GSS Group Ltd. v. National Port Authority of Liberia

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 9, 2016 Decided May 17, 2016

No. 14–7041

GSS GROUP LTD., ALSO KNOWN AS

GLOBAL SECURITY SEALS GROUP LTD.,

APPELLANT

v.

NATIONAL PORT AUTHORITY OF LIBERIA

AND REPUBLIC OF LIBERIA,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:12–cv–00332)

Stanley McDermott III, pro hac vice, argued the cause for

the appellant. Charles B. Wayne was with him on brief.

Colleen E. Roh Sinzdak argued the cause for the

appellees. Jessica L. Ellsworth was with her on brief.

Before: HENDERSON, ROGERS and KAVANAUGH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

2

KAREN LECRAFT HENDERSON, Circuit Judge: GSS

Group, Ltd. (GSS), a construction company incorporated in

the British Virgin Islands and headquartered in Israel, appeals

the district court’s dismissal of its second attempt to confirm a

$44 million arbitral award entered against the National Port

Authority of Liberia (Port Authority) for breach of a

construction contract. When GSS first tried to confirm the

award, the district court found, and we affirmed, that it had no

personal jurisdiction over the Port Authority. When GSS

filed its second petition, it named not only the Port Authority

but also the Republic of Liberia, which owns the Port

Authority, as respondents. The district court again dismissed

GSS’s petition, finding that issue preclusion barred re-

litigating its personal jurisdiction over the Port Authority and

that GSS failed to demonstrate that Liberia was liable for the

Port Authority’s alleged breach. For the reasons stated below,

we affirm.

I. BACKGROUND

Although resolution of this case is ultimately

straightforward, the history leading to our disposition is not.

Three district court orders 1 and one opinion from this Court 2

have set out the relevant background but a refresher is

nonetheless needed for completeness.

1

See GSS Grp. Ltd. v. Nat’l Port Auth. (GSS Grp. I), 774 F. Supp. 2d

134 (D.D.C. 2011) (order dismissing first petition); GSS Grp. Ltd. v. Nat’l

Port Auth. (GSS Grp. II), No. 09-cv-1322 (D.D.C. Aug. 10, 2011) (order

denying GSS’s motion to alter or amend judgment); GSS Grp. Ltd. v.

Republic of Liber. (GSS Grp. IV), 31 F. Supp. 3d 50 (D.D.C. 2014) (order

dismissing second petition).

2

See GSS Grp. Ltd v. Nat’l Port Auth. (GSS Grp. III), 680 F.3d 805

(D.C. Cir. 2012).

3

A. FACTUAL BACKGROUND

The contract dispute at issue has its genesis in the turmoil

following Liberia’s Second Civil War. After four years of

conflict, two separate rebel groups besieged Monrovia,

Liberia’s capital, in 2003. Within months, Liberian President

Charles Taylor was exiled and the separate political factions

signed a Comprehensive Peace Agreement. The Peace

Agreement created the National Transitional Government of

Liberia, a power-sharing entity designed to govern the

recovering nation until it could hold democratic elections.

Monitoring and enforcing the Peace Agreement became the

responsibility of the International Contact Group on Liberia

(ICGL), a multi-national advisory board led by the United

States and including members of the United Nations, the

European Union, the Economic Community of West African

States and the World Bank.

The Peace Agreement also created the Liberian Contract

& Monopolies Commission (Commission) to combat the

corruption and mismanagement that had plagued the nation.

The Peace Agreement authorized the Commission to ensure

that “all public financial and budgetary commitments entered

into by the” National Transitional Government are

“transparent, non-monopolistic and in accordance with the

laws of Liberia and internationally accepted norms of

commercial practice.” Comprehensive Peace Agreement, art.

XVII(2)(a). To accomplish its goal, the Commission

promulgated Liberia’s Interim Public Procurement Policy and

Procedures (Interim Procedures), which set out ground rules

for, inter alia, state procurement of contracts for goods and

services.

During Liberia’s transition period, revitalizing the war-

ravaged Monrovian Port (Port) became a priority. The

4

responsibility of doing so fell to the Port Authority, a wholly

Liberian-owned corporation that manages, operates and

maintains all Liberian ports. Created as “a distinct juridical

entity with the capacity to enter into contracts and to sue and

be sued in its own name,” GSS Grp. IV, 31 F. Supp. 3d at 55,

the Port Authority functions “at some remove from the

government itself,” GSS Grp. III, 680 F.3d at 808. For

instance, it enjoys expansive financial and administrative

authority and has exclusive control over all funds it generates.

Its Board of Directors is primarily comprised of Liberian

government officials and individuals appointed by Liberia’s

president.

On June 9, 2005, the Port Authority awarded GSS a

multi-million-dollar contract to build a container park at the

Port. Although the Interim Procedures mandated that the Port

Authority award such contracts through “open competitive

bidding,” Interim Procedures 3 (Joint App’x (J.A.) 535), the

Port Authority did not do so. As a result, on June 23, 2005,

the Commission informed the Port Authority that the GSS

contract was invalid and reminded it that all contracts must

result from competitive bidding.

Instead of conducting a bid, the Port Authority petitioned

the Commission for a single-source exemption, which allows

a Liberian entity to dispense with competitive bidding if, inter

alia, “there is an urgent need” for the contract and “engaging

in bid proceedings . . . is impractical due to unforeseeable

circumstances.” Id. at 12–13 (J.A. 544–45). The Port

Authority urged the Commission that any further delay in

construction of the container park could result in the Port’s

closure and that the contract would help the Port comply with

the International Ship and Port Facility Security Code. The

Commission granted the exemption on August 12, 2005, and

the parties re-negotiated the contract 10 days later.

5

The GSS contract aroused the international community’s

interest. The ICGL reviewed the contract and came away

with “deep concerns” about its validity and monetary value.

Letter from ICGL to Charles Gyude Bryant, Chairman of

Nat’l Transitional Gov’t of Liber., at 1 (Oct. 19, 2005) (J.A.

220). It notified the National Transitional Government by

letter dated October 19, 2005, stating that, in its view, the

Commission should not have granted the Port Authority the

exemption and that the contract represented poor value for

money. Aware of the scrutiny, GSS and the Port Authority

amended the contract again on October 28, 2005. Their

efforts failed. On December 30, 2005, the National

Transitional Government’s Chairman directed the Port

Authority to cancel the GSS contract. The letter stated:

I have taken off considerable time to carefully

review the analysis of my technical team

regarding equitable benefits to all parties

resulting from the contract entered into

between the [Port Authority] and the GSS.

Our evaluation shows that the contract as

negotiated and concluded places the Port

Authority in a grossly disadvantageous

position for more than a decade. Additionally,

the contract does not contribute in any material

way to compliance with the [International Ship

and Port Facility Security] regulations and as

such Security Qualification of the Free Port of

Monrovia still remains.

I am therefore directing that the GSS contract

be cancelled and the Port Authority work[]

toward a more holistic management contract

that will improve operational, financial and

security efficiency levels. The sourcing of any

6

managing team must be done through a

competitive bidding process after proper terms

of reference are agreed upon and approved by

the . . . Commission and the technical

committee of the [Economic Governance

Steering Committee].[3] The GSS shall be free

to submit an offer at that time.

Letter from Charles Gyude Bryant, Chairman of Nat’l

Transitional Gov’t of Liber., to D. Masuleng Coop, Chairman

of Nat’l Port Auth. (Dec. 30, 2005) (J.A. 977). On January 3,

2006, the Port Authority sought reconsideration from the

National Transitional Government. The record does not

reflect whether the Port Authority’s request prompted a

response. On January 16, 2006, the National Transitional

Government abdicated its power and Liberia’s newly elected

government assumed control.

On January 26, 2006, the Port Authority informed GSS,

via letter, that it was cancelling the contract. A rapid volley

of correspondence between GSS and the Port Authority

ensued, culminating in a February 16, 2006 letter from the

3

The Economic Governance Steering Committee (EGSC) was one

of two organizations created in 2005 as part of an agreement between the

ICGL and the National Transitional Government called the “Governance

and Economic Management Assistance Program” (GEMAP). The

GEMAP’s goal “was to promote accountability and transparency in fiscal

management by setting in place internal governmental controls and

providing for international involvement, all while recognizing and

preserving Liberian sovereignty.” Aff. of O. Natty B. Davis II, Republic

of Liber.’s Minister of State, ¶ 12 (J.A. 244). The EGSC, whose

membership consisted of Liberian government officials as well as

representatives from the United States (including the United States

Ambassador to Liberia), the EU, the World Bank and other international

stakeholders, was the body designed to provide the international

involvement contemplated by the GEMAP.

7

Port Authority explaining that the Interim Procedures demand

complete transparency and adherence to open bidding and

concluding that the GSS contract fell well short of those

standards. It further explained that the Commission only

granted the single-source exemption because it mistakenly

thought the contract was necessary to comply with

international obligations and to avoid the Port’s closure. 4

Because the exemption was mistakenly granted, the Port

Authority considered the contract “null and void ab initio.”

GSS Grp. IV, 31 F. Supp. 3d at 56 (citation omitted).

On March 15, 2006, GSS invoked the contract’s

arbitration clause (which provided that disputes arising under

the agreement were to be arbitrated in London and in

accordance with the laws of England and Wales) against the

Port Authority, but not against Liberia. Meanwhile, a

separate Liberian governmental organization—the Liberian

Public Procurement and Concession Commission5—sought a

Liberian-court declaration that the contract, including the

arbitration provision, was invalid. Because of the Liberian

judicial proceedings, the Port Authority declined to participate

in the London arbitration and GSS appointed the sole

arbitrator. On February 8, 2008, the Liberian court found the

4

According to the Port Authority, the Commission’s mistake was

caused by a $30,000 bribe that GSS paid the Port Authority’s then-

managing director to convince the Commission that an urgent need for the

requested single-source exemption existed.

5

Formed in 2005, the Liberian Public Procurement and Concession

Commission’s mission is “to ensure the economic and efficient use of

public funds in public procurement and to ensure that public procurement

and concession processes are conducted in a fair, transparent and non-

discriminatory manner.” Frequently Asked Questions about PPCC, Public

Procurement & Concessions Commission, Gov. of the Republic of Liber.,

http://www.ppcc.gov.lr/content.php?sub=67&related=1&third=67&pg=sp

(last visited May 9, 2016).

8

relevant portions of the contract unenforceable.

Notwithstanding the Liberian court’s decision, one month

later, the arbitrator determined that he had jurisdiction of the

dispute; in June 2008, he concluded that the Port Authority

was liable for the cancellation and in May 2009, he found that

GSS suffered damages in the amount of $44,347,260.00.

B. GSS’S FIRST PETITION TO CONFIRM

LONDON ARBITRAL AWARD

On June 16, 2009, GSS filed a petition in the United

States District Court for the District of Columbia to confirm

the London arbitral award. 6 The Port Authority moved to

dismiss the petition on the ground that, inter alia, it had no

contact whatsoever with the United States (much less the

District of Columbia) and therefore the district court lacked

personal jurisdiction. GSS responded that the Port Authority,

a wholly state-owned enterprise, was not a “person” within

the meaning of the Due Process Clause and, accordingly, had

no right to assert a personal-jurisdiction defense. GSS Grp. I,

774 F. Supp. 2d at 138.

The district court rejected GSS’s argument, finding that,

although a foreign sovereign is not a person under the Due

Process Clause, the Port Authority “functions more like a

6

Statutory subject matter jurisdiction of GSS’s petition is based on

the Federal Arbitration Act (FAA), 9 U.S.C. §§ 201 et seq, which codifies

the 1958 Convention on the Recognition and Enforcement of Foreign

Arbitral Awards (Convention), June 10, 1958, 21 U.S.T. 2517, 330

U.N.T.S. 3. The Convention, in turn, obligates each contracting nation

(including the United States) to “recognize [foreign] arbitral awards as

binding and enforce them in accordance with” local law. Id. art. III.

Because the United Kingdom is also a party to the Convention, the FAA

provides U.S. courts with authority to enforce the London arbitral award

(notwithstanding neither the arbitral award nor the GSS contract has any

United States connection).

9

private corporation” and, accordingly, has due process rights.

Id. at 141. Because GSS made no attempt to show that the

Port Authority had any United States contacts, the district

court dismissed GSS’s petition for lack of personal

jurisdiction. In so doing, the district court observed that,

“[f]or unknown reasons,” GSS declined to argue that the Port

Authority and Liberia “are legally indistinguishable.” Id. at

138–39.

GSS moved for reconsideration under Rule 59(e). In its

motion, GSS argued for the first time that the Port Authority

was Liberia’s agent and that it was entitled to discovery to

demonstrate the same. The district court found that GSS had

waived the arguments by failing to raise them earlier.

GSS appealed the dismissal and, on May 25, 2012, we

affirmed in toto. As a threshold matter, we agreed that GSS

had waived its agency and jurisdictional-discovery arguments.

We then rejected the only argument GSS had preserved—that

a foreign, state-owned entity has no due process rights—and

affirmed the district court’s dismissal because GSS had failed

to identify “any connection” between the United States and

the Port Authority. GSS Grp. III, 680 F.3d at 817 (emphasis

in original).

C. GSS’S SECOND PETITION TO CONFIRM

LONDON ARBITRAL AWARD

On March 1, 2012 (one day before oral argument here in

GSS’s appeal of the dismissal of its initial petition), GSS filed

in district court a second petition to confirm the award. This

time, however, GSS named Liberia as the sole respondent; 7

7

As noted above, see supra n.6, the FAA provided the subject matter

jurisdiction for GSS’s first position, which named the Port Authority as

the sole respondent. Because GSS named Liberia, a foreign sovereign, as

10

three weeks later, it amended the petition to add the Port

Authority. The thrust of GSS’s second petition was that the

Port Authority was Liberia’s agent and, accordingly, Liberia

was liable for the $44 million London award. Because

Liberia, as a sovereign, may not assert a personal-jurisdiction

defense, GSS believed that its second petition cleared the

hurdle that blocked its first. It also served both the Port

Authority and Liberia with discovery requests to clarify their

inter se connection.

The district court was not persuaded. It began with the

Port Authority’s amenability to suit, concluding that its

dismissal of GSS’s first petition on the “no personal

jurisdiction” ground precluded GSS’s second attempt to sue

the Port Authority in federal court. Despite GSS’s contention

that the district court did not resolve its agency argument

when it dismissed GSS’s first petition, the district court

concluded that collateral estoppel barred issues—not simply

specific arguments—that had been necessarily decided in

earlier proceedings. And because “GSS enjoyed every

the respondent in its second petition, GSS argued that the district court had

subject matter jurisdiction under the Foreign Sovereign Immunities Act

(FSIA), 28 U.S.C. §§ 1330 et seq. Under the FSIA, a foreign state, as well

as its agencies and instrumentalities, is presumed to enjoy sovereign

immunity from suit in U.S. courts unless one of several statutory

exceptions applies. See id. § 1604. One exception—the only one

applicable here—is the “arbitration exception,” which provides that “[a]

foreign state shall not be immune from the jurisdiction of courts of the

United States . . . in any case . . . in which the action is brought [to enforce

an arbitration agreement or award that] is or may be governed by a treaty

or other international agreement in force for the United States calling for

the recognition and enforcement of arbitral awards.” Id. § 1605(a)(6)(B);

see also 28 U.S.C. § 1330(a) (district court has subject matter jurisdiction

of “any nonjury civil action against a foreign state . . . as to any claim for

relief in personam with respect to which the foreign state is not entitled to

immunity”).

11

opportunity to rely on a theory of agency when it earlier

litigated the issue of personal jurisdiction,” GSS Grp. IV, 31

F. Supp. 3d at 61, the district court applied the issue

preclusion bar.

The district court also held that it had no subject matter

jurisdiction of Liberia. It noted that GSS had to overcome the

presumption that “government instrumentalities established as

juridical entities distinct and independent from their

sovereign”—like the Port Authority—“should normally be

treated as such.” Id. at 62 (quoting First Nat’l City Bank v.

Banco Para El Comercio Exterior de Cuba (Bancec), 462

U.S. 611, 626–27 (1983)). To do so, GSS had to demonstrate

either that the Port Authority was Liberia’s agent or that

treating the Port Authority as distinct from Liberia would

perpetuate fraud or injustice. The district court found that

GSS had demonstrated neither.

To support its agency argument, GSS proffered that

Liberia controlled the Port Authority’s board of directors; that

Liberia had assumed a portion of the Port Authority’s

outstanding debt; that, when the Port Authority contracted

with a third party to replace the GSS contract in 2010, several

Liberian government officials, including the Liberian

president, executed the new agreement; and that Liberia

forced the Port Authority to cancel the contract. The district

court found that GSS’s first three arguments were either

foreclosed by Transamerica Leasing, Inc. v. La Republica de

Venezuela, 200 F.3d 843 (D.C. Cir. 2000), or not probative of

Liberia’s control over the Port Authority in 2005–06. It also

rejected the argument that the directive to the Port Authority

to cancel the contract created an agency relationship. In so

doing, it noted that the Port Authority independently

negotiated and executed the contract and that Liberia’s

12

cancellation order was an act of government regulation, not

commandeering.

Having found that the Port Authority was not Liberia’s

agent, the district court made quick work of GSS’s fraud or

injustice argument. It first recognized that the requisite

injustice occurs if, for example, a sovereign uses an

instrumentality to shield itself from costs or risks, to unjustly

enrich itself or to defeat a statutory policy. It then concluded

that the “single sentence” GSS offered in support of its

argument did not suffice to demonstrate injustice. GSS Grp.

IV, 31 F. Supp. 3d at 68.

The district court dismissed GSS’s petition in its entirety

but did not address GSS’s discovery requests before it did so.

GSS timely appealed. 8 Our review of the district court’s issue

preclusion determination, see Hall v. Clinton, 285 F.3d 74, 80

(D.C. Cir. 2002), and its dismissal for lack of subject matter

jurisdiction, see Transamerica Leasing, Inc., 200 F.3d at 847,

is de novo. We review its denial of jurisdictional discovery

for abuse of discretion. See Caribbean Broad. Sys., Ltd. v.

Cable & Wireless P.L.C., 148 F.3d 1080, 1089 (D.C. Cir.

1998).

8

On February 21, 2015, we held this case in abeyance pending the

United States Supreme Court’s disposition of OBB Personenverkehr AG v.

Sachs, 136 S. Ct. 390 (2015). When the Supreme Court granted certiorari

in OBB Personenverkehr AG, a potential issue was “[w]hether, for

purposes of determining when an entity is an ‘agent’ of a ‘foreign state,’ ”

the FSIA’s definition of “agency,” the factors set out in Bancec “or

common law principles of agency” govern. Pet. for Writ of Cert. at i,

OBB Personenverkehr AG v. Sachs (No. 13-1067), 2014 WL 890906 at *i

(Mar. 5, 2014). The Supreme Court ultimately failed to reach the issue.

See OBB Personenverkehr AG, 136 S. Ct. at 395.

13

II. ANALYSIS

On appeal, GSS argues that: (1) the district court had

subject matter jurisdiction of Liberia: the Port Authority was

Liberia’s agent and failure to hold Liberia liable for the Port

Authority’s contract cancellation would permit a miscarriage

of justice; (2) the district court had personal jurisdiction of the

Port Authority by virtue of its jurisdiction of Liberia and the

district court erred by finding that issue preclusion barred the

claim and (3) the district court abused its discretion by

dismissing GSS’s petition before allowing GSS to conduct

jurisdictional discovery. GSS’s appeal turns on whether the

National Transitional Government’s December 30, 2005

cancellation order justifies setting aside our general rule that

“agencies and instrumentalities of a foreign nation are

presumed to be separate from each other and from the foreign

state.” Foremost-McKesson, Inc. v. Islamic Republic of Iran,

905 F.2d 438, 440 (D.C. Cir. 1990).

A. REPUBLIC OF LIBERIA

GSS’s primary argument is that Liberia is liable for the

Port Authority’s cancellation of the contract and, accordingly,

the district court had subject matter jurisdiction of it pursuant

to the FSIA’s arbitration exception. To satisfy its burden,9

GSS must demonstrate either that Liberia controlled the Port

Authority “so extensively” that the Port Authority became

Liberia’s agent or that treating the Port Authority as legally

separate from Liberia would allow fraud or injustice.

Transamerica Leasing, Inc., 200 F.3d at 848. GSS argues

that it satisfies both exceptions, relying almost exclusively on

9

See Foremost-McKesson, Inc., 905 F.2d at 447 (“It is . . . clear that

the plaintiff bears the burden of asserting facts sufficient to withstand a

motion to dismiss regarding the agency relationship.” (emphasis in

original)).

14

the National Transitional Government’s instruction to cancel

the contract.

1. Principal/Agency Relationship

Our resolution of GSS’s agency argument begins and

ends with our Transamerica Leasing, Inc. opinion. In that

case, we explained that a plaintiff may demonstrate that an

agency relationship exists in one of two ways. The first

occurs if a sovereign asserts “complete domination” of a

subsidiary. Id. The second results from “ordinary agency

principles,” which do not require a showing of “complete

dominion.” Id. at 849 (emphasis added). GSS makes no real

attempt to demonstrate that it satisfies the former, instead

focusing its efforts on the latter.

In Transamerica Leasing, Inc., we recognized that

explaining the degree of control necessary to find agency is

challenging. See id. Despite the caselaw’s

“often . . . confusing results,” we discerned four prerequisites.

Id. We held that no agency relationship arises unless (1) the

sovereign makes plain its desire for the instrumentality to act

on the sovereign’s behalf; (2) the instrumentality agrees to so

act; (3) the sovereign has final say over matters delegated to

the instrumentality and (4) the sovereign wields its power

more directly than voting a majority of the instrumentality’s

stock or choosing the instrumentality’s board of directors. 10

Id. at 849–50. Based on these factors, GSS’s argument

reduces to the following: Liberia ordered the Port Authority

to cancel the contract and the Port Authority obliged;

10

See also RESTATEMENT (SECOND) OF AGENCY § 1 (“Agency is the

fiduciary relation which results from the manifestation of consent by one

person to another that the other shall act on his behalf and subject to his

control, and consent by the other so to act.”).

15

therefore, Liberia had the requisite authority over the Port

Authority to make the latter its agent. 11

Superficially, GSS has a point—the National Transitional

Government’s directive left the Port Authority with no

discretion to ignore the cancellation order. But in

Transamerica Leasing, Inc., we recognized that a government

can wield power not only “as shareholder” but also as

“regulator.” 200 F.3d at 851. 12 And read in context, it is

plain that the National Transitional Government was

exercising its regulatory authority when it ordered the Port

Authority to cancel the GSS contract—not commandeering

the Port Authority in a way that erased the separate juridical

boundaries between it and Liberia.

Recall the situation in Liberia during which the contract

emerged. Between 2003 and 2006, Liberia (and, especially,

Monrovia) was struggling to recover not only from a four-

year civil war but also from a history of government

corruption and financial mismanagement. To aid the

recovery, the Commission promulgated Interim Procedures,

which required state-owned corporations to obtain goods and

services through competitive bidding. When the Port

Authority failed to do so, the Commission immediately

advised the Port Authority that the procedural violation

11

See also Appellant’s Br. 9 (“In short, when Liberia directed the

[Port Authority] to cancel the Project Agreement, Liberia acted as

principal, the [Port Authority] was its agent, and that principal-agent

relationship—manifest in the cancellation of the Project Agreement—

satisfies the Bancec standard.”).

12

See also Transamerica Leasing, Inc., 200 F.3d at 851 (“[W]e

cannot say that requiring a shipping company to obtain governmental

approval for the sale of vessels represents the exercise of Venezuela’s

authority as shareholder rather than its exercise of governmental power in

the ordinary course of regulation.”).

16

rendered the contract invalid; in addition, the ICGL undertook

its own review. The Commission’s grant of a single-source

exemption did not erase the ICGL’s “deep concerns” about

the contract’s validity and worth and these concerns prompted

the ICGL to inform the National Transitional Government

that the Commission should not have granted the exemption

and that the contract as a whole disproportionately favored

GSS at the Port Authority’s expense. Letter from ICGL to

Charles Gyude Bryant, Chairman of Nat’l Transitional Gov’t

of Liber., at 1 (Oct. 19, 2005) (J.A. 220). With the ICGL’s

guidance in mind, the National Transitional Government then

instructed the Port Authority to cancel the contract.

The National Transitional Government’s December 30,

2005 letter informed the Port Authority that it had not

complied with a legal obligation, that it had not satisfied the

requirement for an exemption therefrom and that it was to

cancel the contract. This action is the quintessential function

of a government regulator. Granted, one of the criticisms of

the contract was “commercial,” Appellant’s Br. 20, but in our

view, the concern that the contract placed “the Port Authority

in a grossly disadvantageous position” was an outgrowth of

Liberia’s broader regulatory goal of remedying past financial

mismanagement. Letter from Charles Gyude Bryant,

Chairman of Nat’l Transitional Gov’t of Liber., to D.

Masuleng Coop, Chairman of Nat’l Port Auth. (Dec. 30,

2005) (J.A. 977). In any event, the National Transitional

Government also ordered the contract’s cancellation because

it did “not contribute in any material way to compliance with”

the Port’s international responsibilities. Id. Ensuring

compliance with international obligations, and correcting a

17

state-owned instrumentality when it fails to do so, is a

hallmark of a sovereign acting in its regulatory capacity. 13

The National Transitional Government’s directive to the

Port Authority to “work[] toward a more holistic management

contract that will improve operational, financial and security

efficiency levels” emphasized the importance of revitalizing

the Port in a cost-effective manner, id.; moreover, its

instruction that “[t]he sourcing of any managing team must be

done through a competitive bidding process after proper terms

of reference are agreed upon and approved by

the . . . Commission and the technical committee of the

EGSC” reminded the Port Authority of its responsibility to

follow the Interim Procedures, id. Critically, the National

Transitional Government noted that GSS remained free to

submit a bid for the contract so long as it complied with all

applicable procedures. Allowing GSS the opportunity to

secure the contract (through a competitive bid) underscores

that Liberia’s interest was in ensuring that the Port Authority

procured goods and services in accordance with the Interim

13

See, e.g., 46 U.S.C. § 42101 (“[T]he Federal Maritime

Commission shall prescribe regulations affecting shipping in foreign

trade, . . . to adjust or meet general or special conditions unfavorable to

shipping in foreign trade, . . . which arise out of or result from laws or

regulations of a foreign country or competitive methods, pricing practices,

or other practices employed by owners, operators, agents, or masters of

vessels of a foreign country.”); id. § 42106(5) (“If the Federal Maritime

Commission finds that conditions unfavorable to shipping in foreign trade

as described in section 42101 of this title exist, the Commission

may . . . take any [remedial] action the Commission finds necessary and

appropriate to adjust or meet any condition unfavorable to shipping in the

foreign trade of the United States.”).

18

Procedures and not in “wresting control of the . . . contract

from the” Port Authority. Appellant’s Br. 21. 14

GSS discusses (but does not emphasize) other factors

that, in its view, demonstrate Liberia’s control of the Port

Authority. None changes our conclusion. First, GSS argues

that the Port Authority’s board of directors was controlled by

Liberia but we have held that state stock ownership and board

control is an inherent part of state-owned instrumentalities

and, standing alone, does not create an agency relationship.

See Transamerica Leasing, Inc., 200 F.3d at 851. Next, GSS

points out that Liberia absorbed $32.2 million of the Port

Authority’s debt burden but we have held that a sovereign’s

financial aid to an instrumentality is part and parcel of normal

state ownership. Id. at 852. Finally, GSS points to a 2010

agreement that replaced the cancelled GSS contract, which

agreement was executed by several Liberian government

officials, including the Liberian president. But the 2010

agreement sheds no light on the degree to which Liberia

controlled the Port Authority when the Port Authority entered

into and then cancelled the GSS contract in 2005–06.

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GSS argues that “the principal Liberian regulator,

the . . . Commission . . . had approved the Project Agreement before

Liberia cancelled it, indicating that Liberia was not acting in any

regulatory capacity when it did so.” Appellant’s Br. 10. But the

Commission initially advised the Port Authority that the contract was

invalid because it was not awarded through competitive bidding. The

National Transitional Government also cited the Port Authority’s failure to

comply with the competitive-bidding requirement when it ordered the

contract’s cancellation; the only difference between its position and the

Commission’s earlier position was that the National Transitional

Government also concluded that the contract did not qualify for a single-

source exemption.

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2. Fraud or Injustice

GSS also argues that respecting the boundaries between

Liberia and the Port Authority would perpetuate fraud or

injustice. It relies on the Fifth Circuit’s opinion in Bridas

S.A.P.I.C. v. Government of Turkmenistan (Bridas I), which

held that a sovereign can be liable for its instrumentality’s

acts if the sovereign completely controlled the instrumentality

“with respect to the transaction at issue” and exercised its

dominion to commit a “fraud or wrong.” 345 F.3d 347, 359

(5th Cir. 2003). In GSS’s view, Liberia dominated the Port

Authority “with respect to” the contract and the Port

Authority’s cancellation was a “remediable wrong.”

Appellant’s Br. 31–32. This argument is without merit. The

Fifth Circuit explained that the requisite “wrong” must

constitute either “fraud” or “misuse of the corporate form to

promote injustice,” Bridas S.A.P.I.C. v. Gov’t of Turkm.

(Bridas II), 447 F.3d 411, 416–17 (5th Cir. 2006), and not

simply a run of the mill alleged contractual breach. This case

is not the “exceptional case[]” to which Bridas I may apply.

Bridas II, 447 F.3d. at 416.

For the foregoing reasons, we affirm the district court’s

dismissal of the claims against Liberia for lack of subject

matter jurisdiction under the FSIA.

B. PORT AUTHORITY

GSS also argues that issue preclusion does not bar its

claims against the Port Authority because its claims against

Liberia differ from its claims against the Port Authority and

jurisdiction over Liberia necessarily confers jurisdiction over

the Port Authority. Based on our conclusion that Liberia is

not subject to suit in a United States court, GSS’s argument

regarding the Port Authority fails. We note, however, that the

district court’s issue preclusion analysis is plainly correct.

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Preclusion applies if a later argument “is related to the

subject-matter and relevant to the issues that were litigated

and adjudicated previously, so that it could have been raised.”

Hall, 285 F.3d at 81 (quoting Yamaha Corp. of Am. v. United

States, 961 F.2d 245, 257–58 (D.C. Cir. 1992) (emphasis

omitted)); see also Yamaha Corp., 961 F.2d at 254 (“[O]nce

an issue is raised and determined, it is the entire issue that is

precluded, not just the particular arguments raised in support

of it in the first case.” (emphases in original)). GSS could

have raised the agency argument in its first petition; it

eventually did raise the argument but too late to avoid waiver.

Accordingly, we again affirm the district court’s dismissal of

GSS’s petition against the Port Authority.

C. JURISDICTIONAL DISCOVERY

Finally, GSS offers two sentences in support of its

argument that the district court erred by dismissing its petition

before allowing jurisdictional discovery. We are

correspondingly brief in concluding that, without more,

GSS’s two-sentence claim does not suffice and, thus, the

district court committed no abuse of its wide discretion.

For the foregoing reasons, we affirm the district court’s

dismissal of GSS’s petition.

So ordered.