Proskauer Rose International Practice Guide Proskauer Rose LLP |
      Proskauer on International Litigation and Arbitration:
       Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
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  1. No choice: Where the principal wrongdoer is the foreign state –e.g. defaults on sovereign bonds, breach of construction contract by a government-owned company, etc. – a suit in the U.S. will be governed by the FSIA and other foreign-sovereign related laws.
  2. Avoid “necessary party” disputes: If there is a possibility that the principal wrongdoer may try to argue that the dispute cannot be resolved without adversely affecting the foreign state’s interest, you may want to preemptively add the foreign state as a defendant to avoid motions to dismiss.
  3. “Interpleader”-type situations: Where liability lies either with the private entity or the foreign state, you may decide to sue both to expedite resolution of the issue and avoid statute of limitations concerns.
  4. Affirmative basis for federal jurisdiction: If a federal court is preferred, suing a sovereign will create an independent basis for federal subject matter jurisdiction under the FSIA and, potentially, create a basis for supplemental jurisdiction over non-sovereign parties.
  5. Compulsory counterclaim: If a foreign state has sued a party, the party may be required to assert a compulsory counterclaim under Fed. R. Civ. P. 13(a) (or state law equivalents).

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