Devas v. Antrix: Ninth Circuit Requires Minimum Contacts For Personal Jurisdiction Over Foreign States

• Published date: 29 February 2024
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Sovereign Immunity: Public Sector Government
• Law Firm: Shearman & Sterling LLP
• Author: Mr Christopher Ryan, Jesse Sherrett and Anna Stockamore

The Ninth Circuit's February 6, 2024, decision denying rehearing en banc of Devas v. Antrix and upholding its earlier ruling to overturn the enforcement of a $1.3 billion arbitration award diverges significantly from the jurisprudence of other federal circuit courts, and impacts individuals and entities looking to enforce arbitration awards in federal courts within the Ninth Circuit. In Devas, the Ninth Circuit found that award creditors looking to enforce arbitration awards against foreign states and their agencies must prove, in addition to the personal jurisdiction requirements of the Foreign Sovereign Immunities Act (FSIA), that the award debtor has minimum contacts with the United States.¹ The Ninth Circuit is the only federal appeals court to require the minimum contacts test for personal jurisdiction over a foreign state.

This note examines the Ninth Circuit's decision and highlights its relevance to individuals and entities looking to collect on arbitration awards in the United States. Shearman & Sterling regularly advises clients on how best to enforce and execute on international arbitration awards in the U.S. and other jurisdictions.

Devas v. Antrix

Factual Background

In 2005, Devas Multimedia Private Ltd., an Indian telecommunications company, and Antrix Corp. Ltd., a commercial division of India's Department of Space, entered an agreement to build, launch, and manage telecommunication satellites. In 2011, Antrix terminated the agreement, and Devas initiated ICC arbitration as provided for in the parties' agreement.² Antrix initially refused to participate in the arbitration and declined to nominate an arbitrator.

In 2015, the ICC tribunal issued a final award concluding that Antrix had wrongfully repudiated the agreement and awarded Devas US $562.5 million, plus interest. Devas sought to enforce the award in New Delhi, while Antrix filed a petition to set aside the award in a different court in India. While the Indian proceedings were pending, Devas filed a petition to confirm the award in the District Court for the Western District of Washington, where Antrix has business relationships.³

Procedural History and Creation of a Circuit Split

Foreign states are immune from suit in the United States unless one of the enumerated exceptions to the Foreign Sovereign Immunity Act ("FSIA") applies. As such, the FSIA provides the sole basis for jurisdiction over a foreign sovereign in U.S. courts. To this end, the statute provides that personal jurisdiction "shall exist" over a foreign state when (i) service is proper,⁴ and (ii) the claims fall within one of the exceptions to sovereign immunity.⁵ In Devas, the parties did not contest that Antrix qualified as a "foreign state" under the FSIA,⁶ that service was proper, or that Devas' claims fell under the arbitration exception to sovereign immunity. Nonetheless, Antrix challenged personal jurisdiction, arguing that in addition to the FSIA's requirements, it should be entitled to the protection of the Due Process Clause of the Fifth Amendment to the U.S. Constitution and that it did not possess the requisite "minimum contacts" for personal jurisdiction.⁷

On October 27, 2020, the District Court confirmed the arbitration award and rejected Antrix's personal jurisdiction arguments, concluding that because Antrix is "wholly owned and controlled by a foreign state[,] the Due Process Clause does not apply and statutory personal jurisdiction under FSIA is all that is required."⁸ It also noted that even if Antrix was entitled to due process protection, it would have had personal jurisdiction because Antrix possessed the requisite "minimum contacts" with the United States and had "purposefully availed itself of the privilege of conducting business activities in the United States" through its long-term negotiations with a Virginia-based consulting firm which resulted in establishing Devas and in the execution of the parties' agreement.⁹ On the merits, the District Court found no basis under the New York Convention to refuse recognition and entered a judgment confirming the $562.5 million award plus pre- and post-award interest.¹⁰ Antrix appealed the decision.

In January 2022, the District Court granted the motion filed by intervenor companies related to Devas to register the judgment in the Eastern...