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Ehrenstein|Sager Delivers Major U.S. Court Victory to the Republic of Angola

By May 26, 2021 No Comments

Ehrenstein|Sager prevailed by persuading a U.S. Court to rule that Angola is a suitable forum and to reject Plaintiffs’ suggestion of Angolan corruption. An American judge’s ruling that Angola’s courts are adequately equipped to handle billion-dollar international legal disputes is a landmark decision that could pave the way for significantly greater international investment into the Republic of Angola.

“This decision implicitly rejects the condescending stereotype that Africans are not capable of handling their own governance and disputes. I am hopeful that this ruling might fortify the confidence of foreign investors in the strength and fairness of Angola’s judicial system,” said Michael Ehrenstein, who represented Angola in the proceedings.

NJ Ayuk, Executive Chairman of the African Energy Chamber said in a statement that this ruling “reinforces the hope that African countries and Africans have when it comes to the fairness of the American judiciary as compared to many rulings against Africans in the UK and European courts, that have been seen as biased.”

The billion-dollar project at the center of this dispute is critical to President Lorencao’s efforts to provide accessible electricity and enhance the living standards of Angolan citizens. To accomplish that project, Angola entered contracts with Aenergy worth $1.1B for the construction of power plants. Aenergy claims that the Republic of Angola wrongfully terminated contracts. On the other hand, Angola contends that Aenergy ruptured its contractual relationship with Angola by misappropriating Angola’s funds to purchase extra turbines for Aenergy’s own account—all without Angola’s knowledge or consent, and contrary to the terms of the parties’ agreements.

U.S. District Judge John P. Cronan, in his 43-page opinion, agreed with Ehrenstein, ruling that Aenergy’s claims must be adjudicated in Angola and thereby dismissing Aenergy’s complaint. Ehrenstein successfully argued that every aspect of the project is Angolan, and the contracts required that any disputes would be resolved in Angola. Ehrenstein asserted that “these contracts were negotiated, signed, and performed (or breached) in Angola and the contracts provided that if there were any disputes, they would be adjudicated or arbitrated in Angola under Angolan law.”

Ehrenstein said there were four strong arguments against permitting Aenergy’s case to remain in New York.

  1. Aenergy agreed to arbitrate or litigate the case in Angola when it signed the contract.
  2. Angola, as a sovereign entity, is immune from the jurisdiction of U.S. courts under the U.S. Foreign Sovereign Immunities Act.
  3. The U.S. court should defer to previously filed and pending proceedings in Angola’s courts.
  4. The doctrine of forum non conveniens—a discretionary power that permits courts to dismiss a case where another court is better suited to adjudicate a dispute—should apply in this case. Judge Cronan based his decision entirely on this fourth ground, explaining that the witnesses and evidence in this case are primarily in Angola. In opposition, Aenergy argued against dismissal in favor of the Angolan forum, contending Angolan courts are corrupt. Judge Cronan flatly rejected that argument, writing: “The court finds the plaintiff’s vague concerns about ‘corruption’ and a ‘lack of due process’ in Angolan courts do little to show that Angola lacks “procedural safeguards…”.

This case is unusual in another way. Lawsuits of this magnitude are typically handled by the largest U.S. law firms. Here, for this overwhelmingly important case, the Republic of Angola selected Ehrenstein|Sager, a small but highly specialized firm as its lead advocate.

Says Ehrenstein: “The size of a law firm is not the most important factor. It’s the quality of the legal team. We were honored to have been proven worthy by prevailing in a billion-dollar case where, beyond the money, the reputation of the sovereign Republic of Angola was at stake.”

Ayuk with the African Energy Chamber, agrees. “I am very pleased with the ruling,” he said in a statement. “It is a victory for Angola, credible investors and for my good friend and superstar lawyer Mike Ehrenstein. Mike never gave up and in all our conversations, he was so hopeful and committed.”