Bainbridge Fund Ltd. v. Republic of Argentina

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 12, 2024 Decided May 24, 2024
No. 23-7112
BAINBRIDGE FUND LTD.,
APPELLANT
v.
REPUBLIC OF ARGENTINA,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:22-mc-00070)
Anthony J. Costantini argued the cause for appellant. With
him on the briefs was Drew T. Dorner.
Carmine D. Boccuzzi Jr. argued the cause for appellee.
With him on the brief was Rathna J. Ramamurthi.
Before: HENDERSON, Circuit Judge, and EDWARDS and
GINSBURG, Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: Bainbridge
Fund Ltd. (Bainbridge) seeks to attach property owned by the

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Republic of Argentina (Argentina) in partial satisfaction of a
judgment entered against Argentina in 2020. Pursuant to the
Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1602
et seq., the property of a foreign sovereign cannot be attached
unless the sovereign waives immunity and the property is used
for commercial activity in the United States. The district court
denied Bainbridge’s application after evaluating Argentina’s
waiver of sovereign immunity in the bond giving rise to the
judgment and finding that the property in question is not used
for commercial activity.
Bainbridge appeals, arguing that the totality of the
circumstances shows that the property is used for commercial
activity and, alternatively, Argentina’s waiver extended to an
agreement not to invoke FSIA defenses, including the
commercial activity requirement. But the facts show only
aberrational commercial use over the last 25 years. In addition,
Argentina’s contractual waiver is subject to the FSIA’s
restrictions and does not amount to an explicit promise not to
raise FSIA defenses. As detailed infra, we affirm the district
court’s denial of Bainbridge’s application.
I. BACKGROUND
On December 1, 2020, in the Southern District of New
York, Bainbridge obtained a judgment against Argentina for
$95,424,899.38. The judgment arose out of Argentina’s
default on a bond owned by Bainbridge and remains unpaid.
The bond giving rise to the judgment contained the
following waiver of sovereign immunity by Argentina:
To the extent that the Republic or any of its
revenues, assets or properties shall be
entitled . . . to any immunity from suit . . . from
attachment in aid of execution of judgment,

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from execution of a judgment or from any other
legal or judicial process or remedy . . . the
Republic has irrevocably agreed not to claim
and has irrevocably waived such immunity to
the fullest extent permitted by the laws of such
jurisdiction and consents generally for the
purposes of the Foreign Sovereign Immunities
Act to the giving of any relief or the issue of any
process in connection with any Related
Proceeding or Related Judgment . . . .
J.A. 129.
Bainbridge now seeks to attach and execute upon the
Chancery Annex, a building owned by Argentina and located
at 2136 R Street NW, Washington, D.C. The property was
used to “house both diplomats and commercial tenants” several
decades ago but since 1997 has been “uninhabited and in a state
of disrepair.” TIG Ins. Co. v. Republic of Argentina, 967 F.3d
778, 780 (D.C. Cir. 2020) (discussing the Chancery Annex).
The property is subject to residential property taxes. The
Chancery Annex is used to store diplomatic files and access to
the building is limited to members of Argentina’s Ministries of
Foreign Affairs and Defense. It is allocated to the Argentine
Ministry of Foreign Affairs, International Trade & Worship
and displays the Argentine flag and seal.
The Chancery Annex is not currently for sale but
Argentina has listed the property twice. Both times Argentina
attempted to sell the property, creditors unsuccessfully sought
attachment. Argentina first listed the property in 2003 and
removed the listing from the market in January 2004. NML
Cap., Ltd. v. Republic of Argentina, 2005 WL 8161968, at *14
(D.D.C. Aug. 3, 2005). In August 2005, the district court
reviewed the property’s history and quashed the attempted

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attachment because it was no longer on the market and “there
[was] no evidence to support Argentina’s present intent to sell.”
Id. Argentina relisted the property in 2018 and received
multiple offers. TIG Ins. Co., 967 F.3d at 780. A creditor filed
a writ to attach the property and Argentina took the listing
down three days later. Id. The TIG Insurance proceedings are
ongoing. See TIG Ins. Co. v. Republic of Argentina, 2022 WL
3594601 (D.D.C. Aug. 23, 2022), appeal filed, No. 23-7064
(D.C. Cir.).
In July 2022, Bainbridge filed its application seeking both
attachment of the Chancery Annex to satisfy the judgment in
part and a writ of fieri facias. Pursuant to the FSIA, “property
in the United States of a foreign state shall be immune from
attachment” unless the property falls into one of the Act’s
enumerated exceptions. 28 U.S.C. § 1609. The exception at
issue here provides that property “used for a commercial
activity in the United States” is not immune from attachment if
“the foreign state has waived its immunity from attachment in
aid of execution.” 28 U.S.C. § 1610(a)(1). We look to the
totality of the circumstances at the time the application was
filed to determine whether a property is “used for a commercial
activity.” TIG Ins. Co., 967 F.3d at 782, 788.
The district court denied Bainbridge’s application. It held
that Section 1610(a)(1) contains two separate requirements for
attachment: (1) the building must be “used for a commercial
activity” and (2) the foreign state must waive immunity. The
parties agreed that Argentina had waived immunity but
disputed whether the Chancery Annex is used for a commercial
activity. The district court found that the building’s
commercial uses were in the distant past and, at the time of
filing, the building had some limited diplomatic uses and was
otherwise in a state of disrepair. Considering the totality of the
circumstances, the district court concluded that Bainbridge

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failed to meet its burden to show that the property was used for
commercial activity.
II. ANALYSIS
The determination as to whether a property is used for
commercial purposes “requires a court to both make factual
findings concerning how the property was used and to reach
legal conclusions concerning whether that particular use was
‘for commercial purposes.’” Af-Cap Inc. v. Republic of Congo,
383 F.3d 361, 368 (5th Cir.), decision clarified on reh’g, 389
F.3d 503 (5th Cir. 2004). We review the district court’s
determination for clear error with respect to factual findings
and de novo as to legal conclusions and the application of law
to fact. Id.; Price v. Socialist People’s Libyan Arab
Jamahiriya, 389 F.3d 192, 197 (D.C. Cir. 2004).
At this stage in the proceedings, Bainbridge bears the
burden of persuasion to show that the FSIA authorizes
attachment. Execution immunity is a “‘default presumption’
that the judgment creditor must defeat at the outset.” Weinstein
v. Islamic Republic of Iran, 831 F.3d 470, 482 (D.C. Cir. 2016)
(quoting Rubin v. Islamic Republic of Iran, 637 F.3d 783, 800
(7th Cir. 2011)), abrogated on other grounds by Rubin v.
Islamic Republic of Iran, 583 U.S. 202 (2018); accord TIG Ins.
Co., 967 F.3d at 781. Only after Bainbridge defeats the
presumption of execution immunity does the burden shift to the
sovereign to show by a preponderance of the evidence that the
claimed exception does not apply. Bell Helicopter Textron,
Inc. v. Islamic Republic of Iran, 734 F.3d 1175, 1183 (D.C. Cir.
2013).
A.
Bainbridge argues that under the totality of the
circumstances, the Chancery Annex satisfies the FSIA’s

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“commercial activity” requirement. Bainbridge points to two
kinds of commercial use the property has been put to. First, in
the 1980s and 1990s, Argentina leased the property to
commercial tenants, an “unquestionably commercial activity.”
NML Cap., Ltd., 2005 WL 8161968, at *14 (discussing the
Chancery Annex). Second, Argentina contracted with a real
estate agency and listed the property for sale in 2003–2004 and
2018. See Friedman v. Gov’t of Abu Dhabi, 464 F. Supp. 3d
52, 70 (D.D.C. 2020) (“Contracts for services are generally
considered commercial activities when entered into in the
United States.” (quotation omitted)). Bainbridge also claims
that the district court ignored important facts in the record: the
U.S. State Department has not considered the property
diplomatic in nature for “many years,” J.A. 184; the District of
Columbia designates the property as “residential,” J.A. 112;
and Argentina has paid residential property taxes since at least
2005.
Reviewing these facts and considering the totality of the
circumstances, we find no error in the district court’s
conclusion that the Chancery Annex was not “used for
commercial activity” at the time of filing.
As used in the FSIA, “commercial activity” means “either
a regular course of commercial conduct or a particular
commercial transaction or act.” 28 U.S.C. § 1603(d). Our
precedent instructs that the phrase “used for a commercial
activity” is “best interpreted as an adjectival phrase
characterizing the kind of property that may be attached” rather
than indicating any particular time frame for assessing the
property’s use. TIG Ins. Co., 967 F.3d at 786. The property
“retains its immunity protection where its commercial uses,
considered holistically and in context, are bona fide exceptions
to its otherwise noncommercial use.” Id. at 786 (quoting Af-
Cap Inc., 383 F.3d at 370). We must avoid “an artificially

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narrow lens” that would “allow[] one-time or aberrational uses
to dictate the fate of the property.” Id.; see also id. at 788
(“[J]ust as they need to steer clear of relying on the purely
future commercial uses . . . , district courts examining the
totality of the circumstances should avoid finding speculative
or aberrational commercial uses, or uses in the distant past,
sufficient to satisfy the ‘used for a commercial activity’
requirement.”).
When Bainbridge filed its writ in July 2022, the Chancery
Annex was allocated to an Argentine ministry, displayed the
Argentine flag and seal, restricted access to certain Argentinian
government officials, stored diplomatic files and was otherwise
in a state of disrepair. It was listed for sale briefly four years
earlier, as well as in 2003, and had not housed any tenants since
1997. The overall factual picture shows that, to the extent the
Chancery Annex is being used for any purpose, it has some
degree of diplomatic use and infrequent commercial use. There
was plainly no regular course of commercial conduct in 2022
and the only particular commercial acts were either in the
distant past (the commercial leases ending in 1997) or
aberrational (the two sales listings). Commercial leases that
ceased twenty-five years ago and two brief sale listings over a
period of twenty years fall far short of demonstrating
commercial use “considered holistically and in context.” See
TIG Ins. Co., 967 F.3d at 786 (quoting Af-Cap, Inc., 383 F.3d
at 370).
Bainbridge places weight on the U.S. State Department no
longer recognizing the Chancery Annex as diplomatic and
Argentina’s payment of residential property taxes, but those
facts show at most that the property is not diplomatic and do
nothing to show commercial use—the relevant inquiry here.
The Chancery Annex may be used for nondiplomatic and
noncommercial purposes and remain immune from attachment

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under the plain text of the statute, as execution immunity
remains intact so long as the property is not “used for a
commercial activity.” See 28 U.S.C. § 1610(a). The property
would be immune from attachment if it were residential or
unused by Argentina for any purpose. Bainbridge offers no
support for its claim that Argentina must show some level of
diplomatic use.1
Bainbridge also emphasizes Argentina’s alleged
gamesmanship in removing the sale listing in 2018 after a
judgment creditor filed suit to attach it and keeping the property
off the real estate market since then. But as the district court
explained, Argentina’s actions in 2018 are largely irrelevant to
our analysis because the Chancery Annex was not on the
market when Bainbridge filed suit. And Bainbridge provides
no evidence for its suggestion that keeping the property off-
market is a deliberate ploy to avoid attachment.
To the extent the Chancery Annex was being used at all
before Bainbridge filed its suit, Argentina used it primarily to
store diplomatic files. The handful of commercial acts took
place long before filing and do not control the holistic character
of the property. The totality of the circumstances thus shows
that the Chancery Annex is not a property “used for
commercial activity” under the FSIA.
1 Bainbridge cites for the first time in its reply brief Section
1610(a)(4)(B), a provision exempting from immunity non-
diplomatic property where the “execution relates to a judgment
establishing rights in property.” Any argument related to this
subsection is forfeited, as it was not cited by the district court,
Bainbridge’s opening brief or Argentina’s brief. See, e.g., Texas v.
United States, 798 F.3d 1108, 1115-16 (D.C. Cir. 2015). In any
event, Section 1610(a)(4)(B) is subject to the same “commercial
activity” limitation as (a)(1) so it would not change our analysis.

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B.
In the alternative, Bainbridge argues that even if the
Chancery Annex is not “used for commercial activity,”
Argentina has waived this requirement. Bainbridge reads the
relevant language in the bond as containing two distinct
clauses: (1) one clause in which Argentina “consent[ed]
generally for the purposes of the [FSIA] to the giving of any
relief . . . in connection with any . . . Related Judgment” (which
Bainbridge terms the “Consent Clause”); and (2) one clause in
which Argentina “irrevocably agreed not to claim and . . .
irrevocably waived such immunity to the fullest extent
permitted by the laws of such jurisdiction” (which Bainbridge
terms the “Waiver Clause”). J.A. 129. Bainbridge contends
that only the Waiver Clause is limited by the FSIA, while the
Consent Clause makes no reference to the laws of the
jurisdiction or other statutory restrictions and instead consents
for the purposes of the FSIA, meaning it amounts to an
agreement to forego invoking FSIA defenses.
The relevant contract language, however, shows that
Argentina did not waive the “commercial activity” requirement
under Section 1610(a). The so-called Consent Clause provides
consent “for the purposes of the Foreign Sovereign Immunities
Act.” J.A. 129 (emphasis added). The explicit incorporation
of the FSIA means that the most natural reading of the clause
is that Argentina’s consent is subject to the FSIA’s restrictions,
meaning all FSIA statutory defenses are available to Argentina
in litigation. This reading is supported by the fact that the
Consent Clause appears in the same sentence as the clause
waiving immunity “to the fullest extent permitted by the laws
of such jurisdiction,” J.A. 129, which Bainbridge admits limits
Argentina’s waiver to FSIA provisions. The two clauses are
linked by the conjunction “and” and there is no comma
separating them, suggesting they are closely related.

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Bainbridge’s reading strains credulity by insisting that two
clauses in the same sentence and in close proximity have vastly
different meanings and legal effects, despite the fact that both
clauses refer to laws limiting Argentina’s agreement to subject
itself to U.S. law.
This reading accords with how other courts have
interpreted identical contractual language. The Second Circuit
in EM Ltd. v. Republic of Argentina considered a bond in which
Argentina similarly agreed to “consent[] generally for the
purposes of the [FSIA].” 473 F.3d 463, 468 (2d Cir. 2007). In
response to EM Ltd.’s argument that certain foreign assets
should be immune because Argentina “affirmatively pledged
not to assert such immunity in proceedings to enforce the
judgment,” the court found that “the scope of [Argentina’s]
agreement not to claim immunity is coextensive with its waiver
of immunity; both reach only to the ‘extent permitted under the
laws of [the] jurisdiction.’” Id. at 481 n.19. And when
Bainbridge raised its Consent Clause argument in separate
proceedings against Argentina in the Southern District of New
York, the district court had little trouble concluding that the
language “clearly incorporat[es] the FSIA into the consent” and
so the “best reading is that this provision too remains cabined
by the statutory requirements of the FSIA.” Bainbridge Fund
Ltd. v. Republic of Argentina, 2023 WL 5747299, at *5
(S.D.N.Y. Sept. 6, 2023).
Even if Bainbridge’s reading is a possible construction of
the contractual language, any agreement not to raise FSIA
defenses is not clear enough to amount to a waiver. Foreign
states may waive immunity “either explicitly or by
implication.” 28 U.S.C. § 1605(a)(1). “[E]xplicit waivers of
sovereign immunity are narrowly construed in favor of the
sovereign and are not enlarged beyond what the language
requires” so that a “foreign state will not be found to have

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explicitly waived its immunity unless it has clearly and
unambiguously done so.” Wye Oak Tech., Inc. v. Republic of
Iraq, 24 F.4th 686, 691 (D.C. Cir. 2022) (cleaned up). Implied
waiver under the FSIA is also construed narrowly and requires
that the foreign state intended to waive its immunity. Id. The
Consent Clause is neither an explicit promise nor a clear
indication of Argentina’s intent to waive FSIA defenses. See
EM Ltd., 473 F.3d at 481 n.19 (Argentina did not make an
“explicit promise not to assert any of the non-waivable
protections of the FSIA in attachment proceedings”);
Bainbridge, 2023 WL 5747299, at *5 (same). Because the
bond does not evince an explicit promise or intent not to raise
FSIA defenses, we do not address whether the “commercial
activity” requirement of the FSIA is waivable, which is an issue
of first impression in our circuit.
* * *
For the foregoing reasons, we affirm the judgment of the
district court.
So ordered.

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