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Media Alerts - Odhiambo v. Republic of Kenya
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August 29, 2014
  Odhiambo v. Republic of Kenya
Headline: Kenyan government's assistance resettling appellant in United States as a refugee does not bring their contract dispute within the ambit of the "commercial activity" exception of the FSIA.

Area of Law: Foreign Sovereign Immunities Act

Issue Presented: Whether a suit fits within the "commercial activity" exception to the FSIA when a Kenyan national was resettled in the United States by the Kenyan government for his own protection after his role in the underlying commercial transaction was revealed.

Brief Summary: Enticed by the Kenyan government's offer of monetary awards for information about potential tax evasion, appellant, a bank employee, tipped the government off about hundreds of account holders with potential tax deficiencies. Kenya made some but not all of the reward payments to which appellant believed himself entitled. When appellant's role as an informant became public, Kenyan officials helped him move to the United States as a refugee. Appellant then brought suit against the Kenyan government in the United States District Court for the District of Columbia alleging breach of contract due to the underpayment. The district court concluded that the FSIA barred the action and dismissed.

A divided panel of the United States Court of Appeals for the District of Columbia affirmed. The panel found "the closest question" related to the third clause of the FSIA's commercial activity exception, which authorizes suit where plaintiff's claim is based 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 court noted that its precedents had drawn "a very clear line": the requisite "direct effect" exists only when the contract establishes or necessarily contemplates the United States as the place of performance. Because Kenya had never promised reward payments in the United States, the court concluded that this case lacked a "direct effect" in the United States. The court rejected appellant's argument that Kenya's assistance in his asylum application ought to influence the inquiry, reasoning that Kenya had not promised to perform any specific obligations in the United States and that a refugee exception, however meritorious it might be, does not exist in the FSIA itself.

Judge Pillard dissented from this conclusion. She argued that a different result should obtain where the foreign government causes plaintiff to leave the country and directs him to resettle in the United States. She also argued that the majority's express or implied place-of-performance requirement conflicts with the decisions of other circuits.

For the full text of this opinion, please visit http://www.cadc.uscourts.gov/i...3-7100-1509948.pdf.

Panel: Griffith, Kavanaugh, and Pillard

Argument Date: April 8, 2014

Date of Issued Opinion: August 29, 2014

Docket Number: 13-7100

Decided: Affirmed

Case Alert Author: Elizabeth Earle Beske

Counsel (if known): Robert W. Ludwig, W. Clifton Holmes, and Thomas K. Kirui for appellant. David I. Ackerman and Daniel D. Barnowski for appellee.

Author of Opinion: Williams

Dissent by: Pillard

Case Alert Circuit Supervisor: Elizabeth Earle Beske, Ripple Weistling

    Posted By: Ripple Weistling @ 08/29/2014 01:27 PM     DC Circuit  

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