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Click here for the full text of this decision FACTS:The Republic of Congo and Sadelmi Cogepi SpA entered into an infrastructure construction contract, but Congo did not pay. Walker International Holdings bought Congo’s debt from Sadelmi in an assignment agreement. Pursuant to Sadelmi’s contract, Walker took the case to an international arbitration panel, which found Congo liable to Walker. A French court upheld the $26 million award, and Walker registered the award in a federal district court in Washington, D.C. Walker then filed a garnishment action in federal district court for the Southern District of Texas against Murphy Exploration & Production, which Walker suspected owed signing bonuses and money to Congo and its national oil company, Societe Nationale des Petroles du Congo (SNPC). Walker moved for a temporary restraining order against Murphy from making any payments to Congo or SNPC. The magistrate judge, however, granted Murphy’s motions to vacate the TRO, to dissolve writs of attachment and garnishment, and to dismiss. The magistrate judge found that the property Walker attempted to attach was not used for commercial activity, as is required to waive immunity under the Foreign Sovereign Immunities Act. (To waive immunity under the FSIA, the property must be “in the United States” and “used for commercial activity in the United States.”) Murphy paid Congo $6.3 million in signing bonuses, then placed the equivalent amount into a surety bond made payable to Walker if he should win. Walker appeals. HOLDING:Affirmed. The court rejects Walker’s argument that it is entitled to the surety bond because it is not the property of the Congo, thus making the FSIA inapplicable. The court points out that a private corporation currently holds the surety bond. A ruling that allowed the turnover of certain foreign property now held by the United States does not apply, the court rules. Walker also argues that the surety bond is made payable to him upon a final, non-appealable judgment, and since he has a judgment registered in D.C., then he is entitled to the bond now. The court says the argument fails because the bond sets out the style and cause number of the case, and it is this case in particular, not the one in D.C., that the bond refers to. The court also finds that Murphy is entitled to raise an immunity defense; that is, Congo is not the only party that can invoke the FSIA. Confirming that FSIA applies here, the court then turns to whether Congo waived its sovereign immunity either explicitly or by implication. The court notes that in one of Congo’s contract with Murphy, Congo waives any immunity as to any claim relating to an arbitration decision. The plain language of “any immunity” indicates that sovereign immunity is also waived, and so the court rules that Congo has explicitly waived its immunity. The court next turns to ascertain the impact of this waiver. To do so, the court looks to see if the property at issue is in the United States. The property Walker seeks to attach is a surety bond in the United States. The debtor, Murphy, is also in the United States. Therefore, under FSIA, the surety bond is in the United States. The court, however, rules that the property is not used for commercial activity. The magistrate judge found that no agreement was ever reached requiring Congo to reimburse Murphy for its legal expenses. There is no legal authority suggesting that negotiations over property make the property “used for commercial activity” under the FSIA, as urged by Walker. Walker also argues the property was used for commercial activity because Congo was to reimburse Murphy for administrative and transactional costs. Even if there was such an agreement, there was no commercial activity separate from the transaction that generated the property in the first place. The court finds “meritless” the argument that the surety bond is commercial paper under the Texas Uniform Commercial Code and therefore, by definition, commercial. The court says this interpretation would completely undermine the intent of the FSIA. OPINION:Garza, J.; Smith, Garza and Vance, JJ.

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