On October 5th 2009, the Court of Appeals for the District of Columbia denied a request filed by the Inter-American Investment Corporation (IIC) for a hearing en banc of its motion to dismiss claims filed by Jorge Vila, a former consultant. Vila filed his claim against the IIC – the private sector lending arm of the Inter-American Development Bank (IDB) – in October 2006, and since then the Courts have turned back repeated efforts by the IIC to invoke its immunities. This case is now expected to go to trial before the District Court, where significant issues related to the transparency, internal audit and controls and accountability of international organizations are likely to be raised.

As an international organization, the IIC enjoys certain immunities against Court actions. As decided repeatedly by the Courts however, the IIC, like other international organizations, is not protected by its immunities against claims that deal with the “outside world” commercially. Specifically, the IIC cannot invoke its immunities when hiring private sector consultants to assist in its mission of lending funds for development in Latin American and the Caribbean. As decided by the Courts on at least two occasions now, Vila has filed just such a claim. He argues that, as an IIC consultant, he was asked over six months to identify co-financiers of IIC loans (syndications), negotiate terms and conditions of IIC loans and advise the IIC on market conditions to price loans to Latin American and Caribbean borrowers of IIC funds.

Court papers show that Vila claims the IIC requested his services, accepted them during six months and then refused to pay for them, citing internal audits and control procedures. Vila claims that those internal audits and control procedures were not an impediment to requesting and accepting his services during six months, giving him authority to negotiate terms and conditions of IIC loans with clients and counterparts and drafting internal and external documentation for the signature of IIC’s senior management. He claims that these putative controls should not, therefore, be an impediment to paying for his services.

The District Court for the District of Columbia, on February 22, 2008, agreed with Vila’s interpretation, stating that if the alleged facts were true, they amounted to a valid claim for unjust enrichment. Consequently, the Court denied the IIC Motion to Dismiss Vila’s claim. On January 26, 2009, this same Court denied an IIC Motion for Certification for Appeal.

On June 19, 2009, the Court of Appeals for the District of Columbia ruled that the IIC was not immune from Vila’s claim, denied the IIC request to uphold its alleged immunity, and affirmed the District Court decision of 22 February 2008.

The IIC then filed a Petition to Appeal en banc, and the Court of Appeals denied this petition on October 5th. This last is the fourth Court decision against the IIC since Vila filed his claim exactly three years ago. The law firm of Arnold & Porter has represented the IIC throughout these proceedings, and the law firm of Elitok & Hartnett represents Jorge Vila.

Click here to read the 2008 IIC Memo Opinion Motion to Dismiss