cover image: Legal Risk and Accountability in Development Finance: Lessons from Jam v. International Finance Corporation

20.500.12592/cvdnjkv

Legal Risk and Accountability in Development Finance: Lessons from Jam v. International Finance Corporation

6 Feb 2024

The lawsuit, and especially the clash between IFC’s sweeping assertions of jurisdictional immunity on the one hand, and its role in harming communities and the need for remedy to the communities on the other, brought substantial international attention and public scrutiny to the broader accountability crisis at IFC. [...] The FSIA’s statutory requirement that a suit be “based upon” the defendant’s commercial activity in the United States requires courts to determine the “gravamen” of the plaintiff’s claims.15 The “gravamen” of a case refers to “those elements of a claim that, if proven, would entitle a plaintiff to relief under his theory of the case.”16 Because sovereign immunity is conduct based, this test has al. [...] Contrary to the Jam holding that the claims’ gravamen was the third party’s acts because those acts “actually injured” plaintiffs,20 Rodriguez held the gravamen was the defendant organization’s conduct and that the organization’s conduct need not be the conduct that “actually injured” plaintiffs in order to hold the organization liable.21 The Rodriguez decision indicates that a court may impose li. [...] Courts regularly scrutinize the fairness of the procedures, qualifications and impartiality of the arbiters and judges, and the actual possibility of obtaining a remedy, among other considerations,31 and they have regularly refused to recognize immunity where the existing alternative mechanism lacked sufficient indications of impartiality and fairness, including the inability to issue binding deci. [...] During the course of the litigation, IFC turned over the Tata Mundra Loan Agreement and it reveals that, far from IFC lacking leverage to compel the borrower to take remedial action, the terms afford IFC substantial control over the project at every stage and provide IFC with significant leverage over the borrower – much of which continues long after repayment.44 For example, the agreement conditi.

Authors

Michelle Harrison and Shannon Marcoux

Pages
14
Published in
United States of America