IRAQ MIDDLE MARKET DEVELOPMENT FOUNDATION, Plaintiff - Appellant,
MOHAMMAD ALI MOHAMMAD HARMOOSH, a/k/a Mohammed Alharmoosh; JAWAD ALHARMOOSH, Defendants-Appellees.
Argued: December 7, 2016
from the United States District Court for the District of
Maryland, at Baltimore. George L. Russell III, District
Michelle Douglas, KALBIAN & HAGERTY, LLP, Washington,
D.C., for Appellant.
N. Patel, FISHERBROYLES LLP, Princeton, New Jersey, for
V. Kalbian, KALBIAN & HAGERTY, LLP, Washington, D.C., for
WILKINSON, MOTZ, and FLOYD, Circuit Judges.
and remanded by published opinion. Judge Motz wrote the
opinion, in which Judge Wilkinson and Judge Floyd joined.
GRIBBON MOTZ, Circuit Judge
securing a judgment in Iraq for non-payment of a promissory
note, a creditor sought to have the judgment recognized in
the federal district court for the District of Maryland. The
debtor contended that the judgment was not entitled to
recognition given that the parties had agreed to arbitrate
their disputes. The district court agreed and granted summary
judgment to the debtor. Because genuine issues of material
fact remain as to whether the debtor lost his right to
arbitrate by utilizing the Iraqi judicial process, we must
vacate and remand for further proceedings.
Iraq Middle Market Development Foundation, a non-profit
corporation, makes and services loans to local businesses in
Iraq. On November 10, 2006, the Foundation agreed to lend $2
million to Al-Harmoosh for General Trade, Travel, and Tourism
("AGTTT"), a company headquartered in Najaf, Iraq.
The loan agreement includes an arbitration clause specifying
that "[a]ll disputes, controversies and claims between
the parties which may arise out of or in connection with the
Agreement . . . shall be finally and exclusively settled by
arbitration." The clause identifies Amman, Jordan as the
venue for arbitration. As part of the deal, Mohammad
Harmoosh, a managing partner of AGTTT and a dual citizen of
Iraq and the United States, who resides in Maryland, executed
a promissory note guaranteeing repayment of the loan.
2010, after Harmoosh had refused to repay the loan, the
Foundation tried to collect by suing him for breach of
contract in federal court in Maryland. Harmoosh moved to
dismiss, arguing that his alleged breach was an arbitrable
dispute "aris[ing] out of or in connection with"
the loan agreement. The district court agreed and dismissed
the Foundation's complaint. Iraq Middle Mkt. Dev.
Found. v. Al Harmoosh, 769 F.Supp.2d 838, 842 (D. Md.
2011). Harmoosh, however, did not move to compel
arbitration, as he was entitled to do under the Federal
Arbitration Act. 9 U.S.C. § 3 (2012).
February 2014, the Foundation filed another civil action
against Harmoosh to collect on the promissory note, this time
in the Court of First Instance for Commercial Disputes in
Baghdad. Harmoosh appeared in that court through counsel and
asserted at least two affirmative defenses. He contended that
the court lacked personal jurisdiction and that he was not
personally liable because he guaranteed the loan only in his
capacity as a shareholder. The parties disagree as to whether
Harmoosh raised the arbitration clause as a third defense. It
is undisputed that, under Iraqi law, although a valid
arbitration clause deprives a court of ...