1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
Francis A. Vasquez, Jr. (pro hac vice application pending)
Frank Panopoulos (pro hac vice application pending)
701 Thirteenth Street, NW
Washington, DC 20005
Telephone: (202) 626-3600
Facsimile: (202) 639-9355
fvasquez@whitecase.com
fpanopoulos@whitecase.com
Mark F. Lambert (State Bar No. 197410)
3000 El Camino Real
5 Palo Alto Square, 9th Floor
Palo Alto, CA 94306
Telephone: (650) 213-0347
Facsimile: (650) 213-8158
mlambert@whitecase.com
Attorneys for International Finance
Corporation
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
DEBORAH D. PETERSON, Personal
Representative of the Estate of James C.
Knipple (Dec.), et al.,
Plaintiffs,
v.
ISLAMIC REPUBLIC OF IRAN, et al.
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Case No. 08-MC-80030-JSW (BZ)
INTERNATIONAL FINANCE
CORPORATION’S MEMORANDUM
OF POINTS AND AUTHORITIES IN
OPPOSITION TO PLAINTIFFS’ MOTION
FOR ASSIGNMENT OF RIGHTS
PURSUANT TO C.C.P. § 708.510(a)
AND F.R.C.P. 69(a)
Date: July 2, 2008
Time: 9:00 a.m.
Place: Courtroom G
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 1 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-i- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
TABLE OF CONTENTS
BACKGROUND ...................................................................................................................................2
I. IFC IS A PUBLIC INTERNATIONAL ORGANIZATION OF SOVEREIGN
MEMBER NATIONS THAT PROMOTES SUSTAINABLE ECONOMIC
GROWTH IN DEVELOPING COUNTRIES...........................................................................2
II. PLAINTIFFS HAVE SOUGHT TO SUBJECT IFC TO JUDICIAL PROCESS AS
PART OF THEIR ENFORCEMENT EFFORTS......................................................................3
ARGUMENT.........................................................................................................................................3
I. PLAINTIFFS’ MOTION SHOULD BE STAYED PENDING THE D.C. DISTRICT
COURT’S DETERMINATION OF IFC’S IMMUNITY DEFENSES.....................................3
II. IFC IS IMMUNE FROM THE RELIEF SOUGHT BY PLAINTIFFS IN THEIR
MOTIONS FOR ASSIGNMENT OF RIGHTS AND TO APPOINT A RECEIVER..............5
A. The IOIA And IFC’s Articles Of Agreement Accord IFC Immunity From
Every Form Of Judicial Process, Including The Relief Sought By Plaintiffs ...............6
B. The FSIA Expressly Reinforces IFC’s Immunity From Enforcement
Proceedings Against A Foreign Sovereign State ...........................................................8
CONCLUSION....................................................................................................................................10
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 2 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-1- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
International Finance Corporation (“IFC”), a non-party to these proceedings, respectfully
submits this Opposition to Plaintiffs’ Motion for Assignment of Rights. IFC appreciates the
importance of the judgment against the Islamic Republic of Iran (“Iran”) that Plaintiffs seek to
enforce. Nonetheless, IFC has had no role in any of the underlying actions, and is immune from
these and any related judicial proceedings. As the private sector arm of the World Bank Group, IFC
is a public international organization entitled to broad immunity from every form of judicial process
under the International Organizations Immunities Act (“IOIA”), 22 U.S.C. § 288 et seq., and IFC’s
Articles of Agreement. In particular, absent express waiver, IFC enjoys absolute immunity from the
attachment of its assets or the discovery of its records or personnel. Recent amendments to the
Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq., have neither altered nor
abrogated these immunities. In fact, the FSIA specifically reinforces IFC’s IOIA immunity.
Plaintiffs’ Motion for Assignment of Rights openly seeks to circumvent IFC’s immunity.
Plaintiffs argue that the Court “need not necessarily resolve the issue of [IFC’s] sovereign
immunity” because an assignment of rights would allow them to “stand in the shoes of Iran.”
Plaintiffs’ Memorandum of Points and Authorities (“Pls.’ Mem.”) at 14. This argument ignores the
independent obligation of federal courts to consider issues of subject-matter jurisdiction whenever
they are raised. Further, Plaintiffs have not identified, and cannot identify, any waiver of IFC’s
immunity vis-à-vis Iran that would permit them—even if “stand[ing] in the shoes of Iran”—to attach
IFC accounts or other assets purportedly payable to Iran. Indeed, Plaintiffs continue to disregard the
fact that IFC already informed them that it has not uncovered any debts or assets payable to Iran that
might be attached in satisfaction of the judgment.
Because IFC expressly reserves, and has not waived, its absolute immunity from these or any
related proceedings, Plaintiffs’ Motion must be denied. As a threshold matter, however, the same
immunity issues are already before the U.S. District Court for the District of Columbia (“D.C.
District Court”) in separate proceedings in which Plaintiffs seek essentially identical (and redundant)
relief. Accordingly, IFC supports the motion of the International Bank for Reconstruction and
Development (“World Bank”) to stay Plaintiffs’ Motion for Assignment of Rights that was filed in
this Court on May 28, 2008. The D.C. District Court is the jurisdiction in which the original
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 3 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-2- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
judgment was rendered and in which IOIA jurisprudence has been most developed. The D.C.
District Court is thus particularly well-suited to resolve the question of IFC’s immunity from
Plaintiffs’ collection efforts. Issuing a stay in this action pending the D.C. District Court’s decision
would promote judicial economy and reduce the risk of inconsistent rulings.
BACKGROUND
I. IFC IS A PUBLIC INTERNATIONAL ORGANIZATION OF SOVEREIGN
MEMBER NATIONS THAT PROMOTES SUSTAINABLE ECONOMIC GROWTH
IN DEVELOPING COUNTRIES
IFC is a public international organization comprised entirely of sovereign member nations,
and is the private sector arm of the World Bank Group. See, e.g., IFC in Brief: Creating
Opportunities, Improving Lives, available at http://www.ifc.org/ifcext/about.nsf/Content/
IFC_in_Brief (“IFC in Brief”) at 5. IFC was established in 1956 for the purpose of “further[ing]
economic development by encouraging the growth of productive private enterprise in member
countries, particularly in the less developed areas.” IFC’s Articles of Agreement, art. I § 1; see also
IFC in Brief at 7.
Headquartered in Washington, D.C., IFC has 179 member nations—including Iran—and
operates in accordance with its Articles of Agreement, an international intergovernmental agreement
among its member nations. See IFC in Brief at 5; see also IFC’s Articles of Agreement, 7 U.S.T.
2197. IFC’s member nations collectively determine its policies. IFC in Brief at 5. Pursuant to its
Articles of Agreement, IFC invests solely in the private sector, in partnership with private businesses
and entrepreneurs. See id. at 5-8; see also IFC’s Articles of Agreement, art. I § 1.
The United States was a founding member of IFC. In 1955, Congress authorized the
President to accept IFC membership for the United States, as provided for by IFC’s Articles of
Agreement. See 22 U.S.C. § 282. The provisions of IFC’s Articles of Agreement, including
specified privileges and immunities, have been made part of U.S. law. See 22 U.S.C. § 282 et seq.;
see also 7 U.S.T. 2197. Pursuant to the IOIA, the President, by Executive Order, “designate[d]
[IFC] as a public international organization entitled to enjoy the privileges, exemptions, and
immunities conferred by the said [IOIA].” Exec. Order 10680, 21 Fed. Reg. 7647 (Oct. 2, 1956).
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 4 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-3- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
II. PLAINTIFFS HAVE SOUGHT TO SUBJECT IFC TO JUDICIAL PROCESS AS
PART OF THEIR ENFORCEMENT EFFORTS
This collection action is one of two proceedings that Plaintiffs have initiated against IFC as
part of their efforts to enforce their judgment against Iran. As detailed in IFC’s Memorandum of
Law in Opposition to Plaintiffs’ Motion for Appointment of Receiver in the action before the D.C.
District Court (“IFC’s D.C. Opp’n”) (submitted herewith as Exhibit A), Plaintiffs mailed a subpoena
dated April 9, 2008 to IFC directing it to produce certain documents and witness testimony regarding
Iranian assets allegedly held by IFC, and served a writ of attachment on judgment via U.S. Marshals
on April 30. IFC’s D.C. Opp’n at 1-3. In each instance, IFC responded by letter to inform Plaintiffs
of its immunities under the IOIA and its Articles of Agreement. Id. at 1-2. In the letter responding
to the writ of attachment, IFC also informed Plaintiffs that IFC had not uncovered any records
indicating debts or assets owed to Iran or any of the State ministries, divisions, agencies or
instrumentalities identified in the writ. Id. at 2. In response, Plaintiffs filed a motion to appoint a
receiver for the purpose of collecting IFC assets purportedly payable to Iran. IFC and the World
Bank, among other parties, have filed oppositions to the motion.1
The present Motion identifies IFC as one of several “financial institutions” that, according to
Plaintiffs’ speculative reasoning, “[c]ommons [sic] sense would dictate” entered into commercial
transactions with Iran and thus “may have funds” to which Iran is entitled to draw down. Pls.’ Mem.
at 2. Just as in the motion to appoint a receiver, Plaintiffs argue here that they can sidestep IFC’s
immunity by “stand[ing] in the shoes” of Iran through an assignment of rights. Id. at 14. Because
Plaintiffs’ Motion implicates the same immunity defenses currently before the D.C. District Court,
the World Bank moved on May 28 to stay this Motion pending the ruling in the D.C. proceedings on
Plaintiffs’ motion to appoint a receiver.
ARGUMENT
I. PLAINTIFFS’ MOTION SHOULD BE STAYED PENDING THE D.C. DISTRICT
COURT’S DETERMINATION OF IFC’S IMMUNITY DEFENSES
The Court should exercise its discretionary authority to stay these proceedings. See, e.g.,
Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) (“[T]he power to stay proceedings is incidental to
1 Other parties have also raised sovereign immunity defenses in motions to quash the writs of attachment.
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 5 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-4- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
the power inherent in every court to control the disposition of the causes on its docket with economy
of time and effort for itself, for counsel, and for litigants.”); Leyva v. Certified Grocers of Cal., Ltd.,
593 F.2d 857, 863 (9th Cir. 1979) (“A trial court may, with propriety, find it is efficient for its own
docket and the fairest course for the parties to enter a stay of an action before it, pending resolution
of independent proceedings which bear upon the case.”). As set forth in detail in the World Bank’s
motion for a stay, a stay here would both promote judicial economy and reduce the risk of
inconsistent rulings, thereby furthering the interests of all parties.
The D.C. District Court has been seized of this matter since Plaintiffs initiated the underlying
proceedings in October 2001. The threshold immunity issues presented on Plaintiffs’ Motion for
Assignment of Rights and their motion for appointment of receiver in Washington, D.C. are virtually
identical. As both the seat of the judgment and the home to IFC, the World Bank and other public
international organizations accorded IOIA immunity, the D.C. District Court is best situated to
address the intersection of the enforcement actions and immunities of the international organizations.
In that regard, the D.C. Circuit has established the widely adopted “corresponding-benefits” standard
for IOIA immunity, discussed further below, pursuant to which the “virtually absolute immunity”
under the IOIA is “construed as not waived unless the particular type of suit would further [IFC’s]
objectives.” Atkinson v. Inter-Am. Dev. Bank, 156 F.3d 1335, 1338, 1340-41 (D.C. Cir. 1998)
(emphasis in original); see also Banco de Seguros del Estado v. Int’l Fin. Corp., Nos. 06 Civ. 2427
(LAP), 06 Civ. 3739 (LAP), 2007 WL 2746808 (S.D.N.Y. Sept. 20, 2007) (relying on Atkinson and
applying “corresponding-benefits” standard); In re Dinastia, L.P., No. 04:07-cv-02501, 2007 WL
4845977 (S.D. Tex. Nov. 8, 2007) (same); Ashford Int’l, Inc. v. World Bank Group, No. 1:04-CV-
3822-JOF, 2006 WL 783357 (N.D. Ga. Mar. 24, 2006) (same).
Given the D.C. District Court’s familiarity with the underlying action and with the law
governing IOIA immunity, it would promote judicial economy—and potentially narrow the issues
that this Court must address—to stay these proceedings while the D.C. District Court resolves the
immunity arguments raised by IFC and other public international organizations. See FormFactor,
Inc. v. Micronics Japan Co., Ltd., No. CV-06-07159 JSW, 2008 WL 361128, at *3 (N.D. Cal.
Feb. 11, 2008 ) (White, J.) (noting that a stay is favored “when the orderly course of justice will be
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 6 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-5- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
advanced through the simplifying of issues, proof, and questions of law”). Likewise, a stay here
would reduce the risk of inconsistent rulings on the same immunity issues implicated by Plaintiffs’
motions in the D.C. action and these proceedings. See Nielsen v. Merck & Co., No. C07-00076
MJS, 2007 WL 806510, at *2 (N.D. Cal. Mar. 15, 2007) (“[A]bsent a stay, there would be a
significant risk of inconsistent rulings given the number of cases . . . that raise the same jurisdictional
question.”). In both instances, a stay would inure to the benefit of all parties.
II. IFC IS IMMUNE FROM THE RELIEF SOUGHT BY PLAINTIFFS IN THEIR
MOTIONS FOR ASSIGNMENT OF RIGHTS AND TO APPOINT A RECEIVER
As part of their effort to circumvent IFC’s immunity from these and any related proceedings,
Plaintiffs erroneously argue that the question of the Court’s subject-matter jurisdiction over IFC “is
clearly a matter subject to the individual enforcement of the assignment order in a separate satellite
proceeding” and thus “need not be precisely determined” here. Pls.’ Mem. at 10 n.2. To the
contrary, a federal court must consider issues of subject-matter jurisdiction whenever they are raised.
See Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter
jurisdiction, the court must dismiss the action.”); see also EOTT Energy Operating Ltd. v.
Winterthur Swiss Ins. Co., 257 F.3d 992, 996 (9th Cir. 2001) (noting, in sovereign immunity case,
that “we have an obligation to determine whether we and the court below have . . . jurisdiction”)
(citing Fed. R. Civ. P. 12(h)(3)); Benetatos v. Hellenic Republic, No. C 06-06819 SBA, 2008 WL
2079191, at *1 (N.D. Cal. May 15, 2008) (same).
IFC’s immunity is necessarily a threshold jurisdictional issue because sovereign immunity
safeguards immune entities not only from suit and liability, but also all “attendant burdens of
litigation.” In re Minister Papandreou, 139 F.3d 247, 251 (D.C. Cir. 1998) (quoting Foremost-
McKesson, Inc. v. Islamic Rep. of Iran, 905 F.2d 438, 443 (D.C. Cir. 1990)). In addition, the Court
also must address IFC’s immunity at this juncture because “[a]n assignment order [pursuant to
C.C.P. § 708.510] may not be issued with respect to assets which are immune from execution.”
Quaestor Invs., Inc. v. State of Chiapas, No. CV-95-6723 JGD AJW, 1997 WL 34618203, at *6
(C.D. Cal. Sept. 2, 1997) (citing C.C.P. § 708.510(f)); see also Philippine Export & Foreign Loan
Guarantee Corp. v. Chuidian, 218 Cal. App. 3d 1058, 1099-1100 (1990) (denying motion under
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 7 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-6- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
C.C.P. § 708.510 as to sovereign assets immune from execution under the FSIA). While, as
discussed, IFC has not uncovered any records indicating debts or assets owed to Iran or any of the
State ministries, divisions, agencies or instrumentalities identified in the writ of attachment, for the
sake of brevity IFC hereby incorporates by reference and adheres to the argument in the World
Bank’s Memorandum of Points and Authorities in Opposition to Motion for Assignment regarding
the inapplicability of C.C.P. § 708.510 to assets that are immune from execution.
Because Plaintiffs’ efforts to attach IFC assets in satisfaction of the judgment against Iran
plainly fall within the purview of international organizational immunity under both the IOIA and
FSIA, the Motion for Assignment of Rights must be denied.
A. The IOIA And IFC’s Articles Of Agreement Accord IFC Immunity From Every
Form Of Judicial Process, Including The Relief Sought By Plaintiffs
The IOIA provides that “[i]nternational organizations, their property and their assets,
wherever located, and by whomsoever held, shall enjoy the same immunity from suit and every
form of judicial process as is enjoyed by foreign governments,” absent an express waiver of that
immunity. 22 U.S.C. § 288a(b) (emphasis added). This immunity is co-extensive with the “virtually
absolute immunity” accorded to foreign sovereigns in 1945. Atkinson, 156 F.3d at 1340-41
(affirming dismissal of garnishment proceedings) (quotation omitted); see also Mendaro v. World
Bank, 717 F.2d 610, 615 (D.C. Cir. 1983) (“It is well established under international law that an
international organization is entitled to such privileges and such immunity from the jurisdiction of a
member state as are necessary for the fulfillment of the purposes of the organization . . . .”)
(quotation omitted). As detailed in IFC’s Opposition in the D.C. District Court proceedings, this
absolute immunity encompasses all IFC assets, records and personnel. IFC’s D.C. Opp’n at 9-13;
see also Taiwan v. U.S. Dist. Ct. for the N. Dist. of Cal., 128 F.3d 712, 718-719 (9th Cir. 1997)
(holding, with reference to the IOIA, that the employee of an international organization is entitled to
broad testimonial immunity).
In addition, IFC’s Articles of Agreement expressly prohibit judicial recourse against IFC by
“member[] [nations] or persons acting for or deriving claims from members.” IFC’s Articles of
Agreement, art. VI § 3. Plaintiffs have not identified, and cannot identify, any express waiver of
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 8 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-7- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
IFC’s immunity vis-à-vis Iran that would permit them—even if allowed to “stand in the shoes of
Iran” (Pls.’ Mem. at 14)—to attach IFC accounts or other assets purportedly payable to Iran. Indeed,
Plaintiffs’ purportedly “[c]ommons [sic] sense” claim that IFC engaged in some kind of commercial
activity with Iran (see, e.g., id. at 2) is nothing more than unsubstantiated conjecture. As discussed
above, IFC invests solely in the private sector. See IFC in Brief at 5-8; see also IFC’s Articles of
Agreement, art. I § 1 (“The purpose of the Corporation is to further economic development by
encouraging the growth of productive private enterprise in member countries . . . .”).
Moreover, U.S. courts have interpreted Article VI § 3 of IFC’s Articles of Agreement
extremely narrowly, such that there is a waiver only in the most limited circumstances.2 See
Mendaro, 717 F.2d at 611 (holding that immunity waiver “must be narrowly read in light of both
national and international law”). Under the “corresponding-benefits” standard established by the
D.C. Circuit, IFC’s immunity is “construed as not waived unless the particular type of suit would
further [IFC’s] objectives.” Atkinson, 156 F.3d at 1338 (emphasis in original); see also Mendaro,
717 F.2d at 615 (holding that waiver of immunity in Articles of Agreement identical to those of IFC
encompasses only “suits by its debtors, creditors, bondholders, and those other potential plaintiffs to
whom [IFC] would have to subject itself to suit in order to achieve its chartered objectives”). The
waiver is not applicable in this case because IFC would not receive any conceivable “corresponding
benefit” by waiving its immunity from Plaintiffs’ efforts to enforce a judgment against Iran.
In fact, the D.C. Circuit has held specifically that international organizations under the IOIA
do not derive benefits warranting a waiver of immunity in the context of third-party garnishment or
attachment proceedings. See Atkinson, 156 F.3d at 1338-39 (holding, in action to garnish wages of
Inter-American Development Bank employee, that the “clear lack of benefit—indeed,
2 Article VI § 3 of IFC’s Articles of Agreement states:
Actions may be brought against the Corporation only in a court of competent jurisdiction in the territories of
a member in which the Corporation has an office, has appointed an agent for the purpose of accepting
service or notice of process, or has issued or guaranteed securities. No actions shall, however, be brought by
members or persons acting for or deriving claims from members. The property and assets of the
Corporation shall, wheresoever located and by whomsoever held, be immune from all forms of seizure,
attachment or execution before the delivery of final judgment against the Corporation.
An identical waiver provision is included in the Articles of Agreement of the other World Bank entities. See Banco de
Seguros, 2007 WL 2746808, at *4 n.7 (“The status of the immunities of IFC and of the other World Bank entities is
virtually indistinguishable. . . . [E]ven the relevant portions of their Articles of Agreement are the same . . . .”).
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 9 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-8- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
disadvantage—of a waiver of immunity from garnishment proceedings compels the conclusion” that
immunity applied); Inversora Murten, S.A. v. Energoprojekt-Niskogradnja Co., No. 07-7049, 2008
WL 441836, at *2 (D.C. Cir. Feb. 14, 2008) (holding that World Bank’s “interests are not advanced
by subjecting itself to non-wage garnishment proceedings initiated by third-party judgment creditors
of member nations’ contractors”) (internal citation omitted).
Given IFC’s status as a public international organization comprised of individual member
nations, it is essential that IFC retain its immunity in this instance. IFC’s chartered objectives would
not be furthered—and, indeed, would be seriously impaired—if it were deemed to relinquish its
immunity to every third-party judgment creditor of any one of its 179 member nations. See
Mendaro, 717 F.2d at 617 (“[L]imitations on immunity that subject the organization to suits which
could significantly hamper the organization’s functions are inherently less likely to have been
intended . . . .”). The flood of post-judgment discovery requests and writs of attachment arising from
all cases against member nations would pose a costly and time-consuming impediment to the
achievement of IFC’s development objectives. Cf. Atlantic Tele-Network Inc. v. Inter-Am. Dev.
Bank, 251 F. Supp. 2d 126, 132 (D.D.C. 2003) (“[W]ere this suit to be allowed, virtually any U.S.
citizen with a commercial grievance against a debtor nation could challenge a [Bank] loan to that
nation without any ‘corresponding benefit’ accruing thereby to the [Bank] whatsoever.”). Judgment
creditors anxious to satisfy a judgment against a member nation should not do so at the doors of IFC.
In any such instance, the benefit to IFC of waiving its immunity would be nonexistent. See
Atkinson, 156 F.3d at 1338 (holding that “immunity should be construed as not waived unless the
particular type of suit would further [IFC’s] objectives”) (emphasis in original).
B. The FSIA Expressly Reinforces IFC’s Immunity From Enforcement Proceedings
Against A Foreign Sovereign State
To the extent Plaintiffs rely on the FSIA, the FSIA expressly reinforces IFC’s IOIA
immunity in the specific context of enforcement proceedings against a foreign sovereign state.
Section 1611(a) of the FSIA establishes that “the property of those organizations designated by the
President as being entitled to enjoy the privileges, exemptions, and immunities provided by the
[IOIA] shall not be subject to attachment or any other judicial process impeding the disbursement
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 10 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-9- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
of funds to, or on the order of, a foreign state as the result of an action brought in the courts of the
United States or of the States.” 28 U.S.C. § 1611(a) (emphasis added); see also Exec. Order 10680,
21 Fed. Reg. 7647 (Oct. 2, 1956) (designating IFC as international organization entitled to IOIA
privileges and immunities); Atkinson, 156 F.3d at 1342 (noting that, under Section 1611(a), “a
judgment creditor cannot execute upon funds held by international organizations for disbursement to
[a] foreign state judgment debtor”); Trans Commodities, Inc. v. Kazakhstan Trading House, S.A.,
No. 96-316 (NHJ), slip op. at 4-5 (D.D.C. Feb. 20. 1997) (submitted herewith as Exhibit B)
(quashing writ of attachment issued against foreign state’s bank accounts for loan proceeds from
World Bank and holding that “[t]o allow World Bank loan proceeds to become subject to
attachment . . . is untenable and contrary to the purpose of section 1611(a) immunity”). As evident
on its face, the intended purpose of this provision is to permit international organizations entitled to
IOIA immunity “to carry out their functions from their offices located in the United States without
hindrance by private claimants seeking to attach the payment of funds to a foreign state.” Foreign
Sovereign Immunities Act of 1976, H.R. Rep. No. 94-1487 (1976), as reprinted in 1976
U.S.C.C.A.N. 6604 (emphasis added). Section 1611(a) thus prohibits the very kind of judicial
process that Plaintiffs seek here—namely, the assignment of rights to “reach all [IFC] accounts,
accounts receivable and rights to payment of money” (Pls.’ Mem. at 9) purportedly payable to Iran.
The recent amendments to the FSIA highlighted by Plaintiffs (Pls.’ Mem. at 6-7, 13) do not
disturb the IOIA immunities preserved by Section 1611(a). The new provision governing the
attachment of foreign state assets (see id. at 6-7 (quoting “(g) Property in Certain Actions”)) amends
Section 1610 of the FSIA, which enumerates certain exceptions to the immunity from attachment or
execution to which foreign sovereign states are entitled.3 Section 1611(a) of the FSIA—which
remains unchanged by the recent amendments—expressly provides that international organizations
under the IOIA retain their immunity “[n]otwithstanding the provisions of section 1610 of this
chapter.” 28 U.S.C. § 1611(a) (emphasis added). In arguing that the immunity of IFC “would be no
3 The new provision governing attachment is not, as Plaintiffs suggest (Pls.’ Mem. at 6-7), a subsection of 28 U.S.C.
§ 1605A.
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 11 of 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-10- INTERNATIONAL FINANCE CORPORATION’S
OPPOSITION TO MOTION FOR ASSIGNMENT OF RIGHTS
CASE NO. 08-MC-80030-JSW (BZ)
greater than the sovereign immunity of the United States which was waived under 28 U.S.C.
§ 1605A(g)(2)” (Pls.’ Mem. at 13), Plaintiffs are simply ignoring the plain language of the statute.4
CONCLUSION
For the foregoing reasons, IFC respectfully requests that the Court (i) stay these proceedings
pending the D.C. District Court’s ruling on Plaintiffs’ motion for an appointment of receiver in that
action; or, in the alternative, (ii) deny Plaintiffs’ Motion for Assignment of Rights and order that
Plaintiffs cease and desist from serving any further process upon IFC in these or any related
proceedings.
Dated: June 9, 2008 Respectfully submitted,
/s/ Mark F. Lambert
Mark F. Lambert (State Bar No. 197410)
3000 El Camino Real
5 Palo Alto Square, 9th Floor
Palo Alto, CA 94306
Telephone: (650) 213-0347
Facsimile: (650) 213-8158
mlambert@whitecase.com
Francis A. Vasquez, Jr. (pro hac vice pending)
Frank Panopoulos (pro hac vice pending)
701 Thirteenth Street, NW
Washington, DC 20005
Telephone: (202) 626-3600
Facsimile: (202) 639-9355
fvasquez@whitecase.com
fpanopoulos@whitecase.com
Attorneys for International Finance
Corporation
4 In fact, contrary to Plaintiffs’ suggestion, Section 1610(g)(2) also does not waive the immunity of the United States.
The plain language of that provision makes clear that it relates to the “property of a foreign state, or agency or
instrumentality . . . regulated by the United State Government by reason of action taken against that foreign state under
the Trading With the Enemy Act or the International Emergency Economic Powers Act.” See Pls.’ Mem. at 7 (quoting
28 U.S.C. § 1610(g)(2)).
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 12 of 13
Case 3:08-mc-80030-JSW Document 53 Filed 06/09/2008 Page 13 of 13
EXHIBIT A
Case 3:08-mc-80030-JSW Document 53-2 Filed 06/09/2008 Page 1 of 18
UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA
PETERSON, et al. )
)
Plaintiffs, )
)
v. ) Civil Action No. 1-01-CV-02094 RCL
)
ISLAMIC REPUBLIC OF IRAN, et al. )
)
Defendants. )
)
INTERNATIONAL FINANCE CORPORATION’S
MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS’
MOTION FOR APPOINTMENT OF RECEIVER
Francis A. Vasquez, Jr. (D.C. Bar No. 442161)
Frank Panopoulos (D.C. Bar No. 459365)
Jonathan C. Ulrich (D.C. Bar No. 500832)
701 Thirteenth Street, N.W.
Washington, D.C. 20005-3807
(202) 626-3600
Attorneys for International Finance
Corporation
June 5, 2008
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 1 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 2 of 18
-i-
TABLE OF CONTENTS
TABLE OF AUTHORITIES .......................................................................................................... ii
INTRODUCTION .......................................................................................................................... 1
ARGUMENT.................................................................................................................................. 4
I. IFC IS IMMUNE FROM THE RELIEF SOUGHT BY PLAINTIFFS IN THEIR
MOTION TO APPOINT A RECEIVER............................................................................ 4
A. IFC Is An International Organization Of Sovereign Member Nations That
Promotes Sustainable Economic Growth In Developing Countries ....................... 4
B. The IOIA And IFC’s Articles Of Agreement Accord IFC Immunity From
Every Form Of Judicial Process, Including The Relief Sought By
Plaintiffs.................................................................................................................. 5
II. IFC’S IMMUNITIES APPLY TO ALL MOTIONS, WRITS AND OTHER
JUDICIAL PROCESS THAT PLAINTIFFS HAVE SERVED OR MAY SERVE
UPON IFC .......................................................................................................................... 9
A. IFC’s Assets Are Immune From Attachment Or Any Other Judicial
Process Impeding The Disbursement Of Funds To, Or On The Order Of,
A Foreign State ..................................................................................................... 10
B. IFC’s Records And Personnel Are Immune From Judicial Process ..................... 11
CONCLUSION............................................................................................................................. 13
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 2 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 3 of 18
-ii-
TABLE OF AUTHORITIES
FEDERAL CASES Page(s)
Alpha Lyracom Space Commc’ns, Inc. v. Comsat Corp.,
113 F.3d 372 (2d Cir. 1997).....................................................................................................11
* Atkinson v. Inter-Am. Dev. Bank, 156 F.3d 1335 (D.C. Cir. 1998) ....................................... passim
Atlantic Tele-Network Inc. v. Inter-Am. Dev. Bank.,
251 F. Supp. 2d 126 (D.D.C. 2003) ....................................................................................... 7-8
Auster v. Ghana Airways Ltd., 514 F.3d 44 (D.C. Cir. 2008) .........................................................3
Banco de Seguros del Estado v. Int’l Fin. Corp., Nos. 06 Civ. 2427 (LAP),
06 Civ. 3739 (LAP), 2007 WL 2746808 (S.D.N.Y. Sept. 20, 2007).........................................6
Broadbent v. Org. of Am. States, 628 F.2d 27 (D.C. Cir. 1980)....................................................12
Foremost-McKesson, Inc. v. Islamic Rep. of Iran,
905 F.2d 438 (D.C. Cir. 1990) ...................................................................................................9
In re Minister Papandreou, 139 F.3d 247 (D.C. Cir. 1998) ............................................................9
* Inversora Murten, S.A. v. Energoprojekt-Niskogradnja Co.,
No. 07-7049, 2008 WL 441836 (D.C. Cir. Feb. 14, 2008)..............................................3, 7, 11
* Mendaro v. World Bank, 717 F.2d 610 (D.C. Cir. 1983) ...................................................... passim
Renchard v. Humphreys & Harding, Inc., No. 2128-72, slip op.
(D.D.C. Apr. 24, 1975) ............................................................................................................12
Taiwan v. U.S. Dist. Ct. for the N. Dist. of Cal., 128 F.3d 712 (9th Cir. 1997).............................12
* Trans Commodities, Inc. v. Kazakhstan Trading House, S.A.,
No. 96-316 (NHJ), slip op. (D.D.C. Feb. 20. 1997) ..................................................................8
United States v. Chalmers, No. S5 05 CR 59(DC),
2007 WL 624063 (S.D.N.Y. Feb. 26, 2007)............................................................................11
FEDERAL STATUTES, RULES AND EXECUTIVE ORDERS
22 U.S.C. § 282............................................................................................................................ 4-5
Executive Order 10680, 21 Fed. Reg. 7647 (Oct. 2, 1956) .............................................................5
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 3 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 4 of 18
Page(s)
-iii-
Fed. R. Civ. P. 12(h)(3)....................................................................................................................3
Fed. R. Civ. P. 45(b) ........................................................................................................................1
Foreign Sovereign Immunities Act (“FSIA”) of 1976 (as amended),
28 U.S.C. § 1602 et seq................................................................................................1, 8, 9, 10
International Organizations Immunities Act (“IOIA”) of 1945,
22 U.S.C. § 288 et seq...................................................................................................... passim
TREATIES, TREATISES AND OTHER AUTHORITIES
Foreign Sovereign Immunities Act of 1976, H.R. Rep. No. 94-1487 (1976),
as reprinted in 1976 U.S.C.C.A.N. 6604............................................................................... 8-9
International Finance Corporation’s Articles of Agreement,
7 U.S.T. 2197................................................................................................................... passim
Restatement (Third) of Foreign Relations Law § 468 (1986)........................................................11
Restatement (Third) of Foreign Relations Law § 478 cmt. b (1986).............................................11
Vienna Convention on Diplomatic Relations, art. 24, Apr. 18, 1961,
23 U.S.T. 3227, 500 U.N.T.S. 95....................................................................................... 11-12
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 4 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 5 of 18
-1-
INTRODUCTION
International Finance Corporation (“IFC”) is a non-party to these proceedings. While
IFC recognizes the importance of the judgment, IFC has had no role in any of the underlying
actions. Accordingly, IFC respectfully submits this Opposition to Plaintiffs’ Motion for
Appointment of Receiver.
IFC is the private sector arm of the World Bank Group and a public international
organization entitled to broad immunity from every form of judicial process under the
International Organizations Immunities Act (“IOIA”), 22 U.S.C. § 288 et seq., and IFC’s
Articles of Agreement. In particular, absent express waiver, IFC enjoys absolute immunity from
the attachment of its assets or the discovery of its records or personnel. IFC has not waived, and
indeed expressly reserves, its immunity as to all judicial process served upon it in these
proceedings.
Notwithstanding this immunity, Plaintiffs have sought—by various means and in
multiple jurisdictions1—to subject IFC to judicial process as part of their efforts to enforce a
multi-billion dollar judgment against the Islamic Republic of Iran (“Iran”). Plaintiffs first mailed
a subpoena dated April 9 to IFC’s Washington, D.C. headquarters, directing IFC to produce
certain documents as part of post-judgment discovery related to this case.2 The subpoena also
1 In addition to the Motion for Appointment of Receiver before this Court, Plaintiffs are pursuing essentially
identical (and redundant) relief before the U.S. District Court for the Northern District of California. On May 1,
2008, Plaintiffs filed a motion for assignment of rights, pursuant to California state law, to collect Iranian funds
purportedly held by certain “financial institutions,” including IFC. As addressed below, all of these collection
efforts—whether based on federal or state law—are barred by IFC’s immunity under the IOIA, as well as the
Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq. On May 28, the International Bank for
Reconstruction and Development (“World Bank”) filed a motion with the Northern District of California to stay
Plaintiffs’ motion for assignment of rights until this Court has ruled on the present Motion. That motion is
scheduled to be heard on July 2, 2008, by Magistrate Judge Bernard Zimmerman.
2 Letter from David J. Cook to “International Finance Company” dated April 9, 2008, enclosing subpoena dated
April 9, 2008 (submitted herewith as Exhibit 1 to the Declaration of Francis A. Vasquez, Jr. (“Vasquez
Declaration”)). As a preliminary matter, the delivery of the subpoena by mail alone did not constitute effective
service. See Fed. R. Civ. P. 45(b) (requiring personal service of subpoena).
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 5 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 6 of 18
-2-
purported to command deposition testimony, although elsewhere it stated that no appearance was
required. On April 29, 2008, IFC responded to the subpoena by letter, informing Plaintiffs of
IFC’s immunities under the IOIA.3 The following day, U.S. Marshals appeared at IFC’s
headquarters to serve a writ of attachment on judgment that had been issued on March 25, 2008.4
Later, on May 5, Plaintiffs faxed a letter to IFC contesting IFC’s entitlement to immunity.5
On May 14, IFC responded to the writ of attachment by letter, copied to the Court,
reiterating and further detailing its immunity under both the IOIA and FSIA.6 In the letter, IFC
also informed Plaintiffs that its internal inquiries in connection with the writ had not uncovered
any records indicating debts owed by IFC to Iran or any of the State ministries, divisions,
agencies or instrumentalities identified in Exhibit A to the writ of attachment, nor any goods,
chattel or credit of such entities in IFC’s possession. Plaintiffs responded with a two-sentence
faxed letter on May 15 stating that they “disagree with [IFC’s] analysis.”7 Then, on May 20,
Plaintiffs filed the present Motion.8
Plaintiffs suggest that they are not attempting an “end run” around IFC’s immunity.
Memorandum of Points and Authorities in Support of Motion (“Pls.’ Mem.”) at 5. However,
3 Letter from Francis A. Vasquez, Jr. to David J. Cook dated Apr. 29, 2008 (submitted herewith as Exhibit 2 to the
Vasquez Declaration).
4 Writ of Attachment on Judgment other than Wages, Salary and Commissions dated March 25, 2008 (submitted
herewith as Exhibit 3 to the Vasquez Declaration).
5 Letter from David J. Cook to Francis A. Vasquez, Jr. dated May 2, 2008 (submitted herewith as Exhibit 4 to the
Vasquez Declaration).
6 Letter from Francis A. Vasquez, Jr. to David J. Cook dated May 14, 2008 (submitted herewith as Exhibit 5 to the
Vasquez Declaration).
7 Letter from David J. Cook to Francis A. Vasquez, Jr. dated May 14, 2008 (submitted herewith as Exhibit 6 to the
Vasquez Declaration).
8 Plaintiffs still have not properly served the Motion on IFC because they apparently mailed it to the wrong
address. IFC’s headquarters address is 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433. See, e.g., IFC
in Brief: Creating Opportunities, Improving Lives, available at http://www.ifc.org/ifcext/about.nsf/Content/
IFC_in_Brief, (“IFC in Brief”) (submitted herewith as Exhibit 7 to the Vasquez Declaration) at 10. Plaintiffs’ proof
of service indicates that service on IFC was attempted by mailing a copy of the Motion to 1818 H Street,
Washington D.C. 20433.
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 6 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 7 of 18
-3-
Plaintiffs’ Motion seeks to do just that. Based on the legally erroneous and purely speculative
claim that IFC would have waived its immunity to Iran in order to engage in (unspecified)
business transactions with Iran, Plaintiffs argue that the appointment of a receiver would allow
them to “step into the shoes of Iran” and thus sidestep IFC’s immunity. See, e.g., Pls.’ Mem. at
7, 9, 22. Plaintiffs do not—and cannot—identify any such express waiver of immunity by IFC.
Further, the limited waivers of immunity under the IOIA are interpreted narrowly and,
consistent with D.C. Circuit precedent, permitted only where a waiver would further IFC’s
chartered objectives. Atkinson v. Inter-Am. Dev. Bank, 156 F.3d 1335, 1338 (D.C. Cir. 1998).
IFC has not waived its immunity as to these proceedings because it would receive no benefit by
waiving its immunity to third-party judgment creditors seeking to enforce against an IFC
member nation. See id. at 1338-39 (affirming dismissal of action to garnish wages of Inter-
American Development Bank employee); Inversora Murten, S.A. v. Energoprojekt-Niskogradnja
Co., No. 07-7049, 2008 WL 441836, at *2 (D.C. Cir. Feb. 14, 2008) (affirming dismissal of non-
wage garnishment action by creditors of World Bank member nation’s contractors). A waiver of
immunity in such circumstances would subject IFC to a flood of burdensome litigation
proceedings. This would greatly hinder, and not further, IFC’s objectives to promote economic
growth in developing countries through private sector investment.
Accordingly, Plaintiffs’ Motion must be denied. In addition, because a federal court must
also consider issues of subject-matter jurisdiction whenever they are raised,9 IFC also
respectfully requests that the Court order that Plaintiffs cease and desist from serving any further
process upon IFC, and quash the subpoena and writ of attachment.
9 See Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the
court must dismiss the action.”); see also Auster v. Ghana Airways Ltd., 514 F.3d 44, 48 (D.C. Cir. 2008) (where a
defendant has immunity, federal courts lack subject-matter jurisdiction and “must dismiss the case”) (citing Fed. R.
Civ. P. 12(h)(3)).
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 7 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 8 of 18
-4-
ARGUMENT
I. IFC IS IMMUNE FROM THE RELIEF SOUGHT BY PLAINTIFFS IN THEIR
MOTION TO APPOINT A RECEIVER
A. IFC Is An International Organization Of Sovereign Member Nations That
Promotes Sustainable Economic Growth In Developing Countries
IFC is a public international organization comprised entirely of sovereign member
nations, and is the private sector arm of the World Bank Group. See, e.g., IFC in Brief at 5. IFC
was established in 1956 for the purpose of “further[ing] economic development by encouraging
the growth of productive private enterprise in member countries, particularly in the less
developed areas.” IFC’s Articles of Agreement, art. I § 1;10 see also IFC in Brief at 7. IFC’s
work as global investor and advisor reaches some 140 emerging markets. IFC in Brief at 7.
Headquartered in Washington, D.C., IFC has 179 member nations—including Iran—and
operates in accordance with its Articles of Agreement, an international intergovernmental
agreement among its member nations. See id. at 5; see also IFC’s Articles of Agreement, 7
U.S.T. 2197. IFC’s member nations collectively determine its policies. IFC in Brief at 5.
Pursuant to its Articles of Agreement, IFC invests solely in the private sector, in partnership with
private businesses and entrepreneurs.11 See id. at 5-8.
The United States was a founding member of IFC. In 1955, Congress authorized the
President to accept IFC membership for the United States, as provided for by IFC’s Articles of
Agreement. See 22 U.S.C. § 282. The provisions of IFC’s Articles of Agreement, including
specified privileges and immunities, have been made part of U.S. law. See 22 U.S.C. § 282 et
10 IFC’s Articles of Agreement are submitted herewith as Exhibit 8 to the Vasquez Declaration.
11 As stated in its May 14, 2008 letter (Vasquez Decl. Ex. 5), IFC has not uncovered any records indicating debts
owed by IFC to Iran or any of the State ministries, divisions, agencies or instrumentalities identified in Exhibit A to
the writ of attachment, nor any goods, chattel or credit of such entities in IFC’s possession or charge. Because, as
detailed herein, IFC’s records and assets are immune from both discovery and attachment in these proceedings, IFC
declines to respond further to the subpoena or the writ of attachment.
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 8 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 9 of 18
-5-
seq.; see also 7 U.S.T. 2197. Pursuant to the IOIA, the President, by Executive Order,
“designate[d] [IFC] as a public international organization entitled to enjoy the privileges,
exemptions, and immunities conferred by the said [IOIA].” Exec. Order 10680, 21 Fed. Reg.
7647 (Oct. 2, 1956).
B. The IOIA And IFC’s Articles Of Agreement Accord IFC Immunity From
Every Form Of Judicial Process, Including The Relief Sought By Plaintiffs
The IOIA provides that “[i]nternational organizations, their property and their assets,
wherever located, and by whomsoever held, shall enjoy the same immunity from suit and every
form of judicial process as is enjoyed by foreign governments,” absent an express waiver of that
immunity. 22 U.S.C. § 288a(b) (emphasis added). This immunity is co-extensive with the
“virtually absolute immunity” accorded to foreign sovereigns in 1945. Atkinson, 156 F.3d at
1340-41 (affirming dismissal of garnishment proceedings) (quotation omitted); see also Mendaro
v. World Bank, 717 F.2d 610, 615 (D.C. Cir. 1983) (“It is well established under international
law that an international organization is entitled to such privileges and such immunity from the
jurisdiction of a member state as are necessary for the fulfillment of the purposes of the
organization . . . .”) (quotation omitted).
In addition, IFC’s Articles of Agreement expressly prohibit judicial recourse against IFC
by “member[] [nations] or persons acting for or deriving claims from members.” IFC’s Articles
of Agreement, art. VI § 3. Plaintiffs have not identified, and cannot identify, any express waiver
of IFC’s immunity vis-à-vis Iran that would permit them—even if allowed to “step into the shoes
of Iran” (Pls.’ Mem. at 22)—to attach IFC accounts or other assets purportedly payable to Iran.
Indeed, Plaintiffs’ suggestion that such a waiver could have arisen in the context of commercial
transactions between IFC and Iran (see, e.g., id. at 7, 9) is nothing more than unsubstantiated
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 9 of 17Case 3:08-m -80030-JSW ocu ent 53-2 il / 9/ 10 of 18
-6-
conjecture.12 As discussed above, IFC invests solely in the private sector. See, e.g., IFC in Brief
at 5-8; see also IFC’s Articles of Agreement, art. I § 1 (“The purpose of the Corporation is to
further economic development by encouraging the growth of productive private enterprise in
member countries . . . .”).
Moreover, U.S. courts have interpreted Article VI § 3 of IFC’s Articles of Agreement
extremely narrowly, such that there is a waiver only in the most limited circumstances.13 See
Mendaro, 717 F.2d at 611 (holding that immunity waiver “must be narrowly read in light of both
national and international law”). Under the “corresponding-benefits” standard established by the
D.C. Circuit, IFC’s immunity is “construed as not waived unless the particular type of suit would
further [IFC’s] objectives.” Atkinson, 156 F.3d at 1338 (emphasis in original); see also
Mendaro, 717 F.2d at 615 (holding that waiver of immunity in Articles of Agreement identical to
those of IFC encompasses only “suits by its debtors, creditors, bondholders, and those other
potential plaintiffs to whom [IFC] would have to subject itself to suit in order to achieve its
chartered objectives”). The waiver is not applicable in this case because IFC would not receive
12 Plaintiffs’ argument is plainly speculative even on its face. See, e.g., Pls.’ Mem. at 5 (“Iran presumably entered
into the relationship with the LEVIED BANK in which Iran now maintains the full range of civil enforcement
rights.”); id. (“[T]he LEVIED BANKS presumably would not be able to mount [a sovereign immunity] defense
against Iran.”); id. at 7; (noting the “clear and unmistakable inference that Iran obtained a complete waiver” of IFC’s
immunity); id. at 9 (“[P]rudent business experience would suggest that Iran . . . would necessarily demand
redress . . . without, again, the unbelievable burden of litigating . . . .”).
13 Article VI § 3 of IFC’s Articles of Agreement states:
Actions may be brought against the Corporation only in a court of competent jurisdiction in the
territories of a member in which the Corporation has an office, has appointed an agent for the purpose
of accepting service or notice of process, or has issued or guaranteed securities. No actions shall,
however, be brought by members or persons acting for or deriving claims from members. The property
and assets of the Corporation shall, wheresoever located and by whomsoever held, be immune from all
forms of seizure, attachment or execution before the delivery of final judgment against the Corporation.
An identical waiver provision is included in the Articles of Agreement of the other World Bank entities. See Banco
de Seguros del Estado v. Int’l Fin. Corp., Nos. 06 Civ. 2427 (LAP), 06 Civ. 3739 (LAP), 2007 WL 2746808, at *4
n.7 (S.D.N.Y. Sept. 20, 2007) (“The status of the immunities of IFC and of the other World Bank entities is virtually
indistinguishable. . . . [E]ven the relevant portions of their Articles of Agreement are the same . . . .”).
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 10 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 11 of 18
-7-
any conceivable “corresponding benefit” by waiving its immunity to Plaintiffs’ efforts to enforce
a judgment against Iran.
In fact, the D.C. Circuit has held specifically that international organizations under the
IOIA do not derive benefits warranting a waiver of immunity in the context of third-party
garnishment or attachment proceedings. See Atkinson, 156 F.3d at 1338-39 (holding, in action to
garnish wages of Inter-American Development Bank employee, that the “clear lack of benefit—
indeed, disadvantage—of a waiver of immunity from garnishment proceedings compels the
conclusion” that immunity applied); Inversora Murten, 2008 WL 441836, at *2 (holding that
World Bank’s “interests are not advanced by subjecting itself to non-wage garnishment
proceedings initiated by third-party judgment creditors of member nations’ contractors”)
(internal citation omitted).
Given IFC’s status as a public international organization comprised of individual member
nations, it is essential that IFC retain its immunity in this instance. IFC’s chartered objectives
would not be furthered—and, indeed, would be seriously impaired—if it were deemed to
relinquish its immunity to every third-party judgment creditor of any one of its 179 member
nations. See Mendaro, 717 F.2d at 617 (“[L]imitations on immunity that subject the organization
to suits which could significantly hamper the organization’s functions are inherently less likely
to have been intended . . . .”). The flood of post-judgment discovery requests and writs of
attachment arising from all cases against member nations would pose a costly and time-
consuming impediment to the achievement of IFC’s development objectives. Cf. Atlantic Tele-
Network Inc. v. Inter-Am. Dev. Bank, 251 F. Supp. 2d 126, 132 (D.D.C. 2003) (“[W]ere this suit
to be allowed, virtually any U.S. citizen with a commercial grievance against a debtor nation
could challenge a [Bank] loan to that nation without any ‘corresponding benefit’ accruing
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 11 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 2 of 18
-8-
thereby to the [Bank] whatsoever.”). Judgment creditors anxious to satisfy a judgment against a
member nation should not do so at the doors of IFC. In any such instance, the benefit to IFC of
waiving its immunity would be nonexistent. See Atkinson, 156 F.3d at 1338 (holding that
“immunity should be construed as not waived unless the particular type of suit would further
[IFC’s] objectives”) (emphasis in original).
Finally, to the extent Plaintiffs rely on the FSIA, the FSIA expressly reinforces IFC’s
IOIA immunity in the specific context of enforcement proceedings against a foreign sovereign
state. Section 1611(a) of the FSIA establishes that “the property of those organizations
designated by the President as being entitled to enjoy the privileges, exemptions, and immunities
provided by the [IOIA] shall not be subject to attachment or any other judicial process
impeding the disbursement of funds to, or on the order of, a foreign state as the result of an
action brought in the courts of the United States or of the States.” 28 U.S.C. § 1611(a) (emphasis
added); see also Atkinson, 156 F.3d at 1342 (noting that, under Section 1611(a), “a judgment
creditor cannot execute upon funds held by international organizations for disbursement to [a]
foreign state judgment debtor”); Trans Commodities, Inc. v. Kazakhstan Trading House, S.A.,
No. 96-316 (NHJ), slip op. at 4-5 (D.D.C. Feb. 20. 1997)14 (quashing writ of attachment issued
against foreign state’s bank accounts for loan proceeds from World Bank and holding that “[t]o
allow World Bank loan proceeds to become subject to attachment . . . is untenable and contrary
to the purpose of section 1611(a) immunity”). As evident on its face, the intended purpose of
this provision is to permit international organizations entitled to IOIA immunity “to carry out
their functions from their offices located in the United States without hindrance by private
claimants seeking to attach the payment of funds to a foreign state.” Foreign Sovereign
14 Submitted herewith as Exhibit 9 to the Vasquez Declaration.
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 12 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 13 of 18
-9-
Immunities Act of 1976, H.R. Rep. No. 94-1487 (1976), as reprinted in 1976 U.S.C.C.A.N. 6604
(emphasis added). Section 1611(a) thus prohibits the very kind of judicial process that Plaintiffs
seek here—namely, the appointment of a receiver to compel IFC to “pay-over, surrender and
hand over all funds” (Pls.’ Mem. at 5) purportedly payable to Iran.
The recent amendments to the FSIA highlighted by Plaintiffs (Pls.’ Mem. at 2-4) do not
disturb the IOIA immunities preserved by Section 1611(a). The new provision governing the
attachment of foreign state assets (see id. at 3 (quoting “(g) Property in Certain Actions”))
amends Section 1610 of the FSIA, which enumerates certain exceptions to the immunity from
attachment or execution to which foreign sovereign states are entitled.15 Section 1611(a) of the
FSIA—which remains unchanged by the recent amendments—expressly provides that
international organizations under the IOIA retain their immunity “[n]otwithstanding the
provisions of section 1610 of this chapter.” 28 U.S.C. § 1611(a) (emphasis added). In
proceeding with their Motion, Plaintiffs are simply ignoring the plain language of the statute.
II. IFC’S IMMUNITIES APPLY TO ALL MOTIONS, WRITS AND OTHER
JUDICIAL PROCESS THAT PLAINTIFFS HAVE SERVED OR MAY SERVE
UPON IFC
Because IFC would receive no corresponding benefit through a waiver here, it retains
absolute immunity over “every form of judicial process” in these or any related proceedings. See
22 U.S.C. § 288a(b); 28 U.S.C. § 1611(a); see also Atkinson, 156 F.3d at 1340-41; In re Minister
Papandreou, 139 F.3d 247, 251 (D.C. Cir. 1998) (holding that sovereign immunity safeguards
immune entities not only from suit and liability, but also the “attendant burdens of litigation”)
(quoting Foremost-McKesson, Inc. v. Islamic Rep. of Iran, 905 F.2d 438, 443 (D.C. Cir. 1990)).
Such immunity encompasses all IFC assets, records and personnel, thus requiring that the Court
15 The new provision governing attachment is not, as Plaintiffs suggest (Pls.’ Mem. at 3), a subsection of 28 U.S.C.
§ 1605A.
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 13 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 14 of 18
-10-
deny Plaintiffs’ Motion and order that Plaintiffs cease and desist from serving any further
motions or other process upon IFC, as well as quashing both the writ of attachment and
subpoena.
A. IFC’s Assets Are Immune From Attachment Or Any Other Judicial Process
Impeding The Disbursement Of Funds To, Or On The Order Of, A Foreign
State
Pursuant to the IOIA and IFC’s Articles of Agreement, IFC’s assets are immune from
attachment, as well as search, seizure and any other form of interference or restriction. 22 U.S.C.
§ 288a(b) (providing that IFC’s “property and . . . assets” are immune from judicial process);
IFC’s Articles of Agreement, art. VI § 3 (“The property and assets of the Corporation shall,
wheresover located and by whomsoever held, be immune from all forms of seizure, attachment
or execution before the delivery of final judgment against the Corporation.”); see also 22 U.S.C.
§ 288a(c) (“Property and assets of international organizations, wherever located and by
whomsoever held, shall be immune from search, unless such immunity be expressly waived, and
from confiscation.”); IFC’s Articles of Agreement, art. VI § 4 (“Property and assets of the
Corporation, wherever located and by whomsoever held, shall be immune from search,
requisition, confiscation, expropriation or any other form of seizure . . . .”); id. § 6 (“To the
extent necessary to carry out the operations provided for in this Agreement . . . all property and
assets of the Corporation shall be free from restrictions, regulations, controls and moratoria of
any nature.”).
As discussed, Plaintiffs’ efforts to attach IFC assets in satisfaction of the judgment
against Iran—whether through the writ of attachment or Motion for Appointment of Receiver—
plainly fall within the purview of international organizational immunity under both the IOIA and
FSIA. See 22 U.S.C. § 288a(b); 28 U.S.C. § 1611(a); see also Atkinson, 156 F.3d at 1338-39;
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 14 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 15 of 18
-11-
Inversora Murten, 2008 WL 441836, at *2. Accordingly, Plaintiffs’ Motion must be dismissed
and the writ of attachment must be quashed.
B. IFC’s Records And Personnel Are Immune From Judicial Process
In addition to the immunity generally encompassing all IFC assets and property, the IOIA
and IFC’s Articles of Agreement specifically confer upon IFC absolute archival immunity,
which safeguards all IFC records, documents and official communications from compulsory
disclosure. 22 U.S.C. § 288a(c) (“The archives of international organizations shall be
inviolable.”); IFC’s Articles of Agreement, art. VI § 5 (same). The D.C. Circuit has long
recognized this form of immunity enjoyed by international organizations. See Mendaro, 717
F.2d at 615 (“The premises, archives, and communications of international organizations are
shielded from interference by member states.”); see also Alpha Lyracom Space Commc’ns, Inc.
v. Comsat Corp., 113 F.3d 372 (2d Cir. 1997) (affirming district court ruling that international
organization’s official session records were immune from discovery); United States v. Chalmers,
No. S5 05 CR 59(DC), 2007 WL 624063, at *2 (S.D.N.Y. Feb. 26, 2007) (holding, with
reference to IOIA, that international organization remained immune from discovery after the
voluntary production of documents subject to express reservation of privileges and immunities).
It is widely recognized as a principle of international law that public international
organizations like IFC “enjoy[] immunity from any exercise of jurisdiction . . . that would
interfere with official use by the organization of its premises, archives, documents, or
communications.” Restatement (Third) of Foreign Relations Law § 468 (1986). In this respect,
the immunity of IFC’s property and archives is akin to the immunity granted diplomatic
missions. See id. § 478 cmt. b (“[T]he premises, archives, couriers, and bags of major
international organizations enjoy the same inviolability and immunity as those of diplomatic
missions.”); cf. Vienna Convention on Diplomatic Relations, art. 24, Apr. 18, 1961, 23 U.S.T.
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 15 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 16 of 18
-12-
3227, 500 U.N.T.S. 95 (“The archives and documents of the mission shall be inviolable at any
time and wherever they may be.”); see also Renchard v. Humphreys & Harding, Inc., No. 2128-
72, slip op. (D.D.C. Apr. 24, 1975)16 (denying motion to compel discovery against Brazil and
holding that archives of the Brazilian Embassy are inviolable) (citing Vienna Convention, arts.
23, 24, 27, 30, 31, and 37).
To the extent that the subpoena purports to summon any IFC officer or employee for
deposition testimony, such individuals likewise enjoy absolute immunity from judicial process,
including discovery. 22 U.S.C. § 288d(b) (“[O]fficers and employees of such organizations shall
be immune from suit and legal process relating to acts performed by them in their official
capacity . . . .”); IFC’s Articles of Agreement, art. VI § 8 (“All Governors, Directors, Alternates,
officers and employees of [IFC] (i) shall be immune from legal process with respect to acts
performed by them in their official capacity . . . .”). In considering the immunity of international
organization employees, the D.C. Circuit has emphasized that the “unique nature of the
international civil servant is relevant” and that such “officials should be as free as possible,
within the mandate granted by the member states, to perform their duties free from the
peculiarities of national politics.” Mendaro, 717 F.2d at 616 (quoting Broadbent v. Org. of Am.
States, 628 F.2d 27, 34-35 (D.C. Cir. 1980)) (emphasis in original); see also Taiwan v. U.S. Dist.
Ct. for the N. Dist. of Cal., 128 F.3d 712, 718-719 (9th Cir. 1997) (holding, with reference to the
IOIA, that the employee of an international organization is entitled to broad testimonial
immunity).
Thus, pursuant to the IOIA and its Articles of Agreement, IFC remains immune from any
form of process in these proceedings, including the compulsory production of documents or the
16 Submitted herewith as Exhibit 10 to the Vasquez Declaration.
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 16 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 17 of 18
-13-
testimony of IFC officials and employees. 22 U.S.C. § 288a(c); IFC’s Articles of Agreement,
art. VI § 5; see also Mendaro, 717 F.2d at 615. In the absence of any waiver of IFC’s absolute
immunity, the subpoena is without binding legal effect and must be quashed.
CONCLUSION
For the foregoing reasons, IFC respectfully requests that the Court deny Plaintiffs’
Motion to Appoint Receiver, order that Plaintiffs cease and desist from serving any further
process upon IFC, and quash the writ of attachment dated March 25, 2008 and subpoena dated
April 9, 2008.
Dated: June 5, 2008 Respectfully submitted,
Washington, D.C.
/ s / Francis A. Vasquez, Jr.
Francis A. Vasquez, Jr. (D.C. Bar No. 442161)
Frank Panopoulos (D.C. Bar No. 459365)
Jonathan C. Ulrich (D.C. Bar No. 500832)
701 Thirteenth Street, N.W.
Washington, D.C. 20005-3807
(202) 626-3600
Attorneys for International Finance
Corporation
Case 1:01-cv-02094-RCL Document 309 Filed 06/05/2008 Page 17 of 17Case 3:08-mc 80 30 JSW 53-2 Filed 06/09/2 08 Page 18 of 18
EXHIBIT B
Case 3:08-mc-80030-JSW Document 53-3 Filed 06/09/2008 Page 1 of 6
Case 3:08-mc-80030-JSW Document 53-3 Filed 06/09/2008 Page 2 of 6
Case 3:08-mc-80030-JSW Document 53-3 Filed 06/09/2008 Page 3 of 6
Case 3:08-mc-80030-JSW Document 53-3 Filed 06/09/2008 Page 4 of 6
Case 3:08-mc-80030-JSW Document 53-3 Filed 06/09/2008 Page 5 of 6
Case 3:08-mc-80030-JSW Document 53-3 Filed 06/09/2008 Page 6 of 6
