Droit des affaires - Insolvabilité des États et dettes souveraines -1 - 119

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B. THE CONGO: CREDITORS VS. CREDITORS
Another interesting case relates to the debt of the Republic of Congo (Brazzaville), which has also been targeted by creditors in recent years. Litigation was spawned in various jurisdictions in order to collect debts owed by the Republic. 49 The case of Congo is interesting because creditors holding Congo debt resolutely went after non-traditional assets. 50 Instead of attempting to obtain payment on assets owned by the States, some creditors went after receivables owned to the State. This novel tactic was used by creditors, such as FG Hemisphere and Af-Cap, who attempted to attach and garnish royalty and tax obligations owed to Congo by companies involved in oil production projects in the country. 51 52
49. The case of Congo is also interesting in that private creditors attempted to uncover evidence of corruption and misappropriation of public funds by Congo’s government ofﬁcials, in particular the president, in an effort to demonstrate that this sovereign debtor did not deserve the deference traditionally granted to foreign sovereigns. In their efforts, private creditors seem to have passed much information to NGO’s such as Transparency International. See the account by SEBASTIAN MALLABY, “A Corrupt French Connection”, Washington Post, 13 March 2006. 50. It is also worth mentioning because it is in a dispute concerning Congo that the US courts have reﬁned their approach to the commercial-activity exception to enforcement immunity enjoyed by foreign sovereigns, placing much emphasis on how and for what purposes the assets of the foreign sovereign are used – see Connecticut Bank of Commerce v. Republic of Congo, 309 F.3d 240 (5th Cir.) and Walker International Holdings Ltd. v Republic of Congo, 395 F.3d 229 (5th Cir. 2004). 51. Af-Cap, Inc. v. Republic of Congo, 383 F.3d 361 (5th Cir. 2004) (the dispute focused on tax revenue and royalties to be paid to the sovereign debtor. The court had to decide whether these amounts constituted “commercial activity” and were hence subject to attachment because it was transferred to another creditor. The court found that payments by Texas oil companies were “used for a commercial activity” because they had been used by Congo to repay commercial debt located in the United States; garnishment was possible because the garnishee oil companies were located in the United States. The Court therefore held that the tax and royalty obligations were not protected by sovereign immunity). In Appeal, the Court dissolved the garnishment order, see Af-Cap, Inc. v. The Republic of Congo et al., 462 F.3d 417 (2006) (5th Cir. 2006). The same creditor also attempted to attach obligations owed to Congo by ChevronTexaco (Af-Cap, Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080 (9th Cir. 2007). The Court of Appeals dissolved the garnishments and liens after it found that ChevronTexaco’s obligations to Congo were not used for a commercial activity in the United States, upholding the narrow reading of the commercial activity-exception which had already been accepted by the 2nd and the 5th Circuit. See also in the same vein FG Hemisphere Associates v. République du Congo, 455 F.3d 575 (5th Cir. 2006), another case in which the Fifth Circuit Court denied an attempt by a judgment creditor of the Congo to satisfy its claim by executing upon the Congo’s right to receive royalty oil from petroleum exploration projects in the Congo. See also Connecticut Bank of Commerce v. The Republic of Congo, 309 F.3d 240 (5th Cir. 2002). In all these cases, one of the issues was whether garnishment was possible. This required that the garnished property should be located in the United States. The determination was made difﬁcult, at least in the case brought by FG Hemisphere, because the garnishees, who had been located in the United States when the proceedings were initiated, later reorganized their operations outside the United States and hence had no presence in the US. The court found that the determination of whether property is in the United States should be made at the time when the creditors attempt to garnish, not at the time suit was brought. 52. In another case, a creditor attempted to attach payments which two American airline companies were scheduled to make to Nicaragua for taxes collected and paid for ﬂights to Managua (LNC Investments, Inc. v. Republic of Nicaragua, 2000 WL 745550 (S.D.N.Y. June 8, 2000). The Court

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