Dismissal of $110 million expropriation action against Central Bank of Curaçao

On May 30, 2024, Davis Polk obtained a victory for its client, the Central Bank of Curaçao and Sint Maarten (the CBCS), in an action alleging improper expropriation in violation of international law and treaties in the U.S. District Court for the District of Columbia.

In 2018, the CBCS was required to institute emergency measures to restructure and safeguard Ennia, a systemically important provider of insurance and pension benefits on the island of Curaçao. Among other things, the CBCS had serious concerns about mismanagement of funds and improper valuation of certain of Ennia’s assets, which were heightened by the transfer of nearly $100 million from the insurance companies to the individual accounts of the ultimate owners. Litigation regarding this underlying conduct remains pending in Curaçao.

Plaintiff Nina Ansary, daughter of the majority shareholder of Parman International BV (a Curaçao holding company owning Ennia), filed her complaint against the CBCS on January 17, 2023, alleging $110 million in damages asserted to be the result of an unlawful expropriation of her 15.9% stake in Parman when the CBCS exercised its regulatory powers over Ennia. The plaintiff also challenged the CBCS’s ongoing restructuring of the insurance companies, asserting that the CBCS was mismanaging Ennia. The plaintiff claimed violations of international law and certain treaties and argued that the CBCS was subject to suit in the United States under the Foreign Sovereign Immunities Act (the FSIA).

Davis Polk filed a motion to dismiss, arguing strenuously against the plaintiff’s theories establishing jurisdiction in the United States. Among other things, Davis Polk argued that the CBCS retained immunity from suit in the United States and that none of the exceptions to the FSIA’s grant of immunity applied. The court ultimately agreed, determining that the CBCS was entitled to sovereign immunity, and dismissed the action.

The Davis Polk team includes partners James I. McClammy and Jesse Solomon, counsel Craig Cagney, and associates Nicholas D’Angelo, James C. Butler, Grace Lee, Muhammad Sardar, Cristina Lauren Lang and John Chapman III. Members of the Davis Polk team are based in the New York and Washington DC offices.