[00:00:01] Speaker 01: Case number 18-7040, DNS Consulting, Inc., ESCI, a New Jersey Corporation appellate versus Kingdom of Saudi Arabia, His Excellency Adel Ben Ahmed al-Jubeir, Minister of Foreign Affairs. [00:00:16] Speaker 01: Mr. Sternberg for the appellate, Mr. Pan for the appellate. [00:00:20] Speaker 02: Thank you, Madam Clerk. [00:00:22] Speaker 02: Good morning. [00:00:23] Speaker 02: Good morning, Your Honor. [00:00:24] Speaker 02: Good morning. [00:00:25] Speaker 02: Richard Sternberg on behalf of DNS Consulting, which I'll refer to as DSCI often. [00:00:30] Speaker 02: We begin by addressing the Court's per curiam reference to Asimov case, because it is surely determinative in this case. [00:00:40] Speaker 02: The case starts with a substantial presumption in favor of the plaintiff's foreign selection, citing MBI, which was decided by two members of this court. [00:00:49] Speaker 02: Step one in that analysis is for the court below to have determined whether this is mandatory or permissive. [00:00:57] Speaker 02: But that matter is a matter for de novo review by this court in Asimov and Section 382. [00:01:02] Speaker 02: The court accepts plaintiff's complaint in the light most favorable to the plaintiff, also referred to in Asimov citing Xi. [00:01:13] Speaker 02: The court defines mandatory as requires that litigation proceed in a specific forum. [00:01:20] Speaker 02: Permissive is it allows but does not bar. [00:01:24] Speaker 02: Well, looking at some of the examples, in the asthma case itself, the language was the parties submit to the exclusive jurisdiction of the courts of England and Wales. [00:01:34] Speaker 02: In the MS Bremen case, it's any dispute must be treated in merit. [00:01:40] Speaker 03: And here it shall be assigned, right? [00:01:43] Speaker 02: I'm sorry, what? [00:01:43] Speaker 03: Shall be assigned. [00:01:45] Speaker 02: No, grievance counsel, not shall be assigned. [00:01:47] Speaker 02: It's not that the case shall be assigned. [00:01:48] Speaker 02: That's the point. [00:01:49] Speaker 02: That the grievance counsel shall be assigned. [00:01:53] Speaker 02: The shall is not operative for where the hearing will occur. [00:01:57] Speaker 02: It's no different in language. [00:01:59] Speaker 03: What does it mean to assign the, whatever you said, to the [00:02:05] Speaker 03: grievance counsel. [00:02:06] Speaker 02: Well, similar to the contrary. [00:02:08] Speaker 03: I'm sorry. [00:02:09] Speaker 03: What is assigned to the grievance counsel? [00:02:11] Speaker 02: That a grievance counsel shall be assigned. [00:02:13] Speaker 02: The case is not assigned to the grievance counsel. [00:02:15] Speaker 02: The grievance counsel shall be assigned. [00:02:17] Speaker 04: It shall be assigned to any case. [00:02:20] Speaker 04: Pardon me, Your Honor. [00:02:21] Speaker 04: It says to any case arising under this case. [00:02:24] Speaker 02: The grievance counsel shall be assigned. [00:02:28] Speaker 02: The grievance counsel is the operative noun there. [00:02:31] Speaker 03: So if it says the panel of the DC Circuit shall be assigned, [00:02:35] Speaker 02: That would not be, I would think that is not the same language. [00:02:38] Speaker 02: If the case, what the language in asthma says is that permissive is allows but does not bar. [00:02:46] Speaker 02: So I'm looking for language that bars. [00:02:48] Speaker 04: Yeah, but you have to read the rest of the sentence. [00:02:50] Speaker 04: It says that Shelby is signed for settlement of [00:02:55] Speaker 04: any disputes arising under the execution of this contract? [00:02:59] Speaker 02: I think that's substantially different than the language shall be settled by the Greek courts. [00:03:04] Speaker 02: I think that's substantially linguistically different, and indeed, I write language like that when I write employment contracts. [00:03:10] Speaker 02: And all I'm doing is creating a grievance process. [00:03:14] Speaker 04: Your whole case depends on this argument, right? [00:03:17] Speaker 04: No, it does not, Your Honor. [00:03:17] Speaker 04: It doesn't? [00:03:18] Speaker 04: Because the district court and the defendant here say that [00:03:22] Speaker 04: you know, that if it is, if we think it's mandatory, you don't make any public interest argument at all. [00:03:29] Speaker 04: Is that true? [00:03:30] Speaker 02: No, Your Honor. [00:03:31] Speaker 04: No, Your Honor. [00:03:32] Speaker 04: The analysis... Where do you make a public interest argument? [00:03:36] Speaker 02: Oh, I'm sorry. [00:03:37] Speaker 02: I'm only half hearing you, Your Honor. [00:03:38] Speaker 02: I'm sorry. [00:03:38] Speaker 04: Oh, I'm sorry. [00:03:40] Speaker 04: The defendant says that [00:03:44] Speaker 04: that and the district court said that you made no argument that if this is mandatory that it's outweighed by the public interest. [00:03:53] Speaker 02: What we focus on instead your honor is step two of the analysis in asthma and that is that even if it is permissive [00:04:00] Speaker 02: The standard goes to the fourth step in the asthma analysis, even if permissive. [00:04:08] Speaker 04: But I'm asking you, suppose it's not permissive. [00:04:10] Speaker 04: Suppose we think it's mandatory. [00:04:11] Speaker 02: I'm sorry. [00:04:12] Speaker 02: Even if it's mandatory. [00:04:13] Speaker 02: Then what? [00:04:14] Speaker 02: If it is a mandatory clause, I simply said it backwards. [00:04:16] Speaker 02: In a mandatory clause, we go through a fourth factor analysis as to whether we're required to go to that forum. [00:04:21] Speaker 02: And the fourth factor is so gravely difficult and inconvenient that plaintiff will, for all practical purposes, be deprived his day in court. [00:04:29] Speaker 02: And that language is what we need a factual finding on. [00:04:35] Speaker 02: We have argued in the court below, and as we argue in our briefs here, that we can't meet that standard, that there's no transparency, there's no legal framework for resolving commercial disputes. [00:04:50] Speaker 02: There's no starting to ceases. [00:04:52] Speaker 02: It applies Sharia law. [00:04:54] Speaker 02: It's lengthy and unpredictable. [00:04:56] Speaker 02: All of those things are provided with substantial citations. [00:05:00] Speaker 02: Furthermore, unlike the care and caution taken by the trial court in the MBI case, the trial court refused to address the fact that DSCI has no standing in Saudi Arabia. [00:05:11] Speaker 02: They cannot appear. [00:05:12] Speaker 02: They cannot sue before the grievance council because it's a U.S. [00:05:16] Speaker 02: entity. [00:05:17] Speaker 02: They have no standing? [00:05:19] Speaker 02: Correct. [00:05:20] Speaker 02: One, we cite in the materials that as a U.S. [00:05:26] Speaker 02: corporation they cannot sue there. [00:05:30] Speaker 02: Furthermore, they can't enter the country. [00:05:35] Speaker 02: The furthermore, the kingdom's law discriminates against non-citizens, which is both the corporation and its counsel. [00:05:42] Speaker 02: Performance was done in the country, right? [00:05:44] Speaker 02: Excuse me? [00:05:45] Speaker 02: Performance was done in the country. [00:05:46] Speaker 00: That's correct. [00:05:46] Speaker 02: Performance was done in Saudi Arabia. [00:05:48] Speaker 02: Our claim is therefore under the Foreign Sovereign Immunities Act. [00:05:51] Speaker 02: I think that's a jurisdictional issue, Your Honor. [00:05:54] Speaker 02: The performance is outside. [00:05:57] Speaker 04: I'm misunderstanding you. [00:05:58] Speaker 04: If it's mandatory, then all of those private [00:06:02] Speaker 04: considerations fall out, and the only question are the public factors, correct? [00:06:07] Speaker 02: No, that is not what asthma says, Your Honor. [00:06:10] Speaker 02: What asthma says is, if it is mandatory, there is then a four-factor analysis. [00:06:16] Speaker 02: This is in asthma at page seven, citing MS Bremen, which, of course, Your Honor is familiar with. [00:06:23] Speaker 02: And the language specifically is, even if it's mandatory, even if it's mandatory, so gravely difficult and inconvenient, the plaintiff will, for all practical purposes, be deprived of stay in court. [00:06:37] Speaker 02: And in fact, we are deprived that day in court. [00:06:40] Speaker 02: Anybody non-practicing Muslims are also barred in these hearings. [00:06:46] Speaker 02: Other religions, like Jewish lawyers from Maryland, are barred from these proceedings. [00:06:52] Speaker 02: Further, we filed supplements in the court below that we thought were not on factual issues here, so we didn't include them in the record. [00:06:59] Speaker 02: But the administrations changed in the kingdom since the contract was signed by DSCI. [00:07:06] Speaker 02: the kingdoms and prisons and tortured businessmen who were making claims for payment just like DNS Consulting is making here. [00:07:17] Speaker 02: The claimants were held in the Ritz-Carlton Riad and reported some substantial injuries, including death. [00:07:28] Speaker 03: Creditors were held there? [00:07:29] Speaker 02: Yes. [00:07:30] Speaker 02: That's my understanding of the articles I've read. [00:07:32] Speaker 02: And we provide citations to that in the record below. [00:07:36] Speaker 02: But we've had no factual hearing on that point. [00:07:39] Speaker 02: We'd also like to know about another person who complained about the transparency of the process in the kingdom and disappeared in the Turkish embassy and was chopped up into little pieces and dissolved in this nasty scene out of a breaking bed. [00:07:59] Speaker 02: And this court would send us there to try this case. [00:08:04] Speaker 02: The court below would send us there to try this case. [00:08:06] Speaker 00: Your first argument is that it's mandatory rather than permissive. [00:08:10] Speaker 02: My first argument is that it's permissive, not mandatory. [00:08:13] Speaker 00: I'm sorry, this permissive is not mandatory. [00:08:15] Speaker 00: But on that issue, suppose that the Foreign Selection Clause said the agreements counseled shall be assigned for settlement of any and all disputes instead of just any disputes. [00:08:26] Speaker 00: Would you, at that point, would you say that it's mandatory? [00:08:30] Speaker 02: Well, I think that case would be an interesting case to discuss what is excluded. [00:08:36] Speaker 00: But the language in the asthma case is that it must be... No, but I'm talking about the language in this case. [00:08:40] Speaker 00: So it says, the grievance counsel shall be assigned for settlement of any disputes. [00:08:45] Speaker 00: That's what the selection clause says, right? [00:08:48] Speaker 02: A grievance counsel shall be assigned. [00:08:51] Speaker 00: Okay. [00:08:51] Speaker 00: I thought it said the, but that's the district court says the grievance counsel shall be assigned for settlement of any disputes or claims. [00:08:58] Speaker 00: And my question is, what if it says, [00:09:00] Speaker 00: the grievance counsel shall be assigned for settlement of any and all disputes or claims. [00:09:05] Speaker 02: I would certainly, where I make a decision on what that means, I think what asthma means is I need to see two elements for it to be permissive. [00:09:13] Speaker 02: I need to see an assignment, and I need to see an exclusion. [00:09:17] Speaker 00: So even if it said any and all, as in every dispute? [00:09:19] Speaker 02: I might lose that case, but that's not this case. [00:09:22] Speaker 00: Okay, but then everything turns on whether it includes or all. [00:09:26] Speaker 00: And so what's the difference between any disputes and any or all disputes? [00:09:31] Speaker 00: Because it seems like if it says any disputes, it means every dispute. [00:09:34] Speaker 02: I think what I need in the asthma case is a statement first of where to go. [00:09:41] Speaker 02: And I don't think that clause at all, but I hear the court not hearing that. [00:09:46] Speaker 02: First, I need to hear an assignment of not a process, but of a forum. [00:09:53] Speaker 02: And then I need the exclusion of the others, like the language, exclusive, or must be treated, or shall be settled. [00:10:03] Speaker 02: So I don't really think that even if you add an all, I think what you'd have to have in there is exclusively by, or not in the United States, and something else. [00:10:18] Speaker 02: I'm looking for it in the language of asthma. [00:10:22] Speaker 02: the two elements. [00:10:23] Speaker 02: But importantly, since I may not be winning that point, even if I am in a mandatory clause, [00:10:30] Speaker 02: The asthma court refers to the fact that the trial court should be making a factual finding as to whether element four is met. [00:10:39] Speaker 02: And there is no such finding. [00:10:40] Speaker 02: We asked for such a hearing. [00:10:42] Speaker 02: We provided more than a good faith basis in the briefings. [00:10:46] Speaker 02: We provided State Department's findings of that nature, as well as other references from the CIA Factbook. [00:10:56] Speaker 02: And we did not get that hearing. [00:10:59] Speaker 02: The question becomes whether it's available and adequate, which is presumed if it's a mandatory, or whether it's accessible and able to afford relief, which is the language of what happens if it's a mandatory cause. [00:11:18] Speaker 02: And then in asthma at page eight, [00:11:24] Speaker 02: If the preselected form is substantially deficient, for instance, because it is effectively inaccessible or unable to afford the plaintiff any relief, then the clause is not enforceable. [00:11:37] Speaker 02: That's absolutely a mandatory setting. [00:11:40] Speaker 02: If that sentence is to have meaning from this court, it must have meaning in this case. [00:11:46] Speaker 02: Mr. Sternberg, you're out of time. [00:11:49] Speaker 02: I'm showing one minute, 20, 30. [00:11:50] Speaker 02: You're over your time. [00:11:54] Speaker 02: Good morning. [00:12:17] Speaker 05: My name is Alexandra Chopin, and on behalf of the Kingdom of Saudi Arabia, may it please the court [00:12:24] Speaker 05: Raqiya actually ratifies the decision of the district court to dismiss for forum nonconvenience for three key reasons. [00:12:32] Speaker 05: First, the forum selection clause here is mandatory because it states that any claim shall be assigned to the Saudi Board of Grievances. [00:12:44] Speaker 05: Shall means shall. [00:12:47] Speaker 05: Second, the district court did not need to ask whether the Saudi Board of Grievances was an adequate, available, or best for the party's private interest type of forum, because the parties had already agreed that the Saudi Board of Grievances is available and adequate. [00:13:08] Speaker 05: And third, even if the forum selection clause is permissive, Saudi is still the best forum. [00:13:16] Speaker 05: because the Kingdom has waived its sovereign immunity as to any claim on this contract in the Board of Grievances, and the entire contract was performed in Saudi, which is also where all of the witnesses and records are located. [00:13:32] Speaker 05: Generally, as I hear the Court's questions, they focus in on the language of the Forum Selection Clause, and appropriately so. [00:13:41] Speaker 05: And we would emphasize that this clause contains not only language of mandate, which is really the court's instruction, regardless of the specific language itself. [00:13:52] Speaker 05: What the court is looking for, both in Mara and in Raqiya, is language of mandate. [00:13:57] Speaker 05: And here we have that, shall. [00:14:00] Speaker 05: But we also have breadth, and that is what Bremen speaks to, that we look to the all-encompassing nature of this forum selection clause [00:14:09] Speaker 05: which again tells us that it is mandatory. [00:14:13] Speaker 05: The court is correct when it asks, you didn't make any public interest argument, did you counsel for DSCI? [00:14:20] Speaker 05: The answer is no. [00:14:22] Speaker 05: In fact, as the district court recognized, [00:14:26] Speaker 05: There is no argument whatsoever as to the public interest factors. [00:14:31] Speaker 05: But on top of that, and critically, there is no evidence in the record whatsoever to substantiate any of the allegations. [00:14:38] Speaker 05: And they really are generalized allegations based on media reports. [00:14:44] Speaker 04: What could a party show under the public interest analysis to overcome a mandatory clause? [00:14:54] Speaker 05: a party, sir, or DSCI? [00:14:56] Speaker 04: I mean, what could a defendant show? [00:14:59] Speaker 04: What could the party show, in any case, where there's a mandatory clause like, let's assume it's mandatory? [00:15:05] Speaker 04: Sure. [00:15:06] Speaker 04: What would a public interest finding be that would overcome that? [00:15:11] Speaker 05: Well, the court has given us some examples. [00:15:13] Speaker 05: So for example, in the Menendez case, where we saw a bar by the United States on accessing Cuba, [00:15:21] Speaker 05: or, for example, if there were some other foreclosure in the Kingdom of Saudi Arabia barring entry to DSCI. [00:15:30] Speaker 05: But again, there's no evidence in the record. [00:15:32] Speaker 04: What about his argument that it has no standard? [00:15:35] Speaker 05: That's simply incorrect. [00:15:38] Speaker 05: In fact, the mandatory informed selection clause here makes it clear that the party's intent at the time of contracting was that any claim whatsoever on this contract would be brought in [00:15:51] Speaker 05: And so there is an effective way to get to any claim on this contract. [00:15:56] Speaker 00: But I think his argument, your colleague's argument on the other side, is not necessarily that it's incorrect or correct. [00:16:01] Speaker 00: It's that they haven't had a determination of whether it's correct or incorrect. [00:16:05] Speaker 05: As to the adequacy of the forum? [00:16:08] Speaker 05: Yeah. [00:16:08] Speaker 05: The district court did not need to make a determination as to the adequacy of the forum. [00:16:13] Speaker 05: Because when the clause is found to be mandatory, as it was in this instance, [00:16:17] Speaker 05: the party's bargain is in all but the most unusual cases respected by the court. [00:16:22] Speaker 00: But there is this language in Azima that invokes this fourth factor. [00:16:27] Speaker 00: Even in a mandatory case, the trial in the contractual form would be so gravely difficult and inconvenient that the plaintiff will, for all practical purposes, be denied to stay in court. [00:16:36] Speaker 05: And if the court will forgive me, I've come to refer to the cases, Rakia. [00:16:41] Speaker 05: Perhaps that's the focus on the sovereign in me. [00:16:45] Speaker 05: In fact, that analysis comes as part of the validity and enforceability part of the analysis. [00:16:54] Speaker 05: So in this court, Rakia makes clear that the initial analysis by the circuit court is a de novo one on the applicability, the enforceability, the validity, and the mandatory nature of the contract. [00:17:06] Speaker 05: And within that analysis, there's a binary question that gets asked, yes or no. [00:17:11] Speaker 05: Is the foreign so gravely inconvenient [00:17:14] Speaker 05: that you are effectively denied any remedy whatsoever. [00:17:18] Speaker 05: There is no dispute in this case whatsoever as to enforceability or validity. [00:17:22] Speaker 05: In fact, it's only about the mandatory nature. [00:17:25] Speaker 05: That analysis is not the same as the adequacy of the form. [00:17:30] Speaker 05: In fact, that's quite a low bar on adequacy. [00:17:34] Speaker 05: And in fact, there are many courts that have already held around the country that the Saudi board of grievances is an adequate one. [00:17:41] Speaker 00: But the adequacy, you said, is different from this fourth factor. [00:17:45] Speaker 05: It is. [00:17:45] Speaker 05: It is. [00:17:46] Speaker 05: And so first, there's no dispute in this case as to validity and enforceability. [00:17:52] Speaker 05: Within the context of that question, if there were one in this case about a validity and enforceability, then it would be appropriate for the court to ask, is the forum so gravely inconvenient that there is no remedy for DSCI? [00:18:08] Speaker 05: DSCI has made no argument to that effect in the district court or here on appeal. [00:18:12] Speaker 05: They are conflating adequacy of the forum with that validity enforceability inquiry. [00:18:17] Speaker 00: And what you're saying is the threshold validity enforceability question is spoken for. [00:18:21] Speaker 00: It's satisfied. [00:18:22] Speaker 05: It's certainly satisfied. [00:18:24] Speaker 00: And was never disputed? [00:18:24] Speaker 05: It was never disputed. [00:18:25] Speaker 05: But on top of that, to the extent that the court is making a de novo review, the contract is the best evidence for the adequacy of the forum. [00:18:35] Speaker 05: I'm sorry, for the validity. [00:18:37] Speaker 05: and reach, the ability to reach that forum. [00:18:41] Speaker 05: Beyond that, there are numerous decisions of the district courts around this country and ones that have been affirmed in addition by both the Fifth and Seventh Circuits that the Saudi Board of Grievances is accessible. [00:18:57] Speaker 03: If the district court were to dismiss this case with an order, holding the dismissal in abeyance for a period of [00:19:07] Speaker 03: six months or three months or something, within which the plaintiff can file or seek a remedy before the grievance counsel. [00:19:15] Speaker 03: Would the kingdom object to that? [00:19:22] Speaker 05: I would submit that there's no reason to do so, Your Honor, because there's already a submission to that tribunal by the kingdom. [00:19:31] Speaker 03: on top of that really flies in the face of what... If you think that the forum is adequate and dismiss the case and then it turns out for reasons or any one of the reasons that the plaintiff here has deduced from the public media that it's unable to pursue a remedy, the advocacy question will be raised here. [00:19:57] Speaker 05: Well, in that event we would invite the [00:20:01] Speaker 05: a plaintiff appellant to move to reopen the judgment, but to do otherwise would really – Reopen which judgment? [00:20:09] Speaker 04: I'm sorry. [00:20:09] Speaker 04: Reopen which judgment? [00:20:10] Speaker 05: The decision of the district court below. [00:20:12] Speaker 05: The FSAIA is designed to save the Kingdom of Saudi Arabia that very kind of burden where it must hold this case open while it sees – while the [00:20:22] Speaker 05: plaintiff-appellant begins to do the job it should have done in the district court. [00:20:27] Speaker 05: Instead, the FSIA, the decisions implementing it here, including Owens, says that really the FSIA is meant to save not only decisions of the US courts, but litigation in the US courts, and that [00:20:43] Speaker 05: As the moving party on the forum non-convenience motion to dismiss, the Kingdom of Saudi Arabia was entitled to pursue the, quote, most cheaply decisive, that's this court's words in Inrei Papandreou. [00:20:56] Speaker 05: We were not subjected, I'm sorry, we were not expected to keep the decision open while the SCIC sees if it can find some evidence to show that it's not able to access the forum, which clearly it is able to do. [00:21:12] Speaker 03: Okay, thank you. [00:21:15] Speaker 03: What circuit has appell the claim that the defense, that the Grievance Council is out of? [00:21:23] Speaker 05: There are a number of cases cited in our brief. [00:21:26] Speaker 03: Any circuit, please? [00:21:27] Speaker 05: Yes. [00:21:27] Speaker 05: On page 24 of our brief, we discuss UNC Weir, in which the Fifth Circuit affirmed a finding under forum nonconvenience that the Board of Grievances is an adequate forum. [00:21:39] Speaker 05: In addition, the Seventh Circuit [00:21:41] Speaker 05: in Camel, which is K-A-M-E-L, at 108 F-3rd, 799, affirmed a dismissal under Form 9 convenience for the same reason. [00:21:54] Speaker 04: Thank you. [00:21:55] Speaker 05: Thank you. [00:21:56] Speaker 04: Thank you. [00:21:56] Speaker 04: Mr. Sternberg, you are out of time, but you could take one minute if you would like it. [00:22:01] Speaker 02: Thank you, Your Honor. [00:22:07] Speaker 02: As my learned opponent has conceded, the district court did not decide the factual issue of whether the forum was available and adequate. [00:22:20] Speaker 02: Or, I'm sorry, the better term is accessible and able to afford relief. [00:22:25] Speaker 04: Well, isn't that because the district court thought it was mandatory? [00:22:33] Speaker 02: If this court concludes that, I may disagree with that, but that's for this court to decide to no vote. [00:22:39] Speaker 02: If the court decides that, there is still the second standard. [00:22:42] Speaker 02: There is still stage four. [00:22:43] Speaker 02: There is still the language I've quoted a couple of times that even if it is a mandatory provision, the court needs to make a finding. [00:22:52] Speaker 02: as to whether the, not as to whether it's a, I'm sorry, slightly different language between the two, but difficult, so gravely difficult and inconvenient that, and it's available and adequate. [00:23:09] Speaker 02: The, and even just to summarize, not to run out of time, the- You just did, but go ahead. [00:23:15] Speaker 02: Thank you, Your Honor. [00:23:18] Speaker 02: The Court should apply the factors and conclude the language as permissive, but regardless of that, remand for further fact-finding. [00:23:25] Speaker 02: The fact is neither DSCI, Ms. [00:23:27] Speaker 02: Chopin, Mr. Berger, myself, or the members of this Court would have standing. [00:23:32] Speaker 02: And you will, in fact, be deciding the merits of this case. [00:23:36] Speaker 02: And that's not your job. [00:23:37] Speaker 02: Okay. [00:23:38] Speaker 04: Thank you both. [00:23:38] Speaker 04: The case is submitted. [00:23:39] Speaker 04: Thank you, Your Honor. [00:23:40] Speaker 04: Call the next case, please.