On May 11, 2012, Triple A International, Inc., a Michigan corporation, appealed the decision of the Eastern District of Michigan dismissing Triple A’s claims to collect on a debt allegedly owed to it by the Democratic Republic of the Congo.  Triple A Int’l, Inc. v. The Democratic Republic of Congo, Case No. 10-15137.  In 1993, the DRC (known then as Zaire) contracted with Triple A to obtain certain military supplies.  Triple A, which had offices in both Michigan and the DRC, worked from its Michigan office to find a supplier for the goods.  Triple A ultimately located a supplier for the goods in South Korea and arranged for the goods to be purchased by the DRC for just over $14 million.  After Triple A allegedly met all of its obligations under the contract, the DRC failed to make payment for the goods.  Triple A sued in Michigan District Court, and the DRC sought dismissal of the action asserting that the DRC was protected by sovereign immunity under the Foreign Sovereign Immunities Act.       

Under the FSIA, a foreign state is presumed to have immunity unless an exception applies.  In this case, Triple A argued that the “commercial activity” exception applied because its action against the DRC was “based upon a commercial activity carried on in the United States by a foreign state.”  In evaluating whether the exception applied, the court focused on several facts: (1) negotiations between Triple A and the DRC were exclusively held in the DRC; (2) the DRC did not conduct any activities in the United States in connection with its relationship with Triple A; (3) nothing in the contract required that any of the work be done in the United States; and (4) the goods were made and shipped from South Korea, not the United States.   Triple A performed some of its contractual obligations from its office in Michigan, but “there is no indication that the DRC sought this U.S.-based performance, or placed any importance on the likelihood that Plaintiff might undertake some of its contractual duties from its Michigan office.” 

The court concluded that Triple A’s decision to perform some of the contract in the United States was largely “happenstance or Plaintiff’s own choice or convenience, rather than a result of the DRC’s deliberate engagement in commercial activity having ‘substantial contact’ with the United States.”  In order to fall under a FSIA exception, there must have been contact beyond that arising simply because of Triple A’s U.S. residence.  The court reasoned that the DRC selected a company with an office in the DRC, made payment to a local bank in DRC currency, and sent correspondence to Triple A’s DRC office that was written in the DRC’s official language, French.  The court held that these facts were not sufficient to find “commercial activity carried on by [the DRC] and . . . substantial contact with the United States.”  The court also found that there was an insufficient nexus between the DRC’s contacts with the United States and the actual claims in the case.