## Facts

- Harris, a U.S. manufacturer, contracted with National Iranian Radio and Television (NIRT), a government entity, to supply 144 FM transmitters and related services for $6,740,352; NIRT paid an advance to be amortized through later payments.
- Harris procured a Bank Melli Iran performance guarantee in NIRT’s favor, payable upon NIRT’s written declaration of Harris’s noncompliance, without independent proof.
- Continental Illinois issued a standby letter of credit to reimburse Bank Melli for any payment Bank Melli made under the guarantee.
- Harris shipped 138 transmitters; six were not delivered due to disruptions associated with the Iranian Revolution and later political events.
- After the U.S. Embassy seizure and hostage crisis, NIRT ceased communications and asserted nonperformance, seeking payment/extension under the guarantee; Bank Melli sought payment/extension from Continental under the standby letter of credit.
- Harris sued in the Middle District of Florida to enjoin demands and payments under the guarantee and standby letter of credit, alleging force majeure terminated or suspended the contract and that the attempted draws constituted fraud in the transaction.
- The district court granted a preliminary injunction barring NIRT’s demand, Bank Melli’s payment to NIRT, and Bank Melli’s collection from Continental; NIRT and Bank Melli appealed.

## Issues

1. Whether venue was proper in the Middle District of Florida under FSIA and federal venue statutes.
2. Whether the district court had subject-matter jurisdiction under the FSIA over NIRT and Bank Melli.
3. Whether the district court had personal jurisdiction over NIRT and Bank Melli under FSIA service provisions and due process.
4. Whether granting a preliminary injunction against drawing on the guarantee and standby letter of credit was an abuse of discretion.

## Decision

- The Eleventh Circuit affirmed the preliminary injunction.
- Venue was proper in the Middle District of Florida.
- Subject-matter jurisdiction existed under the FSIA because the dispute arose from commercial activity.
- Personal jurisdiction was proper because service complied with 28 U.S.C. § 1608 and defendants had sufficient U.S. contacts tied to the transaction.
- The district court did not abuse its discretion; Harris showed likelihood of success, irreparable harm, favorable balance of harms, and consistency with the public interest.

## Legal Principles

- Foreign-state agencies or instrumentalities are subject to FSIA jurisdiction when the claim is based on commercial activity resembling private-party contracting.
- Under FSIA, personal jurisdiction requires proper service under § 1608 and satisfaction of constitutional due process through minimum contacts.
- Letters of credit are generally independent of underlying contracts, but courts may enjoin payment when there is a strong showing of fraud in the transaction (bad-faith or clearly unmerited demand).
- Preliminary injunctions require: likelihood of success on the merits, irreparable injury, balance of harms favoring the movant, and alignment with the public interest.
- Irreparable harm may be shown where payment would transfer funds to foreign sovereign entities in circumstances making recovery uncertain and damages practically ineffective.

## Conclusion

The Eleventh Circuit held that a contract-and-credit dispute with Iranian state entities fell within the FSIA’s commercial-activity exception, supported venue and personal jurisdiction, and justified preliminary injunctive relief to preserve the status quo where Harris plausibly alleged force-majeure-based nonperformance defenses and fraud in attempted draws on a performance guarantee and standby letter of credit.


Harris Corp. v. Nat’l Iranian Radio & Television, 691 F.2d 1344 (11th Cir. 1982)