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TIFA LTD. v. REPUBLIC OF GHANA

May 13, 1988

TIFA LIMITED, Plaintiff,
v.
REPUBLIC OF GHANA, et al., Defendants



The opinion of the court was delivered by: LECHNER

 This is a commercial dispute in which the plaintiff Tifa Limited ("Tifa") brings an action against the Republic of Ghana and other defendants. Defendants Republic of Ghana ("Ghana"), Ministry of Agriculture of Ghana ("Ministry of Agriculture"), Ministry of Health of Ghana ("Ministry of Health"), the Supreme Military Council of Ghana ("SMC"), the Ghana Cocoa Marketing Board ("GCMB"), the Social Security Bank Limited ("SSB"), the Embassy of the Republic of Ghana to the United States of America (the "Embassy"), and Kwasi Baah-Boakye ("Baah-Boakye") (collectively referred to as the "governmental defendants") bring this motion under Fed. R. Civ. P. 12(b). The governmental defendants seek to dismiss or transfer this action on the following grounds: (1) lack of subject matter jurisdiction; (2) lack of personal jurisdiction; (3) improper venue; and (4) forum non conveniens. For the following reasons, this action is transferred to the United States District Court for the District of Columbia.

 Facts

 Tifa is a New Jersey corporation with its principal place of business in Millington, New Jersey. (Amended Complaint, Parties, para. 1.) Tifa apparently sells pesticides and related equipment worldwide. (Id.) Tifa's managing director is Arnold M. Livingston ("Livingston"). (Id., First Count, para. 1.)

 Ghana is a sovereign nation which achieved its independence in 1957. (Id. at para. 2; Affidavit of Eric Kwamina Otoo ("Otoo Aff."), para. 3.) From January, 1972 to July 1978, General Ignatius K. Acheampong ("General Acheampong") was the head of Ghana. (Certification of Arnold M. Livingston ("Livingston Cert."), para. 18 and Exh. 12.) SMC was the executive and legislative body of Ghana from October, 1975 to June, 1979. (Id. at para. 6.)

 Defendant Sunrise International Services, Ltd. ("Sunrise") was a corporation organized under the laws of Ghana with its principal place of business in Ghana. (Amended Complaint Parties, para. 10.) Defendant Duncan Ozdor ("Ozdor") was the managing director of Sunrise. (Id. at para. 11.) Defendant DHL Consultancy Services, Ltd. ("DHL") was a consulting company retained by Sunrise and Tifa. DHL's principal place of business was in Ghana and defendant Harry Amos Dodoo ("Dodoo") was the director of DHL. (Id. at paras. 12-13.) Defendant Daniel Ashitey ("Ashitey") was a consultant for Sunrise and Tifa. (Id. at para. 14.) Defendants Sunrise, Ozdor, DHL, Dodoo and Ashitey are not parties to the instant motion.

 In late December, 1976, Livingston was contacted at his New Jersey office by Frank Howard ("Howard"), a businessman apparently acting on behalf of certain Ghanaian individuals. In December, 1976 Livingston met in New York City with Howard, Ozdor and Benito Simpson Akatto ("Akatto") (the "New York meeting"). According to Livingston, the three men identified themselves as representatives of Ghana with a mandate from General Acheampong, the Head of Ghana, to contract for a pesticide project in Ghana (Amended Complaint, First Count, para. 1; Livingston Cert., paras. 2-3). The present government of Ghana contradicts Tifa's assertion that Howard, Ozdor, and Akatto acted with a mandate from the head of state of Ghana. *fn1" According to the present government, at no time has any individual or entity been authorized to represent Ghana or its agencies or instrumentalities on visits to the United States regarding the pesticide project. (Otoo Aff., para. 12.)

 Tifa alleges that according to Howard, Ozdor and Akatto, the proposed pesticide project involved a national campaign to eradicate mosquitos, control birds at airports, spray for agricultural pests, and import pesticides for farm use in Ghana. (Amended Complaint, First Count, para. 2.) The three businessmen further stated, according to Tifa, that funding for the project would be through a five year irrevocable letter of credit with five equal annual payments guaranteed by Ghana. (Id.)

 In January, 1977 Tifa apparently prepared a proposal in accordance with the outline set forth in the New York meeting. The proposal provided for two alternative means of payment by Ghana: either (1) an independent source would loan the money to Ghana or (2) Tifa would finance the project on the condition that: (a) an irrevocable letter of credit for the full value of the five-year program was made available to Tifa; (b) the letter of credit provided for five equal annual payments; (c) the letter of credit was guaranteed by the Central Bank of Ghana; and (d) Ghana provided an import license to Tifa that would exempt imports from duties. (Amended Complaint, First Count at para. 3.) Livingston states he addressed the proposal to General Acheampong and forwarded it to Howard for transmission to General Acheampong in Ghana. (Livingston Cert., para. 4.)

 Livingston states that in March, 1977 he was invited by General Acheampong through Ozdor to meet in Ghana with General Acheampong. During that same month Livingston states he met with various government officials in Ghana, including General Acheampong, to discuss the spraying project. (Amended Complaint, First Count, para. 7; Livingston Cert. paras. 7-8). Tifa alleges that in reliance on these meetings with Ghanaian officials in Ghana, it contracted with Sunrise in March of 1977 to supply equipment and goods for the pesticide project. (Id. at para. 8.) The alleged Tifa-Sunrise contract provided all costs for chemicals, equipment and the costs of Tifa personnel would be submitted to the government of Ghana for payment. (Livingston Cert. Exh. 3.) Sunrise was to provide local personnel, facilities and other needed items for the project. (Livingston Cert., para. 9, Exh. 3.)

 On May 2, 1977, Livingston received a letter at his New Jersey office from the Ministry of Agriculture thanking him for the information he had provided about Tifa's spraying equipment and expressing the hope that Tifa would have the opportunity to participate in the spraying of crops against pests, diseases and weeds. (Livingston Cert., Exh. 5.) In June, 1977 representatives of the Ministry of Health, the Ministry of Agriculture, the SMC, Tifa and Sunrise met in Ghana to further discuss the spraying project. (Amended Complaint, First Count, para. 13). Recorded in the minutes of this meeting *fn2" is the following introductory statement by the Commissioner of Health of Ghana: "The project in hand is a joint venture between the government of Ghana on one hand and Tifa USA Ltd./Sunrise Industrial (Ghana) Ltd. on the other. . . . The Ministries of Agriculture and Health will hold Government's shares in the joint venture." (See Livingston Cert., para. 12 and Exh. 6).

 In May, 1978 Colonel Akompi of the SMC ("Colonel Akompi") apparently wrote to the Governor of the Bank of Ghana directing him to waive the mandatory cash margin for the importation by Sunrise of all "spraying machines and related chemicals." (Livingston Cert., Exh. 7; Amended Complaint, First Count, para. 18.) Akompi stated the chemicals were "intended for the Ministries of Agriculture and Health." (Id.)

 In June, 1978 the Ministry of Finance allegedly approved the issuance of the necessary import license for the pesticide project to be conducted by Tifa and Sunrise. (Amended Complaint, First Count, para. 21.) In a letter, dated July 7, 1978, Colonel Akompi wrote to Livingston in New Jersey informing him the import license was issued good through December 31, 1978 and requesting Tifa to "send the items as a matter of urgency." (Id. at para. 21; Livingston Cert., para. 13 and Ex. 9.)

 In July, 1978 General Acheampong's subordinate, Lt. Gen. Akuffo ("Lt. Gen. Akuffo"), apparently replaced Acheampong as the head of state in Ghana. (Livingston Cert., para. 18 and Ex. 1.) In an unrelated event beginning around this time Tifa alleges it provided Odzor with three advance payments in the amount of $ 10,000 each for use in financing local operations in Ghana. These payments were allegedly made in July and September, 1978 and later in February, 1979. (Amended Complaint, Tenth Count, para. 2.)

 Allegedly in reliance on the July 7, 1978 letter from Colonel Akompi and various other communications from government officials in Ghana, Tifa shipped the goods and equipment to Ghana in September and December of 1978. The goods were allegedly shipped at a price of $ 2,309,475.64. The September shipment was payable by Sunrise in two equal installments of $ 761,062.82. (Livingston Cert., para. 14; Amended Complaint, First Count, para. 23.) The first payment was payable on April 10, 1979 and the second payment was due on September 10, 1979. According to Tifa, the price of the December, 1978 shipment was $ 787,350.00 payable to Sunrise, half in 180 days and half in 360 days. (Amended Complaint, First Count. para. 25.) Sunrise was to have been paid by the SSB upon presentation of the government contracts to the SSB in Ghana. (Amended Complaint, First Count, para. 23.) Sunrise would then apparently pay Tifa.

 The goods and equipment were assembled in New Jersey and shipped from New Jersey to Ghana. (Livingston Cert., para. 14.) By letter, dated November 15, 1978, the SSB forwarded to Tifa's bank in the United States copies of two "accepted drafts" for $ 761,062.78 each. (Id. at Exh. 10.)

 After the arrival of the goods in Ghana, Tifa allegedly sent engineering personnel to Ghana to assist in setting up the equipment and training Ghanaians to use the goods. (Livingston Cert., para. 15.) Livingston personally visited Ghana at this time to coordinate the commencement of the program and training of the personnel. (Id.) Livingston states he held numerous meetings in Ghana with government officials who promised to make timely payments. (Id.) A Ghanaian newspaper, dated February 22, 1979, reported the government was undertaking a mass spraying of the entire country. The newspaper indicated the spraying project was a joint venture between Ghana and Tifa. (Id. at Ex. 11.)

 The first of the two payments on the original shipment due to Tifa on April 10, 1979 was not paid. Livingston states he began to inquire in April, 1979 as to the status of the payment and the reason for delay. (Livingston Cert., para. 17.)

 In early June, 1979 the New Armed Forces Revolutionary Council, led by Flight Lieutenant Jerry J. Rawlings, overthrew the Ghanaian military regime in a coup. (Id. at para. 19.) Shortly thereafter, both General Acheampong and Lt. Gen. Akuffo were executed. (Id.) General Acheampong was apparently executed after being convicted of squandering government funds. (Livingston Cert., Ex. 12.)

 Following the coup all telephone, cable and mail communications with Ghana became difficult for several months. (Id. at para. 20.) Sunrise informed Tifa the goods and equipment were being guarded by the new regime. (Id. at para. 20 and Ex. 15.)

 After the events in Ghana calmed, Livingston renewed his efforts to collect the payments due and get the pesticide project started. Livingston alleges he was not successful because Sunrise was no longer cooperative and his contacts with the government were no longer extant. (Id.)

 According to newspaper reports and individuals visiting Ghana, the Ministry of Health began, in February, 1981, a nationwide spraying project using Tifa supplied goods and equipment. (See id. at para. 22 and Exhs. 17-19.) Tifa alleges it neither participated in the spraying project nor was it paid for the goods and equipment. (Id. at para. 23.) Livingston alleges he has not returned to Ghana since the June 1979 coup because his life has been threatened if he returns. (Id.) Tifa apparently pursued its claim against Ghana through the United States Department of Commerce in 1982 but was unsuccessful. (Livingston Cert. at para. 24.) In 1983 Tifa indirectly assisted Akatto in collection efforts in Ghana against Sunrise and Ozdor. (Id.)

 Livingston states he was contacted, in the Fall of 1984, by Baah-Boakye who told Livingston the government of Ghana was conducting an investigation into the pesticide project with Tifa. (Id. at para. 25.) Livingston states he first met with Baah-Boakye in New Jersey at the office of local counsel for Akatto and Howard. (Id.) According to Livingston, Baah-Boakye later came to Tifa's New Jersey offices to review documents. During these meetings Livingston avers Baah-Boakye assured him if the government of Ghana had been involved in the transaction at issue, it would pay Tifa. (Id.) Livingston alleges Baah-Boakye also warned Livingston not to take further legal action because it might jeopardize the investigation. (Id.)

 On February 4, 1987 Tifa filed a complaint in this court. On August 11, 1987, Tifa filed an amended complaint alleging subject matter jurisdiction under 28 U.S.C. § 1330(a); 28 U.S.C. § 1332(a)(2)-1332(a)(4); and 28 U.S.C. § 1602 et seq. (the "Foreign Sovereign Immunities Act" or "FSIA"). In the first count of the amended complaint Tifa alleges Ghana and its various ministries have breached their express promise to participate in the pesticide project as a joint venture. In addition, Tifa alleges defendant SSB has breached its express promise to pay Tifa through Sunrise.

 In the second count Tifa alleges Ghana and its various ministries have breached an implied promise to pay Tifa the reasonable value of the equipment and chemicals shipped to Ghana by Tifa. In the sixth count Tifa alleges reliance on the asserted false assurances and misrepresentations of defendant SSB that Tifa would be paid. In the seventh count Tifa seeks damages against Ghana, its various ministries, the GCMB and Sunrise under the doctrines of quasi contract or quantum meruit.

 In the eighth count Tifa seeks damages against Ghana, its various ministries, Sunrise, Odzor, DHL, Dodoo and Ashity for misrepresentation and fraud. In the ninth count Tifa seeks damages for misrepresentation and fraud against the Ghana Embassy and Baah-Boakye. *fn3" In all counts Tifa seeks damages in the amount of $ 2,309,475.64 plus interest, costs and fees. Tifa seeks punitive damages only in the eighth count.

 I. Discussion

 A district court is powerless to transfer a case unless the court has subject matter jurisdiction over the action. See Atlantic Ship Rigging Co. v. McLellan, 288 F.2d 589 (3d Cir. 1961). Subject matter jurisdiction is "fundamentally preliminary" to both the issues of personal jurisdiction and venue. See Leroy v. Great Western United Corp., 443 U.S. 173, 180, 61 L. Ed. 2d 464, 99 S. Ct. 2710 (1979). Thus, the issue of venue cannot be decided prior to a determination that the court has subject matter jurisdiction over the action.

 The blanket denial by the present government of Ghana that no individual or entity has been authorized to act as Ghana's agent in the United States is not dispositive. (See Otoo Aff., para. 12.) Therefore, for the purposes of this motion the allegations in Tifa's amended complaint are taken as true. See Gemini Shipping v. Foreign Trade Organization, 647 F.2d 317, 319 (2d Cir. 1981). The parties conceded this at oral argument.

 A. Subject Matter Jurisdiction

 28 U.S.C. § 1330(a) confers subject matter jurisdiction on federal district courts over any claim against a foreign state "not entitled to immunity . . . under sections 1605-1607 of this title." 28 U.S.C. § 1604 provides generally that "a foreign state shall be immune from the jurisdiction of the courts of the United States." Section 1605 then ...


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