Robert F. Serio
Direct: +1 212.351.3917
Fax: +1 212.351.5246
RSerio@gibsondunn.com
Client: 04979-00001
April 8, 2013
VIA OVERNIGHT COURIER
The Honorable Andrew W. Klein
Chief Clerk and Legal Counsel to the Court
State of New York Court of Appeals
20 Eagle Street
Albany, New York 12207
Re: Mashreqbank PSC v. Ahmed Hamad Al Gosaibi & Bros. Co.
– and –
Ahmed Hamad Al Gosaibi & Bros. Co. v. Maan Abdulwaheed Al-Sanea,
No. APL-2013-00007 .
Dear Mr. Klein:
Third-Party Defendant-Appellant Maan Abdul Wahed Al-Sanea (“Mr. Al-
Sanea”) respectfully submits this letter in support of his appeal in this action,
which the Court, on its own motion, has designated for alternative review pursuant
to Rule of Practice 500.11.1 This letter constitutes Mr. Al-Sanea’s letter
submission pursuant to Rule 500.11(c)(2); payment in respect of the fee required
pursuant to Rule 500.11(c)(5) is enclosed herewith, and I understand that the
1 Reversal on Rule 500.11 review is warranted here for (among others) the reasons identified
in the thorough opinions of the dissenting Appellate Division Justices and trial court below
(both of which were heard on full briefing), which set forth the correct rules of decision and a
clear rationale for reversing the erroneous decision below. See 22 NYCRR § 500.11(b)(6)
(review warranted for “other appropriate factors”). Mr. Al-Sanea submits, however, that no
other basis for Rule 500.11 review exists, cf. id. § 500.11(b)(1)–(5), and he respectfully
objects to alternative review insofar as the Court bases it on those other grounds. The
decision below addresses legal issues subject to plenary review. Cf. id. § 500.11(b)(1); see
infra at 8. This Court has not addressed issues similar to those raised here for several years.
Cf. id. § 500.11(b)(2). The decision below has implications of clear statewide importance.
Cf. id. § 500.11(b)(3). Reversal would not turn upon “unpreserved issues of law.” Id.
§ 500.11(b)(3). And no party has “request[ed]” alternative review. Id. § 500.11(b)(5).
The Honorable Andrew W. Klein
April 8, 2013
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remaining materials required for filing under Rule 500.11(c) are being submitted to
the Court by counsel for Plaintiff-Appellant Mashreqbank PSC (“Mashreq”),
whose parallel appeal is being reviewed concurrently with Mr. Al-Sanea’s appeal.
For the reasons explained here, and in Mr. Al-Sanea’s papers below, the
September 25, 2012 decision and order of the Appellate Division (the “Decision
and Order”)2 should be reversed, and this action should be remanded with
directions to enter an order dismissing the case in its entirety or, at a minimum,
dismissing the third-party complaint of Defendant-Third-Party Plaintiff-
Respondent Ahmad Hamad Algosaibi & Bros. Co. (“AHAB”).3 The third-party
complaint raises a dispute that has no business being litigated in New York, and all
of the claims in this case can be resolved in more appropriate fora overseas.
PRELIMINARY STATEMENT
In this case, a divided panel of the Appellate Division, comprising just three
of the six Justices assigned to this case in the courts below, held by a 3-to-2 margin
that an action must be heard in New York despite the fact that both the plaintiff and
the third-party defendant maintained that it should be dismissed in favor of parallel
litigation overseas. The Appellate Division vacated the dismissal below even
though all of the parties, and most of the witnesses and evidence, are located in the
Middle East, all of the transactions underlying the dispute arose in the Middle East,
and all of the claims at issue could be litigated in the Middle East—including
within the context of various parallel proceedings already pending in other fora.
The Appellate Division’s principal bases for that holding were that: (a) it
found forum non conveniens dismissal to be inapplicable as a matter of law
because the case involved allegations of tortious conduct relating to electronic
funds transfers that cleared through New York bank accounts—even though all of
the events underlying those transactions transpired in the Middle East, where the
2 A true and correct copy of the Decision and Order, along with the Dissent, was previously
submitted to this Court as Attachment B to Mr. Al-Sanea’s Preliminary Appeal Statement,
dated January 7, 2013.
3 Pursuant to Court of Appeals Rule 500.11(f), Mr. Al-Sanea incorporates by reference all of
the arguments set forth in his Brief to the Appellate Division, dated December 7, 2011.
The Honorable Andrew W. Klein
April 8, 2013
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parties reside; and (b) it purported to find a technical defect in the application of
forum non conveniens dismissal to the first-party action, calling it a “sua sponte”
act even though the parties were all heard on that issue, the third-party defendant
made a motion to dismiss the third-party proceedings on forum non conveniens
grounds, and both the plaintiff and the third-party defendant advised the court that
dismissal of the first-party claims on similar grounds was appropriate.
The Appellate Division’s ruling is premised on substantial errors, including
misapprehension of this Court’s controlling precedents, and it threatens to impose
a rule on future litigation that will subject the New York court system, and foreign
parties around the world, to unprecedented and unjustifiable burdens. Those
fundamental errors, and their attendant drastic consequences, compel reversal.
This case arises out of a series of foreign-exchange transactions negotiated
and entered into in the Middle East, between Plaintiff Mashreq and Defendant-
Third-Party Plaintiff AHAB, that involved payments of dollars on the one hand
and Saudi Riyals on the other. AHAB defaulted on its obligation to make a
payment of Riyals to Mashreq’s account in Saudi Arabia, which gave rise to the
first-party action. In defending that action, and in its third-party complaint against
Mr. Al-Sanea, AHAB claimed the exchange transactions were products of a
“massive fraud” by Mr. Al-Sanea, whereby he allegedly seized control of AHAB’s
business operations in Saudi Arabia—through alleged acts of forgery, undue
control of AHAB employees, and other misconduct—and then borrowed money in
AHAB’s name that he allegedly misappropriated for his own purposes while
concealing those borrowings from AHAB’s principals. Even though all of those
alleged events would have transpired overseas, AHAB insisted that the action must
be litigated here simply because the allegedly fraudulent transactions involved
transfers of dollars—effected by overseas wire transfers directed from the Middle
East—between New York bank accounts. The trial court found that tenuous New
York connection insufficient to avoid forum non conveniens dismissal, but the
Appellate Division disagreed—over the dissent of two Justices (the “Dissent”).
The Appellate Division erroneously reasoned that New York has a
“paramount” interest in policing its banking system that compelled the application
of a bright-line rule foreclosing forum non conveniens dismissal because of the
involvement of New York bank transfers in the allegedly improper transactions.
That supposed rule is contrary to settled forum non conveniens case law, including
The Honorable Andrew W. Klein
April 8, 2013
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this Court’s precedents emphasizing the fundamentally “flexible” nature of forum
non conveniens analysis, and the only purported support the Appellate Division
cited for its conclusion derives entirely from a misreading of decisions this Court
has rendered concerning matters other than forum non conveniens (comity and
choice-of-law issues). Buying into AHAB’s arguments about the New York
courts’ supposed obligation to police every case involving a New York banking
transaction, the Appellate Division fixated on the tangential New York connection
of the bank transfers alleged here to the exclusion of all the other facts of the case.
That was plain error warranting reversal. Indeed, by overlooking the facts
beyond those ministerial New York transfers, the Appellate Division failed to
appreciate that virtually every other allegation and item of record evidence placed
before the courts below demonstrates that this case never had any business being
litigated in New York. New York is not the center of gravity of this dispute—in
fact, it is not even the center of gravity of AHAB’s worldwide litigation campaign
against Mr. Al-Sanea, which includes proceedings in the Middle East, Europe, and
the Caribbean. R.190–99, R.261–89, R.577–78, R.620–22.
As the dissent below recognized, other than ministerial bank transfers
alleged to be products of an overseas fraud, there is no connection between New
York and this dispute. See Dissent at 28–29. Mr. Al-Sanea and AHAB both reside
in Saudi Arabia, and any unauthorized conduct Mr. Al-Sanea allegedly undertook
in AHAB’s name transpired (if at all) in Saudi Arabia, where its business is based.
Neither of them has offices or employees in New York or conducts business here.
Mashreq is based in Dubai, and its claims against AHAB derive from AHAB’s
failure to pay Saudi riyals into Mashreq’s account in Saudi Arabia, pursuant to an
agreement negotiated overseas. R.104, R.125, R.139. New York could not
possibly be called the center of this dispute, so the Appellate Division’s ruling
cannot stand even under its own flawed interpretation of the law.
The Appellate Division also erred in finding that dismissal of the first-party
claims was an improper sua sponte act simply because Mr. Al-Sanea’s notice of
motion did not expressly seek dismissal of the first-party case. That conclusion
was premised on inapposite cases in which the subject of forum non conveniens
dismissal was never raised or addressed by the parties at all, and it conflicts with
case law recognizing that forum non conveniens dismissal does not run afoul of the
rule against sua sponte action if, as here, the litigants have been heard on the issue.
The Honorable Andrew W. Klein
April 8, 2013
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The Appellate Division’s ruling was not only wrong; it was also imprudent,
because it will have the effect of compelling New York courts to hear virtually
every case between foreign parties involving allegations of financial misconduct
that in any way touched New York’s banking system, no matter how extensive the
foreign contacts—and how minimal the New York contacts—may be. That is no
small concern for New York, one of the “financial capitals of the world,” which
routinely facilitates foreign-parties’ dollar-denominated transactions that have no
connection to this State other than the fact that dollars are involved.
QUESTIONS PRESENTED
I. Does New York’s interest in policing the
native banking system bar New York courts from
dismissing on forum non conveniens grounds any action
concerning a dispute between foreign parties that arises
out of conduct undertaken overseas and business
relationships negotiated and entered into overseas, and
that involves the application of foreign law, simply
because the alleged misconduct at issue had some
relationship to a dollar-denominated New York banking
transfer effected by parties located overseas?
No. New York’s interest in policing its banking system is not a dispositive
factor in forum non conveniens analysis and should not compel the denial of forum
non conveniens relief in a case such as this, where the center of gravity of the
parties’ disputes is unquestionably located overseas.
II. Is dismissal of an action or claim on forum
non conveniens grounds always precluded in the absence
of a formal notice of motion expressly seeking dismissal
of such action or claim, even where the litigants raised,
briefed, and were heard by the court on the question of
whether that action or claim should be dismissed on
forum non conveniens grounds?
No. A court may grant forum non conveniens dismissal of first-party claims
if a third-party defendant moves to dismiss the third-party claims and the related
dismissal of the first-party claims is later raised and briefed by the parties.
The Honorable Andrew W. Klein
April 8, 2013
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FACTUAL BACKGROUND
Mr. Al-Sanea refers the Court to his Appellate Division brief below for a
more complete statement of the relevant factual background. This case is just one
of a myriad of legal proceedings that have been commenced in jurisdictions around
the world—many of them, at AHAB’s initiation—concerning AHAB’s inability to
meet approximately $10 billion of liabilities to various banks and financial
counterparties. AHAB, a Saudi Arabian business conglomerate owned by that
country’s prominent Al-Gosaibi family, contends that all of those liabilities are the
products of an alleged “massive fraud” by Mr. Al-Sanea, a Saudi citizen and
resident (and in-law of the Al-Gosaibi family) who previously served as a “senior
executive of AHAB’s financial service division, the Money Exchange.” R.104–08,
618–620. The Mashreq foreign-exchange transactions at issue here are alleged to
be among the products of that supposed fraudulent scheme. R.104, 106.
Fundamental to AHAB’s claims against Mr. Al-Sanea is its contention that
he perpetrated a “massive fraud” by “[d]irecting AHAB’s employees” to engage in
billions of dollars of transactions in the company’s name, without the knowledge
or authorization of its principals, “frequently using forged or falsified documents,”
and “then diverted the funds received to his own use.” R.104–105. That core
allegation underlies AHAB’s third-party complaint against Mr. Al-Sanea here and
its defense and counterclaims to Mashreq’s first-party complaint—as well as
several other proceedings AHAB has commenced against Mr. Al-Sanea abroad,
criminal complaints it has made against him in several countries, and other
proceedings brought by other creditors that it has sought to defend by raising its
fraud and forgery allegations against Mr. Al-Sanea (none of which proceedings
have shielded AHAB from liability on that ground). R.114–120, 620–622.
AHAB’s litigation campaign against Mr. Al-Sanea includes proceedings
before a committee of prominent government officials the King of Saudi Arabia
formed to review AHAB’s allegations. R.620–621. It also includes an action in
the Cayman Islands in which AHAB asserts claims that encompass the same
transactions at issue here—as well as billions of dollars of other claims. R.261–
272, 622. Here, AHAB seeks only indemnity (and punitive damages) from Mr. Al-
Sanea to cover its potential liability on Mashreq’s first-party claims, not the other
billions it claims to be owed by Mr. Al-Sanea as a result his supposed “massive
fraud” against the company. R.114–120.
The Honorable Andrew W. Klein
April 8, 2013
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The specific transactions on which AHAB focuses here were several split-
value exchange transactions, in which Mashreq was to pay U.S. dollars into a New
York bank account in AHAB’s name, and AHAB was to pay Saudi riyals into
Mashreq’s account at a Saudi bank a few days later. R.109–113. On the last of
those transactions, as alleged, Mashreq paid the dollar leg of the deal but AHAB
failed to pay the Saudi riyals that came due several days later. R.104, 113. The
dollars transferred to AHAB’s New York account were transferred to another New
York account held by Awal Bank, and were credited to AHAB’s account at Awal
Bank, but Awal Bank—which has been placed into insolvency proceedings—later
failed to tender those funds to AHAB upon demand. R.113–114.
The only connection these transactions had to New York was that the dollar
transfers at issue were conducted by parties in Saudi Arabia and Dubai who sent
electronic instructions to New York banks that then executed ministerial wire
transfers. Id. AHAB claims these transactions were undertaken without its
knowledge or consent by Mr. Al-Sanea and AHAB employees in Saudi Arabia
acting at his direction. Id. On this set of alleged facts, AHAB contends that Mr.
Al-Sanea somehow “stole” its property in New York, and that New York is the
center of gravity of the dispute. See, e.g., AHAB Br. at 10, 25, 43.
After AHAB filed its answer, counterclaims, and third-party complaint,
Mashreq moved to dismiss the counterclaims for failure to state a claim, R.1127,
and Mr. Al-Sanea moved to dismiss the third-party complaint for lack of personal
jurisdiction and on forum non conveniens grounds, R.65–66. The trial court asked
whether the forum non conveniens concerns raised in Mr. Al-Sanea’s motion had
implications for the entire case, and Mr. Al-Sanea’s counsel stated that, just as with
the third-party claims, “there are multiplicity of other proceedings that have far
greater connection to [Mashreq and AHAB] than does New York,” and that “the
same could be true” for the first-party claims. R.653–55. The trial court requested
briefing on the application of forum non conveniens analysis to the entire action,
R.658–59, and Mashreq ultimately consented to dismissal of its first-party claims,
R.1452–54, 1465–67.4 AHAB, despite previously pleading lack of personal
4 See also Plaintiff Mashreqbank PSC’s Reply Memorandum of Law in Connection with
Third-Party Defendant Al-Sanea’s Motion for Forum Non Conveniens Dismissal at 2–3, filed
in the trial court below on March 23, 2010 (Dkt. No. 115).
The Honorable Andrew W. Klein
April 8, 2013
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jurisdiction as a defense, was the only party left arguing that the case should go
forward in New York. R.1465–67.
The trial court ordered the entire action dismissed on forum non conveniens
grounds. R.28, 37. AHAB appealed, and both Mr. Al-Sanea and Mashreq argued
for affirmance. Nonetheless, a divided panel of the Appellate Division reversed
over the dissent of two Justices. Then-Justice Catterson, writing for the majority,
found that dismissal of the first-party claims had been an improper “sua sponte”
act requiring reversal because no party had filed a formal motion to dismiss the
first-party claims. Decision and Order at 8–11. The Appellate Division also found
that dismissal of the third-party claims was improper for two reasons. First, the
majority concluded that forum non conveniens dismissal could not have been
granted in the absence of a showing that another forum could adjudicate both the
first-party and third-party claims in one proceeding. Id. at 17–18. Second, the
majority concluded that the New York courts had a supposedly “compelling”
interest in adjudicating the third-party claims because they concern allegations of
misconduct involving the use of the state’s “native” banking system. Id. at 12–17.
Mr. Al-Sanea and Mashreq both moved the Appellate Division for leave to
appeal to the Court of Appeals. The Appellate Division granted both motions.
STANDARD OF REVIEW
The Appellate Division certified the following “question of law” for review:
“Was the order of [the Appellate Division], which reversed the judgment of the
Supreme Court, properly made?” Order Granting Review at 1–2. It “further
certifie[d] that its determination was made as a matter of law and not in the
exercise of discretion.” Id. at 2. This Court exercises independent review of such
questions of law. See CPLR 5501(b); Taylor v. Interstate Motor Freight Sys., 309
N.Y. 633, 636 (1956) (per curiam) (conducting independent review where
Appellate Division stated that its decision was made “‘on the law’”).
ARGUMENT
Mr. Al-Sanea’s brief to the Appellate Division set forth in detail the well-
settled law and undisputed record evidence demonstrating that this case was
properly dismissed on forum non conveniens grounds and that the trial court’s
judgment should have been affirmed, either in its entirety or, at a minimum, to the
The Honorable Andrew W. Klein
April 8, 2013
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extent that it dismissed the third-party complaint. Nothing about the trial court’s
ruling involved improper sua sponte action. Al-Sanea Br. at 20–24. Nor was the
trial court required to adjudicate the first- and third-party claims together; even if it
chose to hear the first-party proceedings, there would have been no bar to forum
non conveniens dismissal of the third-party complaint. Id. at 24–26.
Moreover, virtually all of the factors bearing on forum non conveniens
favored dismissal of the case. None of the parties reside in New York. Id. at 26.
The vast majority of the relevant events—and, indeed, all of the disputed events—
occurred in the Middle East, primarily in Saudi Arabia. Id. at 26–28. Dismissal
served the convenience of the parties and witnesses. Id. at 28–33. Hearing the
case would have posed an undue burden on the court, including the burden of
interpreting and applying foreign law. Id. at 34–39. Foreign jurisdictions offer
superior alternative fora for resolving this case. Id. at 39–43. Saudi Arabia has a
compelling interest in resolving this dispute, and New York has virtually no
interest in doing so. Id. at 43–48. Finally, the trial court should have dismissed the
third-party complaint in any event for lack of personal jurisdiction. Id. at 50–53.
Despite all of those incontrovertible facts, a divided panel of the Appellate
Division reached an erroneous, contrary result. Its ruling should be reversed
because it is infected by several legal errors, each of which compels reversal. This
letter submission addresses each of the Appellate Division’s key errors in turn.
Chief among those errors is the fact that the Appellate Division adopted a
bright-line rule of forum non conveniens analysis that compels the New York
courts to hear virtually every dispute relating to alleged misconduct in connection
with transactions that involve a transfer of dollars through a New York bank
account. Such a rule not only runs afoul of this Court’s well-settled precedents
emphasizing the fundamental “flexibility” of forum non conveniens analysis—an
analysis “based upon the facts and circumstances of each case” in which “[n]o one
factor is controlling.” Islamic Republic of Iran v. Pahlavi, 62 N.Y.2d 474, 479
(1984); accord, e.g., Martin v. Mieth, 35 N.Y.2d 414, 418 (1974); Silver v. Great
Am. Ins. Co., 29 N.Y.2d 356, 361 (1972). It also contradicts settled law finding
forum non conveniens dismissal appropriate in cases that, despite being centered in
The Honorable Andrew W. Klein
April 8, 2013
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another jurisdiction, nonetheless had some transitory transactional nexus to New
York (such as transfers of dollars or other assets through New York).5
That error rested on a fundamental misapprehension of principles the
Appellate Division purported to derive from this Court’s decisions in J. Zeevi &
Sons, Ltd. v. Grindlays Bank (Uganda) Ltd., 37 N.Y.2d 220 (1975), and Ehrlich-
Bober & Co. v. University of Houston, 49 N.Y.2d 574 (1980), neither of which
concerns the doctrine of forum non conveniens. This Court has never said that
New York has a paramount interest in forcing its courts to retain jurisdiction over
every tort case that involves a New York banking transaction, and the Appellate
Division plainly erred in construing those precedents as doing so. Indeed, other
courts have recognized that this Court’s “paramount interest” analysis “is not a
trump to be played whenever a party to such a transaction seeks to use our courts
for a lawsuit with little or no apparent contact with New York or the United
States.” First Union, 135 F. Supp. 2d at 453; accord, e.g., World Point Trading,
225 A.D.2d at 160. The Appellate Division failed to appreciate that principle.
Additionally, the Appellate Division’s ruling will impose upon every trial
court in the First Department (and likely many others) a bright-line rule that forum
non conveniens dismissal may never be granted as to any claim or party not
specifically denominated in a formal notice of motion, regardless of the extent to
which the litigants briefed and were heard on the appropriate scope of forum non
conveniens dismissal in the case. As the dissent below recognized, such a rule
conflicts with prior case law and is contrary to the plain text of the CPLR. See,
e.g., CPLR 327(a); CPLR 1008; Banco do Estado de Sao Paulo S.A. v. Mendes
Junior Int’l Co., 249 A.D.2d 137, 139 (1st Dep’t 1998); Smith v. Miller, 237
A.D.2d 294, 295 (2d Dep’t 1997); accord Dissent at 23–23, 26.
5 See, e.g., Atsco Ltd. v. Swanson, 29 A.D.3d 465, 465–66 (1st Dep’t 2006); R.1187–89,
R.1193–95; World Point Trading PTE., Ltd. v. Credito Italiano, 225 A.D.2d 153, 159–61
(1st Dep’t 1996); A&M Exports, Ltd. v. Meridien Int’l Bank, Ltd., 207 A.D.2d 741, 741 (1st
Dep’t 1994); Citigroup Global Mkts., Inc. v. Metals Holding Corp., Index. No. 604205/05,
2006 WL 1594442, at *6–*7 (Sup. Ct. N.Y. Cnty. June 8, 2006), aff’d, 45 A.D.3d 361, 362
(1st Dep’t 2007); First Union Nat’l Bank v. Paribas, 135 F. Supp. 2d 443, 453–54 (S.D.N.Y.
2001); Calgarth Invs., Ltd. v. Bank Saderat Iran, No. 95 Civ. 5332, 1996 WL 204470, at *2,
*6–*7 (S.D.N.Y. Apr. 26, 1996), aff’d, 108 F.3d 329 (2d Cir. 1997); Sussman v. Bank of
Israel, 801 F. Supp. 1068, 1074 (S.D.N.Y. 1992), aff’d, 990 F.2d 71, 72 (2d Cir. 1993).
The Honorable Andrew W. Klein
April 8, 2013
Page 11 of 33
If not reversed, the Appellate Division’s decision will have disastrous
consequences for future litigation in the New York courts. It will subject every
trial court in the First Department (and likely many others) to a rule that compels
them to hear virtually every tort case involving a New York banking transaction
that comes before them and satisfies the most basic prerequisites of modern
personal-jurisdiction jurisprudence. Such a rule frustrates the very purpose of the
doctrine of forum non conveniens, which serves as “a necessary antidote to the
greatly expanded jurisdiction provided by ‘long-arm’ statutes such as CPLR 302.”
Pahlavi, 62 N.Y.2d at 491. A bright-line rule against dismissal of any tort action
with any tie to a New York banking transaction would pervert that fundamental
purpose, at great expense both to the overburdened New York court system and to
foreign parties the world over. Indeed, New York’s status as a “financial capital of
the world,” J. Zeevi, 37 N.Y.2d at 227, is the very fact that gives rise to the need
for “flexibility” in applying New York’s forum non conveniens doctrine, Pahlavi,
62 N.Y.2d at 479. If the Appellate Division’s rigid, bright-line rule became the
law of the land, it surely would dissuade foreign business interests from continuing
to look to New York as a global financial center.
I. The Appellate Division Misconstrued this Court’s Decision in
J. Zeevi as Foreclosing Forum Non Conveniens Relief Here
At its core, the Appellate Division’s forum non conveniens analysis was
indelibly colored by its erroneous reading of this Court’s decision in J. Zeevi &
Sons, Ltd. v. Grindlays Bank (Uganda) Ltd. (and its decision in Ehrlich-Bober &
Co. v. University of Houston, see infra at 14–21) as supporting the notion that New
York’s “compelling interest in the protection of the native banking system from
misfeasance or malfeasance,” Decision and Order at 12, compels New York courts
to deny forum non conveniens dismissal in virtually every tort case that in any way
touches the instrumentalities of the New York banking system. To begin with, the
Appellate Division quoted extensively from J. Zeevi, but did not even acknowledge
that J. Zeevi concerned a dispute over choice of law, not forum non conveniens.
Ignoring this important distinction, the Appellate Division failed to explain why
the choice-of-law analysis in J. Zeevi should compel any particular conclusion as
to forum non conveniens issues in another case.
If New York’s interest in applying its law to a claim were always enough to
render forum non conveniens dismissal of such a claim improper, then forum non
The Honorable Andrew W. Klein
April 8, 2013
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conveniens analysis would turn exclusively on whether or not foreign law applies.
Applicability of foreign law would be the only relevant factor. That, of course, is
not the law—indeed, it is antithetical to this Court’s repeated statements that “[n]o
one factor is controlling” in forum non conveniens analysis and that “[t]he great
advantage of the rule . . . is its flexibility based upon the facts and circumstances of
each case.” Pahlavi, 62 N.Y.2d at 479 (emphasis added). Nothing cited in the
Decision and Order, or elsewhere in the law, supports the notion that choice-of-law
and forum non conveniens analyses are co-extensive—or that dismissal on forum
grounds must be denied in every case where New York law applies.
The Appellate Division also misapprehended the extent to which the facts of
J. Zeevi coincide with the facts of this case, and it erred in concluding that any
distinction between the two cases is “immaterial.” Decision and Order at 14.
J. Zeevi concerned the enforceability of a financial instrument that called for
performance entirely in New York—an irrevocable letter of credit payable by a
New York bank that was dishonored in contravention of its terms by the payor
bank—and that, accordingly, implicated the reliability of financial commitments
made by New York banks and the commercial expectations of parties that rely on
letters of credit payable in New York. Indeed, as the J. Zeevi Court noted, the
“defendant’s order countermanding payment” on the letter of credit “took effect
upon receipt by Citibank in New York” and, accordingly, “New York was the
locus of repudiation, whereas it should have been a site of payment.” 37 N.Y.2d at
226. A significant factor underlying the Court’s decision to apply New York law
was its concern for protecting “the justified expectations of the parties to the
contract” that called for the issuance of the New York letter of credit. Id. at 227.
This case is far different. The financial instruments at issue here—foreign-
exchange agreements negotiated and entered into in the Middle East, and subject to
foreign law by their terms—called for performance primarily overseas, and it was a
failure of performance in Saudi Arabia—not in New York—that gave rise to this
action. In any event, the J. Zeevi Court’s choice-of-law analysis focused on the
location where “that is done which should not be done.” Id. at 226 (internal
quotation omitted). Here, the alleged acts that “should not be done” by Mr. Al-
Sanea—contracting with Mashreq in AHAB’s name but without its knowledge or
authorization, creating and utilizing forged documents to engage in those
transactions in AHAB’s name, and directing bank transfers to divert the proceeds
to his own uses—would have been done (if at all) entirely overseas, where Mr. Al-
The Honorable Andrew W. Klein
April 8, 2013
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Sanea, AHAB, and Mashreq were all located and the exchange transactions were
negotiated. R.13–14, R.24–27, R.104, R.107–09, R.112–15, R.139, R.617–20.
The nefarious aspect of the allegedly fraudulent transactions at issue here is
not hinged to the fact that one leg of those transactions called for a payment in
dollars. Rather, it arises from allegations that Mr. Al-Sanea wielded control over
the implements of AHAB’s business—which is based in Saudi Arabia and has no
presence here—to do business with other Middle Eastern and overseas parties in
AHAB’s name but for his own benefit, and that he allegedly employed fraud,
forgery, and other unlawful practices to do so without AHAB’s knowledge or
consent. The mere fact that one of the strings Mr. Al-Sanea allegedly pulled leads
to a New York wire transfer does not render this dispute one that is centered in
New York or fundamentally concerned with the New York banking system. The
totality of the dispute in J. Zeevi concerned a foreign party’s unlawful acts to bar a
New York bank from honoring its commitment to pay money upon presentment of
appropriate documents in New York; that is nothing like the situation in this case.6
The Appellate Division also failed to recognize that, unlike here, the foreign-
law interests at issue in J. Zeevi were in direct conflict with well-settled New York
policy “against” any “acquiescence in the confiscatory and discriminatory acts” of
a foreign government and, thus, were not entitled to any respect under principles of
comity. Id. at 228. The events that led the defendant in J. Zeevi to instruct its New
York agent to dishonor the letter of credit were the products of a “confiscatory and
discriminatory” policy directive of the Ugandan government that targeted Israeli
business interests and was motivated by the “strong anti-Israel and anti-semitic”
views of the Ugandan government. Id. at 227–28. In other words, J. Zeevi held
that the New York courts should not give deference to the bigoted acts of a foreign
regime that would have had the effect of vitiating well-settled principles of due
process and equal protection embodied in New York law. Here, there is no such
foreign-law interest repugnant to the public policy of New York that compels the
New York courts to embroil themselves in this dispute, and the Appellate Division
6 The Appellate Division also erroneously found similarity between this case and J. Zeevi
based on the notion that the “foreign exchange laws of Uganda” supposedly “were central to
the dispute” in J. Zeevi. Decision and Order at 13. That is the opposite of what this Court
held in J. Zeevi: that Ugandan law did not apply to that dispute at all. 37 N.Y.2d at 226–28.
The Honorable Andrew W. Klein
April 8, 2013
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failed to acknowledge the absence of this factor in concluding that the differences
between this case and J. Zeevi were “immaterial.” Decision and Order at 14.
II. The Appellate Division Misconstrued and Misapplied this Court’s
Decision in Ehrlich-Bober in Finding that Ehrlich-Bober
Foreclosed Forum Non Conveniens Relief Here
The Appellate Division also misread and misapplied this Court’s decision in
Ehrlich-Bober. It not only failed to account for the panoply of facts distinguishing
Ehrlich-Bober from this case, but it also misread Ehrlich-Bober’s analysis of a
comity issue as a discussion relevant to forum non conveniens. The majority found
that this case was “analytically indistinguishable” from Ehrlich-Bober, Decision
and Order at 17, without explaining how one could conclude, as the Ehrlich-Bober
Court expressly found, that “the transactions in question” in this case “must be
considered to have been centered here” in New York. 49 N.Y.2d at 581–82
(emphasis added). That finding in Ehrlich-Bober was based on the facts that:
the transactions in question . . . were initiated by an
employee of the defendant university in a phone call to
the plaintiff’s New York offices. They were accepted in
New York by the plaintiff. The money was paid in New
York. The securities were delivered in New York. And
finally, the repurchases were to have been accomplished
in New York. Id.
The Appellate Division cited nothing to explain how, under that standard,
this case could be characterized as being “centered” in New York. Other than the
fact that one leg of the transactions involved a payment of dollars to a New York
account, none of the facts noted by the Ehrlich-Bober Court is present in this case.
None of the parties resides here; the transactions were not “initiated by . . . a phone
call to New York”; the transactions were not “accepted” by anyone “in New
York”; there were no securities “delivered in New York”; and there were no
unfulfilled “repurchases”—or other failures of performance—that “were to have
been accomplished in New York.”
To the contrary, the only conclusion to be drawn about the events at issue in
this case is that they were “centered” in the Middle East—where all of the parties
are located; where Mr. Al-Sanea allegedly negotiated and entered into fraudulent
The Honorable Andrew W. Klein
April 8, 2013
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transactions in AHAB’s name; where he allegedly forged documents to seize
control of AHAB’s business operations (including by sending wire instructions
from there that gave rise to New York bank transfers in AHAB’s name); where the
proceeds of the alleged fraud ended up; and where AHAB’s liability to Mashreq
arose when it failed to pay Saudi riyals into Mashreq’s account in Saudi Arabia.
The Ehrlich-Bober Court never would have concluded that these events were
“centered” in New York, and the Appellate Division plainly erred in relying on
Ehrlich-Bober in the absence of facts supporting such a conclusion.
Even more importantly, the Appellate Division misread Ehrlich-Bober on
the law, because the analysis from that case on which it relied has nothing to do
with forum non conveniens. Just as it wrongly converted J. Zeevi’s choice-of-law
analysis into a forum non conveniens issue, the Appellate Division unjustifiably
spun Ehrlich-Bober’s analysis of a comity issue into support for its forum non
conveniens ruling here. The core issue in Ehrlich-Bober was “whether New York
should observe” a Texas-law sovereign-immunity statute “as a matter of comity,”
and it was only in that context that the Court discussed New York’s interest in
policing its banking system. 49 N.Y.2d at 577, 581–82. Although the Court noted
without explanation, “[p]reliminary to” its discussion of that core issue, that it
agreed with the Appellate Division’s finding that forum non conveniens was
“inapplicable” to that case,7 it did not even suggest that its subsequent comity
analysis applied with equal force to analyzing forum non conveniens. Id. at 579.
Indeed, neither the Court nor the parties in Ehrlich-Bober ever asserted that
forum non conveniens dismissal was barred by some alleged “paramount” interest
in policing the native banking system; in fact, the plaintiff there, a New York-
based company, argued against forum non conveniens dismissal by reference to the
classic forum non conveniens factors, such as that the agreement at issue was
negotiated with “plaintiff’s New York office” and was “confirmed in a letter
mailed to plaintiff in New York,” that the defendant “received payment” in New
York and “delivered the securities [at issue] to plaintiffs in New York,” and that all
of the records and witnesses of plaintiffs and the banks that “acted for the parties”
7 Notably, the Appellate Division incorrectly found that the Ehrlich-Bober Court had reversed
the Appellate Division on the issue of forum non conveniens. See Decision and Order at 15.
The Honorable Andrew W. Klein
April 8, 2013
Page 16 of 33
were located in New York.8 Thus, the Appellate Division erred in concluding that
this case was “analytically indistinguishable” from Ehrlich-Bober on forum non
conveniens issues when, in fact, the Ehrlich-Bober rationale reveals exactly why
the trial court’s forum non conveniens dismissal should not have been disturbed.9
III. The Appellate Division’s Reversal Was Erroneously Based on the
Notion that the Trial Court Failed to Credit AHAB’s Allegations
The Appellate Division’s misreading of Ehrlich-Bober did not end there.
The Appellate Division also relied on that flawed reading to find support—when
none actually exists—for AHAB’s straw-man argument that the trial court “erred
in not accepting as true AHAB’s allegations that Al Sanea used for its own
purposes, and then looted, AHAB’s New York bank accounts.” Decision and
Order at 15. In reality, there is no support for the contention that all of AHAB’s
factual allegations must be taken as true in evaluating a forum non conveniens
motion—but, in any event, the trial court was guilty of no such charge.
The Appellate Division thought that Ehrlich-Bober “was unequivocal” in
holding that AHAB’s allegations must be accepted as true for purposes of forum
non conveniens analysis, but the language on which that conclusion was based
comes from a statement of this Court’s rationale for affirming a ruling on personal
jurisdiction—not forum non conveniens. The last sentence of the paragraph the
Appellate Division quoted from Ehrlich-Bober—which was omitted from the
8 See Brief for Plaintiff-Appellant at 28, Ehrlich-Bober & Co. v. Univ. of Houston, 49 N.Y.2d
574 (1980).
9 AHAB has also invoked Banco Nacional Ultramarino, S.A. v. Chan, 169 Misc. 2d 182 (Sup.
Ct. N.Y. Cnty. 1996), aff’d sub nom., Banco Nacional Ultramarino, S.A. v. Moneycenter
Trust Co., 240 A.D.2d 253 (1st Dep’t 1997), as support for its forum non conveniens
argument, but that case—which the Appellate Division did not even mention—is inapposite
for similar reasons. AHAB improperly relies on language from Banco Nacional’s analysis of
personal jurisdiction, not forum non conveniens, to support its forum arguments in this case.
Moreover, AHAB fails to address the fact that Banco Nacional denied forum dismissal
because it found that New York was “the hub of defendant’s activities,” id. at 192—a claim
that AHAB does not, and could not, make here. Indeed, AHAB’s own pleading reveals that
this case concerns just a $150 million spoke in the wheel of a $10 billion alleged fraud, most
of which had no alleged connection to New York at all. See R.104–07.
The Honorable Andrew W. Klein
April 8, 2013
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Appellate Division’s block quotation but is included below—makes clear that the
Ehrlich-Bober Court applied two separate rationales in finding that it agreed with
the Appellate Division’s rulings on jurisdiction and forum non conveniens:
Preliminary to our consideration of the comity issue, we
note our agreement with the conclusions reached by the
Appellate Division that there was a proper basis for the
exercise of long-arm jurisdiction and that the doctrine of
forum non conveniens is inapplicable here. Although
“standing by itself, a correspondent bank relationship,
without any other indicia or evidence to explain its
essence, may not form the basis for long-arm jurisdiction
under CPLR 302 (subd. (a), par 1)” (Amigo Foods Corp.
v. Marine Midland Bank-New York, 39 N.Y.2d 391, 396),
the facts alleged here, which we accept as true for this
purpose, show substantially more (compare Longines-
Wittnauer Co. v. Barnes & Reinecke, 15 N.Y.2d 443).
Nor may it be said in this case that the Appellate
Division in its conclusion that forum non conveniens
would not obtain in this case abused its discretion as a
matter of law (Epstein v. Sirivejkul, 48 N.Y.2d 738).
49 N.Y.2d at 579 (emphasis added). The “purpose” referred to by this Court was
the purpose of assessing long-arm jurisdiction described in that sentence—not the
forum non conveniens ruling addressed in the subsequent sentence. Thus, although
Ehrlich-Bober found that factual allegations must be accepted as true in assessing
personal jurisdiction on the pleadings, it drew no such conclusion as to forum non
conveniens. Rather, its ruling on forum non conveniens was simply that the court
below had not abused its discretion in refusing to dismiss on that ground. See id.
The Appellate Division wrongly read this passage from Ehrlich-Bober—a
passage that, incidentally, AHAB never even relied upon, even though it cited the
case for another purpose—as a justification for accepting AHAB’s complaints
about the supposed “recasting” of its factual allegations. That argument is a red
herring. The standard applicable to a CPLR 3211 motion—to determine, for
example, whether a plaintiff could establish jurisdiction over the defendant or
entitlement to relief as a matter of law if all of his allegations were proven true—
The Honorable Andrew W. Klein
April 8, 2013
Page 18 of 33
simply has no bearing on the core question underlying the doctrine of forum non
conveniens (set forth in CPLR 327 and the common law): whether a New York
court is the appropriate forum for adjudicating a given case. The former question
asks whether the law supports the case a plaintiff intends to prove—and, thus, the
only way to test the plaintiff’s pleading for that purpose is to accept his allegations
as true. The latter question, however, is not about the merits of a case; it asks
whether a New York court is the right forum to conduct a trial that will decide
whether the plaintiff is entitled to relief, whether the defendant has valid defenses,
and which party’s version of the facts will be credited.
The Appellate Division cited no case holding that a plaintiff’s allegations
must be accepted as true for purposes of forum non conveniens analysis. That is
unsurprising, because such a proposition has no basis in law or logic. Whether an
allegation ultimately turns out to be true or not has no bearing on ascertaining
whether a court is well-positioned to engage in the inquiry necessary to find out
whether the allegation is true—i.e., whether the court has sufficient access to
relevant information and experience in applying the law that governs the dispute.
The factors that bear on whether a New York court should assume the burden of
hearing a particular case are, of course, the forum non conveniens factors that this
Court and others have recited time and time again.10 Analysis of those factors
simply does not turn upon whether a plaintiff’s allegations are true or not, and
proof bearing on those factors is routinely presented by affidavit or documentary
evidence beyond the four corners of a plaintiff’s complaint.11 A plaintiff’s
10 Those factors include (a) the “nonresiden[ce]” of “both parties to the action”; (b) the
jurisdiction in which the cause of action arose; (c) the “potential hardship to the defendant”
and “proposed witnesses”; (d) the “applicability of foreign law”; (e) “the burden on the New
York courts”; and (f) ”the availability of another suitable forum.” Pahlavi, 62 N.Y.2d at 479,
481; Shin-Etsu Chem. Co. v. ICICI Bank, Ltd., 9 A.D.3d 171, 178 (1st Dep’t 2004); Wentzel
v. Allen Mach., Inc., 277 A.D.2d 446, 447 (2d Dep’t 2000).
11 See, e.g., Brinson v. Chrysler Fin., 43 A.D.3d 846, 847–48 (2d Dep’t 2007) (trial court
improvidently exercised discretion in denying forum non conveniens dismissal where, inter
alia, defendant “produc[ed] the affidavits of 11 [foreign] witnesses” whose testimony was
“essential” to its defense, “all of whom . . . indicated that traveling to New York for a trial
would constitute a hardship); World Point Trading PTE, Ltd. v. Credito Italiano, 225 A.D.2d
153, 160–61 (1st Dep’t 1996) (affirming forum non conveniens dismissal where, inter alia,
defendant’s “affidavit in opposition names two individuals in Italy who have personal
(Cont’d on next page)
The Honorable Andrew W. Klein
April 8, 2013
Page 19 of 33
allegations do not control. Indeed, if that were not the case, any plaintiff could
insulate itself from a potential forum non conveniens motion simply by alleging
facts bearing on the relevant forum factors, such as that the parties, witnesses, and
documents are all located in New York. That is not the law.
More importantly, even if it were true that the trial court was obliged to
“accept AHAB’s allegations,” its ruling did not run afoul of that purported rule.
Neither AHAB nor the Appellate Division identified a single factual allegation
that the trial court disregarded. Rather, the Appellate Division (echoing AHAB’s
rhetoric) purported to find error in how the trial court “characterize[d] the dispute,”
and in its supposed failure to accept the facts as “framed” by AHAB. Decision and
Order at 14, 17. Accepting AHAB’s characterization of the dispute—in essence, a
legal conclusion as to the case’s “center of gravity”—is a far cry from accepting its
well-pleaded factual allegations. The Appellate Division cited no precedent for the
notion that the trial court was obliged to credit AHAB’s argumentative
characterization of its own claims, which self-servingly focused on dollar-
denominated transfers in New York to the exclusion of every other factual
allegation AHAB itself has pleaded.12 As the dissent below understood, nothing in
the doctrine of forum non conveniens compels any court to accept a plaintiff’s self-
serving assertion that one issue is more central or important to his claims than
other issues raised in his pleading, and the Appellate Division strayed from settled
forum non conveniens law in imposing that erroneous legal standard on the trial
court below. See Dissent at 31.
(Cont’d from previous page)
knowledge of the letter of credit (as opposed to no United States personnel) and contends that
some relevant documents are located there,” which was “opposed only by plaintiff’s
allegation that all necessary documents are located in New York and that the testimony is
immaterial”); Blais v. Deyo, 92 A.D.2d 998, 999 (3d Dep’t 1983) (plaintiff failed to rebut
“defendant’s attorney’s affidavit” concerning foreign location of evidence and witnesses).
12 The Appellate Division’s ruling also contradicted settled law governing pleading motions,
which holds that, although “the facts pleaded are presumed to be true[,] . . . allegations
consisting of bare legal conclusions . . . are not entitled to such consideration.” Kliebert v.
McKoan, 228 A.D.2d 232, 232 (1st Dep’t), leave to appeal denied, 89 N.Y.2d 802 (1996);
accord, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Jazini v. Nissan Motor Co., 148
F.3d 181, 185 (2d Cir. 1998).
The Honorable Andrew W. Klein
April 8, 2013
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In fact, the case law AHAB cited on appeal only demonstrates that the trial
court need not have accepted AHAB’s self-serving characterization of this dispute.
In Overseas Programming Cos. v. Cinematographische Commerz-Anstalt, 684
F.2d 232 (2d Cir. 1982), cited in AHAB Reply Br. at 1–2, the Second Circuit
reversed a forum non conveniens dismissal in part because it found that the trial
court had “failed to identify the basic issue in the lawsuit,” which concerned a
question of contract interpretation “governed by New York law,” id. at 235. The
Second Circuit expressly noted, however, that it was for the district court below to
assess how the plaintiff’s claims should properly be construed—regardless of
contrary characterizations offered by the plaintiff—and to decide whether those
claims, as properly construed, should be dismissed. Id. at 235 n.7 (“Although the
complaint could be read to assert infringement claims, [plaintiff] insists in its brief
that it is not presenting such claims. We do not decide whether, should the District
Court construe the complaint to include any infringement claims, such claims
should be dismissed on the ground of forum non conveniens.”). Thus, AHAB’s
own case law contradicts the Appellate Division’s ruling that the trial court was
obligated to accept AHAB’s characterization of this dispute as immutable fact.13
AHAB’s insistence that this case is about nothing more than “fraud and theft
through New York bank accounts,” AHAB Reply Br. at 1, is not a well-pleaded
factual allegation that any court must accept as true for any purpose. Rather, it is
precisely the sort of conclusory characterization that is entitled to no weight.
13 In opposing leave to appeal to this Court, AHAB also cited Ancile Investment Co. v. Archer
Daniels Midland Co., No. 08 Civ. 9492, 2009 WL 3049604 (S.D.N.Y. Sept. 23, 2009), and a
treatise on federal practice, 5B Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure § 1352 (3d ed. 2004), in support of this argument. Neither does so. In fact,
Ancile refutes it, just as the other case cited by AHAB does. Ancile rejected an argument that
defendant had “mischaracterize[d] the dispute by focusing on the events that occurred
[abroad]”—finding that defendant’s position “ha[d] merit,” 2009 WL 3049604, at *3, *5—
and refused to accept uncritically plaintiff’s claim that the case was “not about the ministerial
actions of the [defendant’s] agents . . . in Brazil” but, rather, was about a “decision made and
approved by [the defendant’s] management in the United States.” Id. at *5. The treatise
provision at issue is also inapposite; it concerns the standard for venue motions under Federal
Rule of Civil Procedure 12(b)(3), not forum non conveniens motions, and notes that a
“motion for forum non conveniens is not made under Rule 12(b)(3).” 5B Federal Practice
and Procedure § 1352 at n.21.
The Honorable Andrew W. Klein
April 8, 2013
Page 21 of 33
Although the Appellate Division found that Mr. Al-Sanea had improperly
“recast[]” AHAB’s allegations to suit his forum non conveniens argument,
Decision and Order at 14, in reality it was AHAB that improperly recast its own
allegations—ignoring the significance of any inconvenient facts that did not
support its effort to remain in New York—and the Appellate Division failed to see
through AHAB’s charade.
IV. The Appellate Division Ignored AHAB’s Own Allegations
Revealing that This Dispute Is Not “Centered” in New York
The Appellate Division also overlooked the substance of AHAB’s own
allegations concerning where this dispute is “centered.” A return to AHAB’s
pleading reveals that the position AHAB took in its briefing was nothing but a self-
serving effort to play up the tangential connections between New York and this
dispute in order to stave off dismissal. To begin with, AHAB (a Saudi partnership)
alleged that “Maan Al Sanea, [a Saudi citizen and resident, and] a senior executive
of AHAB’s financial service division, the Money Exchange, had organized a
massive fraud in which he had entered into transactions largely through the Money
Exchange and purportedly in AHAB’s name with third parties, . . . frequently using
forged or falsified documents,” all as part of a “scheme to loot the Money
Exchange.” R.104–05. It further alleged that:
The [Mashreq] transaction at issue was a recent part of
this more extensive fraud . . . , through [which] . . . Al
Sanea fraudulently obtained money as a result of
unauthorized, noncommercial transactions with a variety
of financial institutions in the United States, the Middle
East, and elsewhere, including, apparently, Mashreq.
R.106 (emphasis added). “Among the fraudulent acts by which Al Sanea
misappropriated funds,” AHAB further alleged, were the following:
(a) “[d]irecting AHAB employees to cause AHAB to enter
into financial transactions . . . with third party financial
institutions without recording such transactions on the
books of AHAB”;
The Honorable Andrew W. Klein
April 8, 2013
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(b) “[d]ebiting funds from AHAB accounts,” including
“through the issuance of fraudulent checks drawn on
AHAB accounts,” and “transferring those funds to
entities, persons and accounts controlled directly or
indirectly by Al Sanea”;
(c) “[d]ebiting funds from AHAB accounts for the purpose
of paying unrelated expenses of Al Sanea or companies
controlled by him”;
(d) “[r]ecording sham foreign exchange and other
transactions for the purposes of inflating the financial
statements of Al Sanea and companies controlled by
him”; and
(e) “[d]irecting AHAB employees to falsify AHAB’s books
and records to conceal these fraudulent transactions and
to provide false confirmation of balances to auditors of
his companies.”
R.106–07 (emphasis added).
AHAB further alleged that, to “conceal his fraud from AHAB’s Board of
Directors and Principals,” Mr. Al-Sanea “controlled all information reported to the
Board and principals.” R.107. In particular, it alleged that he “sought to prevent
the Board and principals from receiving any communications from the Money
Exchange’s trading partners, banks or other counter parties” and “directed all
Money Exchange employees to deal solely with him in respect of matters requiring
principal or Board approval.” R.107. Those assertions focus on activities that
transpired—if at all—entirely overseas, where AHAB and Mr. Al-Sanea reside.
Even in stating its specific causes of action, AHAB emphasized the extent to
which its claims arise out of events that would have unfolded, if at all, entirely in
the Middle East, where it and Mr. Al-Sanea have their offices and do business:
(a) Its indemnification claim alleged that the Mashreq
transactions were “unauthorized” and that relevant
transaction documents were executed by AHAB
The Honorable Andrew W. Klein
April 8, 2013
Page 23 of 33
employees “acting solely at the direction of . . . al
Sanea,” and further alleged that Mr. Al-Sanea “directed”
AHAB personnel to transfer the proceeds of those
transactions “to an account under . . . Al Sanea’s control
at Awal Bank,” and that those funds were not returned to
AHAB upon demand to Awal. R.115.
(b) Its fiduciary-duty claim alleged that, as a “senior
executive” of the Money Exchange, Mr. Al-Sanea owed
AHAB a “duty of loyalty,” and that he breached that duty
by “causing AHAB” to enter into “unauthorized
transactions,” by “misappropriating” funds derived from
those transactions, and by “concealing” from AHAB and
its principals “the fact that AHAB was being caused to
undertake transactions for Al Sanea’s benefit, and the
existence and extent of liabilities of AHAB due to those
transactions.” R.116–17.
(c) Its conversion claim—which it later recast as a
conversion that “took place entirely in New York,”
AHAB Brief at 10—alleged that, “[a]s a senior executive
of the Money Exchange,” Mr. Al-Sanea “caused AHAB
to enter [into] transactions solely for his own benefit” and
“directed” that the transactions “should not be properly
recorded in AHAB’s books and records or disclosed to
AHAB’s principals,” and that he then “misappropriated”
the proceeds of those transactions and “conspired with
and/or directed . . . Awal Bank to retain the funds at issue
and to refuse to return them to AHAB.” R.117–18.
(d) In its unjust-enrichment claim, AHAB relied upon the
same allegations supporting its conversion claim, and
further alleged that, “[a]s a result of th[o]se actions, Al
Sanea and Awal Bank have obtained funds that do not
belong to them.” R.118–19.
The Honorable Andrew W. Klein
April 8, 2013
Page 24 of 33
(e) Finally, in its fraud claim, AHAB alleged that Mr. Al-
Sanea and Awal Bank “fraudulently obtained AHAB’s
funds for their own benefit, intentionally creating and
executing documents and making other representations
. . . that disguised the transfer of such funds to
defendants,” and that they “deliberately concealed from
AHAB” the fact that they had caused AHAB to enter into
these transactions, had misappropriated the proceeds
thereof, and had created purported liabilities of AHAB to
third parties, including Mashreq. R.119–20.
As the dissent below recognized, none of those allegations, read fairly and in
their entirety, describes conduct that transpired entirely—or even principally—in
New York. See Dissent at 28–29. Rather, they reveal that the key components of
Mr. Al-Sanea’s alleged misconduct were his efforts to enter into “unauthorized
transactions” in AHAB’s name, to “direct” AHAB’s employees to take
unauthorized action and “conceal” the true facts from AHAB’s principals, and to
“misappropriate” the proceeds of those unauthorized transactions by transferring
them to Awal Bank in Bahrain, which refused to return them to AHAB. Those
actions transpired overseas and have no connection to New York other than the
ministerial involvement of New York bank transfers.
In the words of the Ehrlich-Bober Court, those allegations cannot possibly
be read to describe a dispute that “must be considered to have been centered here’”
in New York. Ehrlich-Bober, 49 N.Y.2d at 582. Although the relevant events
undoubtedly involved some contact with New York, clearly they were “centered”
where the parties lived and worked, where the alleged fraud, forgery, and
misrepresentations transpired, where employees were directed to engage in
unauthorized activity in AHAB’s name, and where fiduciary duties allegedly were
violated. Thus, even if the analysis in Ehrlich-Bober had any bearing on the scope
of forum non conveniens analysis, there was no basis for finding that Ehrlich-
Bober supported AHAB’s position on the facts alleged here.
The Appellate Division similarly ignored the record in concluding that the
trial court had failed to “accept[] as true AHAB’s allegations that Al Sanea used
for its own purposes, and then looted, AHAB’s New York bank accounts.”
Decision and Order at 15. In reality, the trial court made clear in its opinion that it
The Honorable Andrew W. Klein
April 8, 2013
Page 25 of 33
had credited those allegations—it simply found that they did not outweigh the
other components of AHAB’s case that placed the focal point of this dispute in
Saudi Arabia: “Although the alleged fraud may have taken place with the use of
banks in New York, the alleged fraudulent activities occurred in Saudi Arabia
. . . .” R.24 (emphasis added). The Appellate Division failed to address that
finding; rather, it reversed the Judgment below based on the perceived failings of a
straw-man analysis upon which the trial court never relied. That was error.
V. The Appellate Division Also Erred in Articulating and Applying
the Traditional Forum Non Conveniens Factors
The Appellate Division also misconstrued this Court’s settled precedents
articulating the factors relevant to forum non conveniens analysis, and it made
further errors (or, at a minimum, abused its discretion) in purporting to find fault in
the trial court’s application of those factors to this case. For example, the
Appellate Division misread this Court’s decision in Pahlavi as adopting wholesale
all of the factors federal courts have articulated under the federal common law of
forum non conveniens—and as somehow compelling New York courts to make
findings on all of those factors before granting forum non conveniens dismissal.
Decision and Order at 18. Although this Court has acknowledged doctrinal
parallels between New York and federal forum non conveniens law, it has never
held that the particular factors set forth in any federal decision must be applied
slavishly by every New York court entertaining a forum non conveniens motion.14
See Pahlavi, 62 N.Y.2d at 479–83. Rather, this Court has repeatedly stressed that
“[t]he great advantage of the rule of forum non conveniens is its flexibility based
upon the facts and circumstances of each case.” Id. at 479 (citing Martin, 35
N.Y.2d at 418, and Silver, 29 N.Y.2d at 361).
Thus, in discussing whether the existence of an alternative forum had been
established, the Appellate Division erred in reversing based on the trial court’s
perceived failure to make specific findings as to “‘the relative ease of access to
sources of proof’” or the “‘availability of compulsory process for attendance of
14 In fact, Pahlavi specifically held that New York law does not require the existence of an
available alternative forum as a prerequisite to forum non conveniens dismissal, even though
such a prerequisite has been imposed under federal common law. See 62 N.Y.2d at 480–83.
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April 8, 2013
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unwilling, and the cost of obtaining attendance of willing, witnesses.’” Decision
and Order at 18. No such specific findings are required under New York’s
“flexible” forum non conveniens analysis. See, e.g., Pahlavi, 62 N.Y.2d at 479
(“No one factor is controlling.”). In holding the trial court to this erroneous
standard, the Appellate Division failed to acknowledge the well-settled principle
that a forum is “adequate” if, as in this case, the defendant is “amenable to
process” there and the forum “permit[s] litigation of the subject matter of the
dispute.” E.g., Shin-Etsu, 9 A.D.3d at 178–79 (internal quotation omitted).
More to the point, though, the trial court did make findings relating to its
forum non conveniens analysis, including that “Al Sanea and all but one of the
AHAB partners are currently unable to travel to the U.S.”; that the “large majority
of witnesses are located in Bahrain, UAE, . . . or Saudi Arabia” and, in fact,
“[n]one of the scores of witnesses [the parties] identified reside in New York or in
the U.S.”;15 that the case raised “questions to be resolved based on evidence and
documents in those nations”; and that Mashreq had “commenced litigation in the
UAE that includes and encompasses the alleged damages and breaches” at issue in
the first-party claims. R.24, R.26. The Appellate Division appears to have
disagreed with those findings, but it did not hold that the trial court abused its
discretion in making them—rather, it simply acted as though those findings did not
exist. That could not justify reversal of the trial court’s Judgment.
The Appellate Division also based its erroneous holding about the lack of an
adequate forum on the notion that “Al Sanea maintained that he was only subject
to jurisdiction in Saudi Arabia.” Decision and Order at 17. Leaving aside that Mr.
Al-Sanea’s subjective belief about where he may be sued is of no moment to forum
non conveniens analysis, the Appellate Division’s statement is erroneous as a
matter of fact. No such assertion by Mr. Al-Sanea exists in the record—and, in
fact, Mashreq has already sued him in the UAE. R.1467.
15 On appeal, AHAB claimed (without supplementing the record) that one witness relocated to
the United States after the trial court entered judgment. AHAB Br. at 32–33. The Appellate
Division credited that contention even though it arose only after the fact, was dehors the
record, and was supported only by AHAB’s citation to its own filings in other litigation.
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April 8, 2013
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The Appellate Division erred in several other respects that undermine its
analysis of the relevant forum non conveniens factors. It erroneously found, for
example, that the transactions at issue had been “executed in New York.” Decision
and Order at 3. In reality, the transactions were executed entirely overseas by
Mashreq personnel in the UAE and AHAB personnel in Saudi Arabia, and AHAB
has never contended anything to the contrary. The Appellate Division also
disagreed with the trial court’s findings that foreign-language documents and
foreign witnesses would unduly burden a trial in New York, see id. at 18–19, but it
did not even acknowledge the record evidence revealing that AHAB’s own
representatives had confirmed the existence of such burdens, see R.1782, R. 1784.
The Appellate Division also failed to acknowledge the trial court’s finding that
duplicative litigation pending in the UAE supported dismissal here, R.26–27, and
thus offered nothing to explain why that fact should be disregarded.
Finally, the Appellate Division erroneously concluded that only New York
law would apply to this action—a conclusion that apparently was driven by its
uncritical acceptance of AHAB’s characterization of the case as alleging only a
“theft” of property in New York. As previously explained, that self-serving
characterization does not even square with AHAB’s own pleading, which alleges
(among other things) breach of fiduciary duty by an executive of a Saudi business
entity, unjust enrichment of a Bahraini bank and its Saudi owner arising from the
bank’s refusal to turn over funds held in Bahrain on AHAB’s account, and various
acts of corporate misfeasance and malfeasance undertaken in Saudi Arabia.
R.115–20. Even if New York law might apply to some of AHAB’s claims—which
Mr. Al-Sanea disputes, see Al-Sanea Br. at 34–38—it surely would not apply to all
of those claims, and the trial court thus appropriately concluded that “the need to
apply foreign law” was “an appropriate concern” supporting its ruling. R.24
(internal quotation omitted). Even AHAB concedes the existence of some issues
that are governed by foreign law. See, e.g., AHAB Br. at 43; AHAB Reply Br. at
16. Yet the Appellate Division seems to have concluded that there were no issues
in the case that required application of foreign law, finding it to be “patent that
New York law will apply.” Decision and Order at 19. That was yet another error.
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April 8, 2013
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VI. The Appellate Division Erred in Concluding that Reversal Was
Compelled by Some Supposed Sua Sponte Action Concerning
Dismissal of the First-Party Proceedings
The Appellate Division also erred in finding that the first-party claims had
improperly been dismissed on forum non conveniens grounds—and that error
infected its view of the entire case. That ruling was based on the notion that
dismissal of the first-party claims somehow amounted to sua sponte action by the
trial court. The path to that conclusion, however, was paved with errors.
First, the Appellate Division erroneously concluded, based on a misreading
of the record, that the trial court had not ever “invited submissions for dismissal of
the entire case” on forum non conveniens grounds. Decision and Order at 10. To
the contrary, and as the dissent recognized (at 23), that is precisely what happened
when the subject of forum non conveniens was first presented to the trial court.
The issue first arose during a January 5, 2010 hearing relating to other
motion practice—including Mr. Al-Sanea’s motion for a protective order, which
had brought to the trial court’s attention the fact that Mr. Al-Sanea was also
seeking dismissal of the third-party complaint on forum non conveniens grounds.
R.653. During that hearing, the trial court inquired whether “all” counsel “agree[d]
that . . . if the motion to dismiss for forum non conveniens has, shall we say, legs, it
affects everything else?” R.653. Mr. Al-Sanea’s counsel responded:
I do think that your Honor is onto something in that the
first-party action, if you will, filed by Mashreq is also
subject to duplicative proceedings. I understand that
Mashreq has filed a suit in the United Arab Emirates
against AHAB; and so in fact, just as with respect to my
forum non motion where we contend that there are
multiplicity of other proceedings that have far greater
connection to the parties than does New York and that
this is an imposition, I think the same could be true.
R.654–55. The trial court then specifically called for submission of briefing on the
issue of forum non conveniens as applied to all of the proceedings before it:
The Honorable Andrew W. Klein
April 8, 2013
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THE COURT: What we are going to do is you
will have this forum non conveniens fully briefed, and if
any of – I know you have to respond – no, it’s against –
MR. SERIO: It’s against AHAB, your Honor.
THE COURT: Right.
MR. SERIO: And I – we submit that it should be
briefed by –
THE COURT: I also want – I want you to respond
to a forum non conveniens argument because I am very,
very concerned, if you will, that these cases do not
belong here.
R.658–59 (emphasis added); see also R.660.
After that hearing, AHAB and Mr. Al-Sanea completed the initial briefing
on his motion, and AHAB and Mashreq both filed additional briefs on the subject
of forum non conveniens as applied to the entire case, including the first-party
proceedings. AHAB, for its part, argued that the first- and third-party proceedings
were “inseparably connected” and should be addressed as a “whole.”16 Mashreq
filed a memorandum stating that it “would not object to litigating its dispute with
AHAB and the AHAB partners in the UAE” if the court was inclined to dismiss
the third-party proceedings.17 Thus, the Appellate Division plainly misconstrued
the record in finding that “the court only scheduled briefing for Al Sanea’s motion
to dismiss the third-party action.” Decision and Order at 10.
16 Third-Party Plaintiff Ahmad Hamad Algosaibi & Brothers Company’s Opposition to Third-
Party Defendant Maan Al Sanea’s Motion to Dismiss at 19 (internal quotation omitted), filed
in the trial court below on February 5, 2010 (Dkt. No. 82).
17 Reply Memorandum of Law in Connection with Motion by Third-Party Defendant Maan Al
Sanea to Dismiss the Third-Party Complaint on Grounds of Forum Non Conveniens at 2–3,
filed in the trial court below on March 23, 2010 (Dkt. No. 115).
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April 8, 2013
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By the time the trial court heard argument on Mr. Al-Sanea’s forum non
conveniens motion at a later hearing on March 25, 2010, the subject of forum non
conveniens dismissal as applied to the entire action—including both first- and
third-party proceedings—had already been raised and briefed by the parties. As
the trial court noted, forum non conveniens dismissal was being addressed both
“with regard to the third-party defendant” and “for the entire case to be shipped
away.” R.1473. AHAB acknowledged those “two parts” of the application before
the court and stated that it opposed forum non conveniens dismissal both “as to
everybody” and as to a more limited dismissal to have the third-party proceedings
“cut out” of the case—but it never objected to the fact that the court would
“consider forum non conveniens as to everybody,” it merely opposed dismissal on
the merits. R.1473–74. Thus, the Appellate Division’s ruling that forum non
conveniens dismissal of the first-party proceeding was insufficiently raised or
briefed below does not square with the record.18
Case law confirms that the Appellate Division erred by mischaracterizing
the trial court’s ruling as an improper sua sponte action. It is undisputed that the
parties briefed and were heard on the issue of whether the first-party proceedings
should be dismissed—which distinguishes this case from every precedent the
Appellate Division relied upon in reaching its erroneous conclusion. See VSL
Corp. v. Dunes Hotels & Casinos, 70 N.Y.2d 948, 949 (1988); Todtman, Young,
Tunick, Nachamie, Hendler, Spizz & Drogin, P.C. v. Richardson, 231 A.D.2d 1, 5
(1st Dep’t 1997); In re Bernz (Widschi), 139 A.D.2d 444, 444 (1st Dep’t 1988).
This Court’s decision in VSL Corp., for example, did not involve any of the facts
here, as the dissenting Justices below correctly recognized. See Dissent at 22–27.
Both the parties and the trial court here considered and squarely addressed the
application of forum non conveniens to dismissal of the entire case as a “clearly
articulated motif of . . . the motion proceedings.” Banco do Estado, 249 A.D.2d at
139. As the dissent correctly found, the relevant feature authorizing forum non
conveniens dismissal is not the mere technicality of what a formal notice of motion
says; rather, it is the substantive question of whether the issue was placed before
18 Moreover, because AHAB never raised this objection to the trial court, it has waived the
right to complain of any allegedly sua sponte action now. See, e.g., Sosa v. Cumberland
Swan, Inc., 210 A.D.2d 156, 157 (1st Dep’t 1994).
The Honorable Andrew W. Klein
April 8, 2013
Page 31 of 33
the court and addressed by the parties. See id.; Smith, 237 A.D.2d at 295; accord
Dissent at 22–27. The precedents cited by the Appellate Division are inapplicable.
Indeed, the Appellate Division did not ultimately take issue with the concept
that Mr. Al-Sanea’s motion could serve as the legal instrument placing the issue of
forum non conveniens before the court, even as to the first-party proceedings. See
Decision and Order at 9 (distinguishing Imperial Imports Co. v. Hugo Neu & Sons,
161 A.D.2d 411 (1st Dep’t 1990), only on the ground that, “in the instant case,”
Mr. Al-Sanea “made no . . . motion to dismiss the entire case”). Nor could it have
done so, because a third-party defendant “shall have the rights of a party adverse to
the other parties in the action,” CPLR 1008; see also, e.g., Kearns v. Johnson, 238
A.D.2d 121, 122 (1st Dep’t 1997), and “[i]t has long been clear that one of the
main purposes of third-party practice is ‘the avoidance of multiplicity and circuity
of action, and the determination of the primary liability as well as the ultimate
liability in one proceeding, whenever convenient.’” George Cohen Agency v.
Donald S. Perlman Agency, 51 N.Y.2d 358, 365 (1980) (quoting Krause v. Am.
Guar. & Liab. Ins. Co., 22 N.Y.2d 147, 153 (1968)).
Rather, the Appellate Division’s position boils down to the formalistic
conclusion that dismissal of the first-party claims was an unauthorized sua sponte
act simply because Mr. Al-Sanea’s notice of motion did not expressly demand
dismissal of both the first- and third-party proceedings. That cannot possibly be
the law applicable to motions sounding in forum non conveniens—a doctrine the
“touchstone” of which is its “flexibility,” Martin, 35 N.Y.2d at 418, and one that
the legislature has authorized courts to apply “in whole or in part” on the motion of
“any party,” and on “any conditions that may be just,” CPLR 327(a).
Moreover, it could not possibly be an appropriate result here, where Mr. Al-
Sanea’s forum non conveniens motion expressly requested both dismissal of the
third-party complaint and “such other and further relief as the Court deems just
and proper.” R.65–66 (emphasis added); see also Al-Sanea Br. at 23 n.7. Clearly,
dismissal of the first-party claims along with the third-party claims constitutes
“other and further relief” within the scope of that motion. And it is well-settled
that a prayer for such “other and further relief” empowers the motion court to
exercise its discretion in granting appropriate relief beyond what the movant
specifically articulates in its notice. See, e.g., Birchwood Village LP v. Assessor of
City of Kingston, 94 A.D.3d 1374, 1376 (3d Dep’t 2012); Hughes v. Farrey, 30
The Honorable Andrew W. Klein
April 8, 2013
Page 32 of 33
A.D.3d 244, 248 (1st Dep’t 2006); Rodriguez v. Middle Atl. Auto Leasing, Inc.,
122 A.D.2d 720, 721 (1st Dep’t 1986). On the record here, the trial court was not
precluded from dismissing the first-party proceedings simply because Mr. Al-
Sanea’s initial moving papers did not expressly request that it do so.
The Appellate Division failed to appreciate that, if anything, the trial court’s
purported sua sponte dismissal of the first-party claims should have been treated as
nothing more than harmless error. Indeed, as explained by the very authority the
Appellate Division cited, the appropriate remedy for such a “sua sponte” dismissal
is to reverse “without prejudice to a motion by any party to dismiss the proceeding
on the ground of forum non conveniens.” In re Bernz, 139 A.D.2d at 444. Here,
there is no question that Mashreq and Mr. Al-Sanea have consistently advocated in
favor of forum non conveniens dismissal, so there would be no point in remanding
just to see whether they would file such a formal motion. Thus, the Appellate
Division’s outright reversal of the decision below was entirely unwarranted.
Finally, the Appellate Division appears to have accepted AHAB’s erroneous
assertion that forum non conveniens dismissal could not be granted because the
first- and third-party proceedings could not be adjudicated in a single alternative
forum. For one thing, that is not the law; the trial court very well could have kept
the first-party claims and still dismissed the third-party complaint. New York
courts routinely divide cases on forum non conveniens grounds, for example, by
dismissing third-party claims—including indemnity claims such as AHAB’s—
while maintaining related first-party claims. See, e.g., Stravalle v. Land Cargo,
Inc., 39 A.D.3d 735 (2d Dep’t 2007); Shiboleth v. Yerushalmi, 268 A.D.2d 300,
300 (1st Dep’t 2000); Imperial Imps. Co. v. Hugo Neu & Sons, 161 A.D.2d 411,
412 (1st Dep’t 1990); Olympic Corp. v. Societe Generale, 462 F.2d 376, 378–79
(2d Cir. 1972); accord Al-Sanea Br. at 21, 24–26 & n.9. And, in any event, there
are alternative fora capable of hearing both the first- and third-party claims—such
as Saudi Arabia and the United Arab Emirates. See Al-Sanea Br. at 42–43.
VII. Alternately, the Appellate Division Should Have Affirmed
Dismissal of the Third-Party Complaint Against Mr. Al-Sanea for
Lack of Personal Jurisdiction
Finally, even leaving aside the Appellate Division’s errors on forum non
conveniens, it could and should have dismissed AHAB’s third-party complaint for