of contract law, from a party's
"repudiation" of a contract. Such a repudiation relieves the
other party from performing its obligations under that con-
tract, see 13 Williston, Contracts s 39:37 (4th ed. 2000); to
put it another way (and in the way preferred by Marra), once
a party repudiates a contract, it has no right to demand
performance from the non-repudiating party. This rule, in
Marra's view, precludes the Greek government from "revok-
ing" the Flisvos license--and repudiating its obligations to
Marra--at the same time that it avails itself of the forum-
selection clause.
The "repudiation" shoe does not quite fit here, for two
reasons. Adherence to the forum-selection clause is not an
obligation owed by Marra to the Greek government, but a
condition precedent to suit under the contract, binding equal-
ly on both parties. This is a distinction with a difference,
since the "rationale behind the rule that a repudiation of a
contract by one party will excuse the other party from the
duty to perform contractual obligations and conditions, is the
prevention of economic waste, in the sense that, following a
clear repudiation, the other party should not be required to
perform the formal, economically wasteful, and useless act of
further performing." Id. This purpose of preventing "waste-
ful" and "useless" acts of performance is not served in any
way by excusing Marra from compliance with the forum-
selection provision. Moreover, the rule urged by Marra is
contrary to the conceptual understanding, noted above, of a
forum-selection clause as severable from the contract in which
it is contained. Therefore while the Greek government's
denial of its contractual obligations to Marra relieves her of
her duty to perform her side of the contract's terms (for
instance, she is no longer obligated to pay her annual license
fee), that action does not work a repudiation of the forum-
selection clause unless it is specifically directed at the clause
itself. Were this not the case, as the Greek government
correctly points out, the value of a forum-selection clause
would be significantly diminished, since it will often be the
case that a plaintiff can plausibly allege that the defendant's
nonperformance constitutes a "repudiation" of its contractual
obligations precluding it from recourse to the clause.
It is therefore understandable that Marra can point to no
authority extending this general principle of contract law to
preclude a party from relying on a forum-selection clause in a
contract. On the contrary, the Second Circuit has rejected
this argument in the closely analogous context of a challenge
to the enforcement of an arbitration clause in its oft-cited
decision in Kulukundis Shipping Co. v. Amtorg Trading
Corp., 126 F.2d 978 (2d Cir. 1942) (Frank, C.J.). See also Sky
Reefer, 515 U.S. at 534 (noting that "foreign arbitration
clauses are but a subset of foreign forum selection clauses in
general"). In Kulukundis, a defendant in a contract action
sought to stay the suit pending arbitration pursuant to an
arbitration clause in the contract. The plaintiff--like Marra
here--responded that the defendant's denial of the contract's
existence barred it from recourse to the arbitration clause
therein. The Second Circuit rejected the plaintiff's estoppel
theory, drawing on a principle of contract law that is echoed
before us by the Greek government:
As Williston remarks: "A person who repudiates a contract
wrongfully cannot sue upon it himself, but if he is sued
upon it, he can be held liable only according to the terms of
the contract. If, therefore, an arbitration clause amounts
to a condition precedent ... the defendant can be held
liable only if that condition is performed, prevented or
waived."
Arbitration under the [contract] here was a condition pre-
cedent.
Kulukundis, 126 F.2d. at 988 (citing 6 Williston, Contracts
s 1921 (rev. ed. 1938)) (ellipsis added). So too here; under
the terms of the Flisvos license, Marra was obliged to sue in
the Greek courts in order to recover for breach of the license.
The Greek government wins, in our view, the battle of dueling
absurdities.
We might have reached a different conclusion had there
been a dispute as to whether the Flisvos license had been
voluntarily agreed to by the parties. Then it could be
argued--even if one accepts, as we do, the position that a
forum-selection clause is severable from the contract contain-
ing it--that if the parties never entered into a contract in the
first place, they by definition did not agree to the forum-
selection clause, either. Cf. Kulukundis, 126 F.2d at 986,
988-89 (rejecting estoppel theory, but holding that district
court must adjudicate the issue of whether parties entered
into an agreement at all before submitting case to arbitrator).
But the district court determined, and Marra does not chal-
lenge on appeal, that she freely entered into a broadly
worded forum-selection agreement; to borrow a formulation
from the arbitration clause context, Marra offers no challenge
to the "making of the agreement" between the parties to
adjudicate their disputes in Greece. Prima Paint, 388 U.S.
at 404. To the contrary, the event that supposedly renders
the Flisvos license void ab initio took place after the making
of this agreement. If we were to hold that the validity of a
contract and that of a forum-selection clause contained within
it are unavoidably linked in this situation, then two parties
can never agree to a binding provision in a contract, designat-
ing a forum for the resolution of disputes that might arise
from supervening events calling into question that contract's
validity. That outcome could not be squared with the strong
presumption in favor of the enforcement of forum-selection
clauses established by The Bremen and subsequent Supreme
Court cases.
III.
We now turn, briefly, to the Greek government's cross-
appeal. The district court attached two conditions to its
dismissal of Marra's suit, both of which were designed to
protect her ability to pursue a remedy in Greece; the dis-
missal required the Greek government both to waive any
applicable statute of limitations defense should Marra refile
her suit in Greece within six months of the dismissal, and to
appoint an agent to receive process in the United States.
The Greek government argues that these conditions run afoul
of our decision in Papandreou I, where we noted that a
subsequent district court dismissal of the suit on non-FSIA
grounds could not be accompanied by conditions on the Greek
government. See 139 F.3d at 256 n.6.
Unlike Marra's appeal, this cross-appeal presents no onto-
logical dilemmas. Indeed, as it turns out, it does not present
a question at all. Marra did not file a suit in Greece within
the six-month period following dismissal set forth by the
district court, and at oral argument she (understandably,
since she has not filed suit) disavowed any interest in serving
process on the Greek government in the United States. The
questions raised by the cross-appeal are therefore moot.
* * * *
For the foregoing reasons, the judgment of the district
court is affirmed, and the cross-appeal is dismissed.
So ordered.