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Azima v. RAK Investment Authority

United States Court of Appeals, District of Columbia Circuit

June 18, 2019

Farhad Azima, Appellee
Rak Investment Authority, Appellant

          Argued February 22, 2019

          Appeal from the United States District Court for the District of Columbia (No. 1:16-cv-01948)

          Linda C. Goldstein argued the cause for appellant. With her on the briefs were Michael H. McGinley and D. Brett Kohlhofer.

          Laura G. Ferguson argued the cause for appellee. With her on the brief were Kirby D. Behre, Charles F.B. McAleer, Jr., and Ian A. Herbert.

          Before: Griffith and Millett, Circuit Judges, and Edwards, Senior Circuit Judge.


          Griffith, Circuit Judge:

         Farhad Azima and the Ras Al Khaimah Investment Authority (RAKIA) were once business partners. But disagreements arose. As part of a broad settlement of their grievances with one another, they agreed to litigate all future, related claims in England. RAKIA argues that this litigation is covered by that agreement and should be dismissed so that it can instead proceed in England. We agree and reverse the district court's decision to the contrary.


         Farhad Azima is an international businessman who resides in Missouri.[1] RAKIA is the investment and wealth fund of one of the United Arab Emirates, Ras Al Khaimah (RAK). RAK "is the sole owner of [RAKIA]," J.A. 528, and Sheikh Saud bin Saqr al Qasimi is the current ruler of RAK. Over the years, Azima and RAKIA have entered into various business deals, three of which are relevant here. In 2007, RAKIA and HeavyLift International Airlines, one of Azima's companies, created a joint venture to build and operate a flight training academy. In 2011, RAKIA paid another of Azima's companies to identify a prospective buyer for a hotel that RAKIA owned. And from mid-2015 to July 2016, Azima helped negotiate the resolution of a dispute between RAKIA and its former Chief Executive Officer, Khater Massaad.

         With regard to the Massaad negotiation, by the fall of 2015, Azima had met several times with representatives of RAKIA and RAK to discuss a settlement. Negotiations appeared to be progressing, but on October 14, 2015, Sheikh Saud emailed Massaad to express his "disappointment" over information his law firm had uncovered about Massaad's actions. J.A. 419 25. Despite this, the parties continued to work towards a settlement for several more months.

         The Massaad negotiation was still underway in March 2016 when RAKIA agreed to settle Azima's claim that RAKIA owed HeavyLift money for investments the company had made pursuant to their joint venture (the "Settlement Agreement"). The Agreement is brief. It lists the parties, provides that RAKIA will pay HeavyLift to resolve all claims it or Azima has against RAKIA or any other entity owned by RAK, states that the parties agree to act in good faith towards one another, and imposes conditions of confidentiality and non-disparagement. Most important for present purposes are the six "Whereas" (preamble) clauses, J.A. 603, and the final section, titled "Governing law and jurisdiction," J.A. 605. The whereas clauses summarize the respective roles of RAKIA and HeavyLift in the joint venture, the basis of HeavyLift's claim against RAKIA, and other relevant background considerations. The section of the Agreement titled "Governing law and jurisdiction" provides:

This Settlement Agreement and any dispute or claim arising out of, or in connection with, it or its subject matter or formation (including, without limitation, any contractual or non-contractual disputes, claims or obligations) is governed by and shall be construed in accordance with English law and the Parties submit to the exclusive jurisdiction of the courts of England and Wales.

J.A. 605-06. We refer to this provision as the "forum-selection clause."

         Four months after executing the Settlement Agreement, the parties reached a tentative resolution in the Massaad negotiation. But when that deal later fell apart, RAKIA and its attorneys blamed Azima and threatened that he would become "'collateral damage' in the war RAKIA intended to wage against" Massaad. J.A. 421-22 ¶ 35.

         Shortly after RAKIA's threat, files from Azima's computers began to appear online, including documents, messages, contacts, and photos. Unbeknownst to Azima, on October 14, 2015-the same day Sheikh Saud expressed disappointment over Massaad's actions-Azima's U.S.-based business and personal computers were hacked and infected with software that monitored their use. When Azima realized that his computers had been compromised, he changed his passwords, increased his security protocols, and hired experts to assess the damage. Eventually, he replaced the infected computers.

         The hack triggered two lawsuits. First, RAKIA sued Azima in England, claiming that some of the documents made public after the hack show that Azima committed fraud against RAKIA during the hotel deal and breached the Settlement Agreement's warranty of good faith (the "English Action"). That Action is still ongoing. As part of his defense, Azima has argued that RAKIA should not be allowed to rely on stolen documents to support its claims. Separately, Azima filed this suit alleging that, by hacking his computers, RAKIA ...

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