IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
|
Joint Stock Company State Savings Bank of Petitioner, v. The Russian Federation, Respondent. |
CIVIL ACTION NO. 1:23-cv-00764 (ACR) |
Bruce S. Marks (Bar I.D. C0034)
Thomas Sullivan (Bar I.D. PA0122)
Maria Grechishkina (Bar I.D. PA0199)
Marks & Sokolov, LLC
1835 Market St., 17th floor
Philadelphia, PA 19103
Tel: (215) 569-8901
[email protected]
[email protected]
[email protected]
Counsel for Respondent,
The Russian Federation
[Page i]
[Page 1]
Based on FSIA's presumption of sovereign immunity, the MTD demonstrated that
this Court lacks subject matter jurisdiction because Oschadbank did not establish that FSIA
§1605(a)(6) arbitration or §1605(a)(1) waiver exceptions apply. Deliberately ignoring most of the
RF's arguments, Oschadbank gambles on four main assertions. All fail.
First, Points IA-C below, when a sovereign invokes immunity, an investor-claimant cannot
satisfy the arbitration exception by simply introducing a few pieces of paper, i.e., a BIT, notice of
arbitration, and an award. More is required. U.S. Supreme Court precedent dictates that courts, not
arbitrators, decide whether an arbitration agreement applies to a particular type of controversy.
And, as the Supreme Court held in Helmerich and other post-Chevron cases, courts must decide
FSIA jurisdictional issues, even if they overlap with merits. This mandates finding whether there
was an "agreement ... to submit to arbitration,” i.e., whether the RF's offer to arbitrate in the BIT
applies to the Crimea, and whether Oschadbank accepted the offer. The Response, 11, consciously
ignores the RF's six jurisdictional arguments that it never offered to arbitrate investments made in
Crimea, or any investments made before January 1, 1992. As such, they are admitted. And, even
if the RF made such an offer, the Notice of Arbitration rejected it by denying that Crimea was RF
territory. Either basis requires the MTD to be granted.
Second, Point ID, the Response, 15-16, cursorily argues that the BIT's incorporation of
the UNCITRAL Rules “competence-competence” clause precludes the RF from challenging
jurisdiction. This fails, because there is no “clear and unmistakable” evidence the RF and Ukraine
delegated "exclusive authority" to arbitrators to decide whether the RF offered to arbitrate
¹ Unless otherwise stated, all emphases are added, and all citations, quotation marks, footnotes,
ellipses and brackets omitted. Abbreviated citations and defined terms are those used in the MTD.
[Page 2]
investments in Crimea. Further, contrary to the Response, 16, under P&ID I, the Court may not
rule on the RF's NY Convention merits defenses until jurisdiction is resolved. See MTD, 1 n.1, 8.
Third, Points IE and IF, even if an offer was made and not rejected, Oschadbank is not a
"private party” under §1605(a)(6). Under §1603(b), Oschadbank is indisputably an “agency or
instrumentality” of Ukraine, which wholly owns it, and therefore itself falls within the definition
of a "foreign state” under §1603(a). Thus, it is not a “private party” based on elementary principles
of statutory construction. Nor is there a “commercial” legal relationship between Oschadbank and
the RF as the NY Convention (as adopted by the U.S.) requires, because the Convention's history
establishes it does not apply to disputes between foreign states. Tatneft I, an unpublished and non-
precedential decision to begin with, says nothing on the issue, contrary to the Response, 3, because
Ukraine did not assert the claimant was not a private party under FSIA or that the legal relationship
was not commercial. On either ground, the MTD must be granted.
Fourth, Point II, the Response, 19-21, abandons the assertion that the RF waived immunity
by merely signing the NY Convention under FSIA §1605(a)(1). Instead, it now argues that signing
a BIT and the NY Convention together somehow waives immunity as “to all countries.” Response,
20. As the MTD explains, signing a BIT does not waive immunity outside of §1605(a)(6), because
the "specific governs the general.” See MTD, 37 (citing the United States' 2024 Blasket Amicus).
Under the Response's bizarre theory, merely signing a BIT would waive immunity even if the
claimant or controversy had no relationship to the BIT or §1605(a)(6)'s “private party" and
commercial legal relationship requirements were not met. This is nonsense.²
In sum, no FSIA immunity exception applies. The MTD must be granted.
² The Response ends by claiming the RF waived personal jurisdiction, because it did not discuss
the Due Process standard. But, such discussion is premature until Price v. Socialist People's
Libyan Arab Jamahiriya, 294 F.3d 82 (D.C. Cir. 2002) is overturned.
[Page 3]
The legal analysis of the Response, 6-7, is faulty from its inception, getting long-standing
legal standards governing FSIA and its arbitration exception wrong. This taints its entire analysis.
First, "FSIA begins with a presumption of immunity, [under] which the plaintiff bears
the initial burden to overcome by producing evidence that an exception applies.” Bell Helicopter
Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175, 1183-86 (D.C. Cir. 2013). Only then does
“the sovereign bear[] the ultimate burden of persuasion to show the exception does not apply[.]"
Id. Contrary to the Response, 6, the RF does not bear the initial burden of bringing the case within
an exception to immunity.³
Second, the RF disputes both the factual and legal sufficiency of the Petition's allegations.⁴
Thus, contrary to the Response, 6, this Court must not take Oschadbank's factual allegations as
true or draw all reasonable inferences in its favor. See, e.g., Phoenix Consulting Inc. v. Republic
of Angola, 216 F.3d 36, 38-40 (D.C. Cir. 2000) (“Because Angola's motion to dismiss raised a
factual challenge to the court's subject-matter jurisdiction under FSIA, the district court erred in
accepting as true the jurisdictional facts alleged by the plaintiff. Instead, the court should have
settled any contested jurisdictional facts necessary to decide Angola's motion to dismiss.").
Third, as explained below, the Response, 6-7, misstates §1605(a)(6)'s jurisdictional test.
Oschadbank cannot avoid having this Court determine whether the RF offered to arbitrate
investments in Crimea by characterizing it as a merits issue.
³ The Response, 6, quotes Hulley Enterprises Ltd. v. Russian Fed’n, 2023 U.S.Dist.LEXIS 206199
(D.D.C. Nov. 17, 2023) out of context. This quote refers to the burden of persuasion, not production.
Hulley acknowledges “petitioner bears a burden of production.” Id., *30-*31.
⁴ For example, the RF disputes that it offered to arbitrate disputes over investments made before
January 1, 1992 (MTD 17-20) or investments not in conformity with RF law (MTD 20-23).
[Page 4]
As the MTD explained, under BITs, “[d]isputes about ‘arbitrability' ... such as 'whether the
parties are bound by a given arbitration clause' or ‘whether an arbitration clause in a concededly
binding contract applies to a particular type of controversy” are decided by “courts.” BG Group,
PLC v. Argentine Republic, 572 U.S. 25, 34 (2014) (quoting Howsam v. Dean Witter Reynolds,
Inc., 537 U.S. 79, 84 (2002)). “[D]isputes over 'formation of the parties' arbitration agreement'
and 'its enforceability or applicability to the dispute' at issue are 'matters ... the court must resolve."
Id. (quoting Granite Rock Co. v. Int'l Brotherhood of Teamsters, 561 U.S. 287, 299-300 (2010)).⁵
The Response, 7, misstates the test based on its fundamental error in concluding that this Court
need only consider the BIT, Award, and NY Convention and then wave a magic wand conferring
jurisdiction. Sovereign immunity is not so easily eviscerated.
FSIA §1605(a)(6) applies to “enforce an agreement ... to submit to arbitration" and
“confirm an award” against a foreign state. An investment treaty (like the BIT) constitutes a state's
“offer to arbitrate,” which the claimant may “accept” by submitting a notice of arbitration. BG
Group, 572 U.S. at 42. Nothing in FSIA suggests that a court may sustain jurisdiction under the
arbitration exception to compel arbitration or enforce an award without first determining if an
alleged offer applies to a “particular type of controversy,” which would contradict BG Group and
Granite Rock. After all, there is no “agreement...to submit to arbitration” if the sovereign did not
offer to arbitrate the controversy at issue.
⁵ See also Granite Rock, 561 U.S. at 297 (“[A] court may order arbitration of a particular dispute
only where the court is satisfied that the parties agreed to arbitrate that dispute.").
[Page 5]
Bolivarian Republic of Venezuela v. Helmerich & Payne Int'l Drilling Co., 581 U.S. 170
(2017) held that a “nonfrivolous argument" is “insufficient to confer jurisdiction," id. at 174,
overruling the standard discussed in Chevron Corp. v. Ecuador, 795 F.3d 200 (D.C. Cir. 2015).⁶
Granting “sovereign entities an immunity from suit in our courts both recognizes the absolute
independence of every sovereign authority ... including our own.” Helmerich, 581 U.S. at 179.
"[T]he nonfrivolous-argument interpretation would affron[t] other nations, producing friction in
our relations with those nations and leading some to reciprocate by granting their courts permission
to embroil the United States in expensive and difficult litigation, based on legally insufficient
assertions that sovereign immunity should be vitiated.” Id., 183.
Since Chevron, the Supreme Court has repeatedly recognized that courts must determine,
as a jurisdictional threshold, whether an immunity exception applies to specific facts. Rubin v.
Islamic Republic of Iran, 583 U.S. 202, 218-219 (2018) held that property of Iran was outside
FSIA's attachment jurisdiction where the immunity of the property was not rescinded under a
separate exception. F.R.G. v. Philipp, 592 U.S. 169, 184 (2021) held that a claim for property
expropriation by the Nazis was outside §1605(a)(3) exception based on the “domestic takings"
rule, emphasizing Helmerich's warnings to “avoid producing friction” with foreign sovereigns that
could risk “embroil[ing] the United States in expensive and difficult litigation” in foreign courts.
OBB Personenverkehr AG v. Sachs, 577 U.S. 27, 33-37 (2015) held that the “commercial activity
carried on in the United States by [a] foreign state” exception in §1605(a)(2) did not extend FSIA
jurisdiction to the sale of a rail ticket in the U.S. where plaintiff was later involved in an accident
in Austria. In each case, the question of whether FSIA immunity applied to specific facts was
⁶ Chevron observed that the "exception allows jurisdiction any time a plaintiff asserts a non-
frivolous claim involving an arbitration award.” Id., at 204 (citing Chevron's Brief). Thus,
Chevron did not treat whether the BIT applied to the controversy at issue as jurisdictional.
[Page 6]
treated as jurisdictional to avoid embroiling foreign sovereigns in full-fledged merits litigation and
to encourage foreign courts to apply the same deferential approach to immunity to the U.S. abroad.
Under Helmerich, courts must now “answer the jurisdictional question. If to do so, it
must inevitably decide some, or all, of the merits issues, so be it.” Helmerich, 581 U.S. at 179.
Helmerich's reasoning precludes courts from kicking the issue of whether the sovereign offered to
arbitrate a controversy down the road, because it allegedly overlaps a merits issue. Otherwise,
§1605(a)(6) would offer sovereigns little protection when defending claims to compel arbitration
or enforce awards. Courts could strip foreign states of immunity and order arbitration or recognize
an award simply because a claimant produced a BIT, without considering, under BG Group and
Granite Rock, whether the sovereign offered to arbitrate the controversy at issue. This would do
exactly what Helmerich warns against: embroiling a foreign sovereign in “expensive and difficult
litigation ... which should be vitiated” and exposing the U.S. to the same abroad. Id. at 183.
Most recently, the DC Circuit applied this reasoning in Chabad v. Russian Federation,
2024 U.S.App.LEXIS 19564 (D.C. Cir. 2024), vacating judgments against the RF for lack of
subject matter jurisdiction years after they were rendered because the §1605(a)(3) expropriation
exception did not apply to the alleged facts because the property at issue was not in the United
States. Chabad vacated the judgments notwithstanding the “rule of finality,” recognizing that
“Actions against foreign sovereigns in our courts raise sensitive issues concerning the foreign
relations of the United States." Id., at *25.
Under BG Group, Granite Rock, and Helmerich, as well as Chabad, this Court must decide
as threshold jurisdictional issues whether the RF offered to arbitrate investments in Crimea, and
whether Oschadbank accepted the RF's offer as made. The Response, 12-14, hangs its hat on the
[Page 7]
argument that §1605(a)(6) does not require courts to determine whether an alleged offer covers
the particular controversy, misconstruing Chevron, Stileks, and other cases.
BG Group requires courts to decide “whether an arbitration clause in a concededly binding
contract applies to a particular type of controversy” or “the dispute' at issue.” Id., 572 U.S. at 34
(quoting Howsam and Granite Rock). Crucially, a BIT “is not an already agreed-upon arbitration
provision between known parties.” Id., at 46 (Sotomayor, J., concurring in part). Rather, a BIT
narrowly sets forth “a nation state's standing offer to arbitrate” which must be accepted by the
investor. Id. “[A] treaty is a contract, though between nations. Its interpretation normally is, like
a contract's interpretation, a matter of determining the parties' intent.” Id., at 37. Thus, this Court
must determine whether an agreement to arbitrate was formed.
The MTD, 12-28, explained, based on undisputed principles of U.S. and international law
governing treaties, that the RF only offered to arbitrate disputes over investments made in Russian
territory, which did not include Crimea when the BIT was signed in 1998. Also, the RF only
offered to arbitrate investments made on or after January 1, 1992.⁷ The Response acknowledges
each of the RF's six contractual jurisdictional arguments related to Crimea and the temporal
limitation in the MTD and does not dispute them. See Response, 11 n.2 (citing MTD and
summarizing each argument). Neither Chevron, Stileks, nor any other case holds this Court may
eschew determining whether the RF agreed to arbitrate investments made in Crimea, or any
investments made before January 1, 1992.
First, in sustaining FSIA jurisdiction, as an initial holding, Chevron stated where Ecuador
did not dispute the “BIT includes a standing offer to all potential U.S. investors,” the dispute over
“whether lawsuits were ‘investments' for the purpose of the treaty is properly considered as part
⁷ Importantly, the finding of the Paris Court of Appeal (ECF 1-4), ¶¶96-100, that the investments
occurred before January 1, 1992 was not disputed by the Cassation Court. (ECF 1-5), ¶¶10-13.
[Page 8]
of the review under the New York Convention.” 795 F.3d at 206. As the MTD, 11, made clear,
Chevron merely stands for the proposition that where the claimant's investor status is not disputed,
a disagreement over whether an "investment" fits within the BIT's technical definitions falls under
the NY Convention (which the Response, 15-16, describes as “scope”). Thus, Chevron held that
the question of whether “breach of contract claims” were “investments” was not jurisdictional under
FSIA. Id. at 203. Chevron did not hold, nor could it under BG Group, Howsam, and Granite Rock,
that courts may eschew deciding whether a sovereign's offer extended to particular controversies
or disputes such that an agreement to arbitrate exists under FSIA.
Nonetheless, recognizing that this could be a jurisdictional issue, as a second holding,
Chevron stated, if “FSIA required a de novo determination ... Ecuador would have to demonstrate
by a preponderance of the evidence that Chevron's suits were not ‘investments' within the meaning
of the BIT. This Ecuador failed to do.” Id. at 206. Chevron's second holding confirms that courts
decide jurisdictional issues under FSIA based on the preponderance of the evidence.
Here, the RF argues it did not offer to arbitrate controversies over investments made in
Crimea because it was not Russian territory when the BIT was signed in 1998, or any investments
made before January 1, 1992. This argument is neither a “trick” as the Response, 12, contends,
nor does it conflate “arbitrability” with “jurisdictional” questions. The fundamental “arbitrability"
issue of whether an offer covers this controversy must be decided by courts under BG Group and
the cases it cites.⁸ Other disputes, such as whether something is an investment (Chevron), or an
⁸ BG Group stated “arbitrability” includes (1) “whether the parties are bound by a given arbitration
clause," that is, disputes over “formation of the parties' arbitration agreement”; (2) “whether an
arbitration clause in a concededly binding contract applies to a particular type of controversy”;
and (3) whether “particular preconditions for the use of arbitration,” have occurred. Id., 572 U.S.
at 34. BG Group held courts determine the first two issues of arbitrability, while arbitrators decide
pre-litigation conditions such as those at issue in that case.
[Page 9]
investor is eligible (Stileks), may fall outside FSIA's jurisdictional analysis. Thus, this Court must
decide whether the RF's offer applied to Crimea as a threshold jurisdictional issue under Helmerich,
Rubin, Philipp, and Sachs, as well as Chabad.
Second, LLC SPC Stileks v. Republic of Moldova, 985 F.3d 871 (D.C. Cir. 2021) is no
different in its limited application.⁹ Stileks described Chevron as holding "that the arbitrability of
a dispute is not a jurisdictional question." Id. at 878. This is true as far as it goes, because Chevron
only held an “arbitrability” dispute over whether lawsuits fell within the technical definition of
investments under the BIT was not jurisdictional. And, Stileks narrowly held an “arbitrability"
dispute over whether the claimant was an eligible investor was not jurisdictional. Id. at 878. The
Response's manifest error is ignoring that BG Group held “arbitrability” encompasses issues
which must be decided by courts, including the arbitration agreement's “applicability to the dispute
at issue.” BG Group, 572 U.S. at 34. Unlike Chevron (as circumscribed by Helmerich), the RF's
agreement to arbitrate does not apply to this controversy, because its offer – made in a BIT signed
in 1998 — did not extend to Crimea, or to investments made before January 1, 1992.¹⁰
Third, the Court should not overlook the significance of the Response deliberately not
addressing six of the RF's jurisdictional arguments, which are thus unopposed. As the MTD and
Nouvel BIT expert report (ECF 40) explain, unless the Tribunal had jurisdiction over the RF, its
⁹ The Response, 7-8, cites Stileks and other cases for the unremarkable proposition that production
of these three documents establishes a prima facie case of jurisdiction. While this may be true, it
does not undercut the Supreme Court's direction that courts must decide whether an arbitration
agreement applies to a specific controversy, the jurisdictional predicate under §1605(a)(6).
¹⁰ The Response, 13, also cites Process & Indus. Devs. Ltd. v. Fed. Republic of Nigeria, 27 F.4th
771, 776 (D.C. Cir. 2022) (“P&ID III”) and Micula v. Gov't of Romania, 101 F.4th 47, 53 (D.C.
Cir. 2024). In P&ID III, unlike here, the existence of agreement to arbitrate (based on a non-BIT
contract clause) was not disputed. In Micula, Romania conceded jurisdiction, but later contended
that subsequent EU decisions rendered the parties' agreement under the BIT void ab initio. Here,
the RF does not seek to void an admittedly applicable agreement. The Response also cites several
district court cases, which are non-binding and equally inapposite.
[Page 10]
Award is a nullity and cannot be recognized under §1605(a)(6).¹¹ The MTD, 13-28, and Nouvel
BIT Report, ¶¶26-124, quote numerous authorities that the Tribunal lacked jurisdiction over the
RF. See Response, 11 n.2 (citing each argument). Thus, if the Court concludes one (or more) of
these arguments are jurisdictional, the MTD is admitted and must be granted.¹²
The MTD, 15-17, established this Court lacks jurisdiction, because Oschadbank rejected
the RF's offer to arbitrate disputes arising from investments in its territory, denying Crimea was
Russian territory.¹³ The Response, 14-15, (begrudgingly) concedes that failure to accept an offer
is a jurisdictional issue under FSIA. Nor does it dispute that “an acceptance, upon terms varying
from those offered, is a rejection of the offer.” Iselin v. United States, 271 U.S. 136, 139 (1926).¹⁴
It argues solely that the RF's offer was accepted, because the arbitration demand copied the
arbitration provision “word for word.” Response, 15. This argument misses the mark; the
purported acceptance was a counteroffer.
First, BIT Article 9 provides for arbitration of “any dispute between either Contracting
¹¹ See MTD, 12 (“Where a court concludes that no agreement to arbitrate existed under the FSIA
exception, it must dismiss the petition to enforce.”) (citing Al-Qarqani v. Saudi Arabian Oil Co.,
19 F.4th 794, 802 (5th Cir. 2021) (dismissing petition for lack of jurisdiction)).
¹² See, e.g. Fox v. Am. Airlines, Inc., 389 F.3d 1291, 1294-95 (D.C. Cir. 2004) (affirming dismissal:
“Where the district court relies on the absence of a response as a basis for treating the motion [to
dismiss] as conceded, we honor its enforcement of the rule.”); Lockhart v. Coastal Int'l Sec., 905
F.Supp.2d 105, 118 (D.D.C. 2012) (dismissing four counts, holding that “when a plaintiff files a
response to a motion to dismiss but fails to address certain arguments made by the defendant, the
court may treat those arguments as conceded").
¹³ FSIA "requires the District Court to satisfy itself" of the existence of “an agreement between
the parties" to arbitrate, including whether the offer was accepted. Chevron, 795 F.3d at 205 n.3.
For a court to “eschew[] making this determination as part of its jurisdictional analysis” constitutes
"error." Id.
¹⁴ See also Nouvel BIT Report, ¶¶33-35, 39 (citing Guaracachi America, Inc., et al. v. Bolivia,
PCA No. 2011-17 (2014) (investor can “only accept the offer of arbitration as it was presented and
not as it would have liked to receive it")).
[Page 11]
Party and an investor of the other Contracting Party that arises in connection with the investments,
including disputes ... provided for in Article 5." Article 1 defines “investments” as “assets ...
which are invested by an investor of one Contracting Party in the territory of the other Contracting
Party in conformity with its laws..." This is repeated in Article 5 which states “investments of
investors of one Contracting Party, made in the territory of the other Contracting Party, shall not
be expropriated...” Thus, the RF's offer expressly limits arbitration to investments in Russian
territory. Notably, Ukraine never agreed with the RF's Note Verbale offering reciprocal treatment
of Crimea, underscoring its denial that Crimea constitutes RF territory. See RF's Aug. 21, 2023
Note Verbale; cf. Ukraine's Sept. 7, 2023 Note Verbale (ECF 39-36) (terminating BIT).
Second, and significantly, Oschadbank did not merely copy Article 9 into its Notice of
Arbitration. Its Notice went further, rejecting that its investment was made in the RF's territory:
“Oschadbank considers Russia's actions in respect of Crimea wholly illegal under Ukrainian and
international law, and rejects entirely the grounds, legal or otherwise, on which Russia purports
to have annexed Crimea and proclaimed it to be part of its sovereign territory.” Notice, ¶16.
Thus, no agreement to arbitrate was formed because Oschadbank's acceptance failed to match the
RF offer. See Iselin, supra; Dynamo v. Ovechkin, 412 F.Supp.2d 24, 29 (D.D.C. 2006) (declining
to enforce award absent acceptance of offer). Instead, the Notice made a counteroffer, stating:
“investments must be treated as if they were located in Russian territory for purposes of the
Treaty." Id. ¶18. Oschadbank's Notice “varying terms from those offered” is a rejection. See
Iselin, supra; Meeg v. Heights Casino, 2020 U.S.Dist.LEXIS 56387, at *14-*15 (E.D.N.Y. Mar.
27, 2020) (no agreement to arbitrate formed: “Plaintiff's conditions ... amounted to a rejection of
Defendants' offer to agree to arbitrate disputes and a counteroffer to work for Defendants without
entering into an arbitration agreement.”). See also Nouvel BIT Report, ¶¶33-40 (counteroffer is a
[Page 12]
rejection of offer under international law).
Third, the Response, 15, also argues that it is not required “to concede that RF's illegal
occupation of Crimea, or any other territory, was lawful.” But this misses the point. Oschadbank's
interjection of this issue into its Notice was a rejection of the RF's offer, and a counteroffer which
the RF did not accept. The mismatch between the RF's offer to arbitrate disputes in its territory,
and Oschadbank's counteroffer, which was to arbitrate disputes in what it claims is Ukrainian
territory, confirms there was no mutual offer and acceptance.
The Response, 15-16, claims the RF is somehow precluded from raising its jurisdictional
defenses, which it (mis)characterizes as merits challenges under the NY Convention, because the
BIT incorporates UNCITRAL Rules. This argument is baseless.
FSIA guarantees the “resolution of an immunity assertion before the sovereign can be
compelled to defend the merits” under the NY Convention (FAA). Process & Indus. Devs. Ltd. v.
Fed. Republic of Nigeria, 962 F.3d 576, 585 (D.C. Cir. 2020) (“P&ID I”). The RF reserved its
merits defenses, including Oschadbank's failure to file its petition within the three-year FAA
statute of limitations. See MTD, 1 n.1. Nonetheless, the Response, 16, argues “the Court can
resolve both the FSIA and enforceability of the award in one proceeding,” ignoring P&ID I.
Arguendo, if the RF's arguments are not jurisdictional under FSIA (they are), the Court cannot
convert them into merits defenses and decide them now, let alone without full NY Convention
briefing. Oschadbank cannot backdoor a merits issue that the RF is bound by the Award into a
defense to a jurisdictional challenge. The Response's cases are inapposite.
Argentine Republic v. Nat’l Grid, Plc, 637 F.3d 365 (D.C. Cir. 2011) (per curium) did not
[Page 13]
involve resolving FSIA jurisdiction and enforceability in one stage. Argentina itself filed the case
to vacate a domestic award and never raised a FSIA defense. Deutsche Telekom AG v. Republic of
India, 2024 U.S.Dist.LEXIS 55140 (D.D.C. March 27, 2024) denied India's motion to dismiss
under FSIA and then confirmed the award, apparently without allowing full merits briefing. Id. at
*9-*10. The court purported to distinguish P&ID I, which it held “allow[s] separate briefing of
immunity and merits issues only if immunity assertion is ‘colorable,” which India's is not.” Id. at
*13. At most, P&ID I allows courts to order merits briefing if the immunity defense is not colorable;
it does not permit recognition before the merits are briefed. See, e.g., Hulley Enterprises Ltd. v.
Russian Fed’n, 2022 U.S.Dist.LEXIS 68521, *3 n.1 (D.D.C. April 13, 2022) (denying motion to
compel briefing pending appeal of jurisdictional decision). The Response, 2, concedes that the
RF's argument that Oschadbank rejected its alleged offer to arbitrate is a colorable jurisdictional
argument, and does not contest its other arguments as not colorable. The Court may not decide the
RF's merits defenses now.
The Response, 15, argues that “the Court can and should hold that RF's challenges to the
BIT's scope are also irrelevant on the merits because it consented to the UNCITRAL Rules”—
even though the RF did not participate in the arbitration. However, a “defendant is always free to
ignore the judicial proceedings, risk a default judgment, and then challenge that judgment on
jurisdictional grounds in a collateral proceeding.” Ins. Corp. of Ireland v. Compagnie Des Bauxites
De Guinee, 456 U.S. 694, 706 (1982). See, e.g., Practical Concepts, Inc. v. Republic of Bolivia,
811 F.2d 1543, 1547 (D.C. Cir. 1987) (same, citing Compagnie). This principle applies equally to
arbitration proceedings. MCI Telecomms. Corp. v. Exalon Indus., 138 F.3d 426, 430 (1st Cir. 1998)
(holding party not participating in arbitration may make jurisdictional challenges to confirmation,
[Page 14]
noting: “this situation is analogous to where a lawsuit proceeds against a non-appearing party over
whom personal jurisdiction has not been acquired...[the] party can challenge the judgment when
it is executed, for it lacks legal validity"); Langlais v. Pennmont Benefit Servs., 2012 U.S.Dist.LEXIS
95897, at *16 (E.D. Pa. July 10, 2012) (not requiring participation in arbitration to preserve
jurisdictional challenges, as doing so “would ... make little sense”) (citing MCI).
In one paragraph, ignoring Supreme Court precedent, and without evidence, the Response,
15-16, argues incorporation of the UNCITRAL Rules into the BIT somehow establishes “clear
and unmistakable evidence that the parties agreed to arbitrate arbitrability” (quoting Stileks quoting
Chevron). This argument is completely wrong.
Article 21(1) of the relevant 1976 UNCITRAL Rules reads:
The arbitral tribunal shall have the power to rule on objections that it has no
jurisdiction, including any objections with respect to the existence or validity of the
arbitration clause or of the separate arbitration agreement.
This language, known as a “competence-competence” clause in international arbitration,
merely authorizes arbitrators to rule on objections to their jurisdiction, and plainly leaves room for
courts to conclude that parties did not intend for the arbitrators to have exclusive authority over
all issues of arbitrability – including whether an agreement to arbitrate was made in the first place.
First, in holding that parties did not agree to delegate arbitrability to the arbitrators, First
Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) stated: “Courts should not assume that
the parties agreed to arbitrate arbitrability unless there is clear[] and unmistakabl[e] evidence
that they did so.” Id. at 947. As First Options explained, the “who (primarily) should decide
arbitrability' question [] is rather arcane. A party often might not focus upon that question or upon
the significance of having arbitrators decide the scope of their own powers ... And, given the
[Page 15]
principle that a party can be forced to arbitrate only those issues it specifically has agreed to submit
to arbitration, one can understand why courts might hesitate to interpret silence or ambiguity on
the 'who should decide arbitrability' point as giving the arbitrators that power, for doing so might
too often force unwilling parties to arbitrate a matter they reasonably would have thought a judge,
not an arbitrator, would decide." Id. at 945.
Following First Options, Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010) held
that arbitrators had the authority to decide arbitrability only because the parties had “clearly and
unmistakably" delegated "exclusive authority" to them to do so. Id. at 66.¹⁵ Neither the BIT, nor
the open-ended UNCITRAL Rule says anything about “exclusive authority.” The Rule merely
states that the tribunal, in the first instance, has “the power to rule on objections that it has no
jurisdiction." In stark contrast, the agreement in Rent-A-Center stated, “[t]he Arbitrator, and not
any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute
relating to the interpretation, applicability, enforceability or formation of this Agreement.” Id. The
Response submitted no evidence that either Ukraine or the RF understood in 1998 that the mere
incorporation of a UNCITRAL Rule in the BIT “clearly and unmistakably” delegated “exclusive
authority" to arbitrators, as First Options and Rent-A-Center require.
Second, DDK Hotels v. Williams-Sonoma, 6 F.4th 308 (2d Cir. 2021) explains that “context
matters" because “incorporation of ... rules into an arbitration agreement does not, per se,
demonstrate clear and unmistakable evidence of the parties' intent to delegate.” Id. at 318.
Whatever incorporation of a “competence-competence” clause meant to Ecuador when it signed
¹⁵ Courts interpreting Rent-A-Center emphasize that “to demonstrate clear and unmistakable intent
to delegate questions of arbitrability, provisions must be both specific and exclusive.” Deardorff
v. Cellular Sales of Knoxville, Inc., 2022 U.S.Dist.LEXIS 23870, *21-*22 (E.D. Pa. Feb. 9, 2022).
See, e.g., Masci v. Capital Grille, GMRI, Inc., 2024 U.S.Dist.LEXIS 77, *8-*9 (E.D. Pa. Jan. 2,
2024) (rejecting delegation under FAA, because the clause did not "specifically state enforceability
of the arbitration agreement is within the exclusive authority of the arbitrator”).
[Page 16]
the US-Ecuador BIT (Chevron), or to Moldova when it signed the ECT (Stileks),¹⁶ has no
significance as to what the RF and Ukraine understood when signing their BIT in 1998.
If Ukraine believed that a “competence-competence” clause “clearly and unmistakably” delegated
"exclusive authority" to decide arbitrability to arbitrators, Oschadbank (100% owned by Ukraine)
would have submitted evidence to meet its heavy burden under First Options and Rent-A-Center.
It didn't. Decisions under U.S. law in Chevron, Stileks, and other cases decades later have no
relevance to what the RF and Ukraine intended to agree in 1998.
Third, the BIT, as a treaty, is interpreted under international law, including the VCLT. See
VCLT, Art. 31(3)(c); Blasket Renewable Invs., LLC v. Kingdom of Spain, 665 F.Supp.3d 1, 10
(D.D.C. 2023) (considering “rules of international law applicable between the parties in
interpreting the meaning of a treaty. Vienna Convention art. 31(3)(c).”). Neither Chevron, nor
Stileks, nor any other case cited by the Response appears to have considered international law in
interpreting "competence-competence" clauses under UNCITRAL Rules.¹⁷ As explained in
Professor Avtonomov's UNCITRAL legal expert report, filed contemporaneously, (“Av.Rpt."),
incorporation of UNCITRAL Rule 21(1) does not constitute “clear and unmistakable” evidence of
delegating "exclusive authority” to decide arbitrability, i.e., whether an offer applies to a specific
dispute, to provide jurisdiction to arbitrators. Rather, international law, as well as national law of
the RF, Ukraine, France, and all other relevant jurisdictions, holds “competence-competence”
clauses merely allow arbitrators to decide jurisdictional issues at the first instance, subject to de novo
legal review by domestic courts of primary (seat of arbitration) and secondary (where enforcement
is sought) jurisdictions. See Av.Rpt. ¶¶10-15. The VCLT analysis confirms this.
¹⁶ Neither sovereign apparently submitted any evidence on their understanding of “competence-
competence" clauses, or how they are interpreted under international law.
¹⁷ Most recently, Blasket concluded the UNCITRAL Rules did not prevent de novo review of
whether the parties entered into “an agreement to arbitrate.” Id., 665 F.Supp.3d at 9-10.
[Page 17]
VCLT Art. 31(1): The starting point for applying the VCLT is Article 31(1), which
provides that "[a] treaty shall be interpreted in good faith in accordance with the ordinary meaning
to be given to the terms of the treaty in their context and in light of its object and purpose."
Av.Rpt. ¶¶10, 18. With respect to Rule 21(1)’s "ordinary meaning,” “the arbitrators' ‘power to rule
on objections' is not characterized as exclusive. Neither the word, ‘exclusive,' nor any synonym
appears in this provision.” Id. ¶19. With respect to the “context” and “object and purpose" of Rule
21(1), the UNCITRAL Rules “compris[e] one element of the 'unified legal framework' that also
includes the [NY] Convention and the 1985 UNCITRAL Model Law."¹⁸ Av.Rpt., ¶20 (citing
American arbitration scholar, Professor George A. Bermann, Supp. Expert Op. (Dec. 10, 2015)
(Av.Rpt. Ex. 3), ¶48). “Both [those sources] provide for post-arbitration de novo judicial review
of Arbitrability." Id. ¶21.¹⁹ Thus, under VCLT Art. 31(1), “the UNCITRAL Rules should not be
interpreted as precluding such de novo judicial review.” Id. (citing Bermann ¶48).
VCLT Art. 31(3)(c): Article 31(3)(c) provides that the BIT, and the UNCITRAL Rules
incorporated therein, should be interpreted in accordance with “relevant rules of international law
applicable in the relations between the parties.” In this case, “relevant rules” include the principle
of competence-competence, codified in the European Convention on International Commercial
Arbitration, 484 U.N.T.S. 349 (1961) (“1961 Geneva Convention”) (Av.Rpt. Ex. 5), binding on
the RF and Ukraine as signatories. Id. ¶¶11, 25. Geneva Convention Article V(3) provides that a
¹⁸ UNCITRAL Model Law on International Commercial Arbitration (1985) (Av.Rpt. Ex. 4).
¹⁹ See NY Convention, Art. V(1)(a) (“Recognition and enforcement of the award may be refused
[if] ... the award deals with a difference not contemplated by or not falling within the terms of the
submission to arbitration”); 1985 UNCITRAL Model Law, Art. 34(2) (“An arbitral award may be
set aside by the court [if] ... the award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration.”); Art. 36(1) (“Recognition or enforcement of an
arbitral award ... may be refused [if] ... the award deals with a dispute not contemplated by or not
falling within the terms of the submission to arbitration”).
[Page 18]
tribunal is "entitled ... to rule on [its] own jurisdiction,” while Article IX(1) provides that
annulment and denial of recognition are allowed where courts find an award “deals with a
difference not contemplated or not falling within the terms of the submission to arbitration.” Id.
¶¶12, 29-33. The 1961 Geneva Convention, which imposes no restrictions on court review, reflects
the broad international understanding that competence-competence merely provides initial power
to arbitrators to rule on jurisdiction, not “exclusive authority.” Id. ¶¶24-26 (citing Bermann, ¶¶22-
27 (collecting decisions of the highest courts of the UK, France, and the Netherlands)).²⁰
VCLT Art. 31(4): Article 31(4) requires consideration of any “special meaning” that “the
parties ... intended” should be given to any term of an international agreement. Here, the “special
meaning" of competence-competence shared by the RF and Ukraine confirms they did not intend
to exclude de novo judicial review of arbitrability by adopting UNCITRAL Rules. RF and Ukraine
— as well as France, the seat of the arbitration — "apply the same understanding of [competence-
competence] that is set forth in the 1961 Geneva Convention.” Av.Rpt. ¶¶13, 35. The RF and
Ukrainian legal frameworks both include the NY Convention, the 1961 Geneva Convention, near-
identical statutes “On International Commercial Arbitration” (“ICA Statutes”) based on the 1985
UNCITRAL Model Law, and similar procedural rules authorizing “comprehensive” and “direct
examination" of evidence in set-aside and recognition proceedings. See Av.Rpt. ¶¶37, 40, 45, 47.
Both RF and Ukrainian ICA Statutes (numbered identically) include the principle of competence-
competence in Articles 16(1) (tribunal can “rule on its own jurisdiction") and the power of post-
arbitration de novo judicial review of the issues of arbitrability (whether an arbitration agreement
"is not valid" or an award was “made regarding a dispute not contemplated by or not falling within
²⁰ The 1985 UNCITRAL Model Law includes the same provisions in Art. 16(1) (“arbitral tribunal
may rule on its own jurisdiction”) and Arts. 34(2) and 36(1) (see supra, n.19), providing for
competence-competence and de novo judicial review. See Av.Rpt. ¶27.
[Page 19]
the terms of the arbitration agreement, or it contains decisions on matters beyond the scope of the
arbitration agreement”) in Articles 34(2)(1) (set-aside) and 36(1)(1) (denial of enforcement). Id.
¶¶38-40, 46, 47. Cases and legal commentary in both the RF and Ukraine confirm competence-
competence does not convey exclusive authority to arbitrators to decide jurisdiction. Id. ¶¶39, 42,
43, 49-51. Finally, “France is also a party to the 1961 Geneva Convention [and] recognizes both
the [competence-competence] principle and the authority of French courts to review Arbitrability
de novo," as occurred in this very case. Id. ¶52; also ¶¶53-56 (citing cases and legal commentary).
Given both the RF and Ukraine internal law, incorporation of UNITRAL Rules did not delegate
“exclusive authority” to arbitrators to decide jurisdiction.
VCLT Art. 31(3)(b): Article 31(3)(b) concerns “subsequent practice” of the parties, which
in this case "regarding ‘competence-competence' is reflected in the choices of seats of arbitration
by the BIT signatory States ... in other arbitrations since 1998” when the BIT was signed. Id.
¶¶14, 58. “Jurisdictions such as Canada, the Netherlands, Switzerland, and the United Kingdom,
where Ukraine and the Russian Federation have consented to arbitrate in other cases, all recognize
that 'competence-competence' merely provides for tribunals to initially decide Arbitrability, with
courts later reviewing the issues de novo in set-aside and enforcement proceedings.” Id. ¶14; see
also ¶59 n.19 (collecting cases from four jurisdictions), ¶¶60-64 (Canada), ¶¶65-68 (Netherlands),
¶69 (Switzerland), and ¶¶70-72 (UK). How could the RF and Ukraine have delegated exclusive
authority to decide jurisdiction when they repeatedly chose seats with post-award de novo review?
In sum, there is no “clear and unmistakable evidence” that the RF and Ukraine delegated
"exclusive authority" to decide whether they agreed to arbitrate this dispute in the BIT. To the
contrary, under international, Russian, and Ukrainian law, “competence-competence” merely
permits arbitrators to determine their jurisdiction, subject to de novo court review.
[Page 20]
The MTD, 30-34, established, based on the text and history of FSIA, that §1605(a)(6)'s
jurisdictional "private party” limitation does not encompass arbitrations between sovereigns, FSIS
defines to include agencies and instrumentalities. The Response, 16-17, does not address any
arguments premised on FSIA's plain text and rules of statutory construction. Instead, it claims,
with no authority, the exception applies notwithstanding that it is wholly owned by Ukraine.
First, the Response, 18, argues that Oschadbank is a “private party,” because it is a
"separate legal person” from the Ukraine. However, this ignores that FSIA §1603(b) explicitly
states that "separate legal persons” can be an “agency or instrumentality of a foreign state" if the
"majority of [their] shares is owned by a foreign state.” Id. Courts repeatedly recognize that state-
owned banks are an agency or instrumentality of foreign states notwithstanding separate corporate
existence. See, e.g., Shoham v. Islamic Republic of Iran, 2017 U.S.Dist.LEXIS 84119 (D.D.C.
June 1, 2017) (bank primarily owned by Iran is a foreign instrumentality under FSIA). None of
the Response's cases suggest otherwise.²¹ FSIA's express language deems corporations majority
owned by a foreign state to be foreign states, notwithstanding separate existence.
Second, the Response, 16-17, then concedes that Oschadbank is not a “private party,” but
nonetheless argues the Award “was issued under the BIT, which is an agreement for the benefit of
private investors.” The Response improperly reads words into §1605(a)(6), which only states, “an
²¹ Transaero, Inc. v. La Fuerza Aerea Boliviana, 30 F.3d 148, 151 (D.C. Cir.1994) concerned a
distinction between “foreign states” and their “agencies or instrumentalities” for §1608 service of
process, inapplicable here. Dole Food Co. v. Patrickson, 538 U.S. 468, 474 (2003) held a company
was an independent entity rather than an instrumentality, because the foreign state did not directly
own it, as required by §1603(b)(2). Guevara v. Republic of Peru, 468 F.3d 1289 (11th Cir. 2006)
discussed §1605(a)(2)'s “commercial activity" exception rather than the definition of a "foreign
state" under FSIA. The Response's other cases were not even FSIA disputes, merely discussing
the general principle that corporations are considered separate legal entities.
[Page 21]
agreement made by the foreign state with or for the benefit of a private party." .” ²² It does not say
that it can be used to enforce agreements “for the benefit of a private party and foreign sovereigns/
instrumentalities.” Lamie v. U.S. Trustee, 540 U.S. 526 (2004) rejected interpretation of a statute
that "would have us read an absent word into the statute,” because doing so would “rewrite[] rules
that Congress has affirmatively and specifically enacted.” Id. at 538. Further, “an agreement ...
with ... a private party” obviously means the “private party” must be the claimant. Therefore, “for
the benefit of a private party” must mean the “private party” is also the claimant. “Private party”
cannot refer to two different people (claimants and non-claimants) at the same time. Clark v.
Martinez, 543 U.S. 371, 378 (2005) rejected construction of statute that gave the “same words a
different meaning” as doing so “would be to invent a statute rather than interpret one.” A fortiori,
the words "private party” used just once cannot have two meanings.
Third, the Response, 18, argues that the U.S. has “obligations to enforce all New York
Convention awards unless an Article V nonrecognition ground exists.” The Response ignores that
the NY Convention Article V(2)(b) provides recognition may be denied if “contrary to the public
policy of that country.” Obviously, the FSIA and its “private party” restriction represent a significant
U.S. public policy to avoid embroiling U.S. courts in disputes between sovereigns.
²² The Response, 8, wrongly argues this requirement is not jurisdictional based on the “is or may
be" language. The reason for this language is that some treaties, such as the ECT, acknowledge
application of the NY Convention (thus, the “is” language), while other treaties, such as the BIT,
do not (thus, the “may be” language). Cf. ECT Art. 26(5)(a)(ii) (the ECT and notice of arbitration
“shall be considered to satisfy the requirement for ... an ‘agreement in writing' for purposes of
article II of the [New York Convention]"); RF-Ukraine BIT (no provision). Chevron, n.2, stated,
without analysis, FSIA jurisdiction does not require determining whether an award is governed by
a treaty, citing the “is or may be” language. Under Helmerich, decided after Chevron, this Court
must resolve the “may be” dispute, i.e., whether the Award falls under the Convention, as
jurisdictional. Further, Chevron's language was dicta because “the parties d[id] not dispute that
the New York Convention governs” the award. Id.
[Page 22]
The MTD, 34-36, established that, based on its undisputed legislative history, the NY
Convention does not apply to the Award, because there is no “legal relationship ... which is
considered as commercial,” given the dispute is between foreign states, the RF and Oschadbank.
First, the Response, 9, relies on a “crush of cases" where the NY Convention was used to
recognize arbitration awards that arise from disputes under BITs. But every cited case involves a
dispute between a private investor and a foreign sovereign.²³ This dispute is between foreign states
(Ukraine by Oschadbank and the RF), so those cases are all inapposite.
Second, despite the Convention's clear history, the Response, 9, argues that all there needs
to be is a “connection to commerce,” citing Belize Social Dev. Ltd. v. Gov't of Belize, 794 F.3d 99
(D.C. Cir. 2015). Belize concerned a commercial contract between a private telecommunications
company and Belize. Id. at 101. Here, no contractual relationship existed between the RF and
Oschadbank. There was not even a legal commercial regulatory relationship because Oschadbank
refused to submit itself to Russian banking regulation. See Lauts Report, ¶¶79, 81 (citing May 2014
Oschadbank resolutions and letters refusing to comply with Russian regulations and terminating
operations). The purpose of the “commercial” reservation was to exclude “political awards, and
the like." Island Territory of Curacao v. Solitron Devices, Inc., 356 F.Supp. 1, 13 (S.D.N.Y. 1973).
This dispute involves a political conflict between two sovereigns over Crimea, and Ukraine
²³ See Zhongshan Fucheng Indus. Inv. Co. v. Fed. Rep. of Nigeria, 2023 U.S.Dist.LEXIS 13603,
*16 (D.D.C. Jan. 26, 2023) (dispute “between Nigeria and Zhongshan, a private actor—not two
states"); Tatneft v. Ukraine, 21 F.4th 829 (D.C. Cir. 2021) (“Tatneft II”) (Russian privately-owned
company against Ukraine); LLC Komstroy v. Republic of Moldova, 2019 U.S.Dist.LEXIS 143739
(D.D.C. Aug. 23, 2019) (Ukrainian private company against Moldova); Crystallex Int'l Corp. v.
Bolivarian Republic of Venezuela, 244 F.Supp.3d 100 (publicly traded Canadian company against
Venezuela); Gold Reserve v. Bolivarian Republic of Venezuela, 146 F.Supp.3d 112 (D.D.C. 2015)
(private Canadian company against Venezuela).
[Page 23]
prohibiting its banks to operate there. There is nothing “commercial” about this.
Third, the Response, 10, relies on a deliberately truncated quote from the Restatement
(Third) of Foreign Relation, §487 cmt. f. Comment f, with the omitted portion in italics, states: “a
contract between two state-owned commercial enterprises – e.g., a steel company owned by state
A and an automobile company owned by state B – is usually not governed by international law,
and may provide for arbitration subject to the Convention.” Putting aside the Restatement is not
binding, at most it suggests a general rule applicable to contracts between state-owned enterprises.
But, here, there is no contract at all, let alone one between state-owned enterprises.
As an alternative grounds for jurisdiction, Oschadbank claimed that the RF “waived its
immunity from suit under Section 1605(a)(1) by acceding to the New York Convention.” Petition,
¶9. Instead, Oschadbank now claims for the first time that the RF “waived immunity by ratifying
the BIT." Response, 19. The Response concedes that "[i]t is not the New York Convention that
waived immunity ... but the BIT itself.” Id., 20. As such, the MTD's arguments, 36-40, are
admitted and the Petition's §1605(a)(1) claim should be dismissed. See Fox, Lockhart, supra,
n.12. The Response's new claim that signing a BIT and the “New York Convention then makes
it clear that this waiver applies to all countries” is incoherent and wrong.
First, the Response cites no case holding that merely signing a BIT and the NY Convention
waives immunity as “to all countries” under §1605(a)(1). As the MTD, 37, explains, signing a BIT
does not waive immunity outside of §1605(a)(6), because the “specific governs the general.”²⁴
Thus, signing a BIT may only satisfy the arbitration exception if an award is rendered under it.
²⁴ If §1605(a)(6) may apply, the waiver exception should not be considered under "commonplace
statutory construction that the specific governs the general.” 2024 U.S. Blasket Amicus, at 22
(quoting RadLax Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. 639, 645 (2012)).
[Page 24]
Under the Response's bizarre theory, signing a BIT would waive immunity even if the claimant
and dispute had no relationship to the BIT and §1605(a)(6)'s “private party” and commercial
requirements were not met. The Response, 19, cites Creighton Ltd. v. Gov't of Qatar, 181 F.3d
118 (D.C. Cir. 1999), but it applied the arbitration, not the waiver, exception. Id. at 124. Qatar did
not even sign the Convention. Id. at 121. Thus, Creighton offers no support for the assertion that
signing a BIT and the NY Convention waives immunity for “all countries.”
Second, the Response disingenuously quotes Tatneft v. Ukraine, 771 F.App’x 9, 10 (D.C.
Cir. 2019) (“Tatneft I") for the proposition that “Creighton ... concluded that a sovereign, by signing
the New York Convention, waives its immunity." Response, 20. As noted in the MTD, 39 n.27,
Creighton concluded no such thing, nor could it because Qatar had not signed the Convention.
Rather, as Process & Indus. Devs. Ltd. v. Fed. Republic of Nigeria, 506 F.Supp.3d 1 (D.D.C. 2020)
(“P&ID II”) observed, this discussion in Creighton was dictum. Id. at 7 (holding Creighton did not
adopt this theory “as binding Circuit law"). Further, the Response fails to disclose that Tatneft I
is an unpublished disposition lacking precedential value. Id. at 7 n.3; D.C. Circuit Rule 36(e)(2).
Thus, Tatneft I does not help in whatever argument the Response is attempting to make. None of
the other cases cited in the Response, 20 n.9, support the proposition that merely signing a BIT and
the Convention waives immunity “in all countries,” let alone the United States.²⁵
Third, the Response, 20, argues that customary international law recognizes the “same
principle" but never explains what this principle may be, merely citing to draft articles. Id., n.7.
The Response makes no argument that such draft articles are authoritative, or have anything to do
²⁵ See ConocoPhillips Petrozuata B.V. v. Bolivarian Republic of Venezuela, 628 F.Supp.3d 1, 3
(D.D.C. 2022) (finding waiver based on the ISCID Treaty, not a BIT); Stati v. Kazakhstan, 199
F.Supp.3d 179, 188-189 (D.D.C. 2016) (finding waiver based on arbitration exception and
erroneously double counting signing the ECT as the basis for implied waiver); Ipitrade Int'l, S.A.
v. Fed. Republic of Nigeria, 465 F.Supp. 824, 826 (D.D.C. 1978) (finding waiver based on choice-
of-law provision in an agreement to arbitrate under ICC Rules, not signing the NY Convention).
[Page 25]
with the RF signing the NY Convention. Similarly, the Response, 20 n.10, claims the legislative
history of the arbitration exception somehow “endorses” “this understanding” of the waiver
exception, but never explains what this history may be or what “understanding” it endorses.
Finally, the Response, 21, argues that the RF waived immunity because the RF “consented
to arbitrate anywhere Oschadbank desired.” This is blatantly false. BIT Article 9 provides three
forums, including arbitration under UNCITRAL Rules. Rule 16 provides a procedural framework
for parties to select the seat of arbitration; it does not allow investors to arbitrarily select the forum.
Thus, the RF did not agree to arbitrate “without specifying jurisdiction," as discussed in Tatneft,
301 F.Supp.3d at 191. Moreover, Tatneft relied on Frolova v. Union of Soviet Socialist Republics,
761 F.2d 370, 378 (7th Cir. 1985), which found no implicit waiver; to the contrary, it held “courts
have refused to find an implicit waiver to suit in American courts from a contract clause providing
for arbitration in a country other than the United States.” Id. at 377.
In sum, the Response concedes that signing the NY Convention does not waive immunity.
Merely signing the BIT does not waive immunity other than under the arbitration exception.
The MTD objected to personal jurisdiction on Fifth Amendment due process grounds to
avoid any argument that the RF waived its right to raise this issue on appeal. If Price v. Socialist
People's Libyan Arab Jamahiriya, 294 F.3d 82 (D.C. Cir. 2002) is reversed, Oschadbank will be
able to amend its Petition to attempt to comport with Due Process “minimum contacts” requirement.
At this point, there was nothing for the RF to argue (or waive), because the Petition contained no
minimum contacts allegations because Price required none.
For the foregoing reasons, the MTD should be granted, and the Petition dismissed.
[Page 26]
Dated: August 9, 2024
MARKS & SOKOLOV, LLC
/s/ Bruce Marks
Bruce S. Marks (Bar I.D. CO0034)
Thomas Sullivan (Bar. I.D. PA0122)
Maria Grechishkina (Bar I.D. PA0119)
1835 Market St., 17th Floor
Philadelphia, PA 19103
Tel. (215) 569-8901
[email protected]
[email protected]
[email protected]
[Page 27]
I certify that on August 9, 2024, the foregoing document was filed electronically and served
upon all counsel of record via the Court's CM/ECF filing system in accordance with the Federal
Rules of Civil Procedure.
Dated: August 9, 2024
MARKS & SOKOLOV, LLC
/s/ Bruce S. Marks
Bruce S. Marks (D.C. Bar No. CO0034)
1835 Market St., 17th Floor
Philadelphia, PA 19103
Tel. (215) 569-8901
Fax (215) 569-8912
[email protected]
Counsel for Respondent,
The Russian Federation