Damages awards under foreign law
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international law update Volume 18, January–March 2012
© 2012 Transnational Law Associates, LLC. All rights reserved. ISSN 1089-5450, ISSN 1943-1287 (on-line) | www.internationallawupdate.com
States v. Birdsall, 233 U.S. 223, 230-31 (1914)]
did not so hold. Although Birdsall recognized that
every act within the range of ocial duty comes
within the purview of an ocial act, the inquiry
does not end there, and such an act must yet adhere
to the denition conning an ocial act to a
pending question, matter, cause, suit, proceeding or
controversy. We thus part company with Jeerson’s
broad assertion that Sun-Diamond supersedes
Birdsall.” [Slip op. 41]
ough Jeerson tries to argue that the money
he received were those he customarily received
as a Congressman, the Court begs to dier.
“Importantly, the various individuals and businesses
that were paying Jeerson—by delivering money
and things of value to enterprises owned by his
family members—were doing so with the specic
understanding that he would assist in their business
ventures.” [Slip op. 42]
: United States v. Jeerson, 674 F.3d 332
(4th Cir. 2012).
DAMAgES AWARDS
UNDER FOREIgN LAW
I U.S.
I R I,
D C C
’
I
Incorporated on March 12, 1960, Sherkat
Sahami Labaniat Pasteurize Pak (Pak Dairy) is a
joint venture between McKesson Corporation, a
U.S. company, and some Iranian private citizens,
McKesson’s ownership interest in Pak had decreased
to 31% at the time of the Islamic Revolution.
McKesson complains that, in the wake of the
Revolution, agents and instrumentalities of the
government of Iran seized control of Pak’s board of
directors. e board then froze McKesson’s stake in
Pak and blocked its receipt of dividend payments.
In 1982, McKesson sued Iran in the District of
Columbia federal court. Its basic claim is that Iran
had unlawfully expropriated its property without
paying fair compensation.
e district court stayed the case while the
Plaintis presented their claims before the Iran-
United States Claims Tribunal.
Although the Tribunal held that interference
with McKesson’s rights had not amounted to an
expropriation by the last date of the Tribunal’s
jurisdiction, it did rule that Pak Dairy had
unlawfully withheld from McKesson cash dividends
declared in 1979 and 1980. e tribunal awarded
McKesson $1.4 million in damages. Since this sum
failed to fully compensate McKesson. it revived its
suit in the district court.
Iran moved to dismiss, claiming that it was
immune from suit under the Foreign Sovereign
Immunities Act of 1976 (FSIA), 28 U.S.C. § 1605.
e court held, however, that McKesson had
properly pleaded jurisdiction under the “commercial
activities” exception in the FSIA.
On appeal, the U.S. Court of Appeals for the
D.C. Circuit, remanded for further development
of the record about the Pak board of directors. e
district court found that the evidence established
the necessary principal-agent relationship between
the Government of Iran and Pak’s board of directors.
e Court of Appeals armed the ndings of
the district court. In 2000, the district court held a
bench trial to determine the appropriate amount of
damages. e court awarded about $20 million in
damages, including interest. On appeal, Iran again
argued that the court below lacked jurisdiction.
e Court of Appeals rearmed the existence of
jurisdiction under the FSIA and armed most of
the district court’s decision. It remanded, however,
for the determination of two factual issues,
whether Pak had instituted a so-called “come-to-
the-company” requirement for the payment of
dividends, and whether it would have been futile for
McKesson to “come” to Pak to collect its dividends.
Iran unsuccessfully petitioned the Supreme Court
for certiorari. e Circuit Court then vacated a
portion of the McKesson decision that dealt with
the Treaty of Amity between the United States and
Iran [1955 Treaty of Amity, Economic Relations,
and Consular Rights, U.S.-Iran, Aug. 15, 1955, 8
U.S.T. 899 (“Treaty of Amity”)] On remand, the
district court armed its earlier conclusion that the
Treaty did provide a cause of action. e appellate
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