Horacio Sequeira v. Republic of Nicaragua, et al.

Section 1605(a)(1) of the Foreign Sovereign Immunities Act (“FSIA”) provides that a foreign state shall not be immune from the jurisdiction of U.S. Courts when (1) agrees to arbitration in another country, (2) agrees that the law of a particular country should govern the contract. Most courts have found jurisdiction when FSIA is intertwined with the merits of the case involving breach of contract claims containing commercial arbitration clauses naming the U.S. as the situs of the arbitration. They have ruled that the proper procedure is to find jurisdiction and deal with the objection as a direct attack on the merits. However, the Eleventh Circuit took an opposite approach by affirming the district court’s decision on the validity of the contract based on the application of foreign law rather than the FSIA. Also, took a different approach about the enforceability of contracts containing a choice of forum clause. The questions presented are:

1. Whether the proper procedure for a district court to follow, in cases involving the determination of the contract validity in a breach of contract claim under the FSIA, is to apply the FSIA to avoid converting a Motion to Dismiss into a Motion for Summary Judgment, that may result in preventing a party from finding jurisdiction elsewhere.

2. Whether a government official of a centralized government has actual authority to waive said foreign state jurisdiction when it enters into a commercial contract containing an arbitration clause under the FSIA and the foreign state contemplated the involvement of the U.S. federal courts.

3. Whether a Contract that contains an agreement that the parties shall settle their disputes in a U.S. Federal court is enforceable and sufficient for a Federal Court to find jurisdiction despite the fact that the parties lack diversity jurisdiction.