Boko Haram Dolarian Contract: The Back And Forth Of A Failed Deal by Ebi Robert


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Never have I believed that all monies appropriated for National Security, so far as the Book Haram insurgency is concerned, entered into a python mouth. While I tick the likelihood of many misappropriations, I cannot mount faint eyelids under my brows to the singularity that some terms were caught in the web of aborted covenants, and this, I shall bear out on the Dolarian deal.

Of certainty, the Dolarian was seen when I penned a project on Leahy Law and Terrorism in Nigeria, tasking my pen on the possible waivers of the Foreign Assistance Act, 1961, Arms Export Control Act, and making coinages like the Book Excuse, which I shall speak of in a later piece. And from that time on the passage, I perceived the Dolarian as one Martial deal, the Nigerian Army shelved in its parchments.

Howbeit, in this piece, we shall be looking at the Dolarian terms, the bench’s rationales like the Eitel Factors in its analysis, and of course, a failed deal. All these we shall see from one recommendation fora default judgment in SocieteD'equipmentsInternationaux Nigeria, Ltd., v. Dolarian Capital, Inc., And Ara G. Dolarian, Defendants (Case No. 1:15-cv-01553-GEB-SKO), somewhere in California in 2015. Well, I am not awareof anadoption or a set aside.

SEI, which is in the business of acquiring various military assets and munitions[,] primarily for the Nigerian armed services, contracted with the Nigerian military to acquire and deliver various military assets and munitions for the use of the Nigerian military in combating the Boko Haram insurgency (Compl., ¶ 8; Aboubakar Decl., ¶ 10.). SEI then contacted DCI's agent, Marion Ford, to discuss potential arms transactions whereby DCI would procure and sell military assets and munitions to SEI for use by the Nigerian military. (Aboubakar Decl., ¶ 7.) Ford represented to SEI that DCI either had or would be able to acquire the military assets and munitions the Nigerian military needed, and had contacts and connections that would enable DCI to export these assets and munitions to Nigeria. (Adopted).

DCI and SEI signed several contracts, totaling in value to $246,433,542.50. One of these contracts, signed in June 2014, involved the sale and supply of military assets and munitions for the sum of $8,616,042.50. As a condition of the contracts, SEI was to pay a deposit in the amount of "50% of the contract value" at the time of "signing and sealing of the contract" and was to provide DCI "with the necessary End User Certificate(s)" for export. Part payments were made. However, DCI failed in delivering the items. As recorded, SEI cancelled the June 2014 contract by letter dated May 7, 2015, based on the "constant delay of execution of the contract" and DCI's "[f]ailure to obtain export license[s], and then demanded return of the money already paid.

By letter dated May 15, 2015, DCI agreed "to cancel [the June 2014 contract] in [the] amount of $7,823,646.57" and apply the amount as a credit against another contract entered into between SEI and DCI. DCI further demanded an additional $2,583,890.93 "due and payable" on this second contract. (Aboubakar Decl., Exh. F.) DCI refused and failed to return any amount of the $8,618,646.57 it received. (Compl., ¶¶ 18, 40; Aboubakar Decl., Exhs. E, F, G.)

The five signed agreement totaled $246,433,542.50 and were for A (sale of six Mi-24/Mi-35 helicopters); B (sale of six DEFA Type 553 revolver cannons, arming wire for high explosive bombs, a Marta 155 Type rocket launch pad, 1,000 high explosive bombs, 25,000 rounds of helicopter revolver ammunition, 5,000 68 mm SNEB antiaircraft rocket, helicopter pylon cartridges); C (50 20x110 mm single-barrel autocannons); D (50,000 rounds of autocannon ammunition); E (30 T-72 MBTs (main battle tanks); 20 Zu-23-4 23 mm 4 lightly armored anti-aircraft tracked vehicles, 400,000 Zu-23-4 ammunition rounds, 13,500 125 mm T-72 high explosive rounds, 1,500 125 mm APFSDS-T armor-piercing anti-tank ammunition rounds).Failure of DCI to fulfill its own part of the contract led to the suit.

On October 9, 2015, the suit was filed. On November 18, 2015, proceeding pro se, Dolarian filed an answer "by and for himself and on behalf of [DCI]," a Counterclaim for breach of contract against SEI, and a third-party complaint against Amanda Giovanni, a defense contractor. On November 30, 2015, the Court struck the answer as to DCI pursuant to Local Rule 183(a), which prohibits a corporation or other business entity from appearing in federal court without counsel, and entered default against DCI, and on January 12, 2016, dismissed the counterclaim pursuant to Fed. R. Civ. P. 12(b)(1). (Docs. 15; 23.)

On November 19, 2015, SEI filed a request for the Clerk of Court to enter default against Defendant DCI, and on November 30, 2015, default was entered. (Docs. 10; 16.) On March 15, 2016, SEI filed a motion for default judgment against Defendant DCI pursuant to Federal Rule Civil Procedure 54(b) seeking damages in the amount of $8,618,646.57 and costs in the amount of $738.43. (Docs. 32; 33). Defendant DCI did not file an opposition.

On the discussion, the court per SHEILA K. OBERTO, Magistrate Judge of United States District Court, E.D. California, held that the Court may exercise personal jurisdiction over DCI in line with the court rules and that the contracts at issue do not violate the Arms Export Control Act, (AECA). But I shall talk about the AECA later in the piece.

Now let us look at the act of entering a Default Judgment, where the EitelAnalysis lies. For Eitel, seven factors stand that a district court must consider in exercise of its discretion. Videlicet: the possibility of prejudice to the plaintiff; the merits of the plaintiff's substantive claim; the sufficiency of the complaint; the sum of money at stake in the action; the possibility of a dispute concerning material facts; whether the default was due to excusable neglect; and the strong policy underlying the US Federal Rules of Civil Procedure favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Considering the factors all on merits, it concludes that all factors favor the entry of default judgment against DCI in the amount of $8,618,646.57.

And then, on Frow Standard, the court held that exercise of the Court's Discretion to Enter Default Judgment against fewer than all defendants is appropriate, adding that,Frow does not preclude entry of default judgment against DCI. On circumstances the court recommended, it held:

“Here, like Shanghai Automation, "because differing judgments would not necessarily be illogical, Frow does not apply, and the Court retains discretion to enter default judgments against less than all defendants under Rule 54(b). This is an appropriate case to exercise such discretion." Id. at 1009-10.There are strong reasons favoring entry of a default judgment against DCI even though defendant Dolarian will remain in the case. Nearly all the factors enumerated in Eitel v. McCool , militate in SEI's favor. See supra. Further weighing in favor of granting default judgment at this stage is the danger that any damages awarded is likely to become increasingly uncollectible with the passage of time. Cf. In re Uranium Antitrust Litig., 473 F. Supp. 382, 390 (N.D. Ill. 1979) (plaintiff faced the possibility that the "defaulting defendants, which are all foreign corporations, may conceal or transfer their assets which are subject to execution by United States Courts"). There is significant risk of prejudice if entry of judgment against DCI is delayed, in that the damages sought are significant, and defendant Dolarian has previously represented to the Court that the United States government has seized some or all of the funds paid to DCI by SEI under the June 2014 contract (see Answer, ¶ 18 (stating that "Defendants admit that they have not returned funds provided by SEI, as those funds have been improperly seized by the United States Government and [ ] are not in Defendants' possession, custody, or control")). Regardless of the reason the money has been seized, SEI has sufficiently demonstrated the risk of prejudice by a delayed grant of default against DCI.”

Now back to AECA again, we can see how DCI failed in getting the necessary licenses after many representations which were surely missed.  I guess the district’s recommendation is fine on the gavel.

Generally, export of arms, munitions, weapons, equipment for military use and related components, and the technology to design, build, and test such items out of the United States is regulated by  US Federal Law, one of which is the Arms Export Control Act. The president of the USA delegated the authority to regulate the export of defense articles and defense services to the Secretary of State, which ordinarily is the responsibility of the US President. Basically the president is authorized to control the import and export of defense articles and defense services in furtherance of world peace, national security, and the foreign policy of the United States and to establish and maintain a United States Munitions List (the "Munitions List", which is known as a catalog of designated defense articles and defense services that are subject to export restrictions; though the list is not without an exception as in the "normal commercial use". But generally, Items designated by the President are not to be exported without a license for such export from the United States Department of State. 22 U.S.C. § 2278(b)(2).

The contracts between SEI and DCI included a provision requiring DCI to obtain the necessary licenses from the State Department in compliance with ITAR, they do not violate the AECA. Further, SEI allegedthat DCI's failure to obtain the necessary licenses from the State Department caused the breach, supporting an inference that the parties formed the contract with the express intent to comply with the AECA, and DCI does not contend that the contracts are unenforceable. SEI was said to have met its burden of demonstrating that the contracts do not violate the AECA and that damages may be recovered for DCI's breach as recorded.

On the recommendation, default judgment was to be GRANTED against defaulting defendant in the amount of $8,618,646.57.

California law provides that, "[f]or the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this Code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom." Cal. Civ. Code § 3300. In addition, breach of contract damages must be "clearly ascertainable in both their nature and origin." Id., § 3301.

For me, three things are paramount on the Dolarian: One, grant of licenses for some preferred arsenals as shielded by the US WAR GUIDE; Two, the biased Leahy Law which I have once criticized, having subjected the fusion to an impartiality test I modeled, other criticisms such as the Doug Stoke’s four weaknesses, my argument of the Book Excuse, and thirdly, the appropriations which I believe are hidden to many but known to few.Indeed, there are more tales than the Dasukigate; there are the Dolarian and its failed deal.

By

Ebi Robert

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