In FG Hemisphere Associates LLC v Democratic Republic of Congo, (D.C. Cir. Mar. 15, 2011), FG Hemisphere Associates (Hemisphere) entered an agreement with the Democratic Republic of Congo (DRC) and its state-owned electric company to finance construction of a transmission facility. After the DRC failed to make payments, Hemisphere initiated arbitration proceedings. The DRC did not participate in the proceedings and Hemisphere won two awards.

Hemisphere went to District Court for judicial enforcement of the award. Under the FSIA, foreign states are generally immune from the jurisdiction of US courts. There is an exception, however, allowing plaintiffs to "confirm an award made pursuant to... an agreement to arbitrate." The DRC did not appear in court to contest jurisdiction or to litigate the dispute. The District Court entered two default judgments against it.

Hemisphere then sought to execute the judgments. Under the FSIA, Hemisphere could only execute on "[t]he property in the United States of a foreign state... used for a commercial activity in the United States." To locate the DRC's property in the US, Hemisphere filed discovery requests, but the DRC failed to respond. The court then issued a two-part discovery plan. DRC did not comply with the discovery plan and so the court found the DRC in civil contempt but never imposed sanctions. The DRC moved to vacate the contempt order, arguing that the FSIA does not authorise contempt sanctions against foreign sovereigns. The court denied the motion and the DRC appealed.

In the appeal, the US government filed an amicus brief arguing that the FSIA places limits on courts executing judgments against foreign sovereigns, and no provision of the FSIA allows plaintiffs to execute on assets to enforce the court order. The government concluded that since the District Court could not enforce its civil contempt order against the DRC, the court could not issue it. Hemisphere, in turn, argued that a court has inherent authority to control proceedings and the FSIA in no way limits that authority. Further, since the District Court had not attempted to enforce the order, the question of whether the court could execute on the DRC's assets was not at issue.

The DC Circuit rejected the government's argument, explaining that the FSIA "explicitly contemplates" the situation where a court has jurisdiction over a foreign state but cannot enforce a judgment unless the state holds certain types of property. Thus, the court can separately decide questions of whether a court can impose sanctions and whether it can enforce the judgment through execution. The court then held that based on its text and legislative history, "the FSIA does not abrogate a court's inherent power to impose contempt sanctions on a foreign sovereign."

For parties seeking to enforce arbitral awards against foreign sovereigns in court, this opinion helps clarify the options available to plaintiffs and courts when foreign sovereign defendants choose not to adhere to court orders.