Zappia Middle East Constr. Co. Ltd. v. Emirate of Abu Dhabi
United States Court of Appeals for the Second Circuit
215 F.3d 247 (2000)
- Written by Sara Adams, JD
Facts
Zappia Middle East Construction Company Ltd. (ZMEC) (plaintiff) entered public-works construction contracts with the Emirate of Abu Dhabi (Abu Dhabi) (defendant). Abu Dhabi failed to make several payments to ZMEC, so ZMEC took a loan from Emirates Commercial Bank (ECB). When ZMEC reached its credit limit under the loan, ZMEC entered an agreement with ECB to transfer management of ZMEC to another contractor. The agreement barred ZMEC from taking on more debt. Eventually, Abu Dhabi recapitalized ECB and it was merged into Abu Dhabi Commercial Bank (ADCB) (defendant). ZMEC sued parties including Abu Dhabi and ADCB in United States federal court to collect payments that Abu Dhabi missed under the original contract. Abu Dhabi and ADCB filed a motion to dismiss for lack of subject-matter jurisdiction. The district court dismissed the case, finding there was no government taking as required by the expropriation exception to the Foreign Sovereign Immunities Act (FSIA). ZMEC appealed, arguing that ECB and ADCB were alter egos of Abu Dhabi and the expropriation exception applied.
Rule of Law
Issue
Holding and Reasoning (Pauley, J.)
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