ACE American Insurance Company v. University of Ghana

Background

ACE American Insurance Company, identified in the opinion as “Chubb” or the petitioner, filed a petition under the Federal Arbitration Act and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It sought to confirm and enforce an alleged foreign arbitration award against the University of Ghana. ACE was the assignee of rights and interests that CPA Ghana had assigned to it under an Assignment Agreement.

The dispute arose from a 2015 public-private partnership between the University and CPA Ghana. The agreement required an independent expert to calculate a “Termination Value” after termination for an event of default. London-based expert Nicholas Vineall QC issued a Termination Value Award of approximately $165,000,000 on August 1, 2018. Before that award was announced, the University had sent CPA Ghana a notice seeking arbitration in London over disputes including the validity of the agreement and the expert-determination process. The London arbitration had not progressed, and no payments had been made on the Termination Value Award.

Motion to Dismiss

The University moved to dismiss for lack of personal jurisdiction, lack of subject-matter jurisdiction, and improper venue. It alternatively sought a stay while the London arbitration continued. The court chose to address personal jurisdiction first because it could resolve the motion on that ground without deciding the other jurisdictional issue.

Personal Jurisdiction Based on Consent

ACE argued that the agreement’s arbitration clause showed the University’s consent to jurisdiction in New York. The clause stated that the place of arbitration would be London, United Kingdom. It allowed arbitration in New York only if a force-majeure event occurring in the United Kingdom made arbitration there impossible.

The court held that this condition precedent had not been satisfied. ACE did not allege that arbitration in London, or elsewhere in the United Kingdom, was impossible because of a force-majeure event. The existence of an ongoing London arbitration further supported that conclusion. Because the condition for New York arbitration had not occurred, the court could not infer that the University had consented to personal jurisdiction in New York.

Personal Jurisdiction Under the Foreign Sovereign Immunities Act

ACE also relied on the Foreign Sovereign Immunities Act, which can provide personal jurisdiction in certain civil actions against foreign states and their agencies or instrumentalities. ACE asserted that the University was an agency or instrumentality of Ghana, and the University did not dispute that characterization.

The court explained that agencies and instrumentalities of foreign sovereigns generally retain separate legal status and due-process protections. To establish personal jurisdiction over such an entity, a petitioner must show minimum contacts with the forum or that the entity is the sovereign’s alter ego. ACE conceded that the University had no contacts with the United States and described it as an agency or instrumentality, not Ghana’s alter ego. The court therefore rejected this alternative basis for jurisdiction.

Disposition

The court granted the University’s motion to dismiss the petition for lack of personal jurisdiction. It did not reach the University’s arguments concerning subject-matter jurisdiction, venue, or a stay. The Clerk of Court was directed to terminate the pending motion and close the case.