SUING THE REPUBLIC OF IRAQ IN THE UNITED STATES
Two Cyprus based oil brokerage companies sued the Republic of Iraq in a U.S. federal court over the termination of two agreements concerning the purchase and sale of Iraqi oil. Whether a foreign state like the Republic of Iraq can be sued in a U.S. federal court is governed by the Foreign Sovereign Immunities Act (“the Act”). The Republic of Iraq moved to dismiss the lawsuit based upon the doctrine of sovereign immunity granted under the Act. The trial court denied the motion based upon the “commercial exception” to the sovereign immunity otherwise provided by the Act.
The Ninth Circuit Court of Appeals, however, disagreed and reversed the trial court’s decision; thus, dismissing the lawsuit against the Republic of Iraq. The Ninth Circuit did so “[b]ecause the lawsuit [was] not based upon commercial activity by Iraq in the United States nor upon an act in connection with such commercial activity having a direct effect in the United States.”
You can read a copy of the decision – Terenkian v. Republic of Iraq