Lutcher S. A. Celulose E Papel and F. Lutcher Brown v. Inter- American Development Bank

A private company and its legal representative filed a lawsuit in the District Court of the District of Columbia against the Inter- American Development Bank, claiming compensation for the damages resulting from the alleged breaches by the respondent organization of a loan agreement concluded between it and the applicants. The District Court upheld the respondent’s motion for dismissal of the case on the ground of the lack of jurisdiction. The applicants appealed the judgment before the Court of Appeal.

The Court of Appeal observed that the Inter- American Development Bank has been designated, under a Presidential Decree of 1960, as an international organization entitled to enjoy in the territory of the United States the immunities established in the International Organization Immunity Act.

The Court of Appeal accepted the appellants’ argument that the organization’s immunity was to be deemed waived under paragraph 1, Section 3 of Article XI of the Agreement establishing the Inter- American Development Bank. In particular, this provision states that: Actions may be brought against the Bank only in a court of competent jurisdiction in the territories of a member in which the Bank has an office, has appointed an agent for the purpose of accepting service or notice of process, or has issued or guaranteed securities.

According to the Court, this provision envisages a waiver of immunity. Specifically, the Court explained that “Unless this provision is read as merely describing the available forum for such suits and actions as to which waiver had been otherwise made, it must itself be a waiver of immunity. We do not read it as a venue provision for actions resulting from individual waivers; rather it is a provision waiving immunity and laying venue for the suits permitted. The terms are clear that “actions may be brought against the Bank”