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As of: January 4, 2016 1:45 PM EST
Funnekotter v. Agric. Dev. Bank of Zimb.
United States District Court for the Southern District of New York
December 17, 2015, Decided; December 17, 2015, Filed
No. 13 Civ. 1917 (CM)
Reporter
2015 U.S. Dist. LEXIS 170848
BERNARDUS HENRICUS FUNNEKOTTER, et al.,
Plaintiffs,
-againstAGRICULTURAL
DEVELOPMENT BANK OF ZIMBABWE, et al.,
Defendants.
For ZB Bank Limited, Defendant: Edward Paul Gilbert,
Morrison Cohen Singer & Weinstein, LLP, New York,
NY; Mark Samuel Jarashow, Stroock & Stroock &
Lavan LLP, New York, NY.
Prior History: Funnekotter v. Agric. Dev. Bank of
Zimb., 2013 U.S. Dist. LEXIS 164496 (S.D.N.Y., Nov.
15, 2013)
Judges: COLLEEN MCMAHON, UNITED STATES
DISTRICT JUDGE.
Core Terms
discovery,
egos,
undisputed,
designation,
instrumentality, sovereign, minutes, entity, request for
admission, undisputed facts, fail to produce,
resolutions, summary judgment motion, commercial
activity, board of directors, material fact, documents,
immune, alter ego, arbitral, disputed, purposes,
requests, parties, frozen, orders
Counsel: [*1] For Bernardus Henricus Funnekotter,
Hermannes Van Duren, JR., Margareta Van Duren,
Dicky Roelanda Breytenbach, Romelia Gwendolyn
Fisher, Max Willem Arthur Graaf Van Rechteren
Limpurg, Rolf Jan Philip Walraven, Wessel Johannes
Weller, Loekie Weller, Johan Pieter Weller, Lion
Hellmut Benjamins, Carel Frederik Des Tombe, Erica
Hansen, Plaintiffs: Charles Richard Jacob, III, Kerrin
Teneyck Klein, S. Christopher Provenzano, Miller &
Wrubel, P.C., New York, NY.
For Agricultural Development Bank of Zimbabwe,
Minerals Marketing Corporation of Zimbabwe,
Zimbawe Mining Development Corporation, Zimare
Holdings Limited, Defendants: Richard Allen Roberts,
LEAD ATTORNEY, Richard A. Roberts, White Plains,
NY.
Opinion by: COLLEEN MCMAHON
Opinion
MEMORANDUM DECISION AND ORDER
GRANTING PLAINTIFFS’ MOTION FOR
SUMMARY JUDGMENT
McMahon, J.:
Plaintiffs are Dutch nationals who want to use
Defendants’ assets to satisfy a judgment against the
Republic of Zimbabwe (″Zimbabwe″). To do so,
Plaintiffs first must establish [*2] Defendants’ status
as Zimbabwe’s alter egos. Currently before the Court
is Plaintiffs’ motion for summary judgment against
Defendants Agricultural Development Bank of
Zimbabwe (″Agribank″), Minerals Marketing
Corporation of Zimbabwe (″MMCZ″), Zimbabwe
Mining Development Corporation (″ZMDC″), and
Zimare Holdings Limited (″Zimre″) (collectively
″Non-ZB Bank Defendants″), which asks the Court to
declare that (1) the Non-ZB Bank Defendants are alter
egos of Zimbabwe; (2) Plaintiffs may enforce the
judgment against assets of Non-ZB Bank Defendants
that are located in the United States and used for
commercial purposes; and (3) assets frozen pursuant to
sanctions established by the United States Department
of Treasury’s Office of Foreign Assets Control
(″OFAC″) are property of Zimbabwe that is located in
the United States and used for commercial purposes.
Page 2 of 7
2015 U.S. Dist. LEXIS 170848, *3
For the reasons discussed below, the Court grants
Plaintiffs’ requests for declaratory relief.
BACKGROUND
I. Factual Background
The factual background of this case has been detailed
in previous orders by the Court. Plaintiffs held direct
or indirect investments in commercial farms located in
Zimbabwe. Between 1992 and 2001 the Zimbabwean
government [*3] expropriated the farms and, as a
result, Plaintiffs lost their investments. Plaintiffs then
commenced an arbitration against Zimbabwe before
the International Centre for the Settlement of
Investment Disputes (″ICSID″). The ICSID tribunal
ruled that Zimbabwe had violated a bilateral investment
treaty between itself and the Netherlands and awarded
Plaintiffs damages in the amount of €8,220,000.
Plaintiffs then filed a lawsuit (the ″Related Action″) in
this Court seeking to confirm the arbitral award in
their favor pursuant to 22 U.S.C. § 1650a. See Petition
to Confirm Arbitration, Funnekotter v. Republic of
Zimbabwe, 09 Civ. 8168 (S.D.N.Y. Sept. 24, 2009),
ECF #1. Plaintiffs obtained a default judgment in their
favor against Zimbabwe confirming the arbitral award.
SeeFunnekotter v. Republic of Zimbabwe Judgment,
Funnekotter v. Republic of Zimbabwe, 09 Civ. 8168
(S.D.N.Y. Sept. 24, 2009), ECF #11. The Court entered
judgment in the amount of $25,170,171.33, comprising
the amount of the original arbitral award plus interest
and costs. Id.
Zimbabwe did not pay.
II. Procedural Background
Plaintiffs filed this action to seek a declaratory
judgment that Defendants are alter egos of the
Zimbabwean government, and [*4] that their assets in
the United States may therefore be used to satisfy
Plaintiffs’ judgment against Zimbabwe obtained in the
Related Action. While Defendants do not deny having
a relationship with Zimbabwe or its government, they
do deny being alter egos.
Prior to the initial Rule 26 conference, Defendant ZB
Bank Limited (″ZB Bank″) filed a motion to dismiss,
arguing that the Court lacked subject-matter jurisdiction
over ZB Bank, because ZB Bank was entitled to
sovereign immunity. ZB Bank argued in the alternative
that the complaint failed to state a claim. At the initial
pre-trial conference, the Court denied ZB Bank’s
motion without prejudice to renew after the close of
discovery and ordered discovery to be completed
within 120 days. (Docket #29.)
A few weeks later, the Non-ZB Bank Defendants filed
a motion to dismiss, asserting that they too were
entitled to sovereign immunity and that the complaint
failed to state a claim under Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L. Ed. 2d
929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.
Ct. 1937, 173 L. Ed. 2d 868 (2009). (Docket #37.)
Magistrate Judge Ellis denied the Non-ZB Bank
Defendants’ motion without prejudice to renew after
the close of discovery. (Docket #68.)
While the Non-ZB Bank Defendants’ motion was
pending, the parties had a number of discovery disputes
related [*5] primarily to Defendants’ purported failures
to timely respond to Plaintiffs’ discovery requests.
Plaintiffs, citing Defendants’ failure to produce
requested documents, filed a motion to preclude
Defendants from denying that they were alter egos of
Zimbabwe — which would have effectively granted
Plaintiff judgment on its first request for declaratory
relief — or in the alternative to extend the discovery
deadline. (Docket #48.) Magistrate Judge Ellis ordered
Defendants to produce various documents and extended
the discovery deadline by two months. (Docket #55.)
A month later, Magistrate Judge Ellis issued another
order requiring the Non-ZB Bank Defendants to
comply fully with outstanding discovery requests by
the discovery deadline and striking as untimely several
objections to discovery requests interposed by the
Non-ZB Bank Defendants. (Docket #74.) Magistrate
Judge Ellis did not rule on Plaintiffs’ motion to
preclude at that time.
Plaintiffs renewed their motion to preclude several
times with respect to the various Defendants before
Magistrate Judge Ellis ruled on it. (Docket ##57 (ZB
Bank), 58 (Non-ZB Bank Defendants), 69 (all
Defendants), 73 (all Defendants), 75 (Non-ZB Bank
Defendants), [*6] 80 (ZB Bank), 81 (Non-ZB Bank
Page 3 of 7
2015 U.S. Dist. LEXIS 170848, *6
Defendants), 103 (ZB Bank)). In each case, Plaintiffs
pointed to Defendants’ purported ongoing refusal to
comply with court orders concerning discovery and
their failure to produce requested documents.
On September 11, 2014, Magistrate Judge Ellis denied
Plaintiffs’ motion to preclude, except for requiring the
Non-ZB Bank Defendants to produce minutes and
resolutions from meetings of their respective boards of
directors. Although Magistrate Judge Ellis’s opinion
chastised Defendants for their dilatory behavior, he
held that Defendants had not willfully violated any
discovery orders and that the harsh sanction of
preclusion was unwarranted. (Docket #124.)
On September 24, 2014, Plaintiffs filed a new motion
to preclude as to the Non-ZB Bank Defendants only.
(Docket #128.) This motion was predicated on the
Non-ZB Bank Defendants’ failure to produce minutes
and resolutions from meetings of their boards of
directors as required by Magistrate Judge Ellis’s
September 11 order. In the alternative, Plaintiffs asked
that the Non-ZB Bank Defendants be ordered to show
cause why they should not be adjudged in contempt
for failing to produce the required documents.1
On October 10, 2014, this Court withdrew the order of
reference to Magistrate Judge Ellis for supervision of
discovery, ordered a discovery ″do over″ to reconsider
all of Defendants’ objections to the various requests
for discovery, and stated that Defendants were to
produce any documents to which they did not object
by October 24, 2014. (Docket #151.) The Court
specifically warned Defendants that, ″Failure to comply
with this court’s order to produce will be prima facie
evidence of bad faith on the part of the non-producing
defendant and will result in the entry of the very
preclusion order that plaintiffs unsuccessfully sought
from Judge Ellis.″ (Docket #146 at 2.)
Two weeks later, on October 24, 2015, Plaintiffs’
served Non-ZB Bank Defendants with a request for
admissions (″Request for Admissions″). (Docket #185
Exhs. 7-8.) The Non-ZB Bank Defendants did not
respond to the request.
On June 3, 2015, the Court denied Plaintiffs’ motion to
preclude [*8] the Non-ZB Bank Defendants from
1
denying that they are alter egos of Zimbabwe, but
agreed that the Non-ZB Bank Defendants had violated
several court orders by failing to produce minutes and
resolutions of their boards of directors. In light of the
Non-ZB Bank Defendants’ failure to produce these
documents, the Court held that the Non-ZB Bank
Defendants forfeited their right to rely on them and
directed the trier of fact to draw an adverse inference
about their contents. The Court further ordered the
Non-ZB Bank Defendants to produce other evidence
of non-alter ego status within thirty calendar days of
the date of the order or be precluded from offering any
evidence on the subject of alter-ego status beyond the
scant evidence already produced to Plaintiffs. (June 3
Order at 7-10.)
The Non-ZB Bank Defendants failed to produce any
additional evidence.
On July 21, 2015, Plaintiffs filed a motion for summary
judgment, arguing that undisputed facts establish that
the Non-ZB Bank Defendants are alter egos of
Zimbabwe and that Plaintiffs’ judgment may be
enforced against Non-ZB Bank Defendants’ frozen
assets used for commercial activity in the United
States. (Pls. Br. at 14 (Docket # 187).) Plaintiffs [*9]
argue that OFAC’s designation of the Non-ZB Bank
Defendants as Specially Designated Nationals
(″SDNs″), the adverse inference about the contents of
Non-ZB Bank Defendants’ board resolutions and
minutes permitted by the Court, and Non-ZB Bank
Defendants’ admissions, supported in part by
documentary evidence, are undisputed evidence
establishing Non-ZB Bank Defendants’ alter ego status.
Pursuant to Local Civil Rule 56.1, Plaintiffs filed a
Statement of Undisputed Material Facts (″Rule 56.1
Statement″) in support of their motion, listing
contentions that Plaintiffs believe to be undisputed.
(Docket #186.)
On August 11, 2015, the Non-ZB Bank Defendants
filed an opposition to Plaintiffs’ motion for summary
judgement, arguing that Plaintiffs had not overcome
the presumption that the Non-ZB Bank Defendants’
were independent from Zimbabwe because (1)
Plaintiffs had identified no evidence that any of the
In [*7] their reply to the motion to preclude, the Non-ZB Bank Defendants filed a cross-motion to dismiss for lack of jurisdiction.
The Court denied that motion during a telephone conference with the parties. (See Minute Entry of October 28, 2014.)
Page 4 of 7
2015 U.S. Dist. LEXIS 170848, *9
Non-ZB Bank Defendants were created by Zimbabwe
for the specific purpose of working a fraud or an
injustice on Plaintiffs or a third party, and (2) OF AC’s
designation of the Non-ZB Bank Defendants as SDNs
is not ″persuasive″ evidence of their alter ego status.
(Def. Br. at 5 (Docket #189).)
The Non-ZB Bank Defendants did [*10] not file a
statement of undisputed material facts in response to
Plaintiffs’ Rule 56.1 Statement, as required by Local
Civil Rule 56.1. They also did not address their failure
to respond to Plaintiffs’ Request for Admissions.
DISCUSSION
I. Standard
Summary judgment is appropriate where ″there is no
genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.″ Fed. R. Civ.
P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 250, 106 S. Ct. 2505, 91 L. Ed. 2d 202
(1986). In addressing a motion for summary judgment,
″the inferences to be drawn from the underlying facts
. . . must be viewed in the light most favorable to the
party opposing the motion″ and the court must draw
all reasonable inferences in its favor. Matsushita Elec.
Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574,
587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986).
The moving party has the initial burden of
demonstrating the absence of a disputed issue of
material fact. Celotex v. Catrett, 477 U.S. 317, 323,
106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). Once such
a showing has been made, the non-moving party must
present ″specific facts showing that there is a genuine
issue for trial″ to withstand the motion. Fed. R. Civ. P.
56(e). If the non-moving party fails to address an
undisputed fact asserted by the moving party, ″the
court may . . . consider the fact undisputed for
purposes of the motion.″ Id. In demonstrating the
existence of disputed issues of fact, the non-moving
party ″may not rely on conclusory allegations or
unsubstantiated [*11] speculation,″ Scotto v. Almenas,
143 F.3d 105, 114 (2d Cir. 1998), and must ″do more
than simply show that there is some metaphysical
doubt as to the material facts.″ Matsushita Elec.
Industries Co., 475 U.S. at 586.
Matters admitted under Rule 36(a) of the Federal
Rules of Civil Procedure may be used for summary
judgment under Rule 56. Donovan v. Carls Drug Co.,
703 F.2d 650, 651 (2d Cir. 1983), rejected on other
grounds by McLaughlin v. Richland Shoe Co., 486
U.S. 128, 133-34, 108 S. Ct. 1677, 100 L. Ed. 2d 115
(1988).
II. Plaintiffs’ Rule 56.1 Statement
The Non-ZB Bank Defendants have not filed a response
to Plaintiffs’ Rule 56.1 Statement. This poses an
evidentiary issue that must be dealt with at the outset.
To assist the court in determining whether parties
properly address each other’s assertions of fact, Local
Rule 56.1 requires a party moving for summary
judgment to ″annex[] to the notice of motion a
separate, short and concise statement, in numbered
paragraphs, of the material facts as to which the
moving party contends there is no genuine issue to be
tried.″ Local Civ. R. 56.1(a). Each paragraph in the
moving party’s 56.1 statement ″will be deemed to be
admitted for purposes of the motion unless specifically
controverted by a correspondingly numbered paragraph
in the statement required to be served by the opposing
party.″ Local Civ. R. 56.1(c); see also Gadsden v.
Jones Lang Lasalle Americas, Inc., 210 F. Supp. 2d
430, 438 (S.D.N.Y. 2002). However, where the party
opposing the motion fails to respond to a numbered
paragraph, there must be support for that paragraph in
the evidentiary record for it to be deemed undisputed,
since assertions [*12] of fact ″cannot be deemed true
simply by virtue of their assertion in a Local Rule 56.1
statement.″ Holtz v. Rockefeller & Co., 258 F.3d 62,
73-74 (2d Cir. 2001).
Because the Non-ZB Bank Defendants failed to
respond to Plaintiffs’ Rule 56.1 Statement, the Court
need only determine whether the statements in
Plaintiff’s document have support in the record to
deem them undisputed. Many of Plaintiffs’ purported
undisputed facts are supported by citation to
documentary evidence, including executive orders,
press releases, excerpts of OF AC’s list of SDNs, and
corporate governance materials and legislation. (See
Page 5 of 7
2015 U.S. Dist. LEXIS 170848, *12
Jacob Decl. Exhs. 7, 9-15 (Docket # 185).) These are
clearly supported and can be considered undisputed.2
The rest of the Rule 56.1 contentions are supported
only by citations to Plaintiffs’ unanswered Request for
Admissions. These, too, can be deemed undisputed.3
The Non-ZB Bank Defendants failed to respond to
Plaintiffs’ Request for Admissions within 30 days of
service. Under the Federal Rules of Civil Procedure,
Non-ZB Bank Defendants are deemed to have admitted
all ″statements or opinions of fact, or application of
law to fact″ unless [*13] ″the court, on motion, permits
the admission to be withdrawn or amended.″ Fed. R.
Civ. P. 36(a)-(b). The Non-ZB Bank Defendants have
made no such motion, and the Court sees no other
ground for excusing them from the impact of the rule.
The Defendants’ de facto admissions can be used to
support uncontroverted statements in Plaintiffs’ Rule
56.1 Statement, and can be independently considered
in deciding Plaintiffs’ motion for summary judgment.
See J &J Sports Prods., Inc. v. Mari, No. 10-CV-455,
2012 U.S. Dist. LEXIS 40284, 2012 WL 1004842, at
*2 (E.D.N.Y. Mar. 23, 2012); see also Donovan, 703
F.2d at 651.
Because each of the paragraphs in Plaintiffs’ Rule 56.1
Statement contains citations to documentary evidence
or to Plaintiffs’ Requests for Admissions, the Court
concludes, with only one exception, that the statements
contained in Plaintiffs’ Rule 56.1 Statement are
undisputed. Paragraph six is framed as a statement of
what Plaintiffs learned from non-party witnesses, which
Non-ZB Bank Defendants are not in a position to
dispute. (See Rule 56.1 Statement at P 6.) Paragraph
six is not deemed undisputed. However, it is also not
relevant to the outcome of this case.
III. Defendants’ Alter Ego Status
The Supreme Court’s opinion in First National City
Bank v. Banco Para El Comercio Exterior de Cuba
(Bancec), 462 U.S. 611, 103 S. Ct. 2591, 77 L. Ed. 2d
46 (1983), sets out the [*14] analysis for determining
whether the Non-ZB Bank Defendants are alter egos
of Zimbabwe. Under Bancec, there is a presumption
that a corporate entity related to a foreign government
″is to be accorded separate legal status.″ Id. at 628.
That presumption may be overcome ″where a corporate
entity is so extensively controlled by its owner that a
relationship of principal and agent is created″ or where
″adher[ing] blindly to the corporate form ... would
cause ... injustice.″ Id. at 629.
In determining whether a sovereign state ″exercises
significant and repeated control over the
instrumentality’s day-to-day operations″ and thus
whether the ″extensive control″ prong of Bancec is
met, courts examine whether the involvement in the
corporate entity’s day-to-day operations exceeds the
normal supervisory control exercised by a corporate
parent over a subsidiary, or whether the sovereign and
the instrumentality ″operated as a single enterprise.″
See Transamerica Leasing, Inc. v. La Republica de
Venezuela, 200 F.3d 843, 848-849, 339 U.S. App. D.C.
385 (D.C. Cir. 2000). Though a fact-intensive inquiry,
several factors are relevant in that determination,
including ″whether the sovereign nation: (1) uses the
instrumentality’s property as its own; (2) ignores the
instrumentality’s separate status or ordinary corporate
formalities; (3) deprives the [*15] instrumentality of
the independence from close political control that is
generally enjoyed by government agencies; (4) requires
the instrumentality to obtain approvals for ordinary
business decisions from a political actor; and (5) issues
policies or directives that cause the instrumentality to
act directly on behalf of the sovereign state.″ EM Ltd.
v. Banco Cent. de la República Arg., 800 F.3d 78, 91
(2d Cir. 2015).
Plaintiffs rely on certain undisputed facts common to
each of the Non-ZB Bank Defendants. Each was
designated a SDN by OFAC, which, as the Court
previously found, is ″one kind of (potentially very
persuasive) evidence tending to show alter ego status.″
(See June 3 Order at 27.) Plaintiffs are also entitled to
″an adverse inference about the contents″ of board
resolutions and minutes requested but not produced by
2
Paragraphs in Plaintiffs’ Rule 56.1 Statement that are supported by documentary evidence are paragraphs 1-5, 7-28, 33-34, 36-38,
40-41,43, 55-56, 58-60.
3
Paragraphs in Plaintiffs’ Rule 56.1 Statement that are only supported by Plaintiffs’ unanswered Request for Admissions are 6, 29-32,
35, 39, 42, 44-54, 57, 61-64.
Page 6 of 7
2015 U.S. Dist. LEXIS 170848, *15
the Non-ZB Bank Defendants. (Id. at 10.) The court
will presume ″that if [the resolutions and minutes] had
been produced, they would have supported Plaintiffs’
argument and undermined the Non-ZB Bank
Defendants’ argument that they are in fact no alter
egos of the Government of Zimbabwe.″ (Id.)
Based on these and other undisputed facts, the Court
concludes that Zimbabwe’s control over each of the
Non-ZB Bank Defendants is so dominant that they and
[*16] the sovereign operated ″as a single enterprise.″
Defendant ZMDC was structured to be dominated by
Zimbabwe. The Zimbabwe Mining Development
Corporation Act, which created ZMDC, mandates that
Zimbabwe is to own no less than 51% of the entity’s
stock and that members of its board of directors — as
well as the boards of directors of its subsidiaries — are
to ″be appointed by the Minister after consultation
with the President and in accordance with any
directions the President may give him.″ (Rule 56.1
Statement at PP 33-41; Jacob Deck Exh. 12.) The Act
also bars ZMDC from making any investments or
loans without seeking the directions and advice of the
Minister of Mines, who also sets the terms and
conditions for the transfer of shares, approves auditors,
and gives ZMDC’s board of directors directions for
managing the corporation’s general reserve account.
More generally, the Minister of Mines may direct
ZMDC to take any actions that the Minister deems to
be in the national interest, which ZMDC is responsible
for promoting. (Id.)
Furthermore, Plaintiffs’ 56.1 Statement describes
instances in which ZMDC was forced to repay a loan
Zimbabwe received from third parties using ZMDC’s
share of dividends [*17] from a mining project, to turn
over the majority of its interest in a mining joint-venture
to the National Army of Zimbabwe, and to permit
Zimbabwe to retain revenue from certain other joint
ventures in which ZMDC partnered with the
government. (Rule 56.1 Statement at PP 42-52.)
Defendant MMCZ was also structured to be dominated
by Zimbabwe. The Minerals Marketing Corporation of
Zimbabwe Act, which created Defendant MMCZ,
mandates that a majority of the entity’s stock (75%) is
to be owned by Zimbabwe and that members of its
board of directors are to be appointed by the Minister
of Mines ″after consultation and in accordance with
any directions the President may give him.″ (Rule 56.1
Statement at PP 55-60; Jacob Deck Exh, 15.) The
Minister of Mines sets compensation for the Board,
sets the terms and conditions for transfer of shares, and
may direct MMCZ to take certain actions that the
Minister deems to be in the national interest, which
MMCZ is responsible for promoting. (Id.)
Collectively, these facts indicate that Zimbabwe used
ZMDC’s and MMCZ’s property as its own, deprived
ZMDC and MMCZ of independence from close
political control, and required ZMDC and MMCZ to
obtain approval for ordinary business [*18] decisions
from a political actor — namely the Minister of Mines
and the President. In short, Zimbabwe exercised far
more supervisory control over ZMDC and MMCZ
than a corporate parent normally would over a
subsidiary. Plaintiffs have thus shown that ZMDC and
MMCZ are not operated as a typical government
instrumentality entitled to the Bancec presumption,
but rather were so extensively controlled by Zimbabwe
as to be its alter egos.
The undisputed facts as to the other two Non-ZB Bank
Defendants offered by Plaintiffs are less robust. Besides
the SDA designations and the adverse inferences about
the contents of Agribank’s and Zimre’s board
resolutions and minutes, the only undisputed facts
about Agribank and Zimre are that Agribank is wholly
owned and Zimre is 43.23% owned by Zimbabwe.
(Rule 56.1 Statement at PP 61-64.) Zimbabwe’s
ownership stakes in these entities is not dispositive;
courts have consistently rejected the argument that
ownership or even ″the appointment or removal of an
instrumentality’s officers or directors, standing alone,
overcomes the Bancec presumption.″ EM Ltd. v. Banco
Cent. de la República Arg., 800 F.3d 78, 92 (2d Cir.
2015).
Decisive here is the Non-ZB Bank Defendants’ failure
to put forward any evidence of their independence
from Zimbabwe. [*19] In denying Defendant ZB
Bank’s motion for summary judgment on the issue of
its alter ego status, this Court found that the ″question
[of] how much deference″ is owed to OFAC’s
designation of an entity as a SDN ″depends on what
evidence goes the other way.″ (See June 3 Order at 28.)
There, ZB Bank offered evidence that it was separated
Page 7 of 7
2015 U.S. Dist. LEXIS 170848, *19
from Zimbabwe by a layer of intermediate ownership
and that it ″repeatedly struggled to maintain deposits
related to government agencies and to stop government
regulations that might harm its business . . . (Id. )This
created a disputed fact to be decided at trial. The
Non-ZB Bank Defendants have offered no evidence of
their independence whatsoever. As a result, they are
far more analogous to the defendant in In re 650 Fifth
Ave., No. 08 Civ. 10934, 2013 U.S. Dist. LEXIS
79667, 2013 WL 2451067 (S.D.N.Y. June 6, 2013)
than was ZB Bank. In In 650 Fifth Ave, Judge Forrest
held that an OFAC designation alone was sufficient for
plaintiffs to meet their burden of showing that an
entity is an instrumentality of a terrorist sponsor under
the Terrorism Risk Insurance Act because the
defendants, like the Non-ZB Bank Defendants here,
presented no evidence tending to contradict OFAC’s
designation. Id.
execution, upon a judgment entered by a court of the
United States″ if ″the judgment relates to a claim for
which the agency or instrumentality is [*21] not
immune by virtue of section 1605(a) (2), (3), or (5) or
1605(b) of this chapter.″ 28 U.S.C. § 1610 (2014).
This Court has already held that the Non-ZB Bank
Defendants, if found to be alter egos of Zimbabwe, are
not immune from judgment under Section 1605(a)(2).
(See Jacob Decl. Exh. 3 at 4 (Feb. 10, 2011 Order).)
Accordingly, Plaintiffs need only show that the Non-ZB
Bank Defendants’ assets are ″property in the United
States of a foreign state . . . used for a commercial
activity in the United States″ before ″there can be
post-judgment process″ against the Non-ZB Bank
Defendants’ assets under the FSIA. See Aurelius
Capital Partners, LP v. Republic of Argentina, No. 07
CIV. 11327 (TPG), 2010 U.S. Dist. LEXIS 3280, 2010
WL 768874, at *2 (S.D.N.Y. Mar. 5, 2010).
Agribank and Zimri’s failure [*20] to offer any
evidence supporting independence from Zimbabwe
has set the bar low for Plaintiffs. Based on Agribank’s
and Zimri’s designations as SDNs, this Court concludes
that the Agribank and Zimri were also so extensively
controlled by Zimbabwe as to be its alter egos.
The Non-ZB Bank Defendants did not dispute
Plaintiffs’ contentions of fact that ″All of the Non-ZB
Bank Defendants have assets frozen in the United
States pursuant to the Sanctions,″ and that ″The assets
of the Non-ZB Bank Defendants that are frozen were
used for a commercial activity in the United States.″
(Rule 56.1 Statement at PP 28-29.) It being undisputed
that the Non-ZB Bank Defendants have assets in the
United States and that these assets are used for
commercial activity in the United States, the Court
grants Plaintiffs’ second and third requests for
declaratory relief. [*22]
IV. Judgement Against Assets
In addition to a declaration that Non-ZB Bank
Defendants are alter egos of Zimbabwe, Plaintiffs also
ask the Court to declare that (1) the judgment against
Zimbabwe may be enforced using the assets of the
Non-ZB Bank Defendants that are located in the
United States and used for commercial purposes, upon
identification of such property, and (2) ″the Non-ZB
Bank Defendants’ frozen assets in the United States
are such property used for a commercial activity in the
United States.″ (Pis. Br. at 2.)
Section 1610(b) of the Foreign Sovereign Immunities
Act states that ″any property in the United States of an
agency or instrumentality of a foreign state engaged in
commercial activity in the United States shall not be
immune from attachment in aid of execution, or from
CONCLUSION
For the foregoing reasons, Plaintiffs’ motion for
summary judgment is granted in full.
Dated: December 17, 2015
/s/ Colleen Mcmahon
U.S.D.J.
BY ECF TO ALL COUNSEL