Terenkian v. Republic of Iraq , No. 10-56708 (9th Cir. 2012)Annotate this Case
Pentonville Developers, Ltd. and Marblearch Trading, Ltd., two Cyprus oil brokerage companies, sued the Republic of Iraq for unilaterally terminating two contracts for the purchase and sale of Iraqi oil. The district court concluded it had subject matter jurisdiction notwithstanding Iraq's assertion of sovereign immunity under the Foreign Sovereign Immunities Act because the lawsuit fell within the "commercial exception" to that immunity. The Ninth Circuit Court of Appeals reversed, holding that because 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, the district court erred in denying Iraq's motion to dismiss for lack of subject matter jurisdiction.