United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 18, 2002 Decided January 24, 2003
No. 01-7142
Hiwot Nemariam, et al.,
Appellants
v.
The Federal Democratic Republic of Ethiopia and
The Commercial Bank of Ethiopia,
Appellees
Appeal from the United States District Court
for the District of Columbia
(No. 00cv01392)
Donald Francis Donovan argued the cause for appellants.
With him on the briefs was Katherine Birmingham Wilmore.
W. DeVier Pierson argued the cause for appellees. With
him on the brief was Knox Bemis.
Before: Ginsburg, Chief Judge, Henderson, Circuit Judge,
and Williams, Senior Circuit Judge.
Opinion for the Court filed by Chief Judge Ginsburg.
Ginsburg, Chief Judge: Hiwot Nemariam and others appeal
the district court's dismissal of their suit against Ethiopia
seeking recovery for property damage they suffered during
the border war between Ethiopia and Eritrea. The district
court determined that the Ethiopia/Eritrea Claims Commis-
sion was a more appropriate forum for the plaintiffs' claims,
and dismissed their case on the ground of forum non conve-
niens. We reverse the judgment of the district court because
the Commission does not offer the plaintiffs an adequate
remedy.
I. Background
In May 1998 a long-standing border dispute between Eri-
trea and Ethiopia erupted into a general armed conflict.
Nemariam, who was living in Ethiopia at that time, claims
that shortly thereafter the government of Ethiopia began
expelling persons who, like her, were Ethiopian citizens of
Eritrean descent, and confiscating any property they left
behind. To take but one example, Nemariam claims that her
account at the Commercial Bank of Ethiopia (CBE), an
agency or instrumentality of the government, was effectively
expropriated when she was expelled from the country because
Ethiopian banking regulations permit withdrawal of funds
only when an account holder presents a passbook in person at
the bank.
In December 2000 Ethiopia and Eritrea signed a Peace
Agreement, which formally ended the conflict. It also creat-
ed the Ethiopia/Eritrea Claims Commission:
The mandate of the Commission is to decide through
binding arbitration all claims for loss, damage or injury
by one Government against the other, and by nationals
(including both natural and juridical persons) of one
party against the Government of the other party or
entities owned and controlled by the other party that are
(a) related to the conflict that was the subject of the
Framework Agreement, the Modalities for its Implemen-
tation and the Cessation of Hostilities Agreement, and
(b) result from violations of international humanitarian
law, including the 1949 Geneva Conventions, or other
violations of international law.
Art. 5, p 1. The decisions of the Commission are made by a
panel of five arbitrators, two chosen by each country and one
chosen by the other four. Art. 5, p 2. The Commission,
which is based in the Hague, "may hold hearings or conduct
investigations in the territory of either party, or at such other
location as it deems expedient." Art. 5, p 3.
Ethiopia and Eritrea are the only two parties permitted to
appear before the Commission, but they may bring claims "on
behalf of [their] nationals, including both natural and juridical
persons." Art. 5, p 8. Eritrea or Ethiopia may also "file
claims on behalf of persons of Ethiopian or Eritrean origin
who may not be its nationals." Art. 5, p 9. The Agreement
vested in the Commission exclusive jurisdiction over all claims
arising from the conflict "[e]xcept for claims submitted to
another mutually agreed settlement mechanism in accordance
with paragraph 16 or filed in another forum prior to the
effective date of this Agreement." Art. 5, p 8. Therefore,
any claim not filed in another forum prior to December 12,
2000, the effective date of the Agreement, could be filed only
with the Commission. Paragraph 16 of Article 5 allows
Eritrea and Ethiopia to "agree at any time to settle outstand-
ing claims, individually or by categories, through direct nego-
tiation or by reference to another mutually agreed settlement
mechanism."
In June 2000 Nemariam filed a two-count complaint against
Ethiopia and the CBE in the District Court for the District of
Columbia, asserting that Ethiopia's actions amounted to a
taking of her property in violation of international law. Nem-
ariam invoked the jurisdiction of the court under the interna-
tional takings provision of the Foreign Sovereign Immunities
Act, 28 U.S.C. s 1605(a)(3).
Ethiopia moved to dismiss the case on the ground that the
district court was a forum non conveniens, pursuant to the
four-step test we outlined in Pain v. United Technologies
Corp.:
As a prerequisite, the court must establish whether an
adequate forum exists which possesses jurisdiction over
the whole case. Next, the trial judge must consider all
relevant factors of private interest, weighing in the bal-
ance a strong presumption against disturbing plaintiff's
initial forum choice. If the trial judge finds this balance
of private interests to be in equipoise or near equipoise,
he must then determine whether or not factors of public
interest tip the balance in favor of a trial in a foreign
forum. If he decides that the balance favors such a
foreign forum, the trial judge must finally ensure that
plaintiffs can reinstate their suit in the alternative forum
without undue inconvenience or prejudice.
637 F.2d 775, 784-85 (D.C. Cir. 1980) (emphases in original);
but see Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981)
(overruling the third part of the Pain test by stating that
dismissal is appropriate if the plaintiff's "chosen forum [is]
inappropriate because of considerations affecting the court's
own administrative and legal problems").
The district court granted the motion. The court first
determined that the Commission was an adequate alternative
forum; it had five distinguished arbitrators, all well versed in
international law, and it was authorized to hold hearings and
to resolve claims. Although Nemariam could not bring a
claim herself, the district court found that Eritrea could bring
a claim on her behalf, that the Commission had jurisdiction to
hear that claim, and that Eritrea "has no incentive not to
espouse as many meritorious claims as possible before the
Commission."
The district court rejected Nemariam's argument that the
remedy provided by the Commission was inadequate because
Eritrea and Ethiopia might negotiate a set-off of each other's
claims, thereby denying her an award even if she had a
meritorious claim. The district court stated, "nothing in the
record ... suggest[s] that the Commission contemplates a
'set off' remedy;" and "even if compensation under the
Claims Commission proves different than it might be in a
U.S. court, this is not a case where the 'remedy provided by
the alternative forum is so clearly inadequate or unsatisfacto-
ry that it is no remedy at all.' " (quoting Piper Aircraft Co. v.
Reyno, 454 U.S. 234, 254 (1981)). Next, the court found the
private and public interest factors heavily favored the Com-
mission. Finally, the court dismissed the case without preju-
dice and provided that "the case is subject to reinstatement
for good cause shown if named plaintiffs' claims are not
submitted to the Claims Commission by the government of
Eritrea despite affirmative, timely request therefore [sic] by
plaintiffs."
In the time since the district court dismissed the case, the
Commission has implemented procedures and begun the adju-
dication of claims submitted to it. Eritrea's submissions
cover the claims made by Nemariam and the other plaintiffs
in this suit. And the Commission has ordered the filing of
evidence for those claims and has scheduled a 13-day hearing
to begin on June 16, 2003.
II. Analysis
On appeal Nemariam first argues that the Commission is
an inadequate forum because, even if her claim is valid, she
has no personal right to a remedy from the Commission.
Second, Nemariam argues that the Commission is an inade-
quate forum because she may not file a claim before the
Commission and she has no control over any claim Eritrea
may file on her behalf. Third, Nemariam contends that the
district court misapplied the private and public interest fac-
tors. Finally, Nemariam argues that Ethiopia waived its
right to seek dismissal on the basis of forum non conveniens
when it agreed that "the Commission shall be the sole forum
for adjudicating claims" "except for ... claims filed in anoth-
er forum prior to the effective date of this [Peace] Agree-
ment." Art. 5, p 8.
We review the district court's order dismissing the case for
a "clear abuse of discretion." Piper, 454 U.S. at 257. Be-
cause we agree with Nemariam's first point, we do not reach
her other arguments.
Because Nemariam lacks a personal right to a remedy from
the Commission, she argues that any "remedy provided by
the [Commission to Eritrea with respect to her claim] is so
clearly inadequate or unsatisfactory that it is no remedy at
all." Piper, 454 U.S. at 254. We think that the Commission's
inability to make an award directly to Nemariam, and the
possibility that Eritrea could set off Nemariam's claims or
even an award in her favor against claims made by or an
award in favor of Ethiopia, render the Commission an inade-
quate forum.
First, it appears, as Nemariam says, the Commission can-
not award any relief directly to her. Nothing in the Peace
Agreement authorizes the Commission to make an award to
anybody other than Eritrea or Ethiopia, the parties before
the Commission. Although it is true that Article 5, p 9 allows
Eritrea to bring a claim "on behalf of persons [like the
plaintiffs] of ... Eritrean origin who may not be its nation-
als," Eritrea would presumably control the disposition of any
resulting award.
Second, it appears Eritrea may set off Nemariam's claim or
an award in her favor against any claims or awards that
Ethiopia may have against Eritrea. Under international law,
Eritrea is the master of its own claim before the Commission
and may keep or barter any remedy awarded by the Commis-
sion. See Restatement (Third) of the Foreign Relations Law
of the United States s 902, cmt. I (1987) ("The state may
determine what international remedies to pursue, may aban-
don the claim, or settle it"). It is irrelevant whether the
Commission currently contemplates that any awards to the
respective governments will be set off by them against each
other. What matters is that Eritrea and Ethiopia have that
option. In fact, Eritrea and Ethiopia may bypass the Com-
mission entirely in resolving their claims. See Agreement,
Art. 5, p 16 ("The parties may agree at any time to settle
outstanding claims, individually or by categories, through
direct negotiation or by reference to another mutually agreed
settlement mechanism"). Unless Ethiopia can negate these
possibilities, we think they render the Commission an inade-
quate alternative to the district court.
Ethiopia's response is two-fold. First, it points out that
Eritrea has stated before the Commission that it intends to
give directly to the claimant any award made to it for a
taking of private property. Ethiopia does not deny that the
Commission cannot require Eritrea to pass through to Nem-
ariam any award it may receive with respect to the claim it
has filed on her behalf. Rather, Ethiopia claims that Eritrea
intends voluntarily to distribute awards to individual claim-
ants.
Eritrea has indeed indicated in a memorandum to the
Commission that "Eritrea believes that, as a general matter,
awards should be given directly to claimants.... Financial
compensation for large amounts of property damage should
also be given directly to the individual victims." By invoking
those statements, however, Ethiopia is asking Nemariam and
this court to rely upon the goodwill of Eritrea, not upon the
power of the Commission to enforce its judgments. In this
vein, we note that Eritrea has also recognized the possibili-
ty -- albeit in circumstances apparently different from those
alleged in the present case -- that an individual with a
meritorious claim might not receive any compensation: In the
same memorandum, Eritrea informed the Commission that
"the practical difficulties of individual distribution might out-
weigh the desirability of individualized compensation."
Therefore, Ethiopia is unable to substantiate its claim that
Nemariam will receive a remedy if Eritrea succeeds in prose-
cuting her claim before the Commission.
Second, Ethiopia argues that we should follow Gonzalez v.
Chrysler Corp., 301 F.3d 377 (2002), in which the Fifth Circuit
affirmed the dismissal of a case on the ground of forum non
conveniens even though it was unlikely the plaintiff would
receive in the alternative forum -- namely, a Mexican
court -- a remedy adequate by United States standards. In
Gonzalez the law of the alternative forum did provide a
remedy, but it capped the potential recovery at a modest
$2500, and the plaintiff alleged he would not bring the suit in
Mexico because the costs of doing so would outweigh the
potential recovery. In this case, however, Ethiopia cannot
assure Nemariam of recovering any award at all, even if the
Commission upholds her claim in full. While a more limited
recovery than is available in the plaintiff's forum of choice
does not automatically make the alternative forum inade-
quate, we fail to see how an alternative forum in which the
plaintiff can recover nothing for a valid claim may also be
deemed adequate. In other words, it would be peculiar
indeed to dismiss Nemariam's claim in the United States
District Court -- a forum in which, assuming the court has
jurisdiction, she is certain to be awarded full relief if she wins
on the merits of her claim -- in favor of a forum in which she
has no certainty of getting any relief for a meritorious claim.
We conclude that the Commission's inability to make an
award directly to Nemariam, and Eritrea's ability to set off
Nemariam's claim, or an award to Eritrea based upon her
claim, against claims made by or an award in favor of
Ethiopia, render the Commission an inadequate forum; the
"remedy provided by the alternative forum is so clearly
inadequate or unsatisfactory that it is no remedy at all."
Piper, 454 U.S. at 254. In so saying, we recognize that the
decision is a close one, particularly in the light of our limited
standard of review and the district court's observation, with
which we agree, that there is nothing in the record to suggest
the plaintiffs' awards will be set off against debts owed by
Eritrea to Ethiopia. Neither, however, is there any legal
barrier to such a set off.
III. Conclusion
Because we conclude that the district court abused its
discretion in determining that the Commission was an ade-
quate alternative forum we do not reach Nemariam's other
arguments. For the foregoing reasons, the judgment of the
district court dismissing this case on the ground of forum non
conveniens is
Reversed.