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Loeb & Loeb Obtains Second Circuit Victory for U.S. Manufacturer in Breach of Contract Action Against Republic of Iraq

Loeb & Loeb LLP secured another major victory on behalf of SerVaas Inc., a U.S.-based factory supplier and processor of commercial metals, in a long-running contract dispute against the Republic of Iraq. On September 26, the U.S. Court of Appeals for the Second Circuit affirmed the Southern District of New York’s grant of SerVaas’ motion for summary judgment recognizing a $14.5 million dollar French Judgment (now valued at $35 million plus) against the Ministry of Industry of the Republic of Iraq and the sovereign Republic of Iraq.

The underlying action arose out of a 1988 contract between SerVaas and the Iraqi Ministry of Industry, whereby SerVaas supplied Iraq with materials to transform scrap metal into commercial-grade copper. SerVaas initiated an arbitration pursuant to the contract, and later brought an action in the courts of France when the Ministry refused to pay pursuant to the terms of contract. Ultimately, the company was awarded a judgment in the amount of over $14 million. When the Ministry failed to pay the judgment, SerVaas filed an action in the U.S. District Court for the Southern District of New York to recognize the French judgment as against the Ministry as well as the sovereign Republic of Iraq.

In February 2010, the District Court denied the Iraqi’s motions to dismiss SerVaas’ complaint on the grounds of foreign sovereign immunity (686 F. Supp. 2d 346). The District Court’s decision was later affirmed on appeal to the Second Circuit Court of Appeals (2011 WL 665334).

SerVaas’ summary judgment motion was granted by the District Court in February 2012 (2012 WL 335654). 

The Loeb & Loeb attorneys handling this matter for SerVaas Inc. were John Piskora, Mark A. Douglas and Wook Hwang.