UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

NOBLE CAPITAL LLC,

Plaintiff, Civil Action No. 23-03139 (AHA) v.

PEOPLE’S REPUBLIC OF CHINA,

Defendant.

Memorandum Opinion

Noble Capital LLC sues the People’s Republic of China (“PRC”), alleging that it breached

the terms of bonds issued from 1898 to 1913 by predecessor governments of China. The PRC

moves to dismiss, asserting sovereign immunity, the statute of limitations, and other defenses. The

Court agrees the PRC is entitled to sovereign immunity and dismisses the complaint.

I. Background 1

According to the complaint, Noble Capital is the assignee and lawful owner of sovereign

bonds issued by the then-existing governments of China between 1898 and 1913. ECF No. 28 ¶ 7.

The loan agreements for these historical bonds said they “shall have priority over all future loans

secured by a charge on the specified future revenue” and “all future loans secured by a charge on

the specified revenue shall be subject to the current loan.” Id. ¶ 17. They also provided that “no

future loan shall be raised that shall take precedence of or be on an equality with the current loan”

1 As required when evaluating a challenge to the legal sufficiency of a plaintiff’s jurisdictional allegations, the Court accepts the complaint’s well-pled allegations as true and draws all reasonable inferences in Noble Capital’s favor. See Phoenix Consulting Inc. v. Republic of Angola,

(D.C. Cir. 2000). and “no future charge shall lessen or impair the security of the current loan over the specified

future revenue.”

The then-existing government of China made payments on these historical

bonds until 1939, when it defaulted and “thereafter remained in default.” Id. ¶ 24. Despite being

in default, the government reaffirmed its payment obligations in 1947. Id. ¶ 25. But after the PRC

came into power as the successor government, it repudiated the historical bonds in 1953, then

again in 1955, 1982, and 1983. Id. ¶¶ 26, 32–35.

Fast forward to nearly a century after the historical bonds were first repudiated. In 2020

and 2021, the PRC issued distinct, dollar-denominated bonds on the Hong Kong Exchange, which

were sold to qualified institutional investors in the United States. Id. ¶ 38. These bonds are secured

by the PRC and state that they are on equal footing with all unsecured debt issued by the PRC. Id.

¶ 40. The bonds do not reference the PRC’s successor liability for the historical bonds. Id. ¶ 41.

The 2020-21 bonds include a waiver of immunity for any action “arising out of or in connection

with” them. Id. ¶ 43.

Noble Capital now sues, asserting that the PRC breached clauses of the 1898-1913 bonds

giving them priority and precedence over future loans by issuing bonds in 2020 and 2021 that now

have greater priority and precedence. Id. ¶¶ 64–68, 82–83, 99–100, 113–14, 130–31. Noble Capital

seeks damages totaling over $11.5 billion based on the principal and interest owed on the historical

bonds. See ECF No. 28-2 at 2. The PRC moves to dismiss for lack of subject-matter jurisdiction

and failure to state a claim.

II. Discussion

The Foreign Sovereign Immunities Act (“FSIA”) is “the sole basis for obtaining

jurisdiction over a foreign state in our courts.” Argentine Republic v. Amerada Hess Shipping

Corp.,

(1989). The FSIA “codifies a baseline principle of immunity for foreign

states” and “then sets out exceptions to that principle.” Turkiye Halk Bankasi A.S. v. United States,

2

, 272 (2023) (citing 28 U.S.C. §§ 1604–1607). “If no exception applies, a foreign

sovereign’s immunity under the FSIA is complete: The district court lacks subject matter

jurisdiction over the plaintiff’s case.” Phoenix Consulting Inc. v. Republic of Angola,

(D.C. Cir. 2000).

A foreign state may challenge “the legal sufficiency of the plaintiff’s jurisdictional

allegations,” in which case “the district court should take the plaintiff’s factual allegations as true

and determine whether they bring the case within any of the exceptions to immunity invoked by

the plaintiff.”

. The foreign state “bears the burden of proving that the plaintiff’s allegations

do not bring its case within a statutory exception to immunity.”

Noble Capital premises jurisdiction on two of the FSIA’s exceptions: commercial activity

and waiver. ECF No. 28 ¶¶ 9–11. As discussed below, neither applies. The PRC is accordingly

immune from suit under the FSIA.

A. The Commercial-Activity Exception Does Not Apply.

The commercial-activity exception applies to cases where “the action is based upon [1] a

commercial activity carried on in the United States by the foreign state; or [2] upon an act

performed in the United States in connection with a commercial activity of the foreign state

elsewhere; or [3] upon an act outside the territory of the United States in connection with a

commercial activity of the foreign state elsewhere and that act causes a direct effect in the United

States.”

(a)(2).

Here, the dispute centers on whether the first clause applies—that is, whether the action is

“based upon a commercial activity carried on in the United States by the foreign state.”

2 The

2 The complaint references the second clause as well. ECF No. 28 ¶ 11. However, in response to the PRC’s argument that no clause applies, Noble Capital disputes only the first. ECF No. 35 at 13.

3 PRC says this case is based upon the nonpayment of interest and principal on the historical bonds

that Noble Capital allegedly owns—bonds that were “issued and repudiated in China” and do not

constitute commercial activity carried on in the United States. ECF No. 29-1 at 16. Noble Capital

argues that its suit is based upon the PRC’s 2020-2021 sales of bonds to U.S. investors because,

according to the complaint, the sale of those bonds is what breached the priority and precedence

clauses of the historical bonds. ECF No. 35 at 13.

To determine what an action is “based upon” a court must identify, well, “the particular

conduct on which the [plaintiff’s] action is ‘based.’” OBB Personenverkehr AG v. Sachs,

(2015) (quoting Saudi Arabia v. Nelson,

(1993)). Identifying the “basis”

or “foundation” of a claim involves considering “those elements of a claim that, if proven, would

entitle a plaintiff to relief under his theory of the case.” Nelson,

. But it is not

enough for an activity to merely “establish a single element of a claim.” Rosenkrantz v. Inter-Am.

Dev. Bank,

(D.C. Cir. 2022) (quoting Sachs,

). Ultimately, “[w]hat

matters is the crux—or, in legal-speak, the gravamen—of the plaintiff’s complaint, setting aside

any attempts at artful pleading.” Jam v. Int’l Fin. Corp.,

(D.C. Cir. 2021) (quoting

Fry v. Napoleon Cmty. Schs.,

(2017)). Said differently, the Court must “zero[]

in on the core of their suit” and the “sovereign acts that actually injured” the plaintiff. Sachs,

(citing Nelson,

).

Here, the gravamen of Noble Capital’s suit—the act that actually injured them—is the

nonpayment of interest and principal on the historical bonds. The injury, and the more than $11.5

billion in damages sought as relief in this case, stem from Noble Capital’s ownership of the

historical bonds; the terms and conditions upon which those historical bonds were issued,

including the guarantee of priority and precedence; and the failure to pay the principal or interest

4 on the loans for nearly a century, including the PRC’s continued repudiation of the loans. See ECF

No. 28 ¶ 20 (alleging that the historical bonds “for which Noble Capital is the assignee and lawful

owner, that are the subject of this action, are due and payable in an amount to be determined at

trial, but not less than $11.5 billion”) (emphasis added); see also ECF No. 28-2. To be sure, the

issuance of new bonds in 2020 and 2021 is an element of Noble Capital’s claims as pled—the

complaint alleges that the issuance and terms of the new bonds breached the terms of the historical

bonds. And the recent issuance is key to Noble Capital’s theory that its claims are timely. See ECF

No. 35 at 24. But the Supreme Court has cautioned against evasion of the FSIA based on “artful

pleading.” Sachs,

(citing Nelson,

).

Indeed, as Noble Capital acknowledges, the 2020 and 2021 bond issuances would not have

given rise to any action if the principal and interest on the historical bonds had been paid. See ECF

No. 35 at 14 (recognizing that “if the PRC had paid” the historical bonds, the priority and

precedence clauses alleged to have been breached “would no longer apply”). The gravamen of the

suit is accordingly the failure to repay the historical bonds, not the issuance of the new bonds. See

Sachs, 577 U.S. at 35–36 (rejecting that certain conduct in the U.S. was the gravamen in part

because there was “nothing wrongful” about the conduct “standing alone”); Jam,

(same, where “there would have been nothing wrongful” about the U.S. conduct alleged).

The action is accordingly based upon Noble Capital’s ownership of the historical bonds,

their terms, and the PRC’s failure to pay principal and interest on them. As Noble Capital does not

appear to contest, the issuance of the historical bonds and failure to pay principal and interest on

them were carried on in China, not the United States. The FSIA’s commercial-activity exception

therefore does not apply.

5 B. The PRC Has Not Waived Sovereign Immunity.

Noble Capital argues that, in the alternative to the commercial-activity exception, the PRC

is not entitled to sovereign immunity because it has explicitly waived such immunity. The FSIA

states that its presumptive sovereign immunity does not apply where “the foreign state has waived

its immunity either explicitly or by implication.”

(a)(1). “A foreign state

explicitly waives its sovereign immunity in a treaty or contract only if it ‘clearly and

unambiguously’ agrees to suit.” Ivanenko v. Yanukovich,

(D.C. Cir. 2021)

(quoting World Wide Mins., Ltd. v. Republic of Kazakhstan,

(D.C. Cir.

2002)). Explicit waivers must be “narrowly construed ‘in favor of the sovereign.’” Wye Oak Tech.,

Inc. v. Republic of Iraq,

(D.C. Cir. 2022) (quoting World Wide Mins.,

). And the “touchstone of the waiver exception” is “that the foreign state . . . intended to

waive its sovereign immunity.” Ivanenko,

(emphasis in original) (quoting

Creighton Ltd. v. Gov’t of Qatar,

(D.C. Cir. 1999)).

According to Noble Capital, the PRC’s issuance of new bonds in 2020 and 2021 explicitly

waived sovereign immunity in this action because the terms of the new bonds stated that sovereign

immunity would be waived for any action arising “in connection with” them. ECF No. 35 at 15;

see ECF No. 28 ¶ 43. But this action does not arise “in connection with” the 2020 and 2021 bonds.

Noble Capital’s claims are all premised on breach of the terms of the historical bonds, not breach

of the terms of any bonds issued in 2020 or 2021. And it would be difficult to conclude that an

action based on the historical bonds arises “in connection with” the new bonds when, according to

the complaint, the PRC repudiated the historical bonds nearly 70 years earlier, and multiple times

thereafter. ECF No. 28 ¶¶ 32–35. The Court accordingly cannot conclude there is any intent to

waive immunity as to breach of the terms of the historical bonds, let alone a clear and unambiguous

intent to do so. See Ivanenko,

; see also World Wide Mins,

6 (reasoning that “the presence of waivers in” some agreements, but not others, “creates real

ambiguity as to [the foreign sovereign’s] intent”). Indeed, Noble Capital’s briefing does not

meaningfully contest these points. 3

III. Conclusion

For these reasons, the PRC is entitled to sovereign immunity. The Court accordingly lacks

jurisdiction and does not reach the PRC’s additional bases for dismissal. The PRC’s motion to

dismiss, ECF No. 29, is granted and the case is dismissed without prejudice. Noble Capital’s

motion for a hearing, ECF No. 37, is denied as moot. Noble Capital’s motion for leave to file a

surreply, ECF No. 39, is denied, and the PRC’s motion to strike, ECF No. 41, is granted.

A separate order accompanies this memorandum opinion.

AMIR H. ALI United States District Judge

Date: September 15, 2025

3 The PRC also argues that any waiver of sovereign immunity in the terms of the bonds issued in 2020 and 2021 would be enforceable only by someone who owns those bonds, and Noble Capital does not allege it owns any. See ECF No. 29-1 at 25. Noble Capital failed to address this argument in its response brief and has accordingly conceded it. See Mesumbe v. Howard Univ.,

, 96–97 (D.D.C. 2010) (“When a plaintiff files a response to a motion to dismiss but fails to address certain arguments made by the defendant, the court may treat those arguments as conceded.” (quoting Fox v. Am. Airlines, Inc., No. 02-cv-2069,

, at *2 (D.D.C. Aug. 5, 2003))). Noble Capital subsequently moved to file a surreply addressing this issue; however, because the PRC clearly advanced this argument in its motion to dismiss, the Court denies the motion to file a surreply and grants the PRC’s motion to strike. See U.S. ex rel. Pogue v. Diabetes Treatment Centers of Am., Inc.,

(D.D.C. 2002) (“A surreply may be filed only by leave of Court, and only to address new matters raised in a reply, to which a party would otherwise be unable to respond.”).

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