# Petition — Maritime International Nominees Establishment v. Republic of Guinea > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0855%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1983 - **Citation:** 464 U.S. 815 ## Text No IN THE Supreme Court of the United States OCTOBER TERM 1982 IN THE MATTER OF THE ARBITRATION BETWEEN MARITIME INTERNATIONAL NOMINEES ESTABLISHMENT, Petitioner, ¥ THE REPUBLIC OF GUINEA, Respondent, THE UNITED STATES OF AMERICA, Intervenor. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT GF COLUMBIA CIRCUIT Julius Kaplan Counsel of Record, KAPLAN RUSSIN & VECCHI 1218 16th Street, N.W. Washington, D.C. 20036 (202) 638-0060 Attorneys for the Petitioner Of Counsel: James W. Schroeder Robert L. Bard THE CASILLAS PRESS, INC. — 1717 K Street N.W. — Washington, D.C. — 223-1220 (1) QUESTIONS PRESENTED 1. Whether a foreign state is collaterally estopped from challenging the jurisdiction of a district court to en- force an arbitral award, where the foreign state had notice and opportunity to litigate the identical jurisdictional issue in an earlier proceeding between the same parties in which the district court entered an order compelling arbitration. 2. Whether a foreign state which agrees to arbitrate disputes with a private party in the United States, before a panel of arbitrators to be selected by an international organization, can be compelled by a district court to ar- bitrate before a substitute panel of arbitrators designated by the American Arbitration Association, where the ar- bitration as originally stipulated cannot be carried out. The following listed parties appeared below: The Republic of Guinea, appellant; Maritime International Nominees Establishment (MINE), appellee; The United States of America, intervenor. MINE, a Lichtenstein corporation, is (or was) affiliated with the In- ter Maritime Bank of Geneva, Switzerland; M.I.N.E., Inc. (Panama); M.I.N.E. (Liberia); Inter Maritime Management S.A. of Geneva, Switzerland; Global Bulk Transport, Inc., a New York corporation (“Global”); and affiliates of Global: States Marine International, a Delaware corporation; Isthmian Lines, Inc.; and Trans World Car- riers, Inc. (ili) TABLE OF CONTENTS Page ae aa aaa dan he oe She Rae eo Ow Eeed 1 Neen ea ae oa bs dO Ode Nag Oe kee OR 2 Neen cane WERKE RMRCAG RM RAD 2 seve v ek veees Vey eeceneueswends 4 REASONS FOR GRANTING THE PETITION ............... 11 Teen ee hc eek bwe san eh ekee eRe ee 20 i Lis ca pbaadsveseevernusy eet la I ERERE REA amo Ta ee re ad ud cds ee kee ghee un ee en 44a TABLE OF AUTHORITIES Cases: Barcelona Traction Light and Power Co., ee ee hag ee ee as ee et b48 ey eke OER 17 Birch Shipping Corp. v. Embassy of Tanzania, WED occ eevusevcceersroreuveneus 15 Chicot County Drainage District v. Bank, eC 11 Cook Industries, Inc. v. C. Itoh & Co. (America), 449 F.2d 106 (2d. Cir. 1971), cert. denied, Neen en. cane see see pene’ 14 Insurance Corporation v. Compagnie des Bauxites, U.S. eee 10, 11, 13 Ipitrade Int'l, S.A. v. Federal Republic of Nigeria, SS a 15 (iv) Island Territory of Curacao v. Solitron Devices, Inc. 356 F. Supp. 1 (S.D.N.Y 1973), aff'd, 489 F.2d 1313 (2d Cir. 1973), cert. denied, 416 U.S. 986 (1974) Libyan American Oil Co. v. Libya, 482 F. Supp. 1175 (D.D.C. 1980), vacated by stipulation, No. 80-1207 is als Gy GED 3 ves cee ecdis wsceees Montana v. United States, oo errr rere Railroad Commission of Texas v. Pullman Co., PER RENO 6 soda casenisevedevseeedewes Scherk v. Alberto-Culver Co., CET a I 8 have 8 adoe Cees ei Naeeevaews Stoll v. Gottlieb, ee ED oka Soke bce Nieeranencneetene T & R Enterprises v. Continental Grain Co., te breris le | = errrerer Terr rr rrr United States v. Moser, pe PT Tee ree ee Verlinden B.V. v. Central Bank of Nigeria, 488 F. Supp. 1284 (S.D.N.Y. 1980), aff'd on other grounds, 647 F.2d 320 (2d Cir. 1981), cert. granted, U.S. , 71 L.Ed.2d 291 (1982) Constitution, Statutes and Treaties: United States Constitution I rs onnene speech een khdetebeerseees Federal Arbitration Act, 9 U.S.C. § | ef seq. SEE nb caals ne peeynentleknewdeebenieeas eat og Jaane cee amaiareies STHEHSFCOCPSCPEHHKCSCHVEC VERBS VR EHC RTE CeO 8 Page , (v) Page En oa, ce pe diou he eeu bh. Cees RC ORAL eNeN aR Keen WERS 5 IN ele as panes eaies Wasa tkUN ONS eEeS MONTES 6 ee oo i dove ceanecuddnavesstcerins eas ne res 19 i Le leak Gh ane a geri ee Rekieeed eaves 8,19 eas bo weap aReha wes ev Rabe ee a cece een ee 2 Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1330, 1602 ef seq. ERE SR ee ene eee ee eee passim es Oc awh ad be eetawnsewnas eu nen 2, 6 oh ic cewe ydus ssesenneusuewss 7, 45 i os ced el ekuseyceesknsseur ened 7,10 es wea eA oad we vind dues sate eae 6 I OT EPP E TE Ty eee eT TC 6 Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington, March 18, 1965, 17 U.S.T. 1270, T.I.A.S. No. 6090 ches ceo eva cocneh eerie eee CAhee RHE RN ESR OM passim RD pape para ner ae pers apace LR yr oer 16 RR ey ce eee eer Pier pera) Cree eran Ae ees rye A gear 3, 16 ooo a hae 5S eS ROR Oe ROSELLE DER EEE DED EERE 16 RLM Sacco ia ey Gee CREEL SCER EEN SOMO ER TTS EC ES OS way 44 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 21 U.S.T. ae ND ig aces ee ee seueedi ones eek sen 19 International Materials: Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Documents Concerning the Origin and Formulation of the Convention, Vol. II, Pt. I (1968) ..................... 17 ICSID Regulations and Rules, i I SEE os bed waed vce sue eeeaen pe eeens 16 Law No. 66/AN/62, Journal Officiel de la Republique de Guinee, October 1, 1962 ............0..00005: 16 (vi) Page Miscellaneous: H. Rep. No. 94-1487, 94th Cong., 2d Sess .............0 ee eee 15 Tedeschi, The Determination of Corporate Nationality, rr a eee CU agers ucwenee iweeve i7 IN THE Supreme Court of the United States OCTOBER TERM 1982 No. IN THE MATTER OF THE ARBITRATION BETWEEN MARITIME INTERNATIONAL NOMINEES ESTABLISHMENT, Petitioner, Vv. THE REPUBLIC OF GUINEA, Respondent, THE UNITED STATES OF AMERICA, Intervenor. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Petitioner, Maritime International Nominees Establish- ment, respectfully prays that a writ of certiorari issue to review the judgment of the United States Court of Appeals for the District of Columbia Circuit which reversed, for lack of subject matter jurisdiction, a judgment of the United States District Court of the District of Columbia confirming an arbitral award against the Respondent. OPINIONS BELOW The memorandum opinion of the District Court is re- ported at 505 F. Supp. 141, and is set forth in Appendix 2 A, infra, 1a-6a. The opinion of the Court of Appeals of November 12, 1982, is reported at 693 F.2d 1094, and is set forth in Appendix B, infra, 7a-43a; an amendment to that opinion of January 27, 1983, is not reported, and is set forth in Appendix C, infra, 44a-49a. JURISDICTION The judgment of the Court of Appeals was entered on November 12, 1982. A timely petition for rehearing was denied on January 27, 1983. The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). STATUTE AND TREATY INVOLVED 1. The Foreign Sovereign Immunities Act of 1976 (“FSIA”), 28 U.S.C. §§ 1330, 1602 et seg., provides in relevant part as follows: § 1330. Actions against foreign states (a) The district courts shall have original jurisdiction without regard to amount in con- troversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement. (b) Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsec- tion (a) where service has been made under sec- tion 1608 of this title. 3 § 1605. General exceptions to the jurisdictional immunity of a foreign state (a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case — (1) in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect excent in accordance with the terms of the waiver; (2) in which the action is based upon a commercial activity carried cn in the United States by the foreign state; or upon an act performed in the United States in connec- tion with a commercial activity of the foreign state elsewhere; or upon an act out- side the territory of the United States in con- nection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States; ... 2. The Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington March 18, 1965, 17 U.S.T. 1270, T.LA.S. No. 6090 (“ICSID Convention”), provides in Ar- ticle 25(1) as follows: The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an invest- ment, between a Contracting State (or any con- stituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have 4 given their consent, no party may withdraw its consent unilaterally. STATEMENT OF THE CASE In 1971, petitioner, Maritime International Nominees Establishment (“MINE”), a Lichtenstein corporation, and the Republic of Guinea (“Guinea”) contracted to establish SOTRAMAR, a “mixed economy company” under the laws of Guinea, which was to ship bauxite mined in Guinea to Europe and the United States (“SOTRAMAR Agreement;” !.A. 205-27)'. Chapter XVIII of the Agree- ment prescribed binding arbitration to resolve disputes which could not be resolved through conciliation (J.A. 226). The arbitral panel was to be selected as follows: There shall be 3 (three) arbitrators. These will be selected by the President of CIRDI [?] at the joint request of the parties or failing this, at the request of the most diligent party. (J.A. 226). The SOTRAMAR Agreement was subsequently sup- plemented to designate the “President of the International Court of Settlement of International [sic] Disputes in Washington (CIRDI)” as the person who would select the three arbitrators (J.A. 229). Guinea breached the SOTRAMAR Agreement (J.A. 343), and after efforts at informal conciliation failed, MINE sought to arbitrate the dispute. Since officials of the International Centre for the settlement of Investment 'The reference “J.A.” is to the Joint Appendix in the Court of Ap- peals, a copy of which has been lodged with the Clerk of this Court. 2*CIRDI” is the French acronym for the international Centre for Settlement of Investment Disputes in Washington, D.C. 5 Disputes (“ICSID”) do not designate commercial ar- bitrators pursuant to the language of the SOTRAMAR Agreement (J.A. 293-94), MINE and Guinea executed a consent instrument to be submitted to ICSID to obtain an appointment of arbitrators (J.A. 45). After execution of the consent instrument, MINE concluded that its Lichtenstein nationality made it ineligible to use ICSID’s dispute resolving machinery since Lichtenstein is not a party to the ICSID Convention. In an attempt to over- come this jurisdictional deficiency, and because MINE’s affiliate, MINE Inc., had been substituted as the private party to the agreement (J.A. 232), MINE requested Guinea to execute a revised consent instrument (J.A. 46). Guinea, however, did not execute the revised consent and broke off all further communications with MINE. In January, 1978, frustrated in its efforts to have ICSID appoint arbitrators or to obtain Guinea’s cooperation for a valid submission to ICSID, MINE commenced an ac- tion’ in the district court under the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq. to enforce the parties’ undertaking to arbitrate their disputes (J.A. 6-10). MINE petitioned the district court to compel arbitration and to name substitute arbitrators under Sections 4 and 5 of the Federal Arbitration Act, 9 U.S.C. §§ 4, 5. Subject matter jurisdiction and personal jurisdiction over Guinea was in- 3See also n. 11, infra. ‘Prior to the institution of the action, MINE’s new counsel address- ed a letter to the Guinean Ambassador to the United States asking again whether Guinea would consent to arbitration. (Exhibit F to MINE’s Petition to Compel Arbitration; reproduced in the Adden- dum 4 to MINE’s Brief in the Court of Appeals, D.C. Cir. No. 91-1073). The Ambassador had on previous occasions engaged in several business-oriented contacts with MINE related to the SOTRAMAR agreement (App. A, 6a). No response was received to that request. 6 voked under the Foreign Soverign Immunities Act of 1976 (“FSIA”), 28 U.S.C. §§ 1330, 1604(a)(1) and (a)(3). Ser- vice on Guinea was effected under Section 1608(a) of the FSIA (J.A. 47). Guinea did not appear. After a hearing, the district court issued an order com- pelling arbitration of the dispute before a panel to be selected by the American Arbitration Association (J.A. 48-49). In entering the order, the district court found “that the making of the agreement for said arbitration is not an issue,” and that “there has been a lapse in the appointment of arbitrators and frustration of the intent to arbitrate as provided in the said agreement because the respondent has failed to avail itself of the method of naming arbitrators provided for in the said agreement.” (/d). A copy of the district court’s order was served on Guinea in accordance with Section 1608(a) of the FSIA and governing Depart- ment of State regulations. (J.A. 50). Guinea made no at- tempt either to set aside or to appeal the district court’s order. in the ensuing two-year period, extensive arbitration proceedings were held in Washington, D.C., before a panel designated by the American Arbitration Associa- tion. Through notices sent to the Guinean Ministry of Foreign Affairs, and its Embassy in Washington, Guinea was kept abreast of the status of the proceedings and was repeatedly asked to appear and respond (J.A. 92-101). Guinea, however, chose not to appear, participate, or communicate with the arbitral panel. In June, 1980, the ar- bitral panel rendered an award in favor of MINE (J.A. 89-90), which was again duly served upon Guinea (J.A. 101, 121-22). In August, 1980, MINE filed a motion in the district court under Section 9 of the FAA, 9 U.S.C. § 9, for an order confirming the arbitral award and for entry of judg- ment. A copy of the motion to confirm was served on Guinea in the same manner as all previous notices (J.A. 69-71). This time, Guinea appeared and challenged both the district court’s jurisdiction to confirm the award, as well as its jurisdiction to compel the arbitration which resulted in the award that MINE now sought to confirm (J.A. 125-141). Following extensive briefing and oral argument, the district court found that it had subject matter jurisdiction and in personam jurisdiction to compel arbitration and to confirm the ensuing arbitral award, and issued an order confirming MINE’s award (J.A. 297). In its accompanying memorandum opinion, the court found that Guinea had implicitly waived its sovereign immunity from suit by agreeing to arbitration that could be expected to be held in the United States. This waiver gave the district court the requisite subject matter jurisdiction under Section 1605(a)(1) of the FSIA (App. A, 5a). The court also found jurisdiction under Section 1605(a)(2) of the FSIA, based upon Guinea’s extensive activities in the United States in connection with this commercial contract (App. A, 6a). Based on these jurisdictional findings, the court concluded that “it is clear that the Order compelling arbitration was proper, . . . and that this Court has authority to confirm the award.”5 SAfter entry of judgment, Guinea moved in the district court for a new trial or for relief from judgment on the ground that “newly discovered evidence” showed that MINE’s service of process had been defective under the FSIA. (J.A. 305). Coupled with the motion was an application for a stay of the judgment until the district court had ruled on the motion for a new trial. The district court denied both motions, but allowed Guinea five days to seek a stay from the Court of Appeals rp nding appeal. (J.A. 325). Such a stay was granted by the Court of Appeals. (App. B, 15a). 8 The Court of Appeals reversed.* Although Guinea rais- ed numerous issues,’ the Court disposed of the Appeal on ‘The United States was granted leave to intervene in the appeal to submit argument in support of the constitutionality of the FSIA, which Guinea had challenged. Adopting the rationale of the Second Circuit in Verlinden, B.V. v. Central Bank of Nigeria, 647 F.2d 320 (1981), Guinea argued that Congress could not, consistent with Article Ill of the Constitution, confer jurisdiction on federal courts to hear suits by foreign corporations against foreign states. In view of the disposition of the appeal on jurisdictional grounds, the Court of Ap- peals did not reach the constitutional issue. The United States also filed a “suggestion of interest,” setting forth the background and the Executive Branch’s general position with respect to the LCSID Convention. The United States suggested that if a foreign state consents to ICSID jurisdiction only, such consent should not be regarded as a waiver of sovereign immunity from suit in the courts of the United States, other than for purposes of enforcing an ICSID award under 22 U.S.C. § 1650a; the United States further urged that where it is unclear whether ICSID has jurisdiction, the case should be stayed and the matter referred to ICSID for a jurisdictional ruling. Brief of the United States of America as Intervenor and Sug- gestion of Interest, D.C. Cir. No. 81-1073. ’The Court of Appeals summarized the issues raised by Guinea as follows (App. B, 1Sa-16a): First, [Guinea] claims that the District Court lacked sub- ject matter jurisdiction because: (1) the court erred in rul- ing that Guinea was not immune under the FSIA; (2) even assuming non-immunity, the FSIA does not purport to confer subject matter jurisdiction over suits between foreign plaintiffs and foreign states; (3) the FSIA would be unconstitutional if read to confer such jurisdiction; and (4) the signing by both parties of the first ICSID consent form committed them to an ICSID arbitration and therefore deprived the District Court of jurisdiction. Second, Guinea claims that MINE’s service of process upon it was inadequate under the FSIA, and therefore that the District Court lacked personal jurisdiction under the FSIA. Third, Guinea attacks the arbitration award itself, contending (1) that the arbitrators exceeded their authority by disregarding the liquidated damages provision of the contract, (2) that the arbitrators lacked power to delegate 9 the basis of a single issue, viz., that the district court lack- ed subject matter jurisdiction to confirm the arbitration award because Guinea had not waived its sovereign im- munity. (App. B, 8a). The Court of Appeals rejected Guinea’s belated jurisdic- tional challenge to the district court’s earlier order to com- pel arbitration. The Court ruled that the proceeding to compel arbitration was an independent action under the FAA and the ensuing order to compel was a final and ap- pealable order. Since Guinea had failed to appeal that order within the statutory period, the order became res judicata between the parties and “Guinea cannot now, by way of appealing the confirmation order, obtain review of the earlier order to compel.” (App. B, 15a n.8). But despite the fact that Guinea’s grounds for challeng- ing the jurisdiction of the court to confirm the award were identical to those asserted in support of the challenge to the district court’s power to compel arbitration, the Court of Appeals held that Guinea’s non-appearance in the earlier proceedings did not preclude it from challenging the district court’s authority in the later confirmation pro- ceedings. The Court brushed aside the doctrine of col- lateral estoppel with the observation that “that doctrine re- quires that... issues... [of] jurisdiction be fully litigated before they are preclusively established” (App. B, 16a n.9). The Court of Appeals based its decision that Guinea had not waived its sovereign immunity from suit in the the task of damage calculation to an accounting firm, (3) that the award was based on evidence outside the record, and (4) that MINE obtained an AAA arbitration by misrepresenting before the District Court the availability of an ICSID arbitration. 10 courts of the United States on the finding that Guinea only agreed to arbitrate before ICSID, and that an agreement to arbitrate before ICSID does not constitute a waiver of sovereign immunity within the purview of the FSIA (App. B, 18a-25a). In its original opinion, the Court rejected MINE’s argument that the parties had not intended to sub- mit the entire dispute to ICSID, but had intended commer- cial arbitration in the United States before arbitrators selected by the “President” of ICSID. The Court ruled that because MINE had not made the argument in the district court, it was precluded from arguing on appeal that the SOTRAMAR Agreement committed Guinea to any ar- bitration other than arbitration under the ICSID Conven- tion. The Court also reversed the districts court’s finding that Guinea’s commercial activities in the United States in con- nection with the SOTRAMAR agreement established sub- ject matter jurisdiction under Section 1605(a)(2) (App. B, 27a). MINE sought rehearing on the ground that the Court of Appeals was demonstrably incorrect when it assumed that MINE had failed to argue below that the arbitration clause in the SOTRAMAR Agreement stipulated non-ICSID, commercial arbitration (App. B, 20a). MINE further urged that this Court’s recent decision in Jnsurance Corp. v. Compagnie des Bauxites, ___. U.S. ___, 72 L. Ed. 2d 492 (1982), required the application of the principle of col- lateral estoppel to Guinea’s belated attack on the district court’s subject matter jurisdiction. The Court of Appeals denied the rehearing petition, but made extensive revisions in its earlier opinion (App. C, 44a-49a). The Court now held that, based upon its own ex- amination of the circumstances surrounding the execution 1] and implementation of the SOTRAMAR Agreement, the district court’s waiver holding “was unquestionably” based on the factual conclusion that the parties had con- templated an ICSID arbitration, and it declined to disturb that finding (App. C, 45a). As to collateral estoppel, the Court distinguished the Compagnie des Bauxites case on the grounds that Guinea’s immunity defense was based on lack of personal, as well as subject matter, jurisdiction; therefore, Guinea was not foreclosed from challenging the district court’s jurisdiction in a collateral proceeding (App C, 49a). REASONS FOR GRANTING THE PETITION If left standing, the Court of Appea!s’ decision will seriously .compromise the principle of finality which underlies the doctrine of collateral estoppel, which, in turn, will limit the utility of arbitration as an alternative to litigating commercial disputes with foreign states. 1. In an unbroken line of decisions, reaffirmed only last Term in Jnsurance Corp. v. Compagnie des Bauxites, supra, this Court established the rule that a party which has challenged the subject matter jurisdiction of a federal court, or has had the opportunity to challenge subject matter jurisdiction, is estopped from relitigating subject matter jurisdiction in another proceeding between the same parties in the same or in a different forum. Chicot County Drainage District v. Bank, 308 U.S. 371 (1940); Stoll v. Gottlieb, 305 U.S. 165 (1938); United States v. Moser, 266 U.S. 236 (1926). This principle applies to governmental parties as well as private parties. Montana v. United States, 440 U.S. 147 (1979). The Chicot County case is especially apposite here. There, the Court applied the rule of collateral estoppel under circumstances where the district court had based its 12 jurisdiction in the prior proceedings upon a statute that had been declared unconstitutional by this Court in another suit between different parties. The jurisdiction of the district court in the later proceedings was based on the same invalid statute. Furthermore, the party challenging subject matter jurisdiction had not appeared in the original proceedings, though it had the opportunity to do so, and the issue of subject matter jurisdiction had not been raised in those proceedings. The foregoing precedents clearly control this case. The Court of Appeals’ ruling that the order to compel arbitra- tion before a panel selected by the American Arbitration Association was res judicata between the parties necessari- ly implied that the district court had the requisite subject matter and personal jurisdiction to issue that order. Since the district court’s subject matter jurisdiction to confirm the award rested on exactly the same legal predicate as its subject matter jurisdiction to compel arbitration, Guinea should have been collaterally estopped from challenging the court’s subject matter jurisdiction to confirm the award. A more compelling case for the application of the doc- trine of collateral estoppel than the present can hardly be hypothesized. In both the 1978 action to compel arbitra- tion and in the 1980 action to confirm the arbitral award, the parties were the same, the court was the same, the con- tract in dispute was identical, and the jurisdictional predicates for the two proceedings were identical. Guinea had repeated actual notice of the proceedings and full op- portunity to challenge the district court’s jurisdiction to issue the order compelling arbitration; to move to set aside the order, once it was issued; and to seek direct review of the district court’s order. In addition, Guinea received no less than thirty-two notices in the follow-on arbitration proceedings (J.A. 92-101). 13 Guinea elected not to appear in the district court, and it likewise assumed a “wait-and-see” attitude in the arbitra- tion proceedings. But Guinea’s abstention carried a risk which the law imposes on all litigants — governmental and private — under such circumstances, namely, that the trial court would determine its jurisdiction on its own, Stoll v. Gottlieb, supra, 305 U.S. at 171, and that such determina- tion would become final and binding on Guinea in a subse- quent proceeding regarding the same dispute even if the determination was reached upon an erroneous assessment of the facts or by an erroneous application of the law. United States v. Moser, supra, 266 U.S. at 242. The Court of Appeals’ attempt, in its revised opinion, to distinguish /nsurance Corp. v. Compagnie des Bauxites, supra, on the basis of a passing remark in that opinion that a defendant is always free to ignore the judicial pro- ceeding and challenge an ensuing judgment collaterally (72 L. Ed. 2d at 504), is ill-conceived. The Court’s remark ad- dressed solely the issue of collateral attack on in personum jurisdiction, not subject matter jurisdiction, which was the sole basis for the Court of Appeals’ reversal of the order to confirm the award. Other portions of the Compagnie des Bauxites opinion leave no doubt that subject matter jurisdiction may not be collaterally attacked so long as the party has had the opportunity to litigate that issue — regardless of whether it availed itself of that opportunity. As this Court stated: A party that has had the opportunity to litigate the question of subject matter jurisdiction may not, however, reopen that question in a collateral attack upon an adverse judgment. It has long been the rule that principles of res judicata apply to jurisdictional determinations — both subject matter and personal. [Citations omitted; 72 L. Ed. 2d at 501 n. 9]. 14 The Court of Appeals’ erroneous ruling on the lack of preclusive effect of the district court’s earlier order will also seriously undermine the utility of arbitration as an alternative to litigation of commercial disputes with foreign states. Where, as here, the availability ve/ non of commercial arbitration is belatedly disputed by one party to an arbitration agreement, rudimentary fairness and orderly administration of justice demand that the party resisting arbitration raise its challenge at the earliest op- portunity, before the other party embarks upon protracted and expensive arbitration.’ For the arbitral process to work, the party enlisting the aid of the courts must have some assurance that issues such as the arbitrability of the dispute and the subject matter jurisdiction of the court to compel arbitration are not raised for the first time years later when, as here, proceedings to confirm the award become necessary. But this is exactly what the Court of Appeals has permitted Guinea to do when it disregarded the principle — so consistently reiterated by this Court — that subject matter jurisdiction may not be collaterally at- tacked where a party has had the opportunity to litigate that issue. A strict application of the doctrine of collateral estoppel is thus of signal importance to the policy of favoring the 8 See Island Territory of Curacao v. Solitron Devices, Inc., 356 F. Supp. 1, 12(S.D.N.Y. 1973), aff'd, 489 F.2d 1313 (2d Cir. 1973), cert. denied, 416 U.S. 986 (1974) (“[D]efendant was fully advised as to the employment of the arbitrator but remained silent and made no objec- tion to his acting.”); 7 & R Enterprises v. Continental Grain Co., 613 F.2d 1272 (Sth Cir. 1980) Cook Industries, Inc. v. Itoh & Co. (America), 449 F.2d 106, 107-108 (2d Cir. 1971), cert. denied, 405 U.S. 921 (1972). (“[A party] cannot remain silent, raising no objection dur- ing the course of the arbitration proceeding, and when an adverse award to him has been handed down complain of a situation of which he had knowledge from the first.”) 15 settlement of international and domestic disputes by ar- bitration. 2. The Court of Appeals’ ruling undermines the prime objective of the FSIA by frustrating a foreign investor’s clear intent to have its disputes with a foreign state resolv- ed by an effective form of arbitration. Subsection (a)(1) of Section 1605 of the FSIA provides that foreign states are not immune from the jurisdiction of the courts of the United States in any case “[i]n which the foreign state has waived immunity either explicitly or by implication.” The legislative history of that provision expressly mentions as examples of implicit waivers “cases where a foreign state has agreed to arbitration in another country... .” H. Rep. No. 94-1487, 94th Cong., 2d Sess., 18.9 The Court of Appeals held that the arbitration clause in the SOTRAMAR Agreement was not an agreement “to ar- bitration in another country” (App. B, 24a) and, therefore, did not constitute a waiver of sovereign im- munity within the purview of Section 1605(a)(1) of the FSIA. This holding ignores the manifest intent of the par- ®°Lower federal courts have placed varying and inconsistent inter- pretations on Section 1605(a)(1)’s waiver provision. Compare, Verlinden B.V. vy. Central bank of Nigeria, 488 F. Supp. 1284 (S.D.N.Y. 1980) aff'd on other grounds, 647 F.2d 320 (2d Cir. 1981), cert. granted, US. , 71 L. Ed. 2d 291 (1982) (agreement by Nigeria to arbitrate in France under Swiss law does not waive immuni- ty in U.S. courts); with Ipitrade Int’l, S.A. v. Federal Republic of Nigeria, 465 F. Supp. 824 (D.D.C. 1978) (agreement by Nigeria to ar- bitrate in France under Swiss law waives immunity in U.S. courts); Li- byan American Oil Co. v. Libya, 482 F. Supp. 1175 (D.D.C. 1980), vacated by stipulation, No. 80-1207 (D.C. Cir. May 6, 1981) (agree- ment by Libya to arbitrate under Libyan and international law, loca- tion not specified, but eventually arbitrated in Switzerland, waives im- munity in U.S. courts); and, Birch Shipping Corp. v. Embassy of Tan- zania 507 F. Supp. 311 (D.D.C. 1981) (agreement by Tanzania to ar- bitrate, location not specified, but eventually arbitrated in New York, waives immunity in U.S. courts). 16 ties to have their disputes resolved by commercial arbitra- tion.'°® But even if the parties intended ICSID arbitration only, they must have intended an ICSID arbitration that could be realized, that is, arbitration proceedings consistent with the ICSID Convention and the rules of practice of ICSID.!! Under Article 25(1) of the ICSID Convention, supra, the jurisdiction of ICSID is limited to disputes in which both the respondent state and the state of which the private party is a national have ratified the ICSID Conven- tion.'? MINE is a Lichtenstein corporation and Lichten- stein has not ratified the Convention. Under the express '0Guinea entered into the SOTRAMAR Agreement pursuant to the Guinean law on “mixed economy companies,” which provides that the “State in a mixed economy company is a shareholder, like any other, and its rights and obligations are those derived from its statute [sic] as the shareholder, rather than as the State.” (Law No. 66/AN/62, Jour- nal Officiel de la Republique de Guinee, October 1, 1962; J.A. 300 n.1). The Court of Appeals rejected MINE’s argument that by becoming a participant in a commercial enterprise, and by agreeing to arbitrate disputes involving that interprise, Guinea expressly waived its sovereign immunity (App. B, 2). ''The ICSID Convention contemplates arbitration in accordance with a procedural scheme set out in separate rules. See /CSID Regula- tions and Rules, Doc. ICSID/4/Rev. 1 (1975). But ICSID itself does not arbitrate disputes; rather, it arranges for arbitrations by maintain- ing a list of arbitrators designated by Contracting States and by the President of the World Bank. (ICSID Conventi. n, Arts. 12-16). The parties to a dispute are not limited in selecting arbitrators to the ICSID list (id., Art. 40), and they are free to stipulate alternative procedures for the conduct of the arbitration (id., Art. 44). There are no provi- sions for the mere appointment of commercial arbitrators. '2In addition to meeting the Convention’s nationality requirement, consent of the parties is an essential prerequisite for the jurisdiction of ICSID. Jurisdiction is further limited by reference to the nature of the dispute. 17 language of the Convention and established principles of international law,'? MINE could not use the Convention machinery for the arbitration of disputes. The ICSID Convention is part of the law of the land, and its interpretation is uniquely a function of the judiciary. Whether the parties’ endeavor to bring the dispute before ICSID was legally realizable could have been ascertained with facility by the Court of Appeals. If the dispute was ineligible for arbitration under the auspices of ICSID, it is implausible to assume, as the Court of Appeals did, that the parties intended arbitration which could not be carried into effect. Since the arbitra- tion clause in the Agreement makes arbitration the sole method for the resolution of all disputes and claims bet- ween the parties, MINE would be deprived of all redress for Guinea’s breach of the SOTRAMAR Agreement. The Court of Appeals’ ruling, thus, leads to the absurd result that a sophisticated foreign investor who puts large sums of money at risk in a developing country on condition that there will be arbitration, and secures the express written agreement of the foreign sovereign-partner to arbitration, is denied all remedy. To foreclose the possibility of this patently unfair and illogical result, the Court of Appeals should have examined whether the ICSID Convention '3Barcelona Traction Light and Power Co., [1970] I.C.J. 3. See also, Tedeschi, The Determination of Corporate Nationality, 50 Australian L.J. 521 (1976). An earlier draft of the ICSID Convention proposed a broader definition of nationality including a piercing of the corporate veil. Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Documents Concerning the Origin and Formulation of the Convention, Vol. II, Pt. I, 230 (1968). The pro- posal was strongly opposed, and ultimately dropped from the final draft. Jd. at 359-61, 445-51, 537-40. 18 could accommodate an arbitration of the dispute between the parties under the auspices of ICSID. If, on the other hand, the Court of Appeals was not prepared to explore the jurisdictional ramifications of the ICSID Convention on its own, the Court should have adopted the suggestion of the United States, stayed the proceedings, and instructed the district court to obtain an authoritative ruling from ICSID as to whether the dispute was capable of arbitration under the ICSID Convention and the Rules of ICSID.'* The Court of Appeals’ facile conclusion that Guinea’s consent to ICSID arbitration conclusively establishes ICSID’s exclusive jurisdiction, and did “not foresee... a role for United States courts” (App. B, 25a), without regard to the effectiveness of the consent, constitutes an erroneous interpretation of a key component of an im- '4The United States submitted in its suggestion of interest (supra, n.6, pp. 48-49) in relevant part as follows: To prevent United States courts from improperly assert- ing jurisdiction over ICSID cases, and to accord the necessary deference to ICSID’s jurisdictional autonomy, the United States submits that a rule of abstention should be followed in U.S. courts. Cf., Railroad Commission of Texas v. Pullman Co., 312 U.S. 496 (1941). Where cases brought initially in the courts arguably come within ICSID’s exclusive jurisdiction, the proceedings must be Stayed to permit the party alleging ICSID’s unavailability to obtain a definitive ruling from ICSID. Once ICSID makes its determination, either the case would remain Within the Centre’s exclusive jurisdiction, or, if ICSID finds that it lacks jurisdiction, the court would be free to address the case itself, assuming it has an independent basis for exercising jurisdiction over the parties. This proposed rule is similar to the procedure recently urged by the United States to accommodate similar prin- Ciples of exclusivity and autonomy over jurisdiction by the Iran-U.S. Claims Tribunal. 19 portant treaty of the United States, without any analysis of the treaty and its negotiating history. Moreover, it leads to the untenabie result that United States courts are unavailable to enforce the express agreement of the parties here to arbitrate their disputes, “even though the agreed-to arbitration would probably take place on United States soil.” (App. B, 25a). In the context of this case, such a holding undermines the strong national policy of this country favoring the ar- bitrability of transnational commercial disputes, Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974), and the enforce- ment of arbitral awards settling such disputes. '* The petition, we submit, presents important and recurr- ing questions of interpretation of the Foreign Sovereign Immunities Act of 1976 and of the ICSID Convention that have not been, but should be, addressed by this Court. 'SSee the United Nations Convention on the Recognition and En- forcement of Foreign Arbitral Awards, 21 U.S.T. 2517, T.1.A.S. No. 6997, and its implementing legislation, 9 U.S.C. §§ 201 ef seq. See also the act rendering enforceable arbitration awards rendered under the ICSID Convention, 22 U.S.C. § 1650a. 20 CONCLUSION For the foregoing reasons, the petition for a writ of cer- tiorari should be granted. Respectfully submitted, Julius Kaplan Counsel of Record. KAPLAN RUSSIN & VECCHI 1218 16th Street, N.W. Washington, D.C. 20036 (202) 638-0060 Attorneys for the Petitioner. Of Counsel: James W. Schroeder Robert L. Bard APRIL, 1983. APPENDIX la APPENDIX A In the Matter of the Arbitration between MARITIME INTERNATIONAL NOMINEES ESTABLISHMENT, Petitioner, V. The REPUBLIC OF GUINEA, Respondent. Civ. A. No. 78-388. United States District Court, District of Columbia. Jan. 12, 1981. MEMORANDUM GESELL, District Judge. Petitioner in this case is seeking an order confirming an arbitration award in excess of $25,000,000 made following this Court’s Order of June 15, 1978, directing the parties to arbitrate. The Republic of Guinea, after ignoring the earlier proceedings and failing to participate in the arbitra- tion, now comes forward at the eleventh hour contending that this Court is without jurisdiction. Although numerous issues have been advanced by the parties, it now is agreed that the central issue is whether the Foreign Sovereign Immunities Act (“FSIA”) of 1976 (principally codified at 28 U.S.C. §§ 1330, 1602-1611 (1976)) granted this Court jurisdiction to order Guinea to arbitrate. The Court finds that it had jurisdiction under the FSIA and an 2a Order now confirming the award accompanies this Memorandum. A brief description of the history of this litigation will help clarify the legal issues involved. In 1971, petitioner, a Liechtenstein corporation, and the Republic of Guinea signed an agreement forming a company known as Societe d’Economie Mixte de Transports Maritimes (SOTRAMAR) to engage in the shipment of bauxite min- ed in Guinea. SOTRAMAR was formed as a mixed- economy company under the laws of Guinea,' and, accor- ding to the contract, “shall have a civil personality and financial autonomy.” Disputes under the contract forming SOTRAMAR were to have been resolved by binding ar- bitration conducted by three arbitrators selected by the President of the International Centre for Settlement of In- vestment Disputes (“ICSID”), a group affiliated with the World Bank. A dispute ultimately arose between petitioner and the Republic of Guinea, and petitioner attempted to get ap- proval from Guinea for the matter to be heard in arbitra- tion as contemplated by the contract. Guinea refused to give its consent, and petitioner came before this Court in 1978 seeking an order to compei arbitration pursuant to the United States Arbitration Act, 9 U.S.C. § 1 et seq. ‘Article 91 of the Guinean !aw regarding corporate entities, adopted September |, 1962, provides that: The State in a mixed economy company is a shareholder, like any other, and its rights and obligations are those derived from its statute as the shareholder, rather than as the State. Petitioner’s Reply Brief, at 1. 3a (1976).2 Despite more than adequate notice, Guinea never appeared in the proceedings before this Court. A hearing was held and an arbitration was ordered before the American Arbitration Association. Over a two-year period, extensive arbitration pro- ceedings were held. Guinea repeatedly was made aware of what was occurring and periodically was offered an op- portunity to appear and respond. Guinea never answered in any fashion. In June, 1980, the arbitration was conclud- ed and an award was made in favor of petitioner. The peti- tioner then filed a motion with this Court to confirm the award and enter judgment. Shortly before a hearing on the motion was scheduled in this Court, Guinea obtained counsel and that counsel sought a delay in order to res- pond. A short delay was granted, and it was then that Guinea first advanced its argument that this Court was without jurisdiction. Jurisdiction under the FSIA has been discussed by several other courts faced with situations somewhat similar to the one now posed. See, e.g., Verlinden B. V. v. Central Bank of Nigeria, 488 F.Supp. 1284 (S.D.N.Y. 1980); Lybian American Oil Co. v. Socialist People’s Li- ?The parties dispute whether petitioner could have proceeded to ar- bitration in the manner contemplated by the contract despite Guinea’s refusal to participate. The Court finds, on the basis of the affidavits and evidence presented, that petitioner could not have proceeded under the contract. The Arbitration Act was the only mechanism available to the Court in view of its inability to order the President of ICSID to appoint arbitrators. 3At hearing, counsel for Guinea was asked whether there was any explanation for Guinea’s repeated failure — despite notice — to re- spond either in this Court or before the American Arbitration Association. Counsel stated he was unable to present any explanation. 4a byan Arab Jamahirya, 482 F.Supp. 1175 (D.D.C. 1980); Ipitrade International, S.A. v. Federal Republic of Nigeria, 465 F.Supp. 824 (D.D.C. 1978). The discussion here, therefore, will not be extensive. The key question is whether Guinea lost its immunity either because it has waived that immunity, see 28 U.S.C. § 1605(a)(1) (1976), or because of its commercial activities in the United States, see 28 U.S.C. § 1605(a)(2) (1976). The Court finds that under both criteria Guinea lost its immunity and the Court accordingly had jurisdiction. Waiver Under 28 U.S.C. § 1605(a)(1) (1976), a foreign state loses its immunity in any case “in which the foreign state has waived its immunity either explicitly or by implication.” The House Report accompanying the FSIA, moreover, states that: With respect to implicit waivers, the courts have found such waivers in cases where the foreign state has agreed to arbitration in another country or where the foreign state has agreed that the law of a particular country should govern a contract. H.R.Rep.No. 94-1487, 94th Cong., 2nd Sess. 18, re- printed in [1976] U.S. Code Cong. & Admin. News, pp. 6604, 6617. Although courts have differed on the extent to which the House Report language should be read as con- trolling the reach of the waiver provision, compare Verlinden B. V. v. Central Bank of Nigeria, supra, 488 F.Supp. at 1300-02, with Ipitrade International, S.A. v. Federal Republic of Nigeria, supra, 465 F.Supp. a: 826, it is clear that on the facts of this case, there has been an im- plicit waiver of immunity by Guinea sufficient to give this Court jurisdiction. No express provision in the SOTRAMAR contract sets Sa forth a place for arbitration,’ but by agreeing to arbitra- tion before arbitrators selected by the president of ICSID, Guinea implicitly agreed to arbitration in the United States. ICSID is located in Washington, D.C., and under Rule 13 of ICSID’s “Rules of Procedure for Arbitration Proceedings,” sessions of its tribunals “shall meet at the seat of the Centre” unless another site is agreed upon by the parties and approved by ICS!D itself. The only fair construction of the SOTRAMAR contract and the ICSID rules is that the parties contemplated arbitration to be held in the United States.’ This gives the SOTRAMAR contract an even greater nexus with the United States than the con- tracts in other cases where waiver has been found. See, e. g., Libyan American Oil Co. v. Socialist People’s Libyan Arab Jamahirya, supra; Ipitrade International, S.A. v. Federal Republic of Nigeria, supra; cf. Verlinen B.V. v. Central Bank of Nigeria, supra. Counsel for Guinea has argued that a waiver should be found only where there is both an agreement to arbitrate in another country and an agree- ment to be bound by the laws of another country. But that is too constricted a view. The Court finds that by agreeing to arbitration that could be expected to be held in the United States, Guinea waived its immunity before this Court within the meaning of 28 U.S.C. § 1605(a)(1) (1976). ‘The contract does provide, however, a “law of a particular country” to govern the contract, and that is the law of Guinea. ‘The omission of a site for the arbitration cannot be viewed as a mere oversight by the parties. In the agreement between the Republic of Guinea and the Harvey Aluminum Company of Delaware concern- ing mining of the bauxite that would be carried by SOTRAMAR, the contract expressly states that “{ajrbitration shall take place in Geneva.” 6a Commercial Activities Under 28 U.S.C. § 1605(a)(2) (1976), a foreign state also loses its sovereign immunity when it engages in com- mercial activities within the United States or in commer- cial activities outside the United States that have a “direct effect” within this country. The Court finds that Guinea engaged in activities that meet this standard. Numerous meetings were held, including meetings in Connecticut and in the District of Columbia, relating to the contract. Guinea directed an American shipping group to perform substantial activities to aid SOTRAMAR. The Guinean ambassador to the United States engaged in several business-oriented contacts with officials of peti- tioner related to the project. The sum of these activities is more than sufficient to constitute commercial activity within the meaning of section 1605(a)(2), and to give the district courts jurisdiction over Guinea. Venue is proper in this Court under the express authority granted to the District Court for the District of Columbia by 28 U.S.C. § 1391(f)(4) (1976). Having established that this Court has jurisdiction over Guinea, it is clear that the Order compelling arbitration was proper, see 9 U.S.C. § 9 (1976), and that this Court has authority to confirm the award, see 9 U.S.C. § 9 (1976); cf. Marine Transit Corp. v. Dreyfus, 284 U.S. 263, 275-76, 52 S.Ct. 166, 169, 76 L.Ed. 282 (1932). The Court is satisfied that the arbitration proceedings were con- ducted in a regular and proper manner and the award for damages and costs is confirmed in all respects. Ta APPENDIX B Notice: This opinion is subject. to formal revision before publication in the Federal Reporter or US. App.P.C. Reports. Users are requested to notify the Clerk of any formal errors in order that corrections may be made before the bound volumes go to press. Yuited States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 81-1073 IN Tris MATTER OF THE ARBITRATION BETWEEN Manirimt INTERNATIONAL NOMINEES ESTABLISHMENT v. Tuk RepunLic OF GUINEA, APPELLANT UNITED STATES OF AMERICA, INTERVENOR Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 78-00388 ) Argued January 25, 1982 Decided November 12, 1982 Stephen N. Shulman, with whom Mark C. Ellenberg and Alary M. Kearney were on the brief, for appellant. David Michael Cohen, Attorney, Department of Justice, with whom Charles F. C. Ruff, United States Attorney at the time the brief was filed, William Kanter, Linda M. Cole, and James G. Hergen, Attorneys, Department of Justice; and James H. Michel and Jonathan B. Schwartz, Attorneys, Department of State, were on the brief, for intervenor. Mattaniah Fytan, with whom Julius Kaplan and James I”. Schroeder were on the brief, for appellee. tis of costs nmst be filed within 14 days after entry of judgment. The court looks with disfaver upon motions to file bills of costs out of time. 8a Before ROBINSON, Chief Judge, EDWARDS, Circutt Judge, and MCGowAN, Senior Circuit Judge. Opinion for the Court filed by Senior Circuit Judge McGowan. McGowan, Senior Circuit Judge: The Republic of Guinea (“Guinea”) appeals from, and raises numerous challenges to, the District Court’s order confirming an arbitration award rendered by the American Arbitration Association in favor of Marine International Nominees Establishment (“MINE”). The District Court lacked subject matter jurisdiction, Guinea claims, because Guinea was immune under the Foreign Sovereign Immunities Act of 1976 (“FSIA”), Pub. L. No. 94-583, 90 Stat. 2891: because the arbitration clause contained in the parties’ contract precluded the exercise of jurisdiction under the FSIA; and because the FSIA does not, and can- not constitutionally be read to, confer subject matter jurisdiction over suits between foreign plantiffs and for- eign states. Guinea also contends that MINE’s service of process upon it did not meet the requirements of the FSIA and that the arbitration award itself was defective and unenforceable. We reach only the first of these arguments, because we conclude that Guinea was immune under the FSIA and therefore that the court lacked subject matter jurisdiction to confirm the award. Accordingly, we reverse. I The following facts. unless indicated otherwise, are not disputed by the parties. The Republic of Guinea is a for- eign sovereign state, and MINE is a Liechtenstein corpo- ration. On August 19, 1971, Guinea and MINE ' entered into a contract providing for the creation of a ‘mixed economy company” that became known as “SOTRAMAR.” ' The signatories to the contract were Guinea and the Inter Maritime Bank, which acted “in the name and on behalf of” MINE. Joint Appendix (“J.A.") 207. 9a J.A. 205-27.°. The purpose of the contract, as seen by both MINKE and Guinea, was to establish and provide shipping services to transport Guinean baux- ite to foreign markets. Appellant's Br. 4-5; Appel- lee’s Br. 4; J.A. 209. The contract detailed the obli- gations of the parties and included provisions concern- ing capital and profits, operation, management, labor, professional training, and tax treatment. One “special provision” stated that the parties would make a market study and set up a technical and economic dossier, and that ‘‘mixed technical commissions” would stu.ly such mat- ters as organization and finances. All these studies were to take place before SOTRAMALR was formed. J.A. 225. Although Guinean law was to be “applicable” to the con- tract, the contract stated that the “law between the parties” was the contract itself, and therefore that “Guinean laws shall be used for the interpretation and the implementation of this Agreement only accessorily and only in the case where the Agreement would leave a problem unsolved.” J.A. 222-23. The contract also contained several provisions relating to the settlement of disputes. When disagreements arose, the parties were first to attempt informal conciliation. If that effort failed, the parties were then to submit the conflict to arbitration by means of the method described in the contract—a panel of three arbitrators “selected by the President of CIRDI at the joint request of the parties or, failing this, at the request of the most diligent party.” J.A. 226. “CIRDI” is the French acronym for the Inter- national Centre for Settlement of Investment Disputes. A codicil to the contract stated that the arbitrators would be chosen by the “I’resident of the International Court of Settlement of International Disputes |sic] in Washing- ton ‘CIRDI).” J.A. 229. SOTRAMAR” is an acronym for the “Societe Mixte de Transports Maritimes,” Appellant's Brief (“Br.”) 4, or the “Societe Guineenne de Transports Maritimes,” Appellee’s Br. 5. 10a Although we will discuss later the parties’ disagreement over the exact meaning of these arbitration provisions, a brief description of the International Centre for Settle- ment of Investment Disputes (“ICSID") should be helpful at this point. [CSID was established by an international agreement, the Convention on the Settlement of Invest- ment Disputes Between States and Nationals of Other States, Mar. 18, 1965, 17 U.S.T. 1270, T.1.A.S. No. 6090, 575 U.N.T.S. 159 (‘the Convention’), to which the United States and more than seventy-five foreign countries are parties. Although ICSID is seated in Washington, D.C., its purpose is to provide an international conciliation and arbitration forum. Convention art. 1(2). An ICSID ar- bitration is not undertaken by ICSID itself, but by arbi- tral tribunals constituted in accordance with the provi- sions of the Convention and subject to rules promulgated by ICSID. When two eligible parties consent to submit a dispute to an ICSID arbitration, that course is deemed to be their sole remedy unless they specify othewise. /d. art. 26. Following the execution of a valid consent, either party may invoke une ICSID arbitration process, even if the other party refuses to participate. /d. art. 36. An ICSID award, even when rendered in such a default pro- ceeding, is final and binding on the parties. Jd. arts. 45, 53. Although some SOTRAMAR-related activities took place after the contract was signed, SOTRAMAR never became an operating commercial entity. A rift developed between the parties, and in January 1975 the parties signed a form purporting to present their differences to an ICSID arbitration. Appellant's Br. 7: Appellee’s Br. 56-57; J.A. 46. What took place next is disputed. By Guinea's account, MINE agreed to file with ICSID the consent and a for- mal! arbitration request: MINE took no such action but instead determined that the consent form was technically deficient; MINE mailed a purportedly correct rocised form to Guinea: Guinea never received this form: and lla MINE made no effort to determine whether the revised form had reached Guinea. Appellant’s Br. 7. MINE states that it perceived a deficiency in the first consent form and “urged” Guinea to execute a new form, but that Guinea then “broke off all relations and refused to com- municate further with MINE.” Appellee’s Br. 6. ICSID files contain no record of any request for arbitration in connection with the SOTRAMAR contract. J.A. 236 (let- ter from Acting Secretary-General of ICSID to counsel for Guinea (Dec. 8, 1980), Exhibit 7 to Guinea's Motion to Dismiss and Opposition to Motion to Confirm Arbitra- tion Award and Enter Judgment). On January 20, 1878—some three years after the first consent form was signed—MINE filed, in federal district court, a petition to compel arbitration under section 4 of the Federai Arbitration Act (“FAA”), 9 U.S.C. §4 (1976), asserting subject matter jurisdiction under the FSIA and the FAA. J.A. 6. In essence, section 4 of the FAA empowers a federal district court to order arbitra- tion to proceed in accordance with the terms of an arbi- tration agreement when adequate findings are made that an agreement did exist and that a default under the agree- ment did occur. Another relevant section of the FAA, section 5, 9 U.S.C. § 5 (1976), sets forth the circumstances when a court is additionally authorized to order arbitra- tion before an arbitrator or arbitrators not named in the agreement. One such instance occurs when a _ party “fail[s| to avail himself” of the agreed-upon method for naming arbitrators. [d. Drawing on these provisions, the petition to compel set forth a series of allegations, with exhibits attached, to demonstrate that the court should order the parties to — proceed to arbitration before the American Arbitration Association (“AAA"). In essential part, MINE main- tained that it had prepared the joint consent form “in accordance with the terms” of the SOTRAMAR contract, that it had then prepared a corrected consent form and had mailed it to Guinea, and that Guinea had “failed and I2a refused either to sign the revised submission or to proceed with arbitration.” J.A. 8-9 As a result, MINE con- tinued, it could not initiate an ICSID aribtration. J.A. 9. Because in MINE’s view these facts demonstrated that Guinea intended not to abide by the agreed-upon arbitra- tion method, id., the petition went on to assert that no longer was that method available. 7d. An order to com- pel arbitration was therefore proper, “since procedures are available [under section 5] to have a court appoint an arbitrator for the non-cooperating party.” J.A. 10. MINE served process upon Guinea by mailing. via reg- istered mail, copies of the relevant documents to the Min- istry of Foreign Affairs in Conakry, Guinea. MINE also sent. the same documents by certified mail to the Embassy of Guinea in Washington, D. C. J.A. 47. Guinea did not respond to these documents. The District Court heard argument on the petition on June 15, 1978; Guinea made no appearance. That same day, the court entered an order granting MINE’s peti- tion and ordering arbitration before the AAA and in ac- cordance with the rules of the AAA. J.A. 48. The order set forth the court’s conclusions that service had been proper under the FSIA, that the existence of an arbitra- tion agreement and the failure to comply therewith were not in issue, and that Guinea’s failure to avail itself of the agreed-upon arbitration method had frustrated the intent of that agreement. The order did not specifically state the basis for the court’s subject matter jurisdiction. The clerk of the District Court served copies of the order, by registered mail, upon the Ministry of Foreign Affairs in Guinea and upon the Embassy of Guinea in Washing- ton, D.C. LA. 50. MINE then filed, on September 5, 1978, 2 demand for arbitration before the AAA, J.A. 102, serving notice of the demand une, Guinea by the same method it had fol- lowed earlier, J.A. 110. The demand alleged several 13a breaches of the SOTRAMAR agreement, including Guin- ea's failure to give to SOTRAMAR'’s management the necessary authority to conclude contracts for the carriage of bauxite and the provision of services, as well as Guin- ea's grant to another company of the bauxite rights re- served to MINE. J.A. 105-06. Arbitration hearings took place on February 5, 6, and 7, 1979; May 25, 1979; and April 14, 1980. J.A. 95-100 (affidavit of James W. Schroeder, Exhibit C to MINE’s Motion to Confirm Ar- bitration Award and Enter Judgment). During these proceedings, the AAA served upon Guinea various docu- ments concerning the arbitration, id.; Guinea did not ap- pear or file any response. On June 9, 1980, the arbitra- tors rendered an award in excess of $25 million, which primarily represented compensatory damages for breach of contract. J.A. 86-87. MINE then returned to the District Court, filing on August 22, 1980, a motion to corfirm and enter judgment on the arbitration award under section 9 of the FAA, 9 U.S.C. §9 (1976). J.A. 51. Accompanying the motion was a memorandum of points and authorities, with ex- hibits attached. Once again, MINE served process upon Guinea by the method followed earlier. On December 9, 1980, Guinea entered the proceedings for the first time, filing a motion to dismiss for lack of subject matter jurisdiction. Record (‘R.”) 21. Guinea also filed a memorandum of points and authorities in support of the motion to dismiss and in opposition to MINE’s motion to confirm. J.A. 125. In brief outline, the memorandum argued that neither the FAA, the com- mercial rules of the AAA, nor the FSIA provided the court with subject matter jurisdiction to entertain either MINE’s earlier petition to compel or the motion to con- firm. J.A. 134-40. The memorandum also contended that the court's earlier order to compel rested on an incorrect premise, hecause an ICSID arbitration had indeed been available. l4a MINE then filed, on January 5, 1980, a memorandum in reply to Guinea’s motion to dismiss and in further support of its own motion to confirm. J.A. 237. Attached to the document were supporting exhibits. The court heard oral argument from the parties on January 8, 1981, focusing attention on the issue of sub- ject matter jurisdiction under the FSIA.* On January 12, 1981, the court entered an order denying Guinea's motion to dismiss, granting MINE’s motion to confirm, and entering judgment on the award. R. 25.' The court also issued a four-page memorandum opinion primarily discussing its conclusion that it had subject matter juris- tion under the FSIA. Jn re Arbitration between Mari- time International Nominees Establishment v. Republic of Guinea, 505 F. Supp. 141 (D.D.C. 1981) (mem.) “MINE wv. Guinea’. On January 16, 1981, Guinea filed a motion for a new * trial or, in the alternative, for relief from judgment, on the ground that newly discovered evidence showed that MINF’s service of process had been invalid under the FSIA. J.A. 305. Also on that day, Guinea moved for a stay of the judgment until the District Court had ruled on the motion for a new trial, or, in the alternative, for shortening the time for MINE to respond to Guinea’s motion for a new trial. R. 28. That same day, MINE submitted an affidavit in opposition to both motions. J.A. 322." On January 21, 1981, the District Court entered * At the outset of the hearing, the court stated, “The issue that concerns the Court the most and the one that seems to me that you ought to focus your arguments on is, basically, the jurisdictional question.” Transcript of January 8, 1981, Hear- ing, at 3. ‘On March 11, 1981, upon motion of both parties, the District Court corrected this with respect to the amount of the award. J.A. 297. "MINE sought to make a fuller reply to the contentions advanced in Guinea’s motions by filing on January 23, 1981, lSa an order denying both of Guinea’s motions but allowing Guinea five days to seek from this court a stay pending appeal. J.A. 325. Also on January 21, Guinea filed a notice of appeal from the January 12 order confirming the arbitration award.® The next day, Guinea moved this court for a stay pending appeal; on January 23 that motion was granted and execution of judgment was stayed until a decision on the merits or further order of the court.’ II Guinea’s challenges to the confirmation order fall into three categories.* First, it claims that the District Court lacked subject matter jurisdiction because: (1) the court a motion for leave to complete the record. J.A. 326. The District Court granted the motion on February 10, 1981. R. 34. * The same day, Guinea filed with the District Court a mo- tion for a stay pending appeal. R. 30. 7 On September 18, 1981, this court entered an order grant- ing the United States leave to intervene pursuant to 28 U.S.C. § 2403 (1976), and allowing the United States to file a sug- gestion of interest. In addition to the regular cycle of briefing in this case, therefore, we have received a Brief for the United States as Intervenor and Suggestion of Interest, and briefs from MINE and Guinea in reply to the United States’s brief. 8 Although Guinea directs some of its arguments both to the order to compel and the order to confirm, see, e.g., Appel- lant’s Br. 25, it is clear that the only order on review before us is the order to confirm. An order to compel arbitration issued in an independent proceeding under the FAA is a final and appealable judgment. See Chatham Shipping Co. v. Fer- tex Steamship Corp., 352 F.2d 291 (2d Cir. 1965) ; 9 Moore’s Federal Practice {| 110.20[4.-1] (2d ed. 1982). Cf. Goodall- Sanford, Inc. v. United Textile Workers, 353 U.S. 550 (1957) (order directing arbitration under section 301(a) of the Taft-Hartley Act, 29 U.S.C. § 185(a) (1976), is appealable as a final judgment). Guinea cannot now, by way of appealing the confirmation order, obtain review of the earlier order to compel. loa erred in ruling that Guinea was not immune under the FSIA; (2) even assuming non-immunity, the SIA does not purport to confer subject matter jurisdiction over suits between foreign plaintiffs and foreign states; (3) the FSIA would be unconstitutional if read to confer such jurisdiction; and (4) the signing by both parties of the first ICSID consent form committed them to an ICSID arbitration and therefore deprived the District Court of jurisdiction. Second, Guinea claims that MINE’s service of process upon it was inadequate under the FSIA, and therefore that the District Court lacked personal jurisdiction under the FSIA. Third, Guinea attacks the arbitration award itself, contending (1) that the arbitrators exceeded their authority by disregarding the liquidated damages provi- sion of the contract, (2) that the arbitrators lacked power to delegate the task of damage calculation to an account- ing firm, (3) that the award was based on evidence out- side the record, and (4) that MINE obtained an AAA arbiiration by misrepresenting before the District Court the availability of an ICSID arbitration. Because we hold that the court Jacked subject matter jurisdiction to confirm the arbitration award, we need not address the service of process issue or the validity vel non of the arbitration award itself. And, because this jurisdictional holding rests on our conclusion that the condition for subject matter jurisdiction under the FSIA--non-immunity—was not met, we do not reach the second, third, or fourth of Guinea’s subject matter ju- risdiction arguments.® “MINE has not argued that the District Court’s finding that it had jurisdiction under the FSIA in the earlier section A proceeding to compel bars Guinea from questioning the District Court's exercise of jurisdiction in the section 9 pro- ceeding to confirm now under review. Because the section 9 proceeding adjudicated a different claim from that in the earlier proceeding, any preclusive effect would derive from the ductrine of collateral estoppel. See Commissione: v. Sun- 17a III With the passage of the FSIA, Congress enacted a comprehensive scheme setting forth “when and how par- ties can maintain a lawsuit against a foreign state or its entities in the courts of the United States,” and ‘when a foreign state is entitled to sovereign immunity.” H.R. Rep. No. 94-1487, 94th Cong., 2d Sess. 6 (1976). The application of this scheme requires some unraveling of the Act’s interlocking provisions governing the separate issues of subject matter jurisdiction, sovereign immunity, and personal jurisdiction. Subject matter jurisdiction is addressed by section 1530(a), 28 U.S.C. $ 13830(a) (1976), which creates in federal district courts original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement. The Act thereby connects the issue of subject matter jurisdiction to the issue of sovereign immunity: the ab- sence of immunity is a condition to the presence of sub- ject matter jurisdiction. Personal jurisdiction is governed by section 1330(b). id. § 1830(b): nen, 333 U.S. 591, 597-98 (1948) ; Nasem v. Brown, 595 F.2d 801, 805 n.8 (D.C. Cir. 1979). That doctrine requires that even issues less basic than jurisdiction be fully litigated be- fore they are preclusively established. See McCord v. Bailey, 636 F.2d 606, 609 (D.C. Cir. 1980), cert. denied, 451 U.S. 983 (1981); 1B Moore’s Federal Practice ‘| 0.443[3] (2d ed. 1982). Guinea did not appear in the first proceeding, so the issue was not fully litigated and may be raised at this time. 18a Personal jurisdiction over a forcign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsection (a) where service has been made under section 1608 of this title. In other words, a lack of subject matter jurisdiction also deprives the court of personal jurisdiction under the Act. Whether subject matter and personal jurisdiction ex- isted under the Act, then, turns in the first instance on whether Guinea was entitled to immunity under sections 1605 and 1607. These sections set forth the exceptions to the general principle, stated in section 1604, id. $ 1604, that foreign states are immune from the jurisdiction of federal and state courts, subject to existing international agreements to which the United States was a party at the time of the Act’s passage. Of these exceptions, only subsections (a)(1) and (a)(2) of section 1605 have possible relevance to this case; the District Court found that each supported a finding of non-immunity and, hence, of subject matter jurisdiction. A. Section 1605(a)(1) states that a foreign state shall not be immune in any case in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreion state may purport to effect except in accordance with the terms of the waiver. The SOTRAMAR codicil, we recall, stated that the parties would arbitrate before arbitrators selected by the “President of the International Court of Settlement of International Disputes |sic] in Washington (CIRDI).” S.A. 229, Applying section 1605(a) (1) to the parties’ agreement, the District Court began ly noting that ICSID’s Rules of Procedure call for ICSID tribunals to meet at the 19a seat of ICSID-—Washington, D.C.—unless another site is agreed upon by the parties and approved by ICSID. MINE vv. Guinea, 505 F. Supp. at i438. Therefore, the court reasoned, the parties must have contemplated that arbitration would take place in the United States. Be- enuse the legislative history indicates that implicit waiver may be found “in cases where a foreign state has agreed to arbitration in another country,” H.R. Rep. No. 94- 1487, supra, at 18, the court concluded that the SOTRAMAR arbitration clause constituted such a waiver. MINE vv. Guinea, 505 F. Supp. at 143. Guinea challenges this conclusion on the ground that an agreement to submit future disputes to an ICSID arbitration cannot be deemed an implied waiver of im- munity within the meaning of the FSIA." Appellant’s '° MINE also argues that the SOTRAMAR contract consti- tuted an explicit waiver of immunity within the meaning of section 1605(a) (1). Appellee’s Br. 19-20. MINE can point to no particular provision in the contract arguably concerning immunity: rather, MINE rests its argument on the fact that the SOTRAMAR venture was a “mixed-economy” company under the laws of Guinea. Participation in such a company amounted to an explicit waiver, in MINE’s view, because Guinean law provides that the state in a mixed economy com- pany is a shareholder and that the state’s rights and obliga- tions are derived from its standing as a shareholder rather than as a state. /d. Although a state can explicitly waive its immunity in a con- tract with a private party, H.R. Rep. No. 94-1487, supra, at 18, MIN®’s argument falls far short of demonstrating such a waiver. This becomes clear upon reading the House Re- port’s comments about withdrawals of waivers: {[I]f the foreign state agrees to a waiver of sovereign immunity in a contract, that waiver may subsequently be withdrawn only in a manner consistent with the expres- sion of the waiver in the contract. Some court decisions have allowed subsequent and unilateral rescissions of waivers by foreign states. But the better view, and the one followed in this section, is that a foreign state which has induced a private person into a contract by promising 20a Br. 26-28. MINE, however, claims that we need not read the Districl Court as implying the proposition that Guinea attacks. According to MINE, the SOTRAMAR arbitration clause did not contemplate a formal ICSID arbitration, but merely provided for a non-ICSID arbi- tration to be undertaken by arbitrators chosen by ICSID’s President. Appellee’s Br. 23 n.16, 56. The only question we must decide, MINI asserts, is whether the clause, when read this way, constitutes an implicit: waiver of immunity, We reject MINI’s suggested rationale. The factual premise on which it. rests-—-that the parties contemplated a non-ICSID arbitration—-was never argued by MINI before the District Court. Instead, in the confirmation proceedings MINK did not depart from the position it had presented in the original petition to compel arbitra- tion: that the parties had intended to submit future dis- putes to an ICSID arbitration, and that Guinea had pre- vented the effectuation of that intent." not to invoke its immunity cannot, when a dispute arises, go back on its promise and seek to revoke the waiver unilaterally. Id. These statements suggest that Congress contemplated waivers of a much more specific and explicit nature than the one MINE constructs from the operation of this Guinean law. '' Included in the record are several exhibits filed by MINE in connection with its motion to confirm. One of them, a copy of the “Demand for Arbitration” that MINE presented to the AAA, contains the following statement: Disputes between M.I.N.E. and Guinea arose out of and relating to the Agreement. In 1975, M.I.N.E. sought to obtain from Guinea a proper and correct joint submission of their dispute to ICSID. Guinea, however, failed and refused to sign such a submission or to proceed with ar- hitration. The refusal by Guinea to execute a revised joint submission or otherwise cooperate with M.I.N.E.’s efforts made unavailable the method originally agreed upon by the parties for choosing arbitrators. J.A. 103. A reference in another exhibit echoes the allega- tion that the failure to sign a submission to ICSID frustrated 2la The Distriet Court’s waiver holding, moreover, was clearly based on the factual conclusion that the parties had contemplated an ICSID arbitration. As stated above, a central ingredient of that holding was the ICSID proce- dural rule stating that ICSID arbitrations shall normally tuke place at ICSID’s seat in Washington, D.C. From this rule the court inferred that the parties must have anticipated that arbitration would occur in the United States. MINE v. Guinea, 505 F. Supp. at 143. Obviously, the court would not have attached significance to the ICSID rules had it not understood the SOTRAMAR clause as contemplating an arbitration that would be subject to those rules—an ICSID arbitration. We will not consider on appeal an argument that rests on a factual premise never developed before the District Court. See Carr v. District of Columbia, 543 F.2d 917, 921-22 (D.C. Cir. 1976). Instead, we must evaluate the proposition represented by the District Court’s holding— that the parties’ agreement to submit future disputes to an ICSID arbitration can be deemed an implicit waiver of immunity within the meaning of section 1605(a) (1).'? the method “originally agreed upon by the parties.” J.A. 93 (affidavit of MINE’s then-attorney). The clear import of these statements is that the parties contemplated an ICSID arbitration. MINE tries to reconcile these earlier representations with the theory that the parties contemplated a non-ICSID arbi- tration by offering the following scenario: MINE “approached ICSID to determine how and when the President might select the three arbitrators”; ICSID personnel informed MINE that “such a procedure is unknown to the organization”; MINE “reluctantly concluded that the informal procedure . . . could not be accomplished”; and only then did the parties sign the ICSID consent form. Appellee’s Br. 55-56. These allegations were never presented to the District Court, and we will not now consider the argument that MINE bases on them. ' Of course, to say that the parties agreed to a future ICSID arbitration says nothing about whether the parties 22a Explaining this section, the House Report stated: With respect to implicit waivers, the courts have found such waivers in cases where a foreign state has agreed to arbitration in another country or where a foreign state has agreed that the law of a particular country should govern a contract. H.R. Rep. No. 94-1487, supra, at 18. Because the SOTRAMAR contract expressly stated that the law of Guinea would apply to interpretation of the contract, J.A. 222, only the first instance mentioned in the quoted language is relevant to the question at hand.'"* Upon considering this phrase in light of the nature of an ICSID arbitration. we conclude that the SOTRAMAR agreement was not an implicit waiver of immunity within the meaning of the FSIA. As noted earlier, ICSID was established by the Con- vention on the Settlement of Investment Disputes Be- tween States and Nationals of Other States, an interna- tional arreement to which more than seventy-five foreign states are parties. Under the Convention, which has heen implemented by legislation in the United States, 22 U.S.C. §§ 1650-1650a (1976), ICSID has “full interna- tional legal personality,” Convention art. 18. ICSID’s ever took any action that was sufficient to effect that intent. It is the former issue that is relevant to the waiver question, and our discussion of waiver should not be read as implying anything about the latter. '. Of course, an agreement to apply Guinean law is literally an agreement to apply the law of a “particular” country. (Courts have generally assumed, however, that Congress did not endorse the literal wording of the House Report, for when paraphrasing the report they say waiver is to be found when a foreign state ayrees to apply the law of “another” country. Scc Ohntrup v. Firearms Center Inc., 516 F. Supp. 1281, 1284 (F.1D). Pa. 1981) (mem.); Castro v. Saudi Arabia, 510 F. Supp. 399, 312 (W.D. Tex. 1980). Because MINE has not questioned this reading of congressional intent, we see no reason to do so at this time. 23a purpose is to make available to “Contracting States and nationals of other Contracting States” facilities for the conciliation and arbitration of investment disputes. /d. art. 1(2). ICSID arbitrations are undertaken by tribu- nals constituted under the Convention and subject to the rules of ICSID. /d. art. 44. In settling disputes, those tribunals apply “such rules of law as may be agreed by the parties”; when no such agreement exists, the law of the “Contracting State party” and rules of interna- tional law apply. 7d. art. 42(1). A primary motivation for the Convention was the recognition that international methods of dispute settle- ment should be available in addition to national legal processes. Jd. preamble. As stated in an ICSID general information document, ICSID “provides means for a Contracting State to have a dispute with an investor internationally adjudicated without having to bring ac- tion in a foreign court or to undertake intergovernmental litigation with the investor’s State.” International Centre for Settlement of Investment Disputes, Doc. ICSID/12, reprinted in Appellant’s Addenda. The provisions governing ICSID arbitrations give effect to this aim. Article 26 of the Convention states: “Consent of the parties to arbitration under this Con- vention shall, unless otherwise stated, be deemed consent to such arbitration to the exclusion of any other remedy.” In addition, the ICSID processes are self-executing once a proper request is submitted to ICSID: an arbitral tribu- nal is constituted upon receipt of the request, the tribunal itself decides the issue of jurisdiction, and awards ren- dered by the tribunal are certified by ICSID as binding and enforceable. /d. arts. 36, 41, 49, 53. Relying on these facts, the State Department has urged this court to find that agreements to arbitrate with ICSID do not contemplate the involvement of domestic courts, at Icast not before a final ICSID decision is to be 24a enforced." Brief for the United States as Intervenor and Suggestion of Interest 54. We need not reach this precise question here, however. MINE has insisted, and is estopped from denying, that United States courts were powerless to compel an ICSID arbitration under this particular arbitration agreement. Appellee’s Br. 57 & n.49; Appellee’s Reply Br. to Br. for United States 23, 25; J.A. 253 (memorandum before District Court) (“as both ICSID and its President enjoy sovereign im- munity, this court could not compel the President of the World Bank to appoint arbitrators in this matter’). MINE contended that an ICSID arbitration was unavail- able in order to induce the District Court to go beyond the express terms of the arbitration clause and compel arbitration before the American Arbitration Association. Given that this point is now established for purposes of this litigation, we have no trouble holding that this par- ticular ICSID agreement was not an agreement “to arbi- tration in another country” that waives sovereign im- munity under the FSIA."* A key reason why pre-FSIA '* At the enforcement stage, the ICSID treaty, see Conven- tion art. 54, and a supporting United States statute, 22 U.S.C. § 1650a (1976), provide that ICSID arbitrations are to be enforced as judgments of sister states. We need not decide whether Guinea’s signing of the ICSID treaty would thus waive its immunity from proceedings enforcing ICSID awards, for this is a proceeding to confirm an AAA arbitra- tion. We also do not express opinions (1) whether any waiver of immunity for ICSID enforcement proceedings would also waive immunity for suits to compel ICSID arbitrations, or (2) whether Congress’s declaration that the Federal Arbitra- tion Act ‘shall not apply to enforcement of awards rendered” by ICSID, 7d., prohibits proceedings to compel ICSID arbitra- tions. Resolution of neither point is implicit in our holding today, for we decide that this ICSID agrcement did not con- template the involvement of domestic courts before the en- forcement stage only because MINE cannot contend otherwis” in this litigation. 'S Because the ICSID arbitration was to take place in the United States unless otherwise specified, see pp. 12-13 supra, 25a cases found that an agreement to arbitrate in the United States waived immunity from suit was that such agree- ments could only be effective if deemed to contemplate a role for United States courts in compelling arbitration that stalled along the way. See, e.g., Victory Transport Inc. v. Comisaria General de Abastecimientos y Trans- portes, 336 F.2d 354, 363-64 (2d Cir. 1964) (dis- cussing consent to in personam jurisdiction), cert. denied, 381 U.S. 934 (1965): see also Note, Mari- time International Nominees Establishment v. Republic of Guinea: Effect on U.S. Jurisdiction of an Agreement by a Foreign Sovereign to Arbitrate Before the Interna- tional Centre for the Settlement of Investment Disputes, 16 Geo. Wash. J. Int’] L. & Econ. 451, 463-66 (1982). As this particular ICSID agreement concededly did not foresee such a role for United States courts, we hold that it did not waive Guinea’s sovereign immunity even though the agreed-to arbitration would probably take place on United States soil. B. The second immunity provision relevant to this case is section 1605(a) (2). This section sets forth, in the words of the House Report, “probably the most important in- stance in which foreign states are denied immunity, that in which the foreign state engages in a commercial ac- tivity.” H.R. Rep. No. 94-1487, supra, at 18. The section states that a foreign state shall not be immune in any case we need not speculate about whether the courts of some other country might find themselves empowered to compel an ICSID arbitration. Thus, although other courts have found it neces- sary to hold that only an agreement to arbitrate in this country will waive a sovereign’s immunity in United States courts, see Ohntrup v. Firearms Center Inc., 516 F. Supp. 1281, 1285 (E.D. Pa. 1981) (mem.); Verlinden B.V. v. Central Bank of Nigeria, 488 F. Supp. 1284, 1301-02 (S.D.N.Y. 1980), aff'd on other grounds, 647 F.2d 320 (2d Cir. 1981), cert. granted, 102 S. Ct. 993 (1982), we do not settle that question here. 26a in which the action is based upon [1] a commercial activity carried on in the United States by the foreign state; or |2] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or [3] upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. The District Court seems to have held that both the first and third clauses of the section were satisfied. MINE v. Guinea, 505 F. Supp. at 143. After stating this con- clusion, the court went on to list the activities of Guinea that supported it: Numerous meetings were held, including meetings in Connecticut and in the District of Columbia, relating to the contract. Guinea directed an American ship- ping group to perform substantial activities to aid SOTRAMAR. The Guinean ambassador to the United States engaged in several business-oriented contacts with officials of petitioner [MINE] related to the project. MINE v. Guinea, 505 F. Supp. at 143. The sum of these activities, the court continued, was “more than sufficient to constitute commercial activity within the meaning of section 1605/a)(2).” Id. To examine this holding, we turn separately to the first and third clauses of section 1605/a)(2)."" 1. The first clause, like the remaining two, contains the phrase “commercial activity,” which the Act defines as follows: ‘The second clause has no relevance to this case. The “act” on which this action is “based’”—the alleged breach of the SOTRAMAR contract—is not claimed to have been “per- formed in the United States.” 27a A “commercial activity” means either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose. 28 U.S.C. $ 1603(d) (1976). The first clause receives further definition: A “commercial activity carried oi in the United States by a foreign state’ means commercial activity carried on by such state and having substantial con- tact with the United States. Id. § 1603(e). Part of the first clause is easily applied in this case. The “regular course of commercial conduct” or “particular commercial transaction” on which MINE’s action “is based” is the SOTRAMAR contractual undertaking; that activity clearly is of the commercial nature contem- plated by the Act’s exceptions. See H.R. Rep. No. 94- 1487, supra, at 16. The more difficult question is whether the SOTRAMAR venture was “carried on in the United States by a foreign state,” that is, “carried on by such state and having substantial contact with the United States.” Upon examining the findings of the District Court,'’ we must answer this question in the negative. 'T MINE adds to these findings the argument that Guinea’s alleged breach resulted in “contact with the United States” for purposes of the first clause: “Each ton of bauxite which should have been carried by SOTRAMAR to destinations in the United States was instead carried to those same destina- tions by Afro-Bulk.” Appellee’s Br. 26. The District Court made no such finding, and MINE supports its contention in part with evidence outside the record. Jd.; see Fed. R. App. P. 10. As will be clear from our discussion of the contacts listed by the District Court, the record properly before us can- not sustain the assertion, implicit in MINE’s argument, that under the SOTRAMAR contract arrangements had been made to transport bauxite to destinations in the United States. 28a We turn first to the District Court’s conclusion that “Guinea directed an American shipping group to perform substantial activities to aid SOTRAMAR.” MINE ». Guinea, 505 F. Supp. at 143. An analysis of this finding must immediately confront the Act’s requirement that the commercial activity be “carried on by” the foreign state. We have no doubt that in appropriate circumstances the activities of another may be attributed to the foreign state for purposes of the section 1605(a) (2) exception. Espe- cially given the realities of modern commercial under- takings, a contrary conclusion would undermine ‘Con- gress’s concern with providing ‘access to the courts’ to those aggrieved by the commercial acts of a foreign sovereign,” TJ'exas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 312 (2d Cir. 1981) (quoting H.R. Rep. No. 94-1487, supra, at 6), cert. denied, 102 S. Ct. 1012 (1982). On the other hand, this same principle and the words of the statute impose some limits on when a foreign state can be deemed to have “carried on” activities actually performed by another. The legislative history gives some guidance in discover- ing those limits. Although Congress did not elaborate on the “carried on by” requirement, it stated that some ac- tivities falling within the first clause of section 1605(a) (2) might also satisfy the second: an “act performed in the United States in connection with a commercial ac- tivity of the foreign state elsewhere.” One example of the latter, Congress went on, might be “a representation in the United States by an agent of a foreign state that leads to an action for restitution based on unjust enrich- ment.” H.R. Rep. No. 94-1487, supra, at 19. This refer- ence to “an agent of a foreign state” suggests that a foreign state, in Congress’s view, can surrender immunity by virtue of activities committed by an agent, and that, consequently, the “carried on by” requirement can be interpreted in light of broad agency principles. While we do not suggest that those principles should be applied 29a rigidly and in all their detail to the immunity determina- tion, it seems evident that to throw the net of responsi- bility much wider would be to ignore the words Congress employed in both the statute and the legislative history. We also think it appropriate to note the well-established principle that, in assessing personal jurisdiction under either a constitutional due process standard or a statutory standard, courts may look to the contacts between the forum and agents of the defendant. Texas Trading, 647 F.2d at 314-15; C. Wright & A. Miller, Federal Practice and Procedure § 1069, at 251-52 (1969). This principle is of relevance io the immunity exception because Congress viewed that exception not only as governing the immunity determination, but also as representing a central com- ponent in the Act’s structure for personal jurisdiction: For personal jurisdiction to exist under section 1330 (b), the claim must first of all be one over which the district courts have original jurisdiction under sec- tion 1830(a), meaning a claim for which the foreign state is not entitled to immunity. . . . These im- munity provisions, therefore, prescribe the necessary contacts which must exist before our courts can exercise personal jurisdiction. H.R. Rep. No. 94-1487, supra, at 13. Although we do not understand this statement to mean that the statutory standard for determining non-immunity is coextensive with the due process standard governing personal juris- diction,’* see World-Wide Volkswagen Corp. v. Woodson, 18 Of course, a finding of FSIA personal jurisdiction, which would rest in part on a finding of non-immunity, must com- port with the demands of due process, and Congress intended that the Act satisfy those demands, H.R. Rep. No. 94-1487, supra, at 13. But the immunity determination involves con- siderations distinct from the issue of personal jurisdiction, and the FSIA’s interlocking provisions are most profitably analyzed when these distinctions are kept in mind. See gen- erally Texas Trading & Milling Corp. v. Federal Republic of 30a ; 444 U.S. 286 (1980); International Shoe Co. v. Washing- ton, 326 U.S. 310 (1945), we think it relevant that view- ing the “carried on by” requirement in light of agency principles would be compatible with well-established due process analysis. Our views find support in several decisions of other courts. In Yessenin-Volpin v. Novosti Press Agency, 443 F. Supp. 849 (S.D.N.Y. 1978), plaintiff filed a libel suit against three defendants, two of which were Soviet Union information agencies that claimed immunity under the FSIA. Both were alleged to have written defamatory articles and to have caused the publication of those arti- cles in periodicals that were circulated to the public in the United States. Applying the section 1605(a)(2) ex- ception, the court rejected the relevance of the first clause, because “the allegedly offending articles were published outside the country and sent into the United States by means wholly outside the control of either [defendant].” Id. at 855. The court, in other words, properly rejected the proposition that a foreign state “carries on” activities performed by another entity simply because the state and that entity, although unconnected with each othei, can both be seen as participating in the same larger com- mercial endeavor. In Bankers Trust Co. v., Worldwide Transportation Services, Inc., 587 F. Supp. 1101 (f.D. Ark. 1982), a restitution action involving as one defendant an official agricultural organ of the Federal Republic of Mexico, the court held that the “commercial activity” of that de- fendant included activities performed by a bank and a company acting as the defendant’s agents in the United States. Before examining against this conceptual backdrop the Distriet Court’s finding that “Guinea directed an Nigeria. 617 F.2d 300 (2d Cir. 1981). cert. denied. 192 8. Ct. 1012 (1982): Kane, Suing Foreign Sovereigns: A Procedural Compass, 34 Stan. L. Rev. 385, 402-04 (1982). 3la American shipping group to perform substantial activi- tics to aid SOTRAMAR,” we should examine the evidence in the record relevant to that finding. The record dis- closes that fairly substantial SOTRAMAR-related activi- {ies were undertaken in the United States by a company usually referred to as “Global.” J.A. 265, 270-72. There is evidence that Global maintained an office in Stamford, Connecticut. J.A. 270-71. Glohal’s activities can be grouped under two categories. First, there is evidence that Global played a major role in preparing a report, termed a “feasibility” or “techni- cal” study, in connection with the SOTRAMAR venture. J.A. 273, 288. In connection with this report, the record suggests, Global held meetings, expended funds, and pre- pared route and rate computations in the United States. J.A. 270-72. Second, the record contains evidence that Global’s connection with SOTRAMAR went beyond the preparation of the report, and extended also to involve- ment in the shipping of Guinean bauxite. J.A. 275-77. As to the connection between MINE and Global, the record contains evidence of communication and coopera- tion between MINE and Global on the report. J.A. 270- 72. There are also statements in the record that suggest communication between MINE and Global with respect to Global’s other activities. J.A. 276-78. No evidence at all concerns the nature of Global’s corporate structure, and the only evidence of the organizational relationship be- tween MINI and Global are the several references to “MINE. Global.” J.A. 231, 233. The record casts an even dimmer light on the connec- tion between Guinea and Global. The second codicil to the SOTRAMAR contract contains two references to “MINE/ Global.” The first notes that delegates of Guinea and of MINE Global met to agree upon the codicil. J.A. 231. The second states: In order to make it compatible with that option of lease-sale of a part of the ships supplied by MINE/ Fad 32a GLOBAL, the Addendum [the first codicil] of Octo- ber 11, 1971 is added to as follows: “The other ships shall fly a flag agreed to by both parties, which flag in fact shall be the neutrai one of Panama for the duration of the lease-sale.” J.A. 233. Finally, there is some evidence connecting Guinea with the report. The record includes a letter, dated September 11, 1972 and written by MINFE’s then-attorney to a Guinean representative, concerning the former’s views as to “the problems now facing SOTRAMAR.” J.A. 288. The letter contains the following statement: Many different methods of obtaining ships for SOTRAMAR have been detailed. For example, at the request. of the Guinean partners, MINI. prepared an extensive technical study which was presented at the May 1972 meeting in Conakry [Guinea]. J.A. 288. Another record item suggests that MINE and Global, while preparing the report, contemplated present- ing it to Guinea at a future date. J.A. 272. Also deserv- ing of mention is the provision in the SOTRAMAR con- tract stating that the parties would make a “market study” before SOTRAMAR was formed. J.A. 225. Although the District Court’s conclusion that Guinea “directed” Global to perform activities may be interpreted several ways, it can satisfy the first clause only if read to mean that Guinea authorized Global to perform actions on Guinea’s or SOTRAMAR’s behalf in the United States. See Restatement (Second) of Agency §§ 1, 26 (1958). The record cannot sustain this reading, however, even when analyzed with the understanding that the necessary authorization can be conferred by a variety of means, see id. § 26. We note at the outset, with respect both to the prepara- tion of the report and to other activities performed by 33a Global, that there is no evidence of any written or other- wise express authorization from Guinea to Global. Our inquiry thus becomes whether anything in the record can reasonably be read to imply authorization of Global’s services. First, concerning activities related to the report. we find that the record contains no evidence supporting this implication. The statement in the letter from MINIt’s attorney suggests only that Guinea requested MINE to prepare a report. Although a request to one party may, by its nature or context, necessarily imply the need to enlist the services of another, see id. § 79, MINE has not shown that Guinea’s request was of this sort. Similarly, MINE has not shown that the provision in the SOTRAMAR con- tract requiring the parties to make a “market study,” J.A. 225, constituted an authorization by Guinea for MINE to use Global’s services on Guinea’s behalf. Moreover, the mention in the record that MINE and Global eventually presented the report to Guinea does not evidence sufficient knowledge of or acquiescence in Global’s involvement. The record contains nothing to indicate that Guinea monitored or received information about the re- port during its preparation. One portion of the record, in fact, suggests the opposite. At the arbitration hearings, MINE’s former attorney testified as follows: So this work [the report] was done in Stamford and with the aid of their [Global’s] technicians, their gen- eral counsel, me, their outside counsel, Mr. Anada ™ attended substantially all of those meetings from Geneva, other people would come from Geneva, and we worked out how the financing would work, what rates were necessary and so on. Then you will also find it was necessary to show the not too sophisticated Guinean people when they would see this report why it was being done this way. J.A. 272. '" According to MINE’s memorandum in reply to Guinea’s motion to dismiss, Mr. Anada was a MINE official. J.A. 239 n.5. 34a Second, with respect to any non-report-related activi- ties, the record is likewise devoid of evidence from which we can infer implicit authorization. The only recerd item of any relevance is the second codicil, with its mention that delegates of “MINE Global” met with Guinea and that the first codicil had been amended “to make it com- patible with that option of lease-sale of a part of the ships supplied by MINE Global.” These references, standing alone, are too sparse in detail to allow a conclusion that Global was acting under authority conferred by Guinea. We must conclude, then, that Guinea did not “carry on” the activities performed by Global. Global, of course, was not the only entity that acted in the United States; several items in the above-described record suggest that MINIX also undertook actions there. We hesitate to evaluate these facts at length, for the District Court made no finding that Guinea “directed” these activities. The record might support a conclusion, however, that Guinea requested MINE to prepare a study. supra p. 26, and that MINE attended meetings in the United States with Global in connection with that study. See J.A. 265, 270-71. We cannot say with certainty that the report requested was actually the same report MINE worked on in the United States. But even if it was, the record does not show that the understanding between MINE and Guinea reached the stage at which MINI’s actions in the United States could be deemed to be carried on by Guinea for purposes of the FSIA. Explaining why this is so requires us to sharpen slightly the principles that govern this inquiry. We have said that Global’s activities in the United States cannot waive Guinea’s immunity if Guirea cid not authorize them. But this is not to say that every action Guinea “authorizes” which eventually touches American soil will waive Guinea’s immunity. We find aid in discern- ing the far reaches of the “carried on” requirement by 35a considering onee more principles of personal jurisdiction.?° The Supreme Court helped clarify some of those princi- ples in Hanson v. Denckla, 357 U.S. 235, 253 (1958) : The unilateral activity of those who claim some rela- Lionship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. .... [I]t is essential in each cese that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. Accord Texas Trading, 647 F.2d at 314-15 (applying test to foreign sovereign). In this case the record will not support the conclusion that, through MINE’s meetings with Global in the United States concerning the preparation of a report, Guinea pur- posefully availed itself of the benefits of conducting busi- ness in the United States. MINE has offered no evidence that Guinea requested that the study be done in the United States. Nor has it shown that preparation of a preliminary market study is an activity necessarily, fore- seeably, or likely to be undertaken in the United States. And we do not find MINE’s activities in the United States to be-so extensive that we will impute to Guinea, without more, a purposefulness that is not otherwise found in the record. We are concerned, of course, by the fact that Guinea in some sense benefited from activities conducted in the United States by MINE. But in an interdependent world economic system many foreign states may benefit from the acts of others in the United States but still not be considered themselves to be conducting business in the United States within the contemplation of Congress. We “© We are bound in a more basic sense, of course, by con- stitutional precepts of personal jurisdiction, but we go no further than the statute itself to decide this particular ques- tion. And we note once more that while personal jurisdiction principles shed light on the immunity determination, the two inquiries are not entirely the same. Sce supra note 18. 36a thus find that MINE has not proved Guinea to be suffi- ciently a part of MINE’s activities in the United States ihat Guinea surrendered its immunity by virtue of those activities.*! Continuing our search for activity that might satisfy the first clause of section 1605(a) (2), we turn to the District. Court’s finding that “[n]umerous meetings were held, including meetings in Connecticut and in the District of Columbia, relating to the contract.” MINE v. Guinea, 505 F. Supp. at 143. There is evidence that meetings took place, but, with one exception, no reference to such a meet- ing indicates that Guinea was present. Because these references do not contain any information that adds to the evidence of authorization that we have already con- sidered, these meetings cannot be seen as activity “carried on by” Guinea. The one exception is a meeting between MINE and a Guinean representative or representatives, which took place in a Washington, D.C., hotel in September 1973, and which apparently concerned the operation of SOTRAMAR. J.A. 278, 288. Although this meeting is mentioned in a fairly lengthy letter from MINE’s then-attorney to a Guinean representative, the letter primarily summarizes the history of SOTRAMAR-related discussions, and there- fore gives no clear sense of the scope of the Washington meeting.*? Whether the requirement of “substantial con- *! Because we find the link between Guinea on one hand and MINE’s report activities in the United States on the other to be too weak to attribute MINE’s actions here to Guinea, we necessarily find that the path from Guinea to MINE and then from MINE to Global stretches too far to link Guinea with Global indirectly. We distinguish this point from our discussion earlier, svpra pp. 26-28, showing the lack of evidence directly linking Global with Guinea. “: The letter begins with the following statement: Following the meeting of Sunday, September 9, 1973, in Washington, MINE, Inc. believes it useful to lay before 37a tact” is satisfied requires evaluation not only of this meet- ing, but also of the District Court’s third finding. Although the third finding states that “[t]he Guinean ambassador to the United States engaged in several busi- ncss-oriented contacts with officials of [MINE] related to the project,” MINE v. Guinea, 505 F. Supp. at 143, the record contains a suggestion of only one such contact. A portion of a MINE official’s arbitration testimony relates the following: But when we discovered about this breach or about the negotiations with Afrobulk, we were very dis- appointed and we asked for a meeting with the Guineans. We came to see the ambassador in Wash- ington also, asking him—we were sent actually to see him by the government. J.A. 267. This vague statement is scarcely evidence that a meeting occurred at all, and we can only speculate as to that meeting’s scope or nature. An evaluation of these two contacts under the first clause must begin with the recognition that, in Judge Weinfeld’s words, Congress “underscore[d] the fact that the ‘commercial activity carried on in the United States’ must be substantial to support jurisdiction.” Verlinden B.V. v. Central Bank of Nigeria, 488 F. Supp. 1284, 1296 (S.D.N.Y. 1980), aff'd on other grounds, 647 F.2d 320 (2d Cir. 1981), cert. granted, 102 S. Ct. 997 (1982). In choosing those words, Congress made clear that the im- munity determination under the first clause diverges from you for your consideration the following views of the problems now facing SOTRAMAR. J.A. 288. No further reference is made to the Washington meeting until near the letter’s conclusion: In view of the facts set forth above and the references of Your Excellency on September 9, 1973 to the need to change the entire basic SOTRAMAR Convention... . J.A. 291. 38a the “minimum contacts” due process inquiry, as well as from jurisdictional determinations under state long-arm statutes.7> We cannot conclude that these two isolated meetings amounted to more than “transitory” and “in- substantial” contact for purposes of the Act, see Verlinden, 488 F. Supp. at 1297, especially given their uncertain scope and importance. *3 The legislative history does not contradict the clear im- port of the words Congress chose. Commenting on section 1330(b), which concerns personal jurisdiction under the Act, the House Report stated that the immunity provisions “‘pre- scribe the necessary contacts [the “minimum contacts” re- quirement of International Shoe Co. v. Washington, 326 U.S. 310 (1945)] which must exist before our courts can exercise personal jurisdiction.” H.R. Rep. No. 94-1487, supra, at 13. To read “substantial contact” as demanding more than “mini- mum contacts” is fully compatible with this statement. Congress also noted that section 1330(b) is “in effect, a Federal long-arm statute over foreign states... . It is pat- terned after the long-arm statute Congress enacted for the District of Columbia.” H.R. Rep. No. 94-1487, supra, at 13. The phrase “patterned after” is not a clear mandate to inter- pret the immunity exceptions in light of the District of Colum- bia long-arm statute, and “[t]here are significant differences in language and effect between the District’s statute and the Act, which Congress, the author of both, could not have over- looked,” Verlinden, 488 F. Supp. at 1295. Accord Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 311 (2d Cir. 1981), cert. denied, 102 S. Ct. 1012 (1982) ; Harris v. VAO Intourist, 481 F. Supp. 1056, 1963-65 (E.D.N.Y. 1979) (mem.). While these differences might not always undermine the usefulness of referring to the District of Columbia statute,.see VAO Intourist, 481 F. Supp. at 1064- 65, the “substantial contact” requirement has not even a remote relative in that statute. See D.C. Code § 13-423 (a) (1) (1981) (allows personal jurisdiction as to a claim arising from the person’s “transacting any business in the District of Columbia”). “' Although case law construing the phrase “substantial contact” is not extensive, our conclusion finds support by way of contrast with cases that find jurisdiction. See Gemini Shipping, Inc. v. Foreign Trade Org. for Chems. & Fuodstuffs, 39a Having coneluded that the District Court’s three find- ings do not satisfy the first clause of the section 1605(a) (2) exception, we look next ** to the third clause of that section: A foreign state shall not be immune .. . in any ease . . . in which the action is based upon... an act outside the territory of the United States in con- nection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. As noted earlier, the District Court may be read as con- cluding that its three findings met the standard of this clause. The court did not explain, however, how those activities gave rise to a “direct effect in the United States” within the meaning of the Act. MINI: argued before the District Court that the third clause applies because the contractual breach “had a di- rect. effect on Global.” J.A. 248. On appeal, MINE re- news and elaborates upon this argument with the following assertions: “In the later stages” of the SOTRAMAR venture, Global “became closely allied with MINE”; Global “was to place many of its ships on line to implement direct carriage of bauxite to the United States”; Global 647 F.2d 317, 319 (2d Cir. 1981) (defendant solicited bids in U.S. and paid under a contract through a letter of credit confirmed by a New York bank) ; Ohntrup v. Firearms Cen- ter Inc., 516 F. Supp. 1281, 1285-86 (E.D. Pa. 1981) (mem.) (sales agreement was between defendant and U.S. corpora- tion; defendant agreed that U.S. corporation would be its representative in U.S.; and agreement called for substantial sales in U.S. within first year of contract) ; Behring Int’l, Inc. v. Imperial Iranian Air Force, 475 F. Supp. 383, 390 (D.N.J. 1979) (contract was negotiated and executed in New York, where defendant maintained office and picked up contracted- for cargo). 25 Sce supra note 16. 40a “committed substantial financial resources of its own to the venture” and therefore “stood to realize profits as part of the MINE group of affiliated companies participating in the joint venture with Guinea”; and, finally, Guinea’s breach prevented Global from realizing those profits. Appellee’s Br. 27-28. We note at the outset the difficulty of discerning whether these factual allegations were found to be true by the District Court. Before the District Court, MINE did not offer such detailed facts to explain how the breach had a direct effect on Global, see J.A. 55, 248, and the “substan- tial activities” mentioned in the court’s findings might well include both the preparation of the report and other SOTRAMAR-related actions. But our difficulty with MINE’s argument gues further than the possible absence of necessary findings in support of it. Under our reading of the third clause, even the scenario MINE offers on appeal does not constitute a “direct effect in the United States.” This third clause, the House Report stated, would embrace commercial conduct abroad having di- rect effects within the United States which would subject such conduct to the exercise of jurisdiction by the United States consistent with principles set forth in section 18, Restatement of the Law, Second, For- eign Relations Law of the United States (1965). H.R. Rep. No. 94-1487, supra, at 19. Section 18, which is entitled “Jurisdiction to Prescribe with Respect to Effect within Territory,” Restatement (Second) of Foreign Re- lations Law of the United States 818 (1965), concerns the extent to which a state may enact rules of law pro- scribing conduct outside its territory to prevent the effects of that conduct within its territory. Although section 18 is therefore concerned with legislative rather than judicial action, Congress’s clear reference has led some courts to find guidance in section 18’s requirement that the effect 4la be “substantial” and “oecur[| as a direct and foreseeable result of the conduct outside the territory.” *° See Ohn- trup v. Firearms Center Inc., 516 F. Supp. 1281, 1286 (i.D. Pa. 1981) (mem.); Chicago Bridge & Iron Co. v. Islamic Republic of lran, 506 F. Supp. 981, 989 (N.D. Ill. 1980) (mem.); Verlinden, 488 F. Supp. at 1298; Harris v. VAO Intourist, 481 F. Supp. 1056 (E.D.N.Y. 1979) (mem.); see also Note, Direct Effect Jurisdiction Under the Foreign Sovereign Immunities Act of 1976, 13 N.Y. U. J. Intt L. & P. 571, 609-10 (1981). But see Texas Trading, 647 F.2d at 311 & n.32; Note, Effects Jurisdic- tion Under the Foreign Sovereign Immunities Act and the Due Process Clause, 55 N.Y.U. L. Rev. 474, 502-05 (1980). Another factor favoring recourse to section 18 lies in the scope of the FSIA’s direct effect clause. The clause differs from the “direct effect” clauses found in many state long-arm statutes, because the former is explicitly intended to encompass effects resulting from commercial as well as tortious activities. See Texas Trading, 647 F.2d at 311; VAO Intourist, 481 F. Supp. at 1063-64; H.R. Rep. No. 94-1487, supra, at 19. The “substantial” and “direct and foreseeable” standards are likewise intended 26 Section 18 reads as follows: A state has jurisdiction to prescribe a rule of law attach- ing legal consequences to conduct that occurs outside its territory and causes an effect within its territory, if either (a) the conduct and its effect are generally recognized as constituent elements of a crime or tort under the law of states that have reasonably developed legal sys- tems, or (b) (i) the conduct and its effect are constituent ele- ments of activity to which the rule applies; (ii) the effect within the territory is substantial; (iii) it occurs as a direct and foreseeable result of the conduct outside the territory; and (iv) the rule is not inconsistent with the principles of justice generally recognized by states that have reasonably developed legal systems. 42a to apply in commercial contexts. See Restatement (Sec- ond) of Foreign Relations Law of the United States, supra, $18 comment f. In view of Conrress’s statement, and of the not dissimilar functions of section 18 and the third clause,*’ we consider this source of guidance a proper one. The direct effect scenario offered by MINE falls short of satisfying these principles; we cannot conclude that the alleged injury to Global was a foreseeable result of any breach by Guinea. To explain this conclusion, it is im- portant to note that the alleged injury to Global is not that Global went unrecompensed for services rendered to SOTRAMAR, but that Global lost anticipated profits. This alleged injury occurred only because Global became in- volved in the SOTRAMAR undertaking in such a way that it stood to realize some of the profits of that under- taking. Applying the “direct effect” standard to this injury, and without attempting to state generally the cireum- stances when a commercial activity results in direct and foreseeable consequences, we think t [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0855%3A1. Public record. Not legal advice.