## Facts

- Themis Capital, LLC and Des Moines Investments, Ltd. acquired interests in sovereign debt owed by the Democratic Republic of Congo (DRC) and related to a 1980 restructuring.
- The DRC defaulted on the restructured obligations in 1990.
- Plaintiffs sued in 2009 in the Southern District of New York to recover principal and accrued interest.
- To defeat a limitations defense, plaintiffs relied on written debt-acknowledgment (or reconciliation) letters dated 1991, 1997, and 2003, signed by the DRC’s vice minister of finance and the governor of Banque Centrale du Congo (the Central Bank).
- The letters identified the debt, recognized it as outstanding, and reflected an intent to honor the obligations.
- Defendants argued the signatories lacked authority to bind the DRC and/or the Central Bank and that, without valid acknowledgments, the claims were time-barred.
- After an earlier default judgment was set aside, the case proceeded through discovery and a bench trial, after which the court issued its post-trial decision on liability, limitations, and damages.

## Issues

1. Whether the 1991, 1997, and 2003 letters constituted written acknowledgments that revived or restarted New York’s limitations period for the debt claims.
2. Whether the vice minister of finance and Central Bank governor had actual or apparent authority to bind the DRC and the Central Bank through the acknowledgment letters.
3. Whether the DRC and the Central Bank were jointly and severally liable for the debt and what interest (including compounding) was recoverable.

## Decision

- The court held the acknowledgment letters satisfied New York’s requirements for reviving debt claims and restarted the six-year limitations period, making the 2009 action timely.
- The court found the signatories had actual authority, and alternatively apparent authority, to bind both the DRC and the Central Bank.
- The court held the DRC and the Central Bank jointly and severally liable for the outstanding obligations.
- The court awarded accrued interest and permitted compound interest to the extent supported by the governing instruments, but rejected “second-generation” compound interest.

## Legal Principles

- Under New York law, a time-barred debt claim may be revived by a written acknowledgment that is signed by the party to be charged, recognizes an existing debt, and contains nothing inconsistent with an intent to pay.
- Actual authority may be shown by the agent’s role, assigned responsibilities, and the principal’s practices in delegating debt management and execution of debt-related documents.
- Apparent authority exists where the principal’s manifestations, including course of dealing and use of senior officials to execute debt documents, reasonably cause third parties to believe the agent is authorized.
- Joint and several liability may be imposed where debt instruments allocate substantive obligations to multiple obligors rather than limiting an entity’s role to that of a ministerial fiscal agent.
- Contractual authorization is required for compounding; absent clear language, courts may disallow interest-on-interest beyond the level contemplated by the instruments.

## Conclusion

The court entered judgment for the creditors, ruling that the DRC and its Central Bank were bound by authorized written acknowledgments that revived the claims, were jointly and severally liable for the debt, and owed interest including limited compounding, but not second-generation compound interest.


Themis Capital, LLC v. Democratic Republic of Congo, 35 F. Supp. 3d 457 (S.D.N.Y. 2014)