Plaintiffs, the surviving relatives of a passenger killed when Malaysia Airlines Flight 17 was shot down over Ukraine, sued Sberbank of Russia PJSC under the Anti-Terrorism Act. They alleged that Sberbank knowingly facilitated money transfers from donors to the Donetsk People's Republic, a Russian-backed terrorist group, using correspondent accounts in New York City. These funds were used to purchase weapons that allegedly caused the downing of the plane. After the suit was filed, the Russian Ministry of Finance acquired a majority stake in Sberbank. Sberbank moved to dismiss, arguing it was immune under both the Foreign Sovereign Immunities Act and the Anti-Terrorism Act because it was an instrumentality of a foreign state. The district court denied the motion, and Sberbank appealed.
The court addressed four distinct legal issues. First, it determined that Sberbank's status as an instrumentality of a foreign state is based on its current ownership. Citing its recent decision in Bartlett v. Baasiri, the court held that immunity may attach when a defendant becomes an instrumentality mid-suit, rejecting the argument that status is fixed at the time of filing. Since the Russian Ministry of Finance now owns a majority of Sberbank, the bank is presumptively immune under the FSIA. Second, the court applied the FSIA's commercial activity exception. It found that the gravamen of the suit was Sberbank's commercial conduct—facilitating money transfers in the United States—rather than the downstream terrorist attack. Because the nature of the act was commercial, the exception applied, abrogating immunity under the FSIA. Third, the court addressed whether the ATA's immunity provisions cover instrumentalities. Relying on Supreme Court precedent in Republic of Austria v. Altmann and Argentine Republic v. Amerada Hess Shipping Corp., the court held that the FSIA is the sole basis for sovereign immunity in civil cases. Consequently, the term 'foreign state' in the ATA includes instrumentalities as defined by the FSIA, granting Sberbank presumptive immunity under the ATA as well. Fourth, the court ruled that the FSIA's commercial activity exception applies equally to actions brought under the ATA. The court rejected Sberbank's argument that the ATA's silence on the exception or the JASTA amendment implied a repeal, concluding that the FSIA's comprehensive statutory scheme governs immunity for all civil actions against foreign states.
The case is remanded to the district court to proceed with litigation against Sberbank on the merits of the plaintiffs' claims. This decision clarifies that foreign state instrumentalities are covered by the ATA's immunity provisions but can still be sued if their commercial activity in the United States is the basis of the claim. It also establishes that a change in ownership to a foreign state during litigation can trigger sovereign immunity, provided the commercial activity exception applies.
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