BAE Systems Technology v. Republic of Korea's Defense Acquisition Program Admin., No. 17-1041 (4th Cir. 2018)Annotate this Case
In a contract dispute between BAE and Korea, BAE sought a declaratory judgment that it had not breached any contractual obligation to Korea and a permanent injunction barring Korea from prosecuting its suit against BAE in Korean courts. The Fourth Circuit affirmed the district court's grant of BAE's requested declaration, but refused to issue a permanent injunction. The court held that the BAE-Korea agreement's permissive forum selection clause provided no basis for dismissing this action; Korea was not immune from suit under the Foreign Sovereign Immunities Act; the Foreign Military Sales (FMS) structure shields a U.S. contractor, such as BAE, from liability; enforcement of the BAE-Korea agreement would undermine the control the United States retained in all FMS transactions over price; because the U.S. government retained control over price in an FMS transaction, a foreign state generally has no cause of action — against anyone — if the price demanded by the U.S. government increases over time; and the district court did not abuse its discretion in denying BAE's petition for a permanent anti-suit injunction. Accordingly, the court affirmed the judgment.