2nd Circ. Says FSIA Limits US Suits Over Foreign Bonds

Law360, New York (March 13, 2012, 6:20 PM EDT) -- Ruling that a decision undertaken overseas isn't enough to trigger U.S. jurisdiction under the Foreign Sovereign Immunities Act, the Second Circuit on Tuesday overturned a decision that let U.S. bondholders sue Brazil's state oil company for breach of contract in New York federal court.

The bondholders allege Petroleo Brasileiro, known as Petrobras, improperly declined to convert bonds into preferred stock after a designated redemption period had expired.

A Southern District of New York judge ruled the court had jurisdiction under the FSIA, which allows suits to...
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