[00:00:00] Speaker ?:
Okay.

[00:01:06] Speaker 03:
Mr. Nichols.

[00:01:15] Speaker 01:
Good morning, Your Honors.

[00:01:16] Speaker 01:
Thank you, and may it please the Court.

[00:01:18] Speaker 01:
Private party is a statutorily predicate jurisdictional term.

[00:01:23] Speaker 01:
A district court applying the arbitration exception must apply itself.

[00:01:30] Speaker 01:
The district court here did not apply that term.

[00:01:33] Speaker 01:
To the contrary,

[00:01:34] Speaker 01:
The district court said, quote, I will defer to the tribunal's determination on jurisdiction.

[00:01:41] Speaker 01:
That was a categorical error.

[00:01:44] Speaker 01:
It's an error because under the Supreme Court's decision in Verlinden, well, a couple reasons.

[00:01:50] Speaker 01:
Under the Supreme Court's decision in Verlinden, at the threshold of every action, a district court must satisfy itself that one of the FSIA exceptions applies.

[00:02:03] Speaker 01:
And in doing so, it must apply, quote, the detailed federal law standards set forth in the act.

[00:02:11] Speaker 01:
That did not happen here.

[00:02:12] Speaker 01:
The district court said over and over again, I defer to the tribunal's findings.

[00:02:17] Speaker 01:
The tribunal found the tribunal's jurisdiction was not an issue at that point in the discussion.

[00:02:25] Speaker 01:
That was not even relevant.

[00:02:27] Speaker 01:
What needed to be addressed right off the bat was what does private party mean

[00:02:32] Speaker 01:
Who's coming in?

[00:02:34] Speaker 01:
Who's petitioning?

[00:02:36] Speaker 01:
Are you a private party?

[00:02:38] Speaker 01:
As the Supreme Court told us last year in Venezuela versus Helmerich, it's not even enough to say, oh, well, we presented a non-frivolous claim that we're a private party.

[00:02:49] Speaker 01:
In fact, they have to have evidence.

[00:02:51] Speaker 01:
Justice Breyer said, we may have to take evidence and resolve it as soon as possible at the beginning of the case.

[00:03:00] Speaker 03:
Even if we were to agree with you, there was a

[00:03:02] Speaker 03:
different basis for a waiver of sovereign immunity that the district court found, the implied waiver.

[00:03:10] Speaker 03:
So that alone would be sufficient to subject your client to jurisdiction, correct?

[00:03:18] Speaker 03:
Correct, correct.

[00:03:20] Speaker 03:
So even if we were to agree with you, we have this alternative basis in what is

[00:03:31] Speaker 03:
improper about that fund.

[00:03:33] Speaker 01:
Sure.

[00:03:34] Speaker 01:
What was improper about it is that an implied waiver has to be, under this Court's decision in Creighton, has to be unambiguous.

[00:03:40] Speaker 01:
It has to be unmistakable.

[00:03:42] Speaker 04:
How can an implied waiver... We said that signing the New York Convention would be an implied waiver.

[00:03:48] Speaker 04:
We said, you said that in dicta, and it's incorrect because... Well, we said it in drawing the line between what is or is not a waiver.

[00:04:00] Speaker 04:
and we distinguished two lines of cases, right, the ones where the signatory government has signed and the ones where the signatory, I'm sorry, the ones where the foreign state has signed the New York Convention and the ones where it hasn't.

[00:04:14] Speaker 04:
And we said that was the relevant line.

[00:04:16] Speaker 01:
Right, but I don't think it's reasoning necessary to the decision because the court was never faced with the question of, which is faced in this case, with the convention signatory.

[00:04:26] Speaker 01:
And I want to point the court to Amrata Hess, which addresses precisely the question your honor is asking.

[00:04:33] Speaker 01:
Amrata Hess says, a country does not waive its immunity under 6501A1 by signing an international agreement that contains no mention of a waiver of immunity to suit in the United States.

[00:04:45] Speaker 01:
That's the New York Convention.

[00:04:47] Speaker 01:
There is no waiver of immunity, and it wouldn't have made sense in 1958 to even consider that.

[00:04:53] Speaker 01:
Not only does it not mention it, it's not even, it couldn't have been applied because the regime at that point was a regime of absolute immunity.

[00:05:01] Speaker 04:
No, it wasn't.

[00:05:02] Speaker 04:
It's post-1952, come on.

[00:05:05] Speaker 01:
Oh no, Your Honor, we understand the Tate letter existed, but the Tate letter did not by itself change the law across the courts.

[00:05:14] Speaker 01:
And as Your Honor knows, the Supreme Court has said

[00:05:16] Speaker 01:
time after time, after that, that the Tate letter did not change background principles of law.

[00:05:22] Speaker 01:
It simply shifted the recommendation.

[00:05:24] Speaker 04:
Which is to say that exceptions like commercial activity and I would assume waiver existed even as of 1952, much less later.

[00:05:35] Speaker 01:
Well, I just don't know how you get to unmistakable and unambiguous given under the Tate letter when you are Ukraine.

[00:05:45] Speaker 01:
And you're Ukraine, and you're signing a convention in 1958.

[00:05:48] Speaker 01:
And you're supposed to know that by doing that, a letter from an acting legal advisor in the Department of State means you have waived your sovereign immunity to enforcement of awards in the United States.

[00:06:02] Speaker 01:
That just doesn't make sense.

[00:06:03] Speaker 01:
That is not what Ukraine could have possibly been thinking.

[00:06:06] Speaker 01:
And that's why, respected, that's why, Your Honor, my opponent, our opponent, has moved on from this argument

[00:06:12] Speaker 01:
And they say, oh, well, the BIT, or they say the tape letter changed, but it could not have.

[00:06:20] Speaker 01:
It could not have changed.

[00:06:21] Speaker 04:
Do you know anything about the history of waiver exceptions?

[00:06:25] Speaker 04:
I mean, in 1940, if someone had sued a foreign sovereign in a federal court, could the foreign sovereign have waived its immunity?

[00:06:38] Speaker 04:
I would assume so.

[00:06:41] Speaker 04:
I don't know.

[00:06:44] Speaker 01:
But I want to go back to, we need to see what we're building on here.

[00:06:48] Speaker 01:
We need to start from first principles, and we need to see what we're building on.

[00:06:51] Speaker 01:
What we're building on is we're building on a regime where you have a letter from the Department of State, we have a New York Convention with no language concerning waiver of sovereign immunity, and we have a BIT that doesn't mention or locate arbitration in the United States.

[00:07:06] Speaker 01:
It doesn't choose US law.

[00:07:08] Speaker 01:
It doesn't have any US parties.

[00:07:10] Speaker 01:
and in fact contemplated enforcement in Ukraine.

[00:07:13] Speaker 01:
So we don't get anywhere near an unmistakable or unambiguous waiver through a treaty itself that doesn't mention it or a letter from the Department of State that alludes to these principles.

[00:07:28] Speaker 01:
It's just not in the realm of unmistakable or unambiguous.

[00:07:34] Speaker 01:
And I would point out, I want to make sure that we're just clear, we don't think that the...

[00:07:40] Speaker 04:
by implication and the Second Circuit has explicitly held that not withstanding Amaretta Hess and not withstanding your first principles arguments to us, that signing the New York Convention is enough on some theory that it's all about enforcement of arbitral awards.

[00:08:08] Speaker 01:
Well, keep in mind that C-Transport, which is the case you're referring to, wasn't.

[00:08:12] Speaker 01:
I'm into my rebuttal time.

[00:08:14] Speaker 01:
I would like to point out C-Transport was a commercial contract.

[00:08:18] Speaker 01:
It did not involve a treaty, as the VIT does here.

[00:08:22] Speaker 01:
It also located French law, it selected French law, which is another indication of a waiver.

[00:08:27] Speaker 01:
So we don't think the court needs to create a circuit split with C-Transport.

[00:08:31] Speaker 01:
This case is much more like Fallova in the Seventh Circuit, which said that the Helsinki Accords

[00:08:36] Speaker 01:
did not constitute a waiver.

[00:08:39] Speaker 01:
Before I sit down, I want to point out the court textually cannot reach this question.

[00:08:44] Speaker 01:
Textually under the FSIA, implied waiver by itself is off limits because of the private party requirement.

[00:08:52] Speaker 01:
Now if the court reaches the question, I think all of my arguments stand, but I want to point out that the private party requirement is a predicate

[00:09:05] Speaker 01:
to getting to implied waiver.

[00:09:07] Speaker 04:
Your theory is that exemption 6 affected an implied partial repeal of exemption 1, right?

[00:09:21] Speaker 04:
You say we can't consider implied waiver in an arbitration case because that subject is more specifically addressed in the later

[00:09:31] Speaker 04:
abrogation.

[00:09:33] Speaker 04:
Am I understanding it?

[00:09:34] Speaker 01:
No, I apologize if that's how that came out.

[00:09:37] Speaker 04:
I thought that's what I got from your brief, but tell me why that's wrong.

[00:09:40] Speaker 01:
The point is that the court can't get to implied waiver without crossing the private party threshold.

[00:09:48] Speaker 01:
So one has to conclude.

[00:09:50] Speaker 04:
I'm sorry, but the private party requirement is an element of

[00:09:58] Speaker 04:
Six, not an element of one.

[00:10:00] Speaker 01:
Correct.

[00:10:01] Speaker 01:
Correct.

[00:10:01] Speaker 01:
And so the point is that when one wants to enforce an arbitration award, one has to go through the gate six.

[00:10:09] Speaker 04:
Otherwise, gate six, subsection D. Why not go through gate one?

[00:10:14] Speaker 01:
Because that would render gate A6D superfluous.

[00:10:19] Speaker 01:
One would never need to show that one was a private party.

[00:10:22] Speaker 01:
One would always come in and say, implied waiver.

[00:10:24] Speaker 01:
And A6D would be superfluous.

[00:10:26] Speaker 01:
This court does not read statutes

[00:10:28] Speaker 01:
to render provisions meaningless.

[00:10:29] Speaker 01:
The arbitration exception is created for a reason.

[00:10:32] Speaker 01:
It's for countries like Tatarstan to not come in masquerading as a corporation and to do what's happened here.

[00:10:40] Speaker 01:
I'll save the rest of my time for a bottle.

[00:10:42] Speaker 01:
Thank you.

[00:10:52] Speaker 00:
May it please the court that Jonathan Black, when representing Taitneff, the district court was completely right on both of its rulings on subject matter jurisdiction under both the arbitration exception and the implied waiver exception, and also on foreign nonconvenience, if my friend seems appropriately not to be pursuing here anymore, in light of the court's TNR decision, which actually is against the entity of Ukraine.

[00:11:20] Speaker 00:
But on the jurisdiction issue, the judge below is entirely correct.

[00:11:25] Speaker 00:
This private party issue was, in fact, decided by the Arbitral Tribunal, which specifically found that Taitneft was a, quote, private investor.

[00:11:36] Speaker 00:
And it analyzed all the same facts that are now being presented by the appellant on this private party argument, and it concluded that

[00:11:49] Speaker 00:
Todd Neft was a, quote, private investor.

[00:11:52] Speaker 00:
That's the end of the story.

[00:11:54] Speaker 00:
Under your decision in Chevron.

[00:11:56] Speaker 04:
But that was all in the course of addressing whether the claimant was an investor within the meaning of the relevant bid.

[00:12:09] Speaker 04:
And that definition is somewhat

[00:12:14] Speaker 04:
idiosyncratic and specific to Russia and Ukraine.

[00:12:18] Speaker 04:
So why would we think that private party in that context equates to private party as the phrase is used in the FSIA?

[00:12:28] Speaker 00:
Well, because you held in Chevron, following the Supreme Court in BG, that when an arbitral tribunal that the parties have agreed has jurisdiction to decide its jurisdiction,

[00:12:43] Speaker 00:
makes that decision, you have to defer to it.

[00:12:46] Speaker 00:
And the precise issue of the status of Totniff was raised as a jurisdictional objection before the tribunal.

[00:12:54] Speaker 00:
Of course, the tribunal wasn't thinking in FSA terms, but all the underlying facts that my friend said you need to decide, the district court needed to decide, were in fact decided by the tribunal in deciding that it had jurisdiction.

[00:13:08] Speaker 04:
Only if the private party

[00:13:12] Speaker 04:
inquiries are identical for purposes of the bit, as to which I take your point, but arguably there's a separate

[00:13:22] Speaker 04:
element in the FSIA regarding not the jurisdiction of the tribunal, but the jurisdiction of the district court.

[00:13:31] Speaker 00:
Well, if private party has some other meaning, we haven't seen any case, any legislative history, any scholarly commentary, anything that would suggest it would mean anything other than an entity that is not

[00:13:47] Speaker 00:
a majority owned by a state.

[00:13:52] Speaker 00:
I mean, at a minimum, private party can't be something other than a non-agency or instrumentality, as we point out, which, clearly, Tatnyak does not.

[00:14:04] Speaker 00:
I mean, there is no case that, no case,

[00:14:06] Speaker 00:
that suggests that a 36% state-owned company with some state-appointed directors, but that is a public company with its shares publicly traded, held by the public, is anything other than a private party.

[00:14:22] Speaker 00:
That's what the tribunal found, examining all of the facts and 80

[00:14:28] Speaker 00:
plus page award, which it rendered at Ukraine's behest.

[00:14:34] Speaker 00:
Ukraine wanted, raised that as a jurisdictional objection, and now they're trying to repackage it.

[00:14:39] Speaker 04:
It's a very clever argument.

[00:14:42] Speaker 04:
Is there some background principle of international arbitration in the context of these investment disputes that

[00:14:52] Speaker 04:
only private parties can arbitrate against states in this context?

[00:14:58] Speaker 00:
I mean, these bits are all designed to allow investors to trade against states.

[00:15:05] Speaker 00:
Who the investor is depends on the bit.

[00:15:09] Speaker 00:
Depends on the language of the bit.

[00:15:14] Speaker 04:
So there's no reason to think that

[00:15:16] Speaker 04:
private party as defined in one bit would be the same as private party defined in any other bit would be the same as private party as defined in the FSIA.

[00:15:28] Speaker 00:
Correct, but the point is you don't need to get into that de novo or indeed at all because the facts that were found, which you can't overrule,

[00:15:40] Speaker 00:
would satisfy any conceivable definition that you as a federal court would attribute to the words private party in section 1605, 86.

[00:15:52] Speaker 00:
Because all we have from the other side is, well, you know, we don't like Totniff.

[00:15:57] Speaker 00:
We think it's somehow connected with Tartarstan.

[00:16:00] Speaker 00:
That makes it a non-private party.

[00:16:02] Speaker 00:
The tribunal looked at all of that stuff and came out exact opposite.

[00:16:07] Speaker 00:
So if BG, which I argued and lost, I have to say, means anything, and your decision following it in Chevron is very clear on this, that's the end of the issue as far as your subject matter jurisdiction is concerned.

[00:16:21] Speaker 00:
Plus, of course, you do have a one.

[00:16:24] Speaker 00:
And on a one my friend with all respect was just...

[00:16:28] Speaker 00:
wrong on every possible issue.

[00:16:30] Speaker 00:
Of course, the Tate letter changed the law.

[00:16:33] Speaker 00:
Every case that the Supreme Court has ever decided, when they begin and review the history of the FSIA, they say the Tate letter was the kind of tectonic shift.

[00:16:44] Speaker 00:
But beyond that, you have held in Creighton.

[00:16:48] Speaker 00:
You couldn't have been clearer.

[00:16:49] Speaker 00:
Yes, it was technically dictum.

[00:16:51] Speaker 00:
But you, as you said, Judge Pastas, drew this very clear line.

[00:16:55] Speaker 00:
And every court that has addressed the issue,

[00:16:58] Speaker 00:
has done that and no one has ever remotely suggested that 1605A6 is designed, if anything, to expand and clarify the arbitration waiver for

[00:17:12] Speaker 00:
somehow was an implied repealer of 1605A1.

[00:17:17] Speaker 00:
If you look at the history of the FSIA in 76, three examples are given.

[00:17:22] Speaker 00:
They're cited again and again by the courts of what an implied waiver is.

[00:17:26] Speaker 00:
And the first one is agreeing to arbitrate in a foreign state.

[00:17:31] Speaker 00:
And every court has held that the New York Convention, if everyone here is a signatory, which is the case, Ukraine's a signatory,

[00:17:40] Speaker 00:
Russia is a signatory.

[00:17:42] Speaker 00:
The United States is a signatory.

[00:17:44] Speaker 00:
France, which is the seat of the arbitration, is a signatory.

[00:17:48] Speaker 00:
That is

[00:17:50] Speaker 00:
Enough.

[00:17:52] Speaker 00:
I mean, the whole point of this treaty is to allow an award to be enforced elsewhere in a signatory state.

[00:17:59] Speaker 00:
That's why Creighton is right.

[00:18:01] Speaker 00:
That's why sea transport is right.

[00:18:03] Speaker 00:
And again and again and again, if that's not a waiver, it's hard to see what is.

[00:18:07] Speaker 00:
I sign a treaty whose entire raison d'etre is that once I've arbitrated, an award against me can be enforced in other courts.

[00:18:15] Speaker 00:
How can I then say that I haven't waived my immunity to be sued in those courts?

[00:18:20] Speaker 04:
Do you have any idea why the private party requirement was put into a six?

[00:18:28] Speaker 04:
I mean, it does seem odd that when Congress comes to focus more specifically on the legal consequences of signing an arbitration agreement, they limit the rule to cases where the claimant is a private party.

[00:18:45] Speaker 00:
We haven't found any, they haven't found any, but what we do know, we cited in our brief Mark Feldman who has spent a lot of time on the ABA committee.

[00:18:56] Speaker 00:
The FSA is a lovely statute because it actually was a product not only of bipartisan

[00:19:01] Speaker 00:
approval, but it was supported from day one, including when it was amended in 1988, to have the arbitration exception by the entire organized bar that does this stuff.

[00:19:14] Speaker 00:
And there's not a hint there of any attempt to cut back on day one.

[00:19:20] Speaker 00:
This is an attempt to expand the scope, to make it clear beyond per adventure that there would be jurisdiction to enforce an arbitral reward as long as you were signatory.

[00:19:33] Speaker 02:
Is your argument that, confined to subsection six, that even if the entity is not a private party, nevertheless the agreement was made for the benefit

[00:19:49] Speaker 02:
You don't have to be a party to the arbitration.

[00:19:53] Speaker 02:
Is that argument dependent upon who the shareholders are?

[00:19:57] Speaker 00:
Is it dependent upon the shareholder?

[00:20:00] Speaker 00:
No.

[00:20:00] Speaker 02:
Are there any private entities that own the shareholder?

[00:20:05] Speaker 02:
shares in this company?

[00:20:08] Speaker 00:
Yes.

[00:20:08] Speaker 00:
I mean, the entity Tatneft is 36% owned by the Republic of Tatarstan.

[00:20:15] Speaker 00:
The rest of it are private parties.

[00:20:17] Speaker 00:
The rest are private parties.

[00:20:18] Speaker 00:
There's no evidence whatever except some eight-hand hearsay.

[00:20:22] Speaker 02:
So your argument is that the agreement to arbitrate

[00:20:26] Speaker 02:
It was for the benefit of a private party because 70% of the shareholders are private parties.

[00:20:36] Speaker 00:
Well, yes, and also for the benefit language, which I hadn't gotten to, so I'm glad you did.

[00:20:41] Speaker 00:
Judge Randolph also kind of gives the lie to my adversary's argument because a bit is the classic example, again, pointed out in all the legislatures through all the cases, of an agreement that a state makes not directly with a private party, but for the benefit of private parties.

[00:21:00] Speaker 00:
And unless you were to go back to their basic point, which is notwithstanding the tribunal's decisions, notwithstanding the tribunal's conclusions, somehow a 36% state interest equates Topnef to being a non-private party, then they lose.

[00:21:19] Speaker 00:
They lose under A6, and they also lose under A1.

[00:21:26] Speaker 00:
They had a chance to make this argument.

[00:21:28] Speaker 00:
They lost before the tribunal.

[00:21:30] Speaker 00:
They lost in the Paris Court of Appeal.

[00:21:32] Speaker 00:
They lost in the English High Court.

[00:21:34] Speaker 00:
They lost before Judge Coller-Catelli.

[00:21:36] Speaker 00:
And they're industrious and creative, but they have to lose here.

[00:21:41] Speaker 00:
Your cases are clear on that point.

[00:21:43] Speaker 00:
Thank you.

[00:21:43] Speaker 00:
Thank you.

[00:21:46] Speaker 03:
All right, how much time do the panel have left?

[00:21:50] Speaker 02:
We have 30 seconds remaining.

[00:21:51] Speaker 01:
All right, we'll give you two minutes.

[00:21:53] Speaker 01:
Thank you, Your Honor.

[00:21:55] Speaker 01:
This is not Chevron.

[00:21:58] Speaker 01:
Counsel is mistaken.

[00:21:59] Speaker 01:
This case, as Judge Katz's questions have made clear, shows that this is not about a provision that was submitted to the arbitrators.

[00:22:08] Speaker 01:
And we have to start down the right path.

[00:22:11] Speaker 01:
So Judge Randolph, your question about for the benefit of whose private party, the district court didn't even define what private party means as a matter of federal law.

[00:22:21] Speaker 01:
That's square one.

[00:22:22] Speaker 01:
Before one could ever ask whether TATNAF

[00:22:24] Speaker 01:
qualifies, do we have enough facts?

[00:22:27] Speaker 02:
By your lights, this is a jurisdictional question.

[00:22:30] Speaker 02:
Correct.

[00:22:31] Speaker 02:
That's exactly right.

[00:22:32] Speaker 02:
And so regardless of what the district court decided, you know, the standard federal appellate law, that we can so asante consider jurisdictional questions.

[00:22:45] Speaker 01:
Your Honor, you may, and we think you can, and we think you should reverse on the basis of this record.

[00:22:51] Speaker 01:
But I'd point out that there is no discovery in arbitration.

[00:22:54] Speaker 01:
and the limited record that we have revealed Totneft telling the SEC that Totterston mandated oil sales and caused us to raise capital for the benefit of Totterston and pay the debts of Totterston.

[00:23:07] Speaker 02:
Do you dispute that 70% of the shareholders are non-governmental enemies?

[00:23:13] Speaker 01:
We don't know right now because we haven't been able to have discovery.

[00:23:17] Speaker 01:
All we have is the record that was in arbitration.

[00:23:20] Speaker 01:
And what the Supreme Court said last year in

[00:23:25] Speaker 01:
Venezuela is that you need to have discovery up front and that has not happened here.

[00:23:30] Speaker 01:
Let me address the Tate letter issue and the issue of implied waiver because the Tate letter, the Supreme Court would be very surprised to learn what

[00:23:40] Speaker 01:
my colleague said, about the impact, the titanic impact of the Tate letter.

[00:23:45] Speaker 01:
The Supreme Court said in 2004, the Tate letter had little, if any, impact on the federal court's approach to immunity analysis.

[00:23:52] Speaker 01:
In 2014, in Argentina v. NML Capital, it said that the FSIA replaced the factor-intensive, loosely common law-based standards, and until then, Ukraine's signing

[00:24:05] Speaker 01:
couldn't have been a waiver because it was a loose common law based regime until the codification.

[00:24:12] Speaker 01:
That's what the FSA was for.

[00:24:14] Speaker 01:
The whole reason the FSA exists is because the Tate letter didn't do what your honor suggested it did.

[00:24:20] Speaker 01:
We ask the court to reverse.

[00:24:22] Speaker 01:
Thank you.

[00:24:22] Speaker 01:
Thank you.

[00:24:23] Speaker 01:
The letter is submitted.