Case No. 17-1011 | D.C. Cir.
Preview by Michelle Divelbiss, Online Editor
As we saw last term in cases such as WesternGeco LLC v. ION Geophysical Corp. and Animal Science Products v. Hebei Welcome Pharmaceutical Co. Ltd., the Supreme Court continues to address issues of international importance. Before the Court in October is the issue of immunity for the commercial acts of international organizations.
The respondent, International Finance Corporation (“IFC”), is an international organization that provides loans to businesses in developing countries. The IFC provided a loan to a company to build a power plant in India. Due to potential environmental harm, the IFC supervised the project and conditioned the loan on compliance with certain standards. The petitioners are Indian farmers and fishermen, along with other affected entities. The petitioners allege that the IFC failed to adequately supervise the construction and, as a result of that failure, caused foreseeable environmental harms.
This case hinges on an interpretation of the International Organizations Immunities Act (“IOIA”) and whether the IFC has immunity under the IOIA for its actions. The IOIA provides international organizations with the same immunity afforded to foreign governments. At the time the IOIA was passed, foreign governments received “virtually absolute immunity.” Samantar v. Yousuf, 560 U.S. 305, 311–13 (2010). Passed some decades after the IOIA, the Foreign Sovereign Immunities Act (“FSIA”) provides immunity to foreign governments, but the immunity is not absolute—there is an exception for commercial activity.
The petitioners argue that because the IOIA provides for the same immunity given to foreign governments, the IOIA’s immunity provisions are subject to any exceptions in the FSIA. Therefore, the petitioners argue, the IFC is not entitled to immunity for commercial activity under the IOIA.
The IFC, however, claims that despite any alleged wrongdoing, the IOIA provides immunity from suit. The IFC explains that immunity derived from the IOIA must be interpreted as the immunity afforded to foreign governments at the time the IOIA was enacted. That is, the immunity derived from the IOIA is “virtually absolute.” Respondent argues that because the FSIA and the commercial activity exception did not exist when the IOIA was enacted, Congress did not intend for such an exception to apply.
Whatever the outcome, this case is likely to affect international organizations and their projects all over the world.