BSG Resources Limited v. Soros

Background

BSG Resources (Guinea) Limited, BSG Resources (Guinea) Sàrl, and BSG Resources Limited, collectively referred to as BSGR, sued George Soros and several related organizations. The plaintiffs alleged that the defendants interfered with a 2009 agreement between BSGR and Guinea concerning mining rights in the Simandou region. According to the amended complaint, the defendants influenced Guinea’s review of BSGR’s mining rights, spread accusations that BSGR had obtained those rights through bribery, and helped cause Guinea to terminate the agreement and the mining rights in 2014. The plaintiffs also alleged that the defendants later harmed their reputation and business opportunities.

The amended complaint asserted claims for tortious interference with contract; conspiracy to commit tortious interference and other illegal acts; fraud, misrepresentation, and related conspiracy claims against George Soros; commercial defamation; and prima facie tort against George Soros. The plaintiffs sought damages, punitive and exemplary damages, interest, fees and costs, an injunction, and other equitable relief.

The Motion and the Court’s Analysis

The defendants renewed a motion to dismiss the amended complaint. They argued that the claims were barred by issue preclusion, a doctrine that can prevent a party from relitigating an issue already decided in an earlier proceeding. They relied in part on a 2019 arbitration between BSGR and Vale, BSGR’s former joint venture partner, in which the tribunal found that BSGR had engaged in fraudulent misrepresentation and had obtained mining rights by bribing Mamadie Touré. The defendants also relied on materials concerning Touré’s apparent admission to receiving bribes from BSGR.

The defendants separately invoked the act-of-state doctrine, which generally prevents a United States court from declaring invalid an official act of a foreign government. The court rejected that argument at this stage. It explained that the plaintiffs were seeking damages from private defendants for allegedly causing Guinea’s actions, not asking the court to reverse or invalidate Guinea’s official acts. The court therefore held that the act-of-state doctrine did not require dismissal.

The court did not decide the defendants’ arguments that the amended complaint failed to adequately allege causation, fraud with the required detail, or a defamatory statement attributable to the defendants. The court stated that the defendants’ arguments relied on material outside the pleadings, particularly the assertion that BSGR obtained mining rights through bribery. Under Federal Rule of Civil Procedure 12(d), when a court considers material outside the pleadings on a motion to dismiss, it may convert the motion into one for summary judgment. Summary judgment is a procedure for deciding whether undisputed evidence requires judgment before trial.

Ruling and Case Status

Judge John F. Keenan ordered that the defendants’ motion to dismiss be treated as a motion for summary judgment and reserved decision on that motion until the parties submitted the relevant materials. The court lifted the discovery stay only for three questions: whether the plaintiffs bribed Mamadie Touré; whether that alleged bribery was connected to the plaintiffs’ acquisition of mining rights included in the agreement with Guinea; and whether Guinea was permitted to, and did, terminate the plaintiffs’ mining rights because of that alleged bribery.

The parties were permitted to conduct limited discovery on those questions under the supervision of Magistrate Judge Ona T. Wang. The court did not rule on whether the plaintiffs ultimately proved bribery, whether the alleged bribery justified Guinea’s termination, or whether the defendants were entitled to judgment on the plaintiffs’ claims.