Nemariam, Hiwot, et al v. Fed Dem Repub, et al, No. 01-7142 (D.C. Cir. 2003)

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 18, 2002 Decided January 24, 2003

No. 01-7142

Hiwot Nemariam, et al.,

Appellants

v.

The Federal Democratic Republic of Ethiopia and

The Commercial Bank of Ethiopia,

Appellees

Appeal from the United States District Court

for the District of Columbia

(No. 00cv01392)

Donald Francis Donovan argued the cause for appellants.

With him on the briefs was Katherine Birmingham Wilmore.

W. DeVier Pierson argued the cause for appellees. With

him on the brief was Knox Bemis.

 Before: Ginsburg, Chief Judge, Henderson, Circuit Judge,

and Williams, Senior Circuit Judge.

Opinion for the Court filed by Chief Judge Ginsburg.

Ginsburg, Chief Judge: Hiwot Nemariam and others appeal

the district court's dismissal of their suit against Ethiopia

seeking recovery for property damage they suffered during

the border war between Ethiopia and Eritrea. The district

court determined that the Ethiopia/Eritrea Claims Commis-

sion was a more appropriate forum for the plaintiffs' claims,

and dismissed their case on the ground of forum non conve-

niens. We reverse the judgment of the district court because

the Commission does not offer the plaintiffs an adequate

remedy.

I. Background

In May 1998 a long-standing border dispute between Eri-

trea and Ethiopia erupted into a general armed conflict.

Nemariam, who was living in Ethiopia at that time, claims

that shortly thereafter the government of Ethiopia began

expelling persons who, like her, were Ethiopian citizens of

Eritrean descent, and confiscating any property they left

behind. To take but one example, Nemariam claims that her

account at the Commercial Bank of Ethiopia (CBE), an

agency or instrumentality of the government, was effectively

expropriated when she was expelled from the country because

Ethiopian banking regulations permit withdrawal of funds

only when an account holder presents a passbook in person at

the bank.

In December 2000 Ethiopia and Eritrea signed a Peace

Agreement, which formally ended the conflict. It also creat-

ed the Ethiopia/Eritrea Claims Commission:

The mandate of the Commission is to decide through

binding arbitration all claims for loss, damage or injury

by one Government against the other, and by nationals

(including both natural and juridical persons) of one

party against the Government of the other party or

entities owned and controlled by the other party that are



 (a) related to the conflict that was the subject of the

Framework Agreement, the Modalities for its Implemen-

tation and the Cessation of Hostilities Agreement, and

(b) result from violations of international humanitarian

law, including the 1949 Geneva Conventions, or other

violations of international law.



Art. 5, p 1. The decisions of the Commission are made by a

panel of five arbitrators, two chosen by each country and one

chosen by the other four. Art. 5, p 2. The Commission,

which is based in the Hague, "may hold hearings or conduct

investigations in the territory of either party, or at such other

location as it deems expedient." Art. 5, p 3.

Ethiopia and Eritrea are the only two parties permitted to

appear before the Commission, but they may bring claims "on

behalf of [their] nationals, including both natural and juridical

persons." Art. 5, p 8. Eritrea or Ethiopia may also "file

claims on behalf of persons of Ethiopian or Eritrean origin

who may not be its nationals." Art. 5, p 9. The Agreement

vested in the Commission exclusive jurisdiction over all claims

arising from the conflict "[e]xcept for claims submitted to

another mutually agreed settlement mechanism in accordance

with paragraph 16 or filed in another forum prior to the

effective date of this Agreement." Art. 5, p 8. Therefore,

any claim not filed in another forum prior to December 12,

2000, the effective date of the Agreement, could be filed only

with the Commission. Paragraph 16 of Article 5 allows

Eritrea and Ethiopia to "agree at any time to settle outstand-

ing claims, individually or by categories, through direct nego-

tiation or by reference to another mutually agreed settlement

mechanism."

In June 2000 Nemariam filed a two-count complaint against

Ethiopia and the CBE in the District Court for the District of

Columbia, asserting that Ethiopia's actions amounted to a

taking of her property in violation of international law. Nem-

ariam invoked the jurisdiction of the court under the interna-

tional takings provision of the Foreign Sovereign Immunities

Act, 28 U.S.C. s 1605(a)(3).

 Ethiopia moved to dismiss the case on the ground that the

district court was a forum non conveniens, pursuant to the

four-step test we outlined in Pain v. United Technologies

Corp.:

As a prerequisite, the court must establish whether an

adequate forum exists which possesses jurisdiction over

the whole case. Next, the trial judge must consider all

relevant factors of private interest, weighing in the bal-

ance a strong presumption against disturbing plaintiff's

initial forum choice. If the trial judge finds this balance

of private interests to be in equipoise or near equipoise,

he must then determine whether or not factors of public

interest tip the balance in favor of a trial in a foreign

forum. If he decides that the balance favors such a

foreign forum, the trial judge must finally ensure that

plaintiffs can reinstate their suit in the alternative forum

without undue inconvenience or prejudice.



637 F.2d 775, 784-85 (D.C. Cir. 1980) (emphases in original);

but see Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981)

(overruling the third part of the Pain test by stating that

dismissal is appropriate if the plaintiff's "chosen forum [is]

inappropriate because of considerations affecting the court's

own administrative and legal problems").

The district court granted the motion. The court first

determined that the Commission was an adequate alternative

forum; it had five distinguished arbitrators, all well versed in

international law, and it was authorized to hold hearings and

to resolve claims. Although Nemariam could not bring a

claim herself, the district court found that Eritrea could bring

a claim on her behalf, that the Commission had jurisdiction to

hear that claim, and that Eritrea "has no incentive not to

espouse as many meritorious claims as possible before the

Commission."

The district court rejected Nemariam's argument that the

remedy provided by the Commission was inadequate because

Eritrea and Ethiopia might negotiate a set-off of each other's

claims, thereby denying her an award even if she had a

meritorious claim. The district court stated, "nothing in the

record ... suggest[s] that the Commission contemplates a

'set off' remedy;" and "even if compensation under the

Claims Commission proves different than it might be in a

U.S. court, this is not a case where the 'remedy provided by

the alternative forum is so clearly inadequate or unsatisfacto-

ry that it is no remedy at all.' " (quoting Piper Aircraft Co. v.

Reyno, 454 U.S. 234, 254 (1981)). Next, the court found the

private and public interest factors heavily favored the Com-

mission. Finally, the court dismissed the case without preju-

dice and provided that "the case is subject to reinstatement

for good cause shown if named plaintiffs' claims are not

submitted to the Claims Commission by the government of

Eritrea despite affirmative, timely request therefore [sic] by

plaintiffs."

In the time since the district court dismissed the case, the

Commission has implemented procedures and begun the adju-

dication of claims submitted to it. Eritrea's submissions

cover the claims made by Nemariam and the other plaintiffs

in this suit. And the Commission has ordered the filing of

evidence for those claims and has scheduled a 13-day hearing

to begin on June 16, 2003.

II. Analysis

On appeal Nemariam first argues that the Commission is

an inadequate forum because, even if her claim is valid, she

has no personal right to a remedy from the Commission.

Second, Nemariam argues that the Commission is an inade-

quate forum because she may not file a claim before the

Commission and she has no control over any claim Eritrea

may file on her behalf. Third, Nemariam contends that the

district court misapplied the private and public interest fac-

tors. Finally, Nemariam argues that Ethiopia waived its

right to seek dismissal on the basis of forum non conveniens

when it agreed that "the Commission shall be the sole forum

for adjudicating claims" "except for ... claims filed in anoth-

er forum prior to the effective date of this [Peace] Agree-

ment." Art. 5, p 8.

 We review the district court's order dismissing the case for

a "clear abuse of discretion." Piper, 454 U.S. at 257. Be-

cause we agree with Nemariam's first point, we do not reach

her other arguments.

Because Nemariam lacks a personal right to a remedy from

the Commission, she argues that any "remedy provided by

the [Commission to Eritrea with respect to her claim] is so

clearly inadequate or unsatisfactory that it is no remedy at

all." Piper, 454 U.S. at 254. We think that the Commission's

inability to make an award directly to Nemariam, and the

possibility that Eritrea could set off Nemariam's claims or

even an award in her favor against claims made by or an

award in favor of Ethiopia, render the Commission an inade-

quate forum.

First, it appears, as Nemariam says, the Commission can-

not award any relief directly to her. Nothing in the Peace

Agreement authorizes the Commission to make an award to

anybody other than Eritrea or Ethiopia, the parties before

the Commission. Although it is true that Article 5, p 9 allows

Eritrea to bring a claim "on behalf of persons [like the

plaintiffs] of ... Eritrean origin who may not be its nation-

als," Eritrea would presumably control the disposition of any

resulting award.

Second, it appears Eritrea may set off Nemariam's claim or

an award in her favor against any claims or awards that

Ethiopia may have against Eritrea. Under international law,

Eritrea is the master of its own claim before the Commission

and may keep or barter any remedy awarded by the Commis-

sion. See Restatement (Third) of the Foreign Relations Law

of the United States s 902, cmt. I (1987) ("The state may

determine what international remedies to pursue, may aban-

don the claim, or settle it"). It is irrelevant whether the

Commission currently contemplates that any awards to the

respective governments will be set off by them against each

other. What matters is that Eritrea and Ethiopia have that

option. In fact, Eritrea and Ethiopia may bypass the Com-

mission entirely in resolving their claims. See Agreement,

Art. 5, p 16 ("The parties may agree at any time to settle

outstanding claims, individually or by categories, through

direct negotiation or by reference to another mutually agreed

settlement mechanism"). Unless Ethiopia can negate these

possibilities, we think they render the Commission an inade-

quate alternative to the district court.

Ethiopia's response is two-fold. First, it points out that

Eritrea has stated before the Commission that it intends to

give directly to the claimant any award made to it for a

taking of private property. Ethiopia does not deny that the

Commission cannot require Eritrea to pass through to Nem-

ariam any award it may receive with respect to the claim it

has filed on her behalf. Rather, Ethiopia claims that Eritrea

intends voluntarily to distribute awards to individual claim-

ants.

Eritrea has indeed indicated in a memorandum to the

Commission that "Eritrea believes that, as a general matter,

awards should be given directly to claimants.... Financial

compensation for large amounts of property damage should

also be given directly to the individual victims." By invoking

those statements, however, Ethiopia is asking Nemariam and

this court to rely upon the goodwill of Eritrea, not upon the

power of the Commission to enforce its judgments. In this

vein, we note that Eritrea has also recognized the possibili-

ty -- albeit in circumstances apparently different from those

alleged in the present case -- that an individual with a

meritorious claim might not receive any compensation: In the

same memorandum, Eritrea informed the Commission that

"the practical difficulties of individual distribution might out-

weigh the desirability of individualized compensation."

Therefore, Ethiopia is unable to substantiate its claim that

Nemariam will receive a remedy if Eritrea succeeds in prose-

cuting her claim before the Commission.

Second, Ethiopia argues that we should follow Gonzalez v.

Chrysler Corp., 301 F.3d 377 (2002), in which the Fifth Circuit

affirmed the dismissal of a case on the ground of forum non

conveniens even though it was unlikely the plaintiff would

receive in the alternative forum -- namely, a Mexican

court -- a remedy adequate by United States standards. In

Gonzalez the law of the alternative forum did provide a

remedy, but it capped the potential recovery at a modest

$2500, and the plaintiff alleged he would not bring the suit in

Mexico because the costs of doing so would outweigh the

potential recovery. In this case, however, Ethiopia cannot

assure Nemariam of recovering any award at all, even if the

Commission upholds her claim in full. While a more limited

recovery than is available in the plaintiff's forum of choice

does not automatically make the alternative forum inade-

quate, we fail to see how an alternative forum in which the

plaintiff can recover nothing for a valid claim may also be

deemed adequate. In other words, it would be peculiar

indeed to dismiss Nemariam's claim in the United States

District Court -- a forum in which, assuming the court has

jurisdiction, she is certain to be awarded full relief if she wins

on the merits of her claim -- in favor of a forum in which she

has no certainty of getting any relief for a meritorious claim.

We conclude that the Commission's inability to make an

award directly to Nemariam, and Eritrea's ability to set off

Nemariam's claim, or an award to Eritrea based upon her

claim, against claims made by or an award in favor of

Ethiopia, render the Commission an inadequate forum; the

"remedy provided by the alternative forum is so clearly

inadequate or unsatisfactory that it is no remedy at all."

Piper, 454 U.S. at 254. In so saying, we recognize that the

decision is a close one, particularly in the light of our limited

standard of review and the district court's observation, with

which we agree, that there is nothing in the record to suggest

the plaintiffs' awards will be set off against debts owed by

Eritrea to Ethiopia. Neither, however, is there any legal

barrier to such a set off.

III. Conclusion

Because we conclude that the district court abused its

discretion in determining that the Commission was an ade-

quate alternative forum we do not reach Nemariam's other

arguments. For the foregoing reasons, the judgment of the

district court dismissing this case on the ground of forum non

conveniens is

Reversed.