Equus Mining LTD. v. Blox Inc.

Background

Equus Mining Ltd. brought the case after Blox Inc. allegedly commenced and continued two proceedings in Guinea using Equus’s name, without Equus’s knowledge or consent. The proceedings concerned the withdrawal of a mining license and the issuance of a license to a competing entity.

Equus and Burey Gold Guinee had entered into a sale and purchase agreement with Joseph Boampong Memorial Institute Ltd. concerning rights in the Mansounia mining property in Guinea. Joseph Boampong Memorial Institute later assigned its rights and obligations under that agreement to Blox. The agreement required Equus to perform certain limited actions concerning the mining license and to assist in obtaining a license for Blox or its assigns. The court found ambiguity about whether the agreement authorized renewal of the license in Equus’s name, so it did not resolve that licensing issue in this case.

Equus alleged, however, that nothing in the agreement authorized Blox to bring lawsuits or similar proceedings in Equus’s name without Equus’s knowledge and consent. After learning of the proceedings, Equus asked Blox to stop and to provide information about them. Equus said Blox did not comply and instead continued to assert before the Guinean Supreme Court that it had authority to proceed.

Default and Motions

Equus filed this action and sought a temporary restraining order on December 28, 2021. Blox did not timely appear or comply with the court’s scheduling directives. The Clerk entered a certificate of default. Equus then moved for default judgment, while Blox moved to vacate, or set aside, the certificate of default.

The court applied the factors governing vacatur of a default: whether the default was willful, whether the defendant had a potentially meritorious defense, and whether setting aside the default would prejudice the other party. The court found Blox’s default was willful because Blox deliberately failed to appear and comply with court orders, while commencing another proceeding in Guinea. The court rejected Blox’s explanation that later providing Equus with a copy of an intervention filing would have made the federal case unnecessary.

The court rejected Blox’s argument that the amount-in-controversy requirement was not met and held that it had subject-matter jurisdiction. The court concluded that Blox’s international-comity and forum-non-conveniens defenses were not certain to fail and therefore recognized that Blox might have a meritorious defense. But the court found that vacating the default would prejudice Equus because further delay could create greater opportunities for misleading or fraudulent statements to the Guinean courts, while Equus had limited information about the proceedings.

Declaratory Relief

The court held that Equus’s allegations stated a claim under the Declaratory Judgment Act, which permits a federal court to declare the parties’ legal rights in a real and sufficiently immediate dispute. The court concluded that the dispute was concrete, that a declaration would clarify the parties’ legal relationship, and that the declaration would not improperly interfere with the Guinean courts’ authority over Guinean mining-law issues.

The court accepted Equus’s well-pleaded allegations as true for purposes of the default judgment. It declared that Blox lacked, and continues to lack, the capacity to sue in Equus’s name without Equus’s knowledge and consent. It also declared that Blox had not obtained Equus’s knowledge and consent before filing the Guinean proceedings.

The court did not award the requested injunctive relief. It explained that the remaining issues in the Guinean proceedings involved the award and withdrawal of mining licenses under Guinean law, which the Guinean courts were better positioned to decide. The court therefore limited the relief to the declaration concerning Blox’s authority to sue in Equus’s name.

Disposition

The court granted in part Equus’s motion for default judgment and awarded the declaratory relief described above. It denied Blox’s motion to vacate the certificate of default. The Clerk was directed to enter judgment, terminate the pending motions, adjourn the remaining dates, and close the case.