To Be Argued By:
BRUCE R. GRACE
Time Requested: 30 Minutes
APL-2013-00007
New York County Clerk’s Index Nos. 601650/09 and 590643/09
Court of Appeals
State of New York
Index No. 601650/09
MASHREQBANK PSC,
Plaintiff-Appellant,
—against—
AHMED HAMAD AL GOSAIBI & BROTHERS COMPANY,
Defendant-Respondent.
Index No. 590643/09
AHMED HAMAD AL GOSAIBI & BROTHERS COMPANY,
Third-Party Plaintiff-Respondent,
—against—
MAAN ABDUL WAHEED AL SANEA,
Third-Party Defendant-Appellant,
—and—
AWAL BANK BSC,
Third-Party Defendant.
BRIEF FOR DEFENDANT-RESPONDENT/
THIRD-PARTY PLAINTIFF-RESPONDENT
BRUCE R. GRACE
ERIC L. LEWIS
LEWIS BAACH PLLC
1899 Pennsylvania Avenue, NW,
Suite 600
Washington, DC 20006
Telephone: (202) 833-8900
Facsimile: (202) 466-5738
Attorneys for Defendant-Respondent/
Third-Party Plaintiff-RespondentSeptember 12, 2013
STATE OF NEW YORK COURT OF APPEALS
------------------------------------------------------------ )(
MASHREQBANK PSC,
New York
Plaintiff-Appellant, County Clerk's
Inde}( No. 601650109
v.
AHMED HAMAD ALGOSAIBI &
BROTHERS COMPANY,
Defendant-Respondent.
------------------------------------------------------------ )(
AHMED HAMAD ALGOSAIBI &
BROTHERS COMPANY,
Third-Party Plaintiff-Respondent, New York
County Clerk's
v. Inde}( No. 590643/09
MAAN ABDUL WAHEED AL SANEA,
Third-Party Defendant Appellant,
-and-
AWAL BANK BSC,
Third-Party Defendant.
------------------------------------------------------------ )(
22 NYCRR § 500.1(F) DISCLOSURE STATEMENT OF DEFENDANT
RESPONDENT THIRD-PARTY PLAINTIFF-RESPONDENT AHMAD
HAMAD ALGOSAIBI & BROTHERS COMPANY
Defendant-Respondent Third-Party Plaintiff-Respondent Ahmad Hamad
Algosaibi & Brothers Company ("AHAB"), by its attorneys, Lewis Baach
PLLC, hereby submit the following 22 NYCRR §500.l(f) disclosure statement:
1. AHAB is a non-domiciliary general partnership organized and existing
under the laws of the Kingdom of Saudi Arabia.
2. AHAB does not have any corporate parents, subsidiaries, or affiliates.
Dated: Washington, DC
September 12, 2013
LEWIS BAACH PLLC
Bruce R. Grace
Eric L. Lewis
1899 Pennsylvania Ave., Suite 600
Washington, DC 20006
Tel: (202) 833-8900
Fax: (202)-466-5738
Bruce. Grace@lewisbaach.com
Eric.Lewis@lewisbaach.com
Counsel for Defendant-Respondent
Third-Party Plaintiff-Respondent
2
To:
Robert F. Serio
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
Tel: (212) 351-4000
Fax: (212) 351-5246
rserio@gibsondunn.com
Counsel for Third-Party Defendant-Appellant
Maan Abdulwaheed AISanea
Carmine D. Boccuzzi, Jr.
Cleary Gottlieb Stern & Hamilton
LLP One Liberty Plaza
New York, NY 10006
Tel: (212) 225-2000
Fax: (212) 225-3999
cboccuzzi@cgsh.com
Counsel for Plaintiff-Appellant
Mashreqbank PSC
David J. Molton
Brown Rudnick LLP
Seven Times Square
New York, NY
10036
Tel: (212) 209-4800
Fax: (212) 938-2822
dmolton@brownrudnick.com
Counsel for Charles Russell LLP,
as External Administrator ofA WAL Bank
3
i
TABLE OF CONTENTS
PAGE
QUESTIONS PRESENTED ...................................................................................... 1
PRELIMINARY STATEMENT ............................................................................... 3
SUMMARY OF FACTS ........................................................................................... 9
I. Al Sanea’s Worldwide Ponzi Scheme ............................................................. 9
II. Al Sanea’s Fraudulent Foreign Exchange Deals with Mashreq .................... 12
III. The F/X Scheme’s Core Nexus to New York’s Banks ................................. 14
IV. Procedural Background ................................................................................. 16
ARGUMENT ........................................................................................................... 19
I. The Appellate Division Properly Determined that AHAB’s Third-Party
Complaint Should Not Be Dismissed on Forum Non Conveniens
Grounds. ......................................................................................................... 21
A. The Appellate Division Properly Found New York’s Paramount
Interest in Protecting This State’s Banks from Misuse as an
Instrument of Fraud and Theft to be a Pivotal Forum Non Conveniens
Issue. .................................................................................................... 22
1. New York’s Paramount Interest in Prevention of Misuse of this
State’s Banking System ............................................................ 24
2. The Nature of the Instant Dispute and Its New York Nexus .... 31
B. The Appellate Division Properly Weighed the Other Pahlavi Factors
in Retaining this New York Forum. .................................................... 38
1. The Availability of Witnesses ................................................... 42
2. The Availability of Documents ................................................. 46
3. Application of Foreign Law ...................................................... 48
4. Interests of Saudi Arabia in this Dispute .................................. 50
II. The Appellate Division Correctly Concluded that Supreme Court Engaged in
Improper Sua Sponte Action in Dismissing the First-Party Claims. ............. 52
A. If the Court Affirms Retention of the Third-Party Claim, Any
Argument that the First-Party Claims Should Be Dismissed Is
Rendered Moot. ................................................................................... 52
ii
B. Neither Mashreq Nor Al Sanea Has Standing to Appeal the
Reinstatement of the First-Party Claims. ............................................ 53
C. Supreme Court Improperly Acted Sua Sponte in Dismissing the First-
Party Claims. ....................................................................................... 55
1. The Procedural Record ............................................................. 55
2. The Legal Effect of this Sua Sponte Action ............................. 58
III. The Court Had Personal Jurisdiction Over Al Sanea. ................................... 63
CONCLUSION ........................................................................................................ 64
iii
TABLE OF AUTHORITIES
A&M Exports, Ltd. v Meridien Int’l Bank, Ltd.,
207 AD2d 741, 616 NYS2d 621 (1st Dept 1994) .................................... 36
Am. BankNote Corp. v Daniele,
45 AD3d 338, 845 NYS2d 266 (1st Dept 2007) ...................................... 29
Amigo Foods Corp. v Marine Midland Banc-N.Y.,
39 NY2d 391, 384 NYS2d 124 (1976)..................................................... 27
Ancile Inv. Co., Ltd. v Archer Daniels Midland Co.,
No 08 Civ 9492 (PAC), 2009 WL 3049604 (SDNY Sept 23, 2009) ....... 34
Atsco Ltd. v Swanson,
29 AD3d 465, 816 NYS2d 31 (1st Dept 2006) ........................................ 37
Banco Ambrosiano v Artoc Bank & Trust,
62 NY2d 65, 476 NYS2d 64 (1984) ......................................................... 38
Banco Do Estado De Sao Paulo, S.A. v Mendes Jr. Int’l Co.,
249 AD2d 137, 672 NYS2d 28 (1st Dept 1998) ................................ 58, 59
Banco Nacional Ultramarino, S.A. v Chan,
169 Misc 2d 182, 641 NYS2d 1006 (Sup Ct, NY Cnty 1996), aff’d
240 AD2d 253, 659 NYS2d 734 (1st Dept 1997) ............24, 25, 28, 40, 49
Broida v Bancroft,
103 AD2d 88, 478 NYS2d 333 (2d Dept 1984) ....................................... 17
Calgarth Invs., Ltd. v Bank Saderat Iran,
No. 95 Civ. 5332, 1996 WL 204470 (SDNY Apr. 26, 1996) ............ 36, 37
Citigroup Global Mkts., Inc. v Metals Holding Corp.,
45 AD3d 361, 845 NYS2d 282 (1st Dept 2007) ...................................... 37
Creditanstalt Inv. Bank AG. v Chadbourne & Parke LLP,
4 Misc 3d 481, 778 NYS2d 863 (Sup Ct, NY Cnty 2004) ................. 40, 41
iv
D’Ambrosio v City of New York,
55 NY2d 454, 450 NYS2d 149 (1982)..................................................... 53
Daniels v City of New York,
7 NY3d 825, 822 NYS2d 753 (2006) ....................................................... 54
Duffy v Horton Mem. Hosp.,
66 NY2d 473, 497 NYS2d 890 (1985)..................................................... 55
Edwards v Erie Coach Lines Co.,
17 NY3d 306, 929 NYS2d 41 (2011) ....................................................... 49
Ehrlich-Bober & Co. v Univ. of Houston,
49 NY2d 574, 427 NYS2d 604 (1980)......................................... 29, 30, 34
Factors Etc., Inc. & Boxcar Enter., Inc. v Pro Arts, Inc.,
579 F2d 215 (2d Cir 1978) ....................................................................... 44
Firegreen Ltd. v Claxton,
160 AD2d 409, 553 NYS2d 765 (1st Dept 1990) .................................... 44
First Union Nat’l Bank v Paribas,
135 F Supp 2d 443 (SDNY 2001) ............................................................ 36
Gulf Oil Corp. v Gilbert,
330 US 501 (1947) ............................................................................. 21, 41
Hecht v City of New York,
60 NY2d 57, 467 NYS2d 187 (1983) ....................................................... 54
Imperial Imports Co. v Neu & Sons,
161 AD2d 411, 555 NYS2d 323 (1st Dept 1990) .................................... 59
Indosuez Int’l Fin. B.V. v Nat’l Reserve Bank,
279 AD2d 408, 720 NYS2d 102 (1st Dept 2001), aff’d 98 NY2d
238, 746 NYS2d 631 (2002) .................................................................... 28
Intertec Contr. A/S v Turner Steiner Int’l S.A.,
6 AD3d 1, 774 NYS2d 14 (1st Dept 2004) .............................................. 17
v
Islamic Republic of Iran v Pahlavi,
62 NY2d 474, 478 NYS2d 597 (1984)..............................................passim
J. Zeevi & Sons, Ltd. v Grindlays Bank (Uganda) Ltd.,
37 NY2d 220, 371 NYS2d 892 (1975) ................................. 27, 28, 30, 63
Licci v Lebanese Can. Bank,
20 NY3d 327, 960 NYS2d 695 (2012)............................................... 29, 30
Mahmood v Gutman,
81 AD3d 792, 916 NYS2d 802 (2d Dept 2011) ....................................... 54
Matter of Smith v Miller,
237 AD2d 294, 654 NYS2d 167 (2d Dept 1997) ..................................... 59
O’Connor v Bonanza Int’l, Inc.,
129 AD2d 569, 514 NYS2d 67 (2d Dept 1987) ....................................... 44
Overseas Programming Co., Ltd. v Cinematographische Commerz-
Anstalt,
684 F2d 232 (2d Cir 1982) ....................................................................... 32
Padula v Lilarn Props. Corp.,
84 NY2d 519, 620 NYS2d 310 (1994)..................................................... 48
Piper Aircraft Co. v Reyno,
454 US 235 (1981) ....................................................................... 21, 40, 41
R. Maganlal & Co. v M.G. Chem. Co., Inc.,
942 F2d 164 (2d Cir 1991) ....................................................................... 32
Republic of Lebanon v Sotheby’s,
167 AD2d 142, 561 NYS2d 566 (1st Dept 1990) .............................. 40, 47
Rhodes v ITT Sheraton Corp.,
CIV A 97-4530-B, 1999 WL 26874 (Mass Super Jan 15, 1999) ............. 45
Schultz v Boy Scouts of Am.,
65 NY2d 189, 491 NYS2d 90 (1985) ................................................. 48, 49
vi
Shin-Etsu Chem. Co., Ltd. v 3033 ICICI Bank Ltd.,
9 AD3d 171, 777 NYS2d 69 (1st Dept 2004) .............................. 39, 40, 51
Silver v Great Am. Ins. Co.,
29 NY2d 356, 328 NYS2d 398 (1972)..................................................... 38
Sirius Am. Ins. Co. v Vigo Const. Corp.,
48 AD3d 450, 852 NYS2d 176 (2d Dept 2008) ....................................... 53
VSL Corp. v Dunes Hotels & Casinos Inc.,
70 NY2d 948, 524 NYS2d 671 (1988)..............................................passim
Waterways Ltd. v Barclays Bank PLC,
174 AD2d 324, 571 NYS2d 208 (1st Dept 1991) .................................... 40
Wells Fargo Asia Ltd. v Citibank, N.A.,
936 F2d 723 (2d Cir 1991) ....................................................................... 28
World Point Trading PTE, Ltd. v Credito Italiano,
225 AD2d 153, 649 NYS2d 689 (1st Dept 1996) .................................... 36
RULES
CPLR 327 ...................................................................................................... 17
CPLR 5511 .................................................................................................... 53
MISCELLANEOUS
5B Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure: Civil § 1352 (3d ed 2004)...................................................... 34
Arthur Karger, Powers of the New York Court of Appeals, § 11:6 (3d
ed rev 2005) .............................................................................................. 53
1
Defendant Third-Party Plaintiff Ahmad Hamad Al Gosaibi & Brothers Co.
respectfully submits this brief in opposition to the appeals of Plaintiff-Appellant
Mashreqbank PSC and Third-Party-Defendant Appellant Maan Abdul Wahed Al
Sanea from the September 25, 2012 decision and order of the Appellate Division.
The Appellate Division properly exercised its discretion and committed no error in
reversing the prior decision of Supreme Court and reinstating the instant action as
properly filed in this New York forum.
QUESTIONS PRESENTED
1. Does the Appellate Division properly exercise its discretion when it
considers and weighs all of the recognized factors bearing on forum non
conveniens in reversing Supreme Court and ruling that the action should remain in
this New York forum?
Yes. Where the Appellate Division considers the recognized forum factors
and reasonably weighs them in reaching its decision, its action cannot constitute an
abuse of discretion.
2. In considering forum non conveniens, should the Appellate Division
properly recognize New York’s strong interest in protecting New York’s banks
from misuse when the dispute at issue concerns the fraudulent use of this State’s
banks to both structure and carry out bogus foreign exchange transactions and
2
results in the theft of funds from such transactions out of an account in one of these
New York banks?
Yes. New York recognizes a paramount interest in protecting this State’s
banks from misuse as instruments of fraud and theft.
3. In considering the availability of an alternative forum for purposes of
forum non conveniens, does the Appellate Division properly consider and weigh
the extent to which the competing fora have genuine access to sources of proof
and/or whether critically important proof can be presented in one of those fora?
Yes. Genuine access to sources of proof is an appropriate factor for
consideration in a forum analysis.
4. Does the Appellate Division properly reverse a Supreme Court
dismissal on forum non conveniens grounds in circumstances where none of the
parties have moved, formally or informally, for such dismissal of the claims in
question and the traditional forum factors have neither been briefed nor fully
considered with respect to those claims?
Yes. Such dismissal constitutes sua sponte action prohibited under
established precedent.
3
PRELIMINARY STATEMENT
This is an action brought by a bank with a New York branch against a Saudi
partnership, which accepted the forum and brought a counterclaim and third-party
claim. The third-party then challenged forum and jurisdiction for the third-party
claim. Supreme Court initially dismissed the entire action – first-party,
counterclaim, and third-party claim – on forum grounds, but the Appellate Division
reversed, finding that this action properly belongs in New York. Appellants now
ask this Court to overturn the Appellate Division’s decision, but they identify no
abuse of discretion or rulings of law in conflict with prior precedent that would
justify such relief. The decision below broke no new legal ground; it simply
applied well-recognized and long-established rules governing forum non
conveniens to the specific facts in the dispute at issue. While the Appellate
Division’s decision is a matter of importance to the parties, it represents no
departure from settled precedent and does not otherwise merit review by this
Court.
Mashreqbank PSC (“Mashreq”), a Dubai-based bank with offices in New
York, filed the instant action against Ahmad Hamad Al Gosaibi & Brothers Co.
(“AHAB”), a Saudi Arabian family business partnership, seeking recovery on a
$150 million debt arising out of U.S. dollar foreign exchange transactions
conducted through New York banks. AHAB responded by filing a counterclaim
4
against Mashreq and a third-party complaint against Maan Abdul Waheed Al
Sanea (“Al Sanea”), who managed a division of AHAB and who was responsible
for the purported debt on which Mashreq sued. AHAB’s third-party complaint
alleged that transactions that gave rise to the Mashreq debt were part of a multi-
billion dollar international Ponzi scheme perpetrated by Al Sanea, in which Al
Sanea fraudulently incurred the Mashreq debt, falsely misusing AHAB’s name and
credit, and then wrongfully converted to his own use the funds he had obtained
from Mashreq. AHAB’s counterclaim alleged that, while Mashreq obviously had
not planned on itself being victimized by Al Sanea, it was nonetheless also at fault
by acting in concert with Al Sanea, when it aided and abetted his unlawful scheme
by assisting him to disguise the very nature of these transactions.
While Al Sanea’s overall Ponzi scheme was enormous in size and
international in scope, involving the systematic misuse of AHAB’s good name and
credit to borrow billions in funds from lenders around the world and then pilfer the
proceeds to Al Sanea’s own use, AHAB’s claim here does not seek relief for the
totality of Al Sanea’s fraud. It seeks recovery only in respect of the one aspect of
that fraud that occurred in New York: the series of phony foreign exchange (“f/x”)
transactions that Al Sanea and Mashreq conducted through the calculated misuse
of New York banks. Over a period of years, Al Sanea and Mashreq engaged in
nearly $5 billion in New York based f/x transactions, with the last $150 million
5
stolen by Al Sanea in New York. The use of New York banks was not a tangential
or inconsequential component of these f/x deals; it provided the essential structure
that allowed Al Sanea to obtain and roll over a series of ever-increasing, short-term
loans by disguising them as mere currency swaps and then diverting the proceeds
of these loans to his own purposes. It was not a coincidence that Al Sanea’s f/x
fraud happened here. In order to succeed, it could only happen in New York. This
State is not just a proper forum for litigating this f/x fraud; it has a uniquely
compelling interest in adjudicating this dispute: the protection from misuse of its
banking system, on which much of international commerce depends. New York
courts, moreover, are particularly well-suited to litigate this dispute due to their
ability to obtain and hear the evidence concerning it. In rejecting a forum non
conveniens dismissal, the Appellate Division correctly recognized the centrality of
New York to the instant dispute, the critical interest of New York in protecting its
banking system from abuse, and the appropriateness of New York serving as the
forum for the dispute’s adjudication.
In their efforts to challenge the decision below, appellants Al Sanea and
Mashreq (which initiated suit in this forum and later apparently thought better of it)
resort to gross mischaracterizations as to the fundamental nature of the instant
dispute and the Appellate Division’s decision concerning it. In appellants’ telling,
this case concerns an alleged fraud carried out entirely in Saudi Arabia and
6
elsewhere in the Middle East, with only the most tangential connection to New
York. It is a case which, according to appellants, the Appellate Division could
justify keeping here only by adopting a new, “bright-line” rule precluding a forum-
based dismissal if the dispute involves virtually any ministerial transfer of funds
through a New York bank. Even then, say appellants, the Appellate Division had
to largely ignore the traditional Pahlavi factors for testing forum non conveniens
motions in order to retain the case here.
Appellants’ arguments founder, however, once their distortions of AHAB’s
allegations are exposed. First, Al Sanea’s contention that this case centers in Saudi
Arabia, because it turns on issues of authority and knowledge having nothing to do
with New York, ignores AHAB’s well-pleaded allegations that Al Sanea, with
Mashreq’s help, structured what were actually extraordinary short-term loans to fit
the appearance of f/x transactions precisely so they would appear to comply with
the form followed by New York banks for such transactions in order thereby to
conceal their fraudulent nature.
Second, Al Sanea’s insistence that the theft of the funds that these deals
generated took place in Dubai, impermissibly and incorrectly disputes on this
preliminary motion AHAB’s well-pleaded allegation that the theft occurred in New
York. As the Appellate Division correctly pointed out, a motion seeking dismissal
on forum grounds, like any preliminary motion, requires the court to accept the
7
truth of the non-movant’s allegations. It does not permit the movant to simply
recast them into ones more to its liking.
Third, AHAB did not argue for, and the Appellate Division did not adopt,
any new or radically expansive “bright line” rule requiring New York courts to
retain jurisdiction over all cases in which there is any use of New York banks, no
matter how tangential. Tellingly, appellants are unable to quote any statement in
the court’s decision below that expresses such a new rule. In fact, the decision
below simply applied established precedent identifying a compelling New York
interest in cases that allege fraudulent transactions that depend at their very core on
misuse of bank accounts in this State, including use of such accounts to make
transfers that unlawfully convert the transferred funds. The court’s decision did
not in any way sanction use of New York courts to adjudicate every dispute with
any tangential connection to a New York bank. Instead the court concluded that,
here, the connection AHAB has alleged is anything but tangential; it is central to
the bogus f/x split-value trading scheme that Al Sanea devised, and was the very
vehicle by which Al Sanea stole more than $150 million from AHAB when he
wrongfully transferred those funds from one New York bank account to another.
Finally, appellants downplay, indeed, denigrate the critical role that New
York courts’ far superior access to sources of proof plays in the circumstances of
the instant case. Yet the Appellate Division properly rejected appellants’
8
contention that the sole relevant considerations for forum non conveniens purposes
on the question of whether an alternative forum exists are whether the parties are
subject to service or process in that forum, and whether the subject matter of the
dispute can be litigated there. As the court below recognized, the issue of whether
an appropriate alternative forum exists is far more nuanced and includes evaluation
of several factors, not the least of which is access to sources of proof, that help to
assess whether the dispute can be “better adjudicated” there. See Islamic Republic
of Iran v Pahlavi, 62 NY2d 474, 479, 478 NYS2d 597, 599 (1984). The court thus
did not just examine in the abstract such matters as the location and language of
witnesses and documents, but correctly considered whether these sources of proof
would actually be available for use in the proposed alternative forum.
In sum, the Appellate Division fully and appropriately applied the factors
this Court approved in Pahlavi, and it properly refused to be misled by appellants’
mischaracterization of the claim AHAB alleged or the law by which it is measured.
There is no occasion for this Court to disturb that analysis.
This case raises one further issue, one which this Court needs address only if
it were to reverse the decision rejecting a forum non conveniens dismissal of the
third-party complaint against Al Sanea. That issue concerns Supreme Court’s
authority to act sua sponte to dismiss the first-party claims along with the third-
party claims when there was no motion by the parties for such relief. Relying on
9
this Court’s decision in VSL Corp. v Dunes Hotels & Casinos, Inc., 70 NY2d 948,
524 NYS2d 671 (1988), the Appellate Division properly ruled that Supreme Court
lacked such authority and thereby reversed its dismissal of these claims. Its
decision was squarely in accord with controlling precedent.
SUMMARY OF FACTS
For purposes of conducting a proper analysis of forum non conveniens, it is
critically important to appreciate the limited scope of the instant action as framed
by AHAB’s pleadings rather than by Mashreq’s and Al Sanea’s tactical
reconstruction of those pleadings. AHAB is the victim of a massive Ponzi scheme
conducted by Al Sanea, a scheme that is worldwide in scope. The instant action,
however, does not seek to adjudicate Al Sanea’s liability for the entirety of that
multi-billion dollar fraud scheme. It seeks recovery only as to one aspect of that
overall scheme: Al Sanea’s fraudulent foreign exchange transactions with Mashreq
conducted through the misuse of New York banks. The larger scheme is thus an
important backdrop to the specific fraudulent transactions here, but it is the part of
that scheme that involved bogus f/x transactions with Mashreq in New York and
subsequent conversion that is crucial to the forum analysis at issue on this appeal.
I. Al Sanea’s Worldwide Ponzi Scheme
In 1981, Maan Al Sanea, a citizen of Kuwait, married into the prominent
Saudi Arabian family, the Al Gosaibis. R. 108, ¶ 12. The Al Gosaibi family
10
owned and operated AHAB, a general partnership, located in Saudi Arabia, which
engaged in wide-ranging and successful businesses throughout the southern part of
that country, including oil field servicing, shipping, hotels, soft drink bottling, food
service, and other commercial ventures. R. 107-08, ¶ 11. As a new member of the
Al Gosaibi family, Al Sanea was given a portion of AHAB’s business to manage: a
division of AHAB known as the Money Exchange. As its name implies, the
Money Exchange primarily provided currency remittance services to foreign
workers in Saudi Arabia, conducted credit card and travel-related services and
owned a portfolio of Saudi shares. R. 107-08, ¶¶ 11-12. Al Sanea returned this
kindness and the trust placed in him by the Al Gosaibi family by fraudulently
usurping AHAB’s credit and systematically plundering its assets in order,
surreptitiously, to line his own pockets and finance his own separate business
empire. R. 104-05, ¶ 3.
Al Sanea’s scheme to bilk AHAB was complex and multifaceted, but it was
based on a simple principle. Vested by the family with the management of the
Money Exchange, Al Sanea misused that authority to enter into thousands of
unauthorized financial transactions, all purportedly in AHAB’s name and all based
on its credit, but emphatically not for AHAB’s benefit. Almost as a matter of
routine, Al Sanea forged the signatures of AHAB’s managing partner on financial
documents that authorized these various transactions, including straight term loans,
11
letters of credit for purported trade purchases, foreign exchange transactions, and
numerous other banking arrangements with hundreds of banks worldwide. R. 19,
R. 91 ¶ 13. He maintained a secret ledger at the Money Exchange, separate from
its operating accounts, in which he kept track of his fraudulent transactions (R. 91
¶ 12), and he instructed hand-picked subordinates loyal to him not to divulge to
AHAB management anything having to do with his illicit dealings. R. 90-91 ¶ 10,
R. 107 ¶¶ 9-10.
Operating his scheme as a classic Ponzi structure, Al Sanea used newly
raised money to pay off old debts, all the while siphoning off as much as possible
to “false flag” accounts, nominally held for AHAB but actually controlled
exclusively by Al Sanea, and then channeling the money into his own, separate
business and personal accounts. R. 88 ¶ 2, R. 89 ¶ 8. His scheme ultimately
unraveled, but not as a result of the 2009 “worldwide financial crisis,” as Al Sanea,
without a shred of record support, suggests. Al Sanea Brief at 7. It collapsed
because, like all Ponzi schemes, it eventually expanded in size beyond the point
where it could be sustained. When the scheme finally toppled, it left Al Sanea
fabulously wealthy from this massive influx of ill-gotten money and left AHAB
exposed to nearly $10 billion in claims from banks and other creditors around the
world. Id.
12
As might be expected with a scheme of this staggering scope, Al Sanea’s
fraudulent transactions have led to litigation in a number of different countries
around the world. Hundreds of lenders have sought recovery from AHAB, and
AHAB, in turn, has sought to hold Al Sanea accountable for his dishonesty and
faithlessness and to chase the assets he plundered and has now largely hidden.
AHAB has initiated a comprehensive action in the Cayman Islands against Al
Sanea and his numerous businesses incorporated in that country (R. 69 ¶ 13, R.
1454), an action in which Al Sanea fought jurisdiction, lost, and then defaulted.
AHAB also has brought and defended numerous more discrete actions in other fora
limited to specific fraudulent transactions. The instant action is one of those.
II. Al Sanea’s Fraudulent Foreign Exchange Deals with Mashreq
One of the ways that Al Sanea misused his position at the Money Exchange
to borrow huge sums of money based on AHAB’s credit was to conduct what on
the surface appeared to be routine and essentially risk-free foreign exchange (“f/x”)
transactions. R. 94 ¶¶ 21-22. For four years, Al Sanea engaged in hundreds of
these transactions with Mashreq, which became one of his favorite banking
partners. R. 92 ¶ 16, R. 104 ¶ 6. Each of these purported f/x deals involved the
purchase of U.S. dollars from Mashreq in New York, with payment made into a
New York bank account held in AHAB’s name (but controlled by Al Sanea),
balanced by a payment in Saudi riyals made, at a later date, to a Mashreq account
13
in Saudi Arabia. R. 94 ¶ 21, R. 104 ¶ 2. These deals with Mashreq, however, were
not true f/x transactions. There was no exchange risk, because the Saudi Riyal is
pegged to the dollar at a fixed rate. In reality, they functioned as high-cost, short-
term loans, made possible by a gap of up to twelve days between what was
effectively a U.S. dollar loan and a Saudi riyal repayment. R. 94 ¶ 21(b), R. 96
¶ 23. This huge volume of transactions – totaling more than $5 billion – had no
genuine currency exchange purpose for AHAB’s comparatively meager remittance
business, a fact that would have been obvious to anyone at Mashreq. R. 96 ¶ 24 –
R. 97 ¶ 25, R. 105 ¶ 4. Al Sanea counted on the facial regularity of these f/x deals,
however, to avoid any genuine scrutiny.
Like all Ponzi schemes, Al Sanea’s depended on ever-increasing access to
money, both to fund his expanding misappropriations and to service the growing
debt incurred to finance these misappropriations. These bogus f/x deals with
Mashreq admirably accomplished both purposes, expanding in frequency and size
over the four-year period. In the last of these f/x transactions, Mashreq paid $150
million into an account at Bank of America (“BOA”) in New York. R. 113 ¶ 25.
Knowing that the scheme was finally crumbling under its own weight, Al Sanea
initially tried to transfer the funds in the BOA account to his wife. R. 705 ¶ 11.
When even his henchmen balked at this obvious theft, he stole the funds by
transferring them to an account in the name of Awal Bank BSC (“Awal”) held at
14
the Hong Kong and Shanghai Banking Corporation’s (“HSBC”) New York branch.
R. 704 ¶ 10 - R. 705 ¶ 14, R. 113 ¶ 26. Awal is a Bahraini bank wholly owned by
Al Sanea and completely under his control. R. 113 ¶ 26. This bank-to-bank
transfer in New York was intended to and did put those funds beyond AHAB’s
access. As the Appellate Division correctly found, all of the f/x transactions were
executed in New York, and Al Sanea’s theft of the funds that are the specific
subject of the instant action took place in New York. R. 1806-07.
III. The F/X Scheme’s Core Nexus to New York’s Banks
To appreciate the centrality of the New York banks to this scheme, it is
essential to understand how these f/x deals were designed by Al Sanea and
Mashreq to work. Indeed, a proper understanding of how these f/x deals worked,
how they served Al Sanea’s fraudulent purpose, and how they required the
systematic misuse of New York’s banks (and only New York’s banks) in order to
succeed, is critical to this appeal. We outline the structure below:
Ordinarily, a currency exchange involves almost no commercial risk.
Since the exchange is usually simultaneous, there is no credit risk that
one party might default on payment and no currency risk due to
fluctuations in the rate of exchange. R. 93 ¶ 19 – R. 94 ¶ 20.
Here, however, Al Sanea and Mashreq engaged in “split-value” f/x deals,
whereby the two currencies are not exchanged simultaneously. Such
deals typically are used to accommodate the different calendars observed
by different cultures, here Muslim and non-Muslim, so that a payment
made during a work day in one country can be matched on the other
15
country’s next work day, resulting in a delay of only two or three days.
For example, a payment from a Western country made on a Friday is
typically matched by a payment from a Middle Eastern country on the
following Sunday. Id.
Where the exchange is U.S. dollars for Saudi riyals, this brief delay
intrinsic to “split-value” deals entails no currency risk because the Saudi
riyal by law is pegged to the U.S. dollar, precluding any fluctuation
between the two currencies during the interim. R. 94 ¶ 20.
By using this structure, these f/x deals therefore appeared to be low-risk
liquidity management, enabling Al Sanea and Mashreq to engage in them
without attracting the attention that might ____ obtain from the bank’s
credit and risk management divisions. This lack of scrutiny was critical
to Al Sanea’s scheme, since he knew that this volume of short-term
lending could not be justified under banking standards as necessary for
AHAB’s various business ventures, R. 96 ¶ 24, which were largely self-
sustaining, much less for the Money Exchange’s comparatively tiny
currency remittance business. R. 105¶ 4, R. 713 ¶ 6, R. 1135.
Critically, Al Sanea could accomplish this massive, scrutiny-free
borrowing through split-value f/x deals only by using New York banks,
because f/x deals are the purchase or exchange of currencies as
commodities, and deals involving the purchase of U.S. dollars can only
be done in this volume using banks in New York.
Al Sanea’s scheme was to introduce much longer split-value dates than
usual for f/x transactions – even up to twelve days – and, as an incentive
to look the other way, to offer Mashreq an exchange rate not pegged to
the fixed riyal-dollar rate, but much higher than would have been usual
even for commercial short-term loans. R. 94 ¶ 21, R. 95 ¶ 21, R. 96 ¶ 25
- R. 97 ¶ 25.
This allowed Al Sanea to engage in ever-expanding, short-term
borrowing, conducted without attracting the scrutiny typically given to
16
such extensive borrowing. And it allowed Mashreq to extract profits far
in excess of what it could command for genuine split-value f/x
transactions. R. 95 ¶ 22, R. 96 ¶ 24 - R. 97 ¶ 25.
In short, misuse of the split-value, dollar-for-riyal f/x structure, which could
only be accomplished through New York banks, both to carry out and disguise this
scheme, was critical to its success. Contrary to appellants contentions, New
York’s banks were not a mere conduit to pass funds through, incidental or
peripheral to the fraud; they were the critical component of an elaborate fraud that
depended on the facial regularity of split-value f/x transactions routinely processed
through New York banks and that could not be carried out through any other
banking system. The Appellate Division so recognized when it identified a
compelling New York interest in the protection of this State’s native banking
system from such misuse. R. 1805.
IV. Procedural Background
The procedural posture of this case is pertinent for two reasons. First, it
defines the scope of the instant appeal; second, it puts into context the Appellate
Division’s determination that Supreme Court improvidently acted sua sponte in
dismissing the first-party claims despite the absence of any motion by one of the
parties for such relief.
As to the first, this appeal arises on certification by the Appellate Division of
the question whether, as a matter of law, it acted properly when it reversed
17
Supreme Court’s dismissal on forum non conveniens grounds. Appellants devote
considerable argument to whether Supreme Court properly weighed the Pahlavi
forum factors and whether the dissenting justices in the Appellate Division had the
better argument as to how those factors should be weighed. But their argument is
misplaced. It is beyond dispute that weighing the factors bearing on forum non
conveniens is committed to the sound discretion of the lower courts, and, where the
Appellate Division acts, it is not limited to an “abuse of discretion” standard in
reviewing a forum decision by Supreme Court but may independently exercise its
own discretion in determining whether dismissal is appropriate. See, e.g., Intertec
Contr. A/S v Turner Steiner Int’l S.A., 6 AD3d 1, 3-4, 774 NYS2d 14, 15-17 (1st
Dept 2004); Broida v Bancroft, 103 AD2d 88, 93-94, 478 NYS2d 333, 336-37 (2d
Dept 1984); CPLR 327. This Court is not similarly unconstrained. Its function is
to review issues of law and not to substitute its own exercise of discretion for that
of the Appellate Division.
Hence, the issue before this Court is whether the Appellate Division
majority abused their collective discretion in rejecting a forum dismissal and not
whether this Court might prefer how Supreme Court or the Appellate Division’s
dissenting justices weighed the forum factors. As will be shown, the Appellate
Division majority properly identified and weighed the factors pertinent to forum
18
non conveniens in the instant case, and there is no rational basis for argument that
its decision represented an abuse of discretion.
As to the second, it is axiomatic under this Court’s jurisprudence that a case
may not be dismissed on forum non conveniens grounds based on the court’s own
motion and in the absence of a motion by one of the parties. VSL Corp., 70 NY2d
at 949, 524 NYS2d at 671. Here, Mashreq voluntarily selected New York as the
forum for its debt action against AHAB, and Mashreq’s suggestion to this Court
that it was “forced to file suit in New York” (Mashreq Brief at 9) is pure nonsense.
As will be discussed more fully in the argument on this issue, at no time did
Mashreq ever seek dismissal of its own claim on grounds that it had selected an
improper forum. To the contrary, it repeatedly argued that its complaint could
properly be adjudicated here. And at no time did Mashreq ever move to dismiss
AHAB’s counterclaim on forum grounds. It only belatedly advised that if
Supreme Court were to dismiss AHAB’s third-party claim against Al Sanea,
Mashreq “would not object” to litigating its own claim in the UAE. R. 1453. In
short, Mashreq simply volunteered that it would acquiesce if the court took it upon
itself – the epitome of sua sponte action – to dismiss Mashreq’s complaint.
For his part, while Al Sanea moved to dismiss AHAB’s third-party claim, he
never moved to dismiss the first-party claims. At one point in oral argument, Al
Sanea’s counsel, acting by his own description as an “amicus” and thus not as
19
counsel for a party making his own motion, suggested that the court might also
wish to dismiss the first-party claims along with the third-party claim, again,
unambiguously suggesting that the court engage in sua sponte action but not
actually moving for such relief. R. 1451. Al Sanea’s only cognizable concern – as
his counsel’s reference to himself as a sort of amicus showed that he understood –
was with AHAB’s third-party complaint. He had and has no interest one way or
the other in the first-party claims between Mashreq and AHAB.
On this procedural record, it is unassailable that in dismissing the first-party
claims Supreme Court acted sua sponte and not on any motion by a party.
ARGUMENT
The Appellate Division duly applied the factors this Court recognized in
Pahlavi as controlling on the issue of forum non conveniens. Contrary to
appellants’ submissions, in assessing Al Sanea’s motion to dismiss AHAB’s third-
party complaint, the Appellate Division properly exercised its discretion when it
decided to give significant weight to this State’s compelling interest in protecting
New York’s banking system from abuse in circumstances where these banks are
made the very vehicle by which fraud and theft are committed. R. 1805. The court
did not determine, as appellants charge, that the existence of an adequate
alternative forum to resolve the dispute is a prerequisite to any forum dismissal.
Instead, it properly considered, as an important issue (albeit a non-dispositive one)
20
in any forum analysis whether there is any foreign court capable of gaining access
to critical sources of proof on this dispute, and it correctly analyzed the location
and language of key witnesses and documents and the possible application of
foreign law as bearing on that very issue. R. 1810-12. Appellants point to nothing
in the Appellate Division’s analysis that even remotely can be called an abuse of
discretion.
The Appellate Division also correctly concluded on the record before it that
Supreme Court had improperly acted sua sponte in dismissing the first-party
complaint and counterclaim. R. 1800-01. It is beyond dispute that no party ever
moved, formally or informally, to dismiss the first-party claims on forum grounds.
R. 1803-04. Al Sanea expressly acknowledged that he had no interest in those
claims, and his counsel only suggested their dismissal, not as a movant, but as a
self-appointed amicus. R. 1451. Mashreq repeatedly argued that its complaint was
properly filed in a New York forum, R. 1465; it was silent as to the counterclaim;
and in the end it simply advised that it would not object if the court dismissed on
its own motion, which it ultimately did. R. 1466-1467. This is the very essence of
sua sponte action, and this Court’s settled jurisprudence precludes it.
21
I. The Appellate Division Properly Determined that AHAB’s Third-Party
Complaint Should Not Be Dismissed on Forum Non Conveniens
Grounds.
In its Pahlavi decision, this Court listed the traditional factors bearing on
forum non conveniens, including: (i) the burden that resolution of the dispute may
impose on New York courts; (ii) the potential hardship to the defendant in having
to litigate here; (iii) whether an alternative forum is available in which the suit may
be brought; (iv) whether the parties to the action are residents or nonresidents of
this State; and (v) whether the transaction out of which the dispute arose occurred
primarily here or in a foreign locale. 62 NY2d at 479, 478 NYS2d at 599-600.
This Court also noted that the burden rests on the party challenging the New York
forum “to demonstrate relevant private and public interest factors which militate
against accepting the litigation,” factors identified by the United States Supreme
Court in Piper Aircraft Co. v Reyno, 454 US 235 (1981). Pahlavi, 62 NY2d at
479, 478 NYS2d at 599-600. Piper Aircraft, in turn, referenced those factors as
listed in Gulf Oil Corp. v Gilbert, 330 US 501, 508 (1947), including: (vi) relative
ease of access to sources of proof; (vii) use of compulsory process to obtain the
attendance of unwilling witnesses and the costs of obtaining attendance of willing
witnesses; and (viii) all other practical problems that affect easy, expeditious, and
inexpensive trial of the case. As this Court recognized in Pahlavi, the ultimate
22
goal is to determine whether the dispute properly belongs in New York or “would
be better adjudicated elsewhere.” 60 NY2d at 479, 478 NYS2d at 599-600.
Significantly, this Court also held in Pahlavi that “[t]he application of the
doctrine of forum non conveniens is a matter of discretion to be exercised by the
trial court and the Appellate Division.” 62 NY2d at 478, 478 NYS2d at 599. That
discretion is exercised through the application and weighing of the factors
identified by this Court. So long as the Appellate Division “takes these various
factors into account in making its decision, there has been no abuse of discretion
reviewable by [the Court of Appeals].” Id. at 479, 478 NYS2d at 600. As shown
below, it is indisputable that the Appellate Division carefully considered and
weighed the appropriate forum factors pertinent to the circumstances of this case.
While it reached a different view from that of Supreme Court (and from that of the
appellate panel’s dissenting justices), it is the weight given to those factors by the
panel majority that constitutes the decision below, and that decision cannot
reasonably be deemed to constitute a reversible abuse of discretion.
A. The Appellate Division Properly Found New York’s Paramount
Interest in Protecting This State’s Banks from Misuse as an
Instrument of Fraud and Theft to be a Pivotal Forum Non
Conveniens Issue.
Of the various factors listed in Pahlavi, the first is whether the action
imposes a burden on New York’s courts. 62 NY2d at 479, 478 NYS2d at 600.
The burden issue, of course, deals with the potential complexities, including the
23
expenditure of judicial time and administrative expense, that the action is likely to
entail. But the test is not whether the case imposes any burden on the New York
courts. All cases impose some burden. Rather, as Al Sanea himself aptly put it,
the issue is whether that burden is “unjustified” because there is an “insubstantial
connection” to the interests of this State. Al Sanea Brief at 21.
Appellants’ challenge to the Appellate Division’s conclusion that this
Pahlavi factor strongly supports retaining this New York forum rests on a
remarkable set of mischaracterizations of both the underlying facts and the
Appellate Division’s construction of the controlling issues of law. They argue that
the decision below turned on the court’s adoption of a new, bright-line rule
precluding dismissal on forum grounds whenever the dispute has any connection,
however tangential or ministerial, to New York banks. They insist that the court
accept their recasting of AHAB’s allegations, disregarding the New York nexus
that those allegations detail and adopting instead appellants preferred rendering of
those allegations as concerning issues of authority centering in Saudi Arabia.
As shown below, the Appellate Division did not adopt nor apply any such
bright-line rule. Instead, it faithfully adhered to long-standing precedent in
concluding that this State has a paramount interest in protecting its banking system
from being used as the very instrument of fraud and theft, and finding that AHAB
had alleged precisely such a nexus with that compelling state interest. Further, the
24
Appellate Division rejected appellants’ attempt to recast AHAB’s allegations into
ones they feel more comfortable defending, instead properly crediting AHAB’s
well-pleaded claims that these f/x deals centered in New York and depended at
their core on the misuse of New York’s banks to structure the deals to avoid
genuine scrutiny and to steal the funds they produced. R. 1807.
AHAB’s necessary task on the instant appeal is to deconstruct the numerous
mischaracterizations on which appellants’ arguments depend. Once these
mischaracterizations are understood for what they are, the decision below is self-
evidently correct and should be affirmed by this Court.
1. New York’s Paramount Interest in Prevention of Misuse of this
State’s Banking System
In case after case, New York courts have declared that this State has a
powerful, indeed, paramount interest in protecting its banking system from misuse
as an instrument of fraud. And that interest is undiminished by the fact that the
defrauder keeps his own physical distance from the place where his fraud plays
out, acting through subordinates and contacts through electronic means to carry out
his scheme.
In a case with striking parallels, New York courts previously upheld the
refusal to dismiss on forum non conveniens grounds an action involving money
laundering through financial transactions that, like this one, “span[ned] two oceans
and four continents.” Banco Nacional Ultramarino, S.A. v Chan, 169 Misc 2d
25
182, 185, 641 NYS2d 1006, 1008 (Sup Ct, NY Cnty 1996), aff’d 240 AD2d 253,
659 NYS2d 734 (1st Dept 1997). The court recognized that, wherever the scheme
had been planned, it ultimately and necessarily was implemented though misuse of
New York bank accounts to convert funds stolen in one country in order to
transfer them to another. As the Banco Nacional court found:
The allegation that Money Center used its [Bank of New York
(“BONY”)] account to receive and transfer the stolen funds, thus
converting the money, satisfies the statutory requirement that the tort
occur within the State.
Id. at 188, 641 NYS2d at 1009. The court then used a vivid and apt analogy in
explaining its decision to keep the case in New York:
First, assuming the truth of the allegations, Money Center is accused
of having committed an affirmative act in New York, money
laundering, via instructions conveyed to BONY. Second, to allow a
defendant to conspire and direct tortious activities in New York, in
furtherance of that conspiracy, and then avoid jurisdiction because it
directs those activities from outside the State or country, is to ignore
the reality of modern banking and computer technology in the end of
the twentieth century! A defendant with access to computers, fax
machines, etc., no longer has to physically enter New York to perform
a financial transaction which may be criminal or tortious, i.e.,
conversion. He may secrete himself and/or direct activities from
locations where jurisdiction may be impossible to acquire, including a
boat beyond the three-mile limit.
Id., 641 NYS2d at 1009-10 (citations omitted). The Banco Nacional analysis
could have been written for the instant action. Although Al Sanea may have
devised his scheme in Saudi Arabia, like the money launderer in Banco Nacional,
he implemented the relevant portion of it here in New York, and New York is
26
plainly an appropriate forum in which to hold him liable for the damages caused
by his criminal conduct in this State.
Appellants advance two lines of argument against application of these
established principles here. First, they contend that the Appellate Division’s
decision turns on that court’s adoption of a new, bright-line rule. As Al Sanea put
it, this rule would require New York courts to refuse any forum non conveniens
dismissal in “virtually any action alleging misconduct in relation to a New York
banking transfer” or that “in any way touched New York’s banking system.” Al
Sanea Brief at 1, 6. Second, they criticize the Appellate Division for relying on
cases that arose outside the forum non conveniens context in support of its view
that this State has a paramount interest in preventing misuse of New York’s banks.
Both arguments unravel on close inspection, as the Appellate Division recognized.
Contrary to appellants’ repeated assertions, the Appellate Division did not
announce any new, bright-line forum non conveniens rule that precludes
dismissal of any action that alleges any use of a New York bank account,
regardless of how tenuous and peripheral it is to the claim in dispute. Appellants
point to nothing in the opinion below that announces any such new rule. The
dissenting opinion, while disagreeing with how the majority weighed the forum
factors, does not accuse the majority of adopting such a new rule. And AHAB’s
own brief before the Appellate Division expressly disavowed any request that the
27
court apply such a rule. There, AHAB argued:
There is a crucial distinction between disputes in which New York
banks play only a marginal role and disputes like this one in which the
misuse of New York banks, including the implementation of tortious
conversion occurring in New York, is central to the controversy.
AHAB does not suggest that the incidental use of the New York
banking system can suffice to establish personal jurisdiction, much
less make New York the preferred forum. As held in Amigo Foods
Corp. v Marine Midland Banc-N.Y., 39 NY2d 391, 396 (1976),
“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,” and by similar logic may not support
New York as the more appropriate forum.
AHAB App. Div. Brief at 23-24 (emphasis in original). In short, AHAB did not
advocate nor did the court below approve any departure from the principle
announced in Amigo Foods.
The further criticism that appellants level at the Appellate Division is that it
relied on cases outside the forum non conveniens setting in identifying New York’s
interest in protecting its banks from being used as instruments of fraud, theft, or
other misconduct. Yet, as the Appellate Division recognized, and as this Court’s
own jurisprudence confirms, the issue is the strength of this State’s interest in the
underlying dispute, regardless of the context in which it arises.
As this Court has recognized, when the New York banking system is
instrumental to the transaction at issue and is used by the defendant as the very
vehicle of his misconduct, New York’s interests have been deemed “overriding
and paramount.” J. Zeevi & Sons, Ltd. v Grindlays Bank (Uganda) Ltd., 37 NY2d
28
220, 227, 371 NYS2d 892, 898 (1975). In J. Zeevi & Sons, an Israeli partnership
was entitled to draw payment in U.S. dollars on a letter of credit opened in its favor
by a Ugandan bank through its correspondent bank in New York but subsequently
repudiated by the bank through instructions to its New York correspondent not to
transfer funds. The Court stated:
New York has an overriding and paramount interest in the outcome of
this litigation. It is a financial capital of the world, serving as an
international clearinghouse and market place for a plethora of
international transactions, such as to be so recognized by our
decisional law.
Id. (citations omitted); see also Wells Fargo Asia Ltd. v Citibank, N.A., 936 F2d
723, 726-27 (2d Cir 1991) (citing J. Zeevi & Sons); Indosuez Int’l Fin. B.V. v Nat’l.
Reserve Bank, 279 AD2d 408, 408-09, 720 NYS2d 102 (1st Dept 2001), aff’d 98
NY2d 238, 746 NYS2d 631 (2002) (also citing J. Zeevi & Sons in the personal
jurisdiction setting).
In J. Zeevi, this Court addressed the issue of New York’s interest in the
transaction in the setting of choice of law, but its analysis is no less instructive for
choice of forum. Similarly, the same analysis of New York’s interest in preventing
abuses of its banking system underlies both the personal jurisdiction and the forum
non conveniens decisions in Banco Nacional. The underlying factor – the strength
of the New York connection and this State’s interest in the dispute – is the same in
all of these settings. New York courts routinely, and quite properly, rely on cases
29
in such analogous settings in discussing the state interest factor. For example, in
Ehrlich-Bober & Co. v Univ. of Houston, 49 NY2d 574, 581-82, 427 NYS2d 604,
608-09 (1980), this Court analyzed choice-of-law and long-arm jurisdiction
decisions for purposes of the separate issue of comity. The Court emphasized New
York’s interest as the “preeminent commercial and financial nerve center of the
Nation and the world,” noting that although such issues as comity, personal
jurisdiction, and forum “are analytically distinct, there is no reason in law or logic
why they may not overlap, or even coincide.”1 Id.
This Court recently addressed a similar issue in the personal jurisdiction
setting. In Licci v Lebanese Canadian Bank, 20 NY3d 327, 960 NYS2d 695
(2012), the Court reiterated this State’s compelling public interest in assuring the
integrity and transparency of the New York financial system. The Court focused
on the fact the defendant did not just maintain a correspondent account in New
York but used it “‘dozens’ of times” in wiring funds that were intended to support
terrorist attacks against Israel. Id. at 340, 960 NYS2d at 703. Rejecting the
defendant’s contention that the mere use of a New York correspondent bank
account is an unimportant and incidental contact with this State, this Court
unanimously held:
1 See also Am. BankNote Corp. v Daniele, 45 AD3d 338, 339-40, 845 NYS2d 266, 267-68 (1st
Dept 2007) (discussing in the context of both personal jurisdiction and forum defendants’ New
York bank accounts as “central” to their fraud scheme).
30
[C]omplaints alleging a foreign bank’s repeated use of a
correspondent account in New York on behalf of a client – in effect, a
‘course of dealing’ … show purposeful availment of New York’s
dependable and transparent banking system, the dollar as a stable and
fungible currency, and the predictable jurisdictional and commercial
law of New York and the United States.
Id. at 339, 960 NYS2d at 702 (citations omitted). The Court further ruled that this
“repeated use of the correspondent account shows not only transaction of business,
but an articulable nexus or substantial relationship between the transaction” and the
plaintiffs’ claims. Id. at 340, 960 NYS2d at 703. The same considerations that
informed the jurisdictional analysis in Licci underlie the forum analysis here. In
structuring his bogus f/x deals, Al Sanea counted on the appearance of
transparency offered by the New York banking system in what passed for routine
foreign exchange transactions to pull off his fraud.
Licci is a personal jurisdiction case. Yet the strength of New York’s interest
in the impact of a massive fraudulent transfer scheme on the dependability and
transparency of the banking system informs both the quality of a defendant’s
contacts for jurisdictional purposes and the degree of this State’s interest in the
dispute. Efforts to confine this interest to the personal jurisdiction context were
repudiated in Ehrlich-Bober, 49 NY2d at 582, 427 NYS2d at 609, as cited with
approval in Licci. 20 NY3d at 335-337, 960 NYS2d at 699-701.
In sum, the Appellate Division properly relied on J. Zeevi and Ehrlich-Bober
as articulating New York’s compelling interest in adjudicating disputes that
31
involve at their core the fundamental misuse of this State’s banking system, an
interest that informs forum analysis just as much as it does jurisdictional, comity,
and choice of law analyses. And it focused on that compelling interest not to
promulgate a new, bright-line rule but simply to apply longstanding New York
jurisprudence in assessing one of the key factors in forum non conveniens analysis:
the public interest of the forum in adjudicating the dispute.
2. The Nature of the Instant Dispute and Its New York Nexus
As described in detail in AHAB’s allegations, Al Sanea’s misuse of the New
York banking system was anything but incidental, tangential, or ministerial. It was
wholly dependent upon Al Sanea’s fraudulent use of the split-value, f/x structure
that only New York banks could provide. It went to the core of the fraud and was
the sole vehicle for the ultimate theft. Appellants’ strategy here, as it was below, is
to miscast AHAB’s allegations as ones centering not in New York but in the
Middle East. In appellants’ telling, this dispute is not about fraudulent misuse of
New York banks but about whether Al Sanea was authorized by AHAB to engage
in financial transactions on the partnership’s behalf. Supreme Court adopted this
false premise, announcing that the core dispute is “whether or not Al Sanea was
authorized to do what he did.” R. 24.
The Appellate Division, however, saw through Al Sanea’s attempt to
misportray this dispute. R. 1807. This dispute is not about what authority AHAB
32
gave Al Sanea as its agent to act on AHAB’s behalf, and it does not require parsing
the internal operations of a Saudi Arabian business partnership to determine the
extent of that authority. Indeed, it is conceded that AHAB granted Al Sanea
general authority to operate the Money Exchange and to engage in transactions
concerning its operation on AHAB’s behalf. Rather, this dispute is about Al
Sanea’s fraudulent use of New York bank accounts to structure and carry out
bogus f/x transactions, not on AHAB’s behalf or for its benefit, but for Al Sanea’s
own purposes. Whatever Al Sanea was authorized to do, he was not authorized to
borrow money on the strength of AHAB’s credit so he could steal it. Such conduct
can never be authorized, no more in Saudi Arabia than in New York.
As the Appellate Division recognized, improper identification of the key
issues in dispute can undermine a correct analysis of forum non conveniens.
R. 1807-08. See, e.g., Overseas Programming Co., Ltd. v Cinematographische
Commerz-Anstalt, 684 F2d 232, 235 (2d Cir 1982); R. Maganlal & Co. v M.G.
Chem. Co., Inc., 942 F2d 164, 168 (2d Cir 1991).2 Here, Al Sanea
mischaracterizes the nature of the action against him, distorting AHAB’s
allegations into ones more to his liking, in order to portray the case as centered in
Saudi Arabia rather than in New York. The issue is whether the claims actually
2 Al Sanea criticizes AHAB’s reliance on Overseas Programming on grounds that the case
makes clear that it is the trial court’s obligation to construe the operative claims and not just
accept plaintiff’s characterization of them. 684 F2d at 235 n. 7. AHAB has no quarrel with that
formulation. What is clear is that the issues are determined by plaintiff’s actual claims and not
by defendant’s mischaracterization of them.
33
made belong in New York, not whether a different set of claims would be better
adjudicated elsewhere.
Appellants nonetheless contend that the Appellate Division should not have
credited AHAB’s allegations concerning the centrality of the bogus f/x deals and
their reliance upon misuse of New York bank accounts, arguing that on a forum
non conveniens motion the court is not obliged to accept the claimant’s well-
pleaded factual allegations as true. Appellants cite no authority for this
proposition. It is dead wrong. On any preliminary motion to dismiss, the
claimant’s allegations must be accepted as true. What distinguishes a motion to
dismiss for forum non conveniens (like motions challenging personal jurisdiction
and other preliminary motions) from motions to dismiss for failure to state an
actionable claim is that on the former the parties are not limited to the allegations
of the complaint. The complaint’s allegations must be deemed true, but the parties
are permitted to submit evidence, typically by sworn affidavits, bearing on facts
specifically pertinent to the forum or other preliminary issues that are not fully
developed in the complaint’s allegations. In the forum setting, this may include
evidence concerning the location of witnesses and documents, identification of
issues of foreign law, the availability of an alternative forum to hear the dispute,
access to evidence in the alternative forum, and similar matters that typically are
not addressed within the four corners of the complaint’s allegations. But apart
34
from the submission of such evidence bearing on these forum factors, the well-
pleaded allegations of the complaint must be taken as true, as this Court has
repeatedly recognized.
This is precisely the rule applied by this Court in Ehrlich-Bober in the
comity setting and by the federal court in Ancile Inv. Co, Ltd. v Archer Daniels
Midland Co., No. 08 Civ 9492 (PAC), 2009 WL 3049604, at *1 n1 (SDNY Sept.
23, 2009), in the setting of forum non conveniens. In dealing with venue and
forum motions, it is standard federal practice to accept “[a]ll well-pleaded
allegations in the complaint bearing on the venue question generally . . . as true,
unless contradicted by the defendant’s affidavits.” 5B Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure: Civil § 1352 at 324 (3d ed
2004). The same practice is followed in New York’s courts.
Appellants are therefore wrong in their assertion that the Appellate Division
erroneously accepted AHAB’s contention that its claims in the instant action deal
with wrongdoing centered in New York and instead should have credited
appellants’ reformulation of those claims as principally involving issues of
authority centered in Saudi Arabia. The court was obliged to accept AHAB’s
formulation of its own claims and not appellants’ self-serving revision of those
claims. In considering the issue of forum non conveniens, the Appellate Division
thus properly focused on AHAB’s allegations that the fraud and theft at issue
35
occurred in New York, made possible by the systematic misuse of New York
banks, and refused to be diverted by Al Sanea’s unsupported assertion that issues
of authority and conduct in Saudi Arabia will predominate. R. 1807-08.
The nature of the wrongful conduct at issue and the strength of its
connection to New York, moreover, are not matters that depend on AHAB’s
characterizations of its claims, but on the factual allegations that squarely assert
this nexus. As detailed in the above Summary of Facts, AHAB has alleged that
New York’s banks did not simply serve as a conduit for transfer of funds, with no
other role in these transactions. The success of Al Sanea’s fraud was dependent
upon the facial appearance of regularity conferred by conducting it as a foreign
exchange transaction routinely carried out through New York banks. New York
banks regularly process such transactions, including split-value deals (R. 470),
another aspect of the structure that was essential to Al Sanea’s fraud, and it is
through New York banks alone that such split-value f/x deals involving U.S.
dollars for Saudi riyals can be conducted in such volume.
It was through these same New York banks, moreover, that Al Sanea
ultimately stole the U.S. dollar funds provided in the last of these f/x transactions,
when he transferred the funds from a BOA account that was at least nominally held
in AHAB’s name to an HSBC account in Awal’s name over which Al Sanea had
complete control. R. 14, R. 113 ¶ 26. That Al Sanea’s objective in making this
36
transfer was to gain exclusive control of the funds as against AHAB is underscored
by Al Sanea’s earlier abortive attempt to transfer them directly to his wife. R. 705
¶ 11. Al Sanea now argues that the only actionable theft took place in Bahrain,
when Awal refused AHAB’s demands for the funds, but AHAB’s complaint
alleges otherwise, that Al Sanea’s own liability arose when he ordered the funds
moved from the BOA account to the HSBC account in New York. R. 113 ¶ 26 -
R. 114 ¶ 27-28. AHAB’s separate claim against Awal – which is no longer a party
here due to its insolvency – does not negate its theft claim against Al Sanea, and
the Appellate Division properly treated that claim as centering in New York.3
The instant dispute’s nexus with New York’s banks thus has nothing in
common with the sort of tangential connection resulting from ministerial use of the
banks to conduct routine transfers of funds that characterize the cases on which
appellants rely. Cases like World Point Trading PTE, Ltd. v Credito Italiano, 225
AD2d 153, 649 NYS2d 689 (1st Dept 1996), A&M Exports v Meridien Int’l Bank,
207 AD2d 741, 616 NYS2d 621 (1st Dept 1994), First Union Nat’l Bank v
Paribas, 135 F Supp 2d 443 (SDNY 2001), and Calgarth Invs., Ltd. v Bank
3 In yet another mischaracterization, Al Sanea asserts that AHAB “insist[s] that this case is about
nothing more than a ‘theft of funds in New York’” (Al Sanea Brief at 40), yet the full sentence
from AHAB’s earlier brief out of which Al Sanea plucked this quote shows the assertion to be
false. There, AHAB contended, as it contends here, that New York has a specific and concrete
interest “in a dispute that centers on the misuse of New York banks and the theft of funds in New
York.” AHAB App. Div. Reply Brief at 9 (emphasis supplied). While theft of funds in New
York, standing alone, is a sufficient nexus justifying retention of the dispute in this forum,
AHAB’s allegations lay out a far more elaborate structural misuse of the split-value foreign
exchange transactions that New York banks uniquely provide.
37
Saderat Iran, No. 95 Civ. 5332, 1996 WL 204470 (SDNY Apr. 26, 1996), are
typical of the handful of letter of credit cases that involve foreign issuers and
foreign beneficiaries of letters of credit securing foreign purchases of goods and a
dishonor of the letter by a foreign bank, in which the sole New York involvement
is its complete non-involvement: an anticipated reimbursement of funds by a
confirming bank in New York that does not take place because of the foreign
dishonor.4 Indeed, it is a stretch even to describe the role of these New York banks
as “utterly tangential.” Appellants’ other cases are of the same stripe.
In contrast, a fair reading of the allegations of AHAB’s third-party
complaint and counterclaim can leave no doubt that Al Sanea’s misconduct here,
part of one of the largest misuses of the New York banking system in history,
fundamentally depended on New York banks for its structure and implementation
and, accordingly, is of critical interest to New York.
In sum, misuse of the New York banking system, both in structuring the f/x
deals and in the ultimate theft of funds, was the core vehicle by which this scheme
was accomplished. The Appellate Division was therefore indisputably correct in
concluding that this constituted a powerful New York nexus in which this State’s
4 AHAB has no quarrel with the legal proposition stated in the cases cited on this issue by Al
Sanea and Mashreq. Those cases are simply factually inapposite, involving disputes where the
supposed nexus to New York was that nothing actually happened here. See Citigroup Global
Mkts., Inc. v Metals Holding Corp., 45 AD3d 361, 845 NYS2d 282 (1st Dept 2007) (no New
York bank involvement; assets held by a corporate stakeholder in interpleader action); Atsco Ltd.
v Swanson, 29 AD3d 465, 816 NYS2d 31 (1st Dept 2006) (fraudulent conveyance in Malaysia
with funds sent to New York).
38
interests are paramount, and its decision as to this important Pahlavi factor did not
amount to an abuse of discretion.
B. The Appellate Division Properly Weighed the Other Pahlavi
Factors in Retaining this New York Forum.
The Appellate Division engaged in a rigorous analysis of the other Pahlavi
factors, especially those bearing on whether another forum exists where the instant
dispute “would be better adjudicated.” 62 NY2d at 479, 478 NYS2d at 599. It was
Al Sanea’s burden to demonstrate that litigation in his proposed alternative forum
“will best serve the ends of justice.” See Silver v Great Am. Ins. Co., 29 NY2d
356, 361, 328 NYS2d 398, 402 (1972). His burden could not be satisfied by
generalities; it required Al Sanea to provide “specific information” showing why
his alternative forum, Saudi Arabia, should be preferred. Banco Ambrosiano v
Artoc Bank & Trust, 62 NY2d 65, 74, 476 NYS2d 64, 68 (1984). Al Sanea utterly
failed to make this showing. Indeed, the record below unequivocally established
that Saudi Arabia cannot better adjudicate this particular international dispute.
Appellants criticize the Appellate Division for even considering this factor,
arguing variously that: (i) the availability of an adequate alternative forum is not a
prerequisite under Pahlavi; (ii) in any event, the test for availability is simply
whether the defendant is subject to process in the proposed forum and the subject
matter can be litigated there; and (iii) issues concerning genuine access to sources
of proof are federal court factors not to be applied in New York courts or, at least,
39
not “slavishly.” Each of these criticisms is baseless, and the Appellate Division
acted properly in assessing whether an adequate alternative forum is both available
and capable of deciding the instant dispute.
AHAB did not argue nor did the Appellate Division rule that identification
of an available alternative forum is an absolute prerequisite. The Pahlavi Court
was clear, however, that “[w]ithout doubt, the availability of another suitable
forum is a most important factor to be considered in ruling on a motion to dismiss
. . ..” Id. at 481, 478 NYS2d at 601 (emphasis added). The Appellate Division
properly considered this factor. R. 1810-11.
Moreover, as Pahlavi recognizes, there is much more to the analysis of this
factor than simply whether the defendant is amenable to suit and the foreign court
permits litigation of disputes of the type in issue. As Pahlavi put it, the question is
not just whether a foreign forum would entertain the dispute but whether it “would
be better adjudicated” in that forum. Id. at 479, 478 NYS2d at 599. Al Sanea
relies heavily on the First Department’s decision in Shin-Etsu Chem. Co., Ltd. v
3033 ICICI Bank Ltd., 9 AD3d 171, 777 NYS2d 69 (1st Dept 2004), as supporting
his contention that availability of an alternative forum is determined solely by
amenability to process and subject matter jurisdiction. In fact, in Shin-Etsu, the
court did not confine its inquiry to these two issues. Indeed, the court expressly
considered the procedures that the Indian courts would follow, exploring whether
40
the dispute would be subject to undue delays in that country and ruling on the basis
of expert submissions that it would not. Id. at 178-80, 777 NYS2d at 74-76. Thus
Shin-Etsu does not reject, but instead affirmatively supports, examination of the
processes and procedures of the proposed alternative forum as part of the inquiry
into whether the dispute will be “better adjudicated” there.
Like Shin-Etsu, numerous cases examine whether the rules applied in the
proposed alternative forum limit access to proof in a manner that compels the
conclusion that the dispute cannot be “better adjudicated” there. See Waterways
Ltd. v Barclays Bank PLC, 174 AD2d 324, 328, 571 NYS2d 208, 211 (1st Dept
1991); Republic of Lebanon v Sotheby’s, 167 AD2d 142, 145, 561 NYS2d 566,
568 (1st Dept 1990); Banco Nacional, 169 Misc 2d at 192, 641 NYS2d at 1012;
Creditanstalt Inv. Bank AG. v Chadbourne & Parke LLP, 4 Misc 3d 481, 485-86,
778 NYS2d 863, 866-867 (Sup Ct, NY Cnty 2004). In making this nuanced
determination, this Court frequently invokes the various private and public interest
factors recited in the United States Supreme Court’s decisions in Piper and Gulf
Oil, including the pivotal factor whether the foreign court will have access to
necessary sources of proof. Numerous forum non conveniens decisions in the New
York courts have turned on precisely this factor. See, e.g., Banco Nacional, 169
Misc 2d at 192, 641 NYS2d at 1012 (forum dismissal precluded by absence of
discovery procedures and inability “to marshall . . . proof” in Nigeria in connection
41
with an action for fraud and conspiracy) (sic); Creditanstalt, 4 Misc 3d at 485-86,
778 NYS2d at 866-867(absence of pretrial discovery, right to jury trial, and
recognition of tort of legal malpractice as making Russia an unsuitable alternative
forum).
Rather than make any real attempt to evaluate this factor, Al Sanea instead
erects another straw man, arguing that there is no requirement that the access to
sources of proof factor recognized in Piper and Gulf Oil “must be applied slavishly
by every New York court.” Al Sanea Brief at 50-51. The Appellate Division
adopted no rule of slavish application. It merely concluded that genuine access to
sources of proof – the actual ability to obtain the testimony of witnesses so the
dispute can be properly adjudicated – is highly significant to the forum analysis in
the instant case. In assessing this issue, the Appellate Division properly credited
the uncontroverted affidavit of AHAB’s expert in Saudi law showing that virtually
all of the witnesses with pertinent testimony on the issues in dispute (i) could not
be compelled personally to appear in Saudi Arabia, (ii) could not be required to
appear by deposition for use in Saudi proceedings, or (iii) would be prohibited
from testifying because of their personal interests in the dispute. R. 950-51 ¶ 19,
R. 1811. As will be discussed more fully below, this submission established that it
would be impossible to fairly and fully adjudicate this dispute in Saudi Arabia.
42
1. The Availability of Witnesses
The Appellate Division correctly found that Supreme Court “simply made
no factual findings whatsoever” on the ability to obtain testimony from witnesses
with knowledge of the dispute and who are legally competent to testify about it.
R. 1811. As the court concluded (id.):
There is no finding that witnesses subject to a travel bar in Saudi
Arabia would be precluded from testifying via some alternate means.
Similarly, and perhaps more importantly, there is no finding that the
witnesses could even testify in Saudi Arabia, Bahrain or the UAE.
AHAB proffered that two of the witnesses with the most knowledge
of the Al Sanea scheme reside in England and Los Angeles. Al Sanea
identified no witnesses in his moving brief. It was only in reply that
he listed a series of witnesses but failed to link their proposed
testimony to the allegations of the third-party complaint.
The ease of access to the testimony of key witnesses is determined by
several different considerations. First, and foremost, it required the actual
identification of who those witnesses are. Here, they are the persons directly
involved in creating and operating the bogus f/x scheme, including Al Sanea and
his primary subordinates. AHAB proffered a witness list that included the two Al
Sanea subordinates most closely involved with his operation of the Money
Exchange and especially with the f/x transactions here at issue: Mark Hayley, the
Money Exchange’s General Manager, and Glenn Stewart, the CEO of The
International Banking Corporation, which Al Sanea established to assist in his
scheme. The most important witness to Al Sanea’s fraudulent conduct, Mark
43
Hayley, lives in London, will be available for deposition, and likely will agree to
come to New York to testify.5 Glenn Stewart, another Al Sanea co-conspirator,
now lives in California and is subject to deposition in that state at the behest of a
New York court. Both are native English speakers, and neither speaks Arabic.
While Al Sanea is currently under travel restrictions in Saudi Arabia, he is
subject to jurisdiction in New York and therefore can be compelled to testify at
least by deposition or video-link. Despite his protestations, Al Sanea is a fluent
English speaker and routinely conducted these very f/x transactions in English, the
language of international finance.
In addition to these three, AHAB listed nine other non-party witnesses with
knowledge of Al Sanea’s misuse of the Money Exchange to arrange and cover up
these f/x transactions. All of these witnesses are fluent English speakers, and many
speak no Arabic.6 Three live in England, two in India, two in Bahrain and one
each in Saudi Arabia, Canada, and Jordan. R. 939-40 ¶ 12c-k. One is now
deceased. At least five of these witnesses are subject to giving evidence in a U.S.
5 Hayley, Al Sanea’s principal accomplice, later turned whistleblower, who has since moved
back to his native England, has provided an affidavit that sets forth specifically and in detail
information regarding the key witnesses in this action, their native countries, languages, and
current locations. R. 936-941.
6 Grasping at straws, appellants repeatedly refer to certain English court proceedings involving
loans made to AHAB by various English banks, arguing that AHAB sought to introduce
voluminous documents in Arabic that required translation and represented that various witnesses
would need to testify through translators. But appellants made no attempt to show that the
evidence in the English proceedings had anything to do with the unrelated currency transactions
with Mashreq, and AHAB expressly denied its relevancy.
44
action through the Hague Evidence Convention. Id. In contrast, Saudi Arabia is
not a Hague signatory, and its courts will not compel the testimony of non-party
witnesses by depositions outside of Saudi Arabia. R. 950-51 ¶ 19. The ability of
New York courts to compel testimony of foreign witnesses via letters rogatory or
international conventions is another factor that justifies retaining this action in New
York, particularly where such devices are unavailable in the competing forum.
Under New York law, a defendant who seeks dismissal on forum non
conveniens grounds must specifically identify the witnesses who he anticipates
should be called to testify and describe the substance of their testimony. See
Firegreen Ltd. v Claxton, 160 AD2d 409, 412, 553 NYS2d 765, 767 (1st Dept
1990); O’Connor v Bonanza Int’l, Inc., 129 AD2d 569, 569-70, 514 NYS2d 67,
67-68 (2d Dept 1987); Factors Etc., Inc. & Boxcar Enters, Inc. v Pro Arts, Inc.,
579 F2d 215, 218 (2d Cir 1978). Notwithstanding this requirement, when he
moved to dismiss, Al Sanea made no effort to identify any witnesses. Not until he
filed his reply brief in Supreme Court did he identify non-party witnesses he
asserts may have relevant testimony. R. 1295-1304 ¶ 5, R. 1811. But few, if any,
of Al Sanea’s purported witnesses are said to have testimony germane to the
Mashreq f/x transactions. They are proffered instead on a variety of irrelevant or
peripheral topics, such as Al Sanea’s general authority to act on AHAB’s behalf,
45
the practices of AHAB partners in executing documents, AHAB’s accounting
procedures, unspecified transactions between AHAB and Awal, and the like. Id.
More important than the mere location and language of the key witnesses is
whether they will be deemed legally competent to testify on the issues in dispute.
Plainly, all of these witnesses would be competent to testify in New York. But in
sharp contrast, as set forth in the expert affidavit of Professor Frank Vogel, the
former Director of the Islamic Legal Studies Program at Harvard Law School,
because their bias is presumed as a matter of Saudi law, the parties themselves and
their employees and agents are not deemed to be competent to testify as witnesses
on their own (or their principal’s) behalf, and any statements they make to the
Saudi court, if contested, would have to be confirmed by independent evidence.
R. 952 ¶ 23; see, e.g., Rhodes v ITT Sheraton Corp., CIV.A. 97-4530-B, 1999 WL
26874, at *2 (Mass Super Jan. 15, 1999). (“All parties [under Saudi Arabian law]
are presumed to be prejudiced in favor of themselves and therefore are not
considered to be reliable witnesses”). Thus, a Saudi court would have little, if any,
access to the substantive evidence in this complex international dispute. Al Sanea
did not challenge Professor Vogel’s submissions on these procedural aspects of
Saudi law.7
7 Al Sanea recites that Prof. Vogel opined that Saudi Arabia “maintains an effective judicial
system to adjudicate commercial disputes” (Al Sanea Brief at 47), but Al Sanea misleadingly
omits the balance of Prof. Vogel’s sentence: “yet good reasons can still exist why, for particular
46
Moreover, because Saudi Arabia’s evidentiary rules preclude testimony by
the parties on their own behalf on grounds of bias, the existence of the travel ban
on Al Sanea and AHAB’s partners does not tilt the analysis in favor of a Saudi
forum. In fact, it tilts the analysis decidedly in favor of New York, which turns out
to be the only forum in which the parties – notwithstanding the travel ban – could
testify at all. Given its ability to secure testimony through video-links or by
depositions de bene esse, New York is the one forum where sworn testimony can
most conveniently be taken from virtually all relevant witnesses.
2. The Availability of Documents
Al Sanea asserted that the documents pertinent to AHAB’s claim are in
Saudi Arabia and many are in Arabic, but he proffered no list of documents in
support of his assertion.8 In contrast, AHAB provided an affidavit listing the key
disputes, forums outside Saudi Arabia would be more appropriate or ‘better equipped,’” and
opining that this is just such a case. R. 947 ¶ 11. Al Sanea also cites several cases that have
upheld Saudi Arabia as an adequate alternative forum. These cases concerned such local matters
as breach of contract relating to construction at Riyadh International Airport, medical
malpractice at a Saudi hospital, and employment disputes in that country. None of these cases
raised issues concerning impediments to access to proof in any of those proceedings.
8 In a remarkably disingenuous statement, Al Sanea contests the Appellate Division’s
observation that he failed to specify which documents were necessary to the dispute, arguing that
the court simply “ignor[ed]” his submission of documents included at R. 989-1024. Al Sanea
Brief at 57-58. In fact, the documents he references consist solely of several powers of attorney
whereby AHAB’s principals appointed various persons to represent their interests in various
matters, only one of such powers of attorney appointing Al Sanea, and none of them concerning
the f/x transactions with Mashreq. These apparently are the documents that constitute Al
Sanea’s list.
47
documents actually pertinent to this dispute and identifying the language in which
they are written.
While there may be documents located in Saudi Arabia that shed light on Al
Sanea’s defalcations, as shown in the evidence of record below, many relevant
documents pertaining to the instant dispute are located in New York and the UAE.
The BOA and HSBC records that document the f/x transactions are all in New
York. Mashreq’s records documenting the underlying fraudulently-created credit
facilities are, presumably, in the UAE or at its branch in New York. AHAB’s own
documents relevant to the Mashreq transactions have been scanned and can be
made available in New York with little difficulty. The relevant documents were
written in English, the language of international finance.9 (R. 668 ¶ 29, R. 738-43,
R. 941 ¶¶ 15-18). Indeed, all of these documents would need to be translated into
Arabic in order to litigate these claims in Saudi Arabia or the UAE. This factor
strongly supports litigation here. See Sotheby’s, 167 AD2d at 145, 561 NYS2d at
567.
9 As is set forth in the Hayley Affidavit, the activities of the Money Exchange and AHAB’s other
financial units were conducted in English, and not only the pertinent transactional documents but
all pertinent documents are written in English, or in limited cases, side-by-side English and
Arabic. R. 941 ¶¶ 15-17.
48
3. Application of Foreign Law
Both Al Sanea and Mashreq take aim at the Appellate Division’s conclusion
that New York law will govern this dispute. That conclusion is unassailable.10
Crediting AHAB’s well-pleaded allegations that the misuse of New York’s
banking system to structure and carry out the f/x fraud and that AHAB suffered
injury from this fraud and the subsequent conversion of funds stolen from its New
York bank account, and applying a traditional “interest analysis,” the Appellate
Division’s conclusion that New York law will apply to these torts is patently
correct.
The law of the jurisdiction where the tort occurred will generally apply
because that jurisdiction has the greatest interest in regulating behavior within its
borders. Schultz v Boy Scouts of Am., 65 NY2d 189, 195, 491 NYS2d 90, 93-94
(1985). Under New York law, a tort occurs “where the last event necessary to
make the actor liable occurred.” Id., 491 NYS2d at 94. In Padula v Lilarn Props.
Corp., 84 NY2d 519, 521-22, 620 NYS2d 310, 311-312 (1994), the Court
reaffirmed Schultz, ruling that, in addition to examining relevant contacts, “interest
analysis” in the tort context depends on whether the tort law is “conduct
regulating” or “loss allocating” and, if the former, the “law of the place of the tort
10 Indeed, when Mashreq filed its complaint, it told the court that it was “entitled to the
protections of the laws of New York State.” Affirmation of Adam Finkel, Esq., in Support of
Mashreqbank’s Complaint, Dkt. No. 1, ¶ 13.
49
governs.” Accord, Edwards v Erie Coach Lines Co., 17 NY3d 306, 929 NYS2d 41
(2011). The law of fraud and theft is indisputably “conduct regulating.”
In the final throes of his elaborate Ponzi scheme, Al Sanea stole $191
million from AHAB, and this theft occurred entirely in New York. R. 114 ¶ 27.
This last event necessary to Al Sanea’s liability therefore occurred in New York,
and New York law will apply to Al Sanea’s tortious conduct. See, e.g., Banco
Nacional, 169 Misc 2d at 187, 641 NYS2d at 1009. Appellants challenge this
ruling only by improperly contesting AHAB’s allegations concerning the centrality
of the New York banking system to this fraud, even going so far as to
impermissibly dispute AHAB’s allegation that Al Sanea stole the funds in New
York. Tellingly, the Appellate Division dissenters did not take issue with the
majority’s conclusion that New York law would apply to this dispute.
Appellants’ arguments on choice of law also founder on the absence of any
showing that there is a meaningful conflict between the laws of New York and the
laws of Saudi Arabia, the UAE, or any other candidate forum. They muse that
issues could arise concerning Al Sanea’s agency and authority to act for AHAB
that would be governed by Saudi law. They raise the possibility that construction
of the Mashreq loan documents might be required and assert that they would be
governed by UAE law. These arguments are disingenuous, manufactured
contentions.
50
Al Sanea’s contention that this action will turn on principles of agency and
authority under Saudi law is incomprehensible. Whatever authority Al Sanea had
under Saudi law as AHAB’s agent, there is no basis for the suggestion that Saudi
law conferred on him authority to plunder the assets of the partnership. Indeed, he
provided no evidence below as to how Saudi law on agency might differ from New
York law on any issues actually in dispute. This is hardly surprising. No system
of law permits an agent to loot his employer’s company, and, in any event, New
York courts would never apply such a rule. Similarly, Mashreq made no attempt
to identify peculiar UAE rules of contract construction that would come into play
in interpreting the loan documents under which the f/x deals were conducted.
Indeed, those loan documents were specifically drafted and written in English to
follow form to New York law governing foreign exchange transactions.
In supporting his motion, it was incumbent upon Al Sanea to show an actual
conflict with New York law and that the New York court would have to apply
foreign law. He did not even attempt such a showing. In short, there are no issues
of foreign law that would provide support for dismissal on grounds of forum non
conveniens.
4. Interests of Saudi Arabia in this Dispute
Finally as to forum non conveniens factors, Al Sanea urges that the
Appellate Division ignored Saudi Arabia’s critical interest in this dispute in
51
“resolving its own affairs,” again citing Shin-Etsu, 9 AD3d at 178, 777 NYS2d at
74. Al Sanea points to the fact that the Saudi government formed a special
committee to investigate the dispute, demonstrating that this is a “matter of
significant public concern with substantial implications for the Saudi economy at
large.” Al Sanea Brief at 49-50. There is utterly no record support for these
overblown statements.
To be sure, the AHAB partners and Al Sanea are Saudi citizens. But the
instant suit is limited to the f/x transactions that occurred in New York and the
theft of those funds in New York. Neither the Saudi government nor its special
committee has expressed any concern with this dispute. The scope of the Saudi
committee’s investigation is restricted to the parties’ dealings with Saudi banks.
R. 699 ¶ 14-702. Indeed, the committee eschewed any involvement in dealings by
AHAB and Al Sanea with non-Saudi banks like Mashreq. Id. Whatever interest
Saudi Arabia may be said to have in disputes between Saudi citizens regarding
Saudi banking transactions, it hardly trumps the specific and concrete interest New
York has in a dispute that centers on the misuse of New York banks and the theft
of funds in New York.
In sum, the Appellate Division addressed the proper factors under Pahlavi
and exercised its discretion in weighing them. Its decision that AHAB’s third-
52
party complaint against Al Sanea should be retained in the New York courts was in
no sense an abuse of its discretion, and it should be affirmed.
II. The Appellate Division Correctly Concluded that Supreme Court
Engaged in Improper Sua Sponte Action in Dismissing the First-Party
Claims.
When it dismissed the third-party claim on forum grounds, Supreme Court
decided, on its own initiative, also to dismiss the first-party claims. The Appellate
Division properly ruled that Supreme Court’s sua sponte action violated this
Court’s decision in VSL Corp., 70 NY2d at 949, 524 NYS2d at 671; R. 1801.
The Appellate Division’s decision should be sustained on multiple grounds.
A. If the Court Affirms Retention of the Third-Party Claim, Any
Argument that the First-Party Claims Should Be Dismissed Is
Rendered Moot.
The Court need not reach the issue of sua sponte action if it affirms the
decision below to keep the third-party claim in this forum. This is because it is
undisputed that no party requested, and Supreme Court did not consider on its own
initiative or otherwise, the dismissal of the first-party claims separately from and
independent of the third-party claim. In his self-appointed role as an amicus, Al
Sanea’s counsel suggested that Supreme Court might wish to consider dismissing
the whole case if it decided to dismiss the third-party claim. For its part, Mashreq
ultimately advised that it would have no objection to having its complaint
dismissed if the third-party complaint were also dismissed. No consideration was
53
asked or given to dismissing the first-party claims alone. Hence, if this Court
affirms the retention in New York of AHAB’s third-party claim, no issue will
remain in respect of the first-party claims.
B. Neither Mashreq Nor Al Sanea Has Standing to Appeal the
Reinstatement of the First-Party Claims.
In all events, appellants have no standing to challenge the Appellate
Division’s decision to retain the first-party claims in this forum. CPLR 5511
provides that only “[a]n aggrieved party or a person substituted for him may appeal
from any appealable judgment or order.” Mashreq is not aggrieved by a decision
finding that its own complaint was properly filed in a New York court. Sirius Am.
Ins. Co. v Vigo Const. Corp., 48 AD3d 450, 451, 852 NYS2d 176, 177 (2d Dept
2008). And since Al Sanea is not a party to the first-party claims, he also is not
aggrieved by the Appellate Division’s disposition of those claims. D’Ambrosio v
City of New York, 55 NY2d 454, 459-60, 450 NYS2d 149, 150-151 (1982); see
Arthur Karger, Powers of the New York Court of Appeals, § 11:6 (3d ed rev 2005).
Mashreq, which consistently argued in Supreme Court that its complaint
should not be dismissed on forum grounds, was undoubtedly “aggrieved” in the
sense utilized in the CLPR by Supreme Court’s original dismissal of its complaint.
Mashreq was no longer an “aggrieved party” within the meaning of CPLR 5511,
however, when the Appellate Division reversed Supreme Court’s dismissal. To the
contrary, that decision upheld the very position Mashreq took in Supreme Court.
54
The fact that Mashreq felt that subsequent developments in the parallel
proceedings it instituted in Dubai appeared to be favorable and caused it to
reconsider its forum preferences did not turn Mashreq into an aggrieved party for
purposes of this appeal. Whether a party is aggrieved for purposes of the right to
appeal is determined by the party’s position in the lower court, not by the party’s
later change of heart leading it to wish to reverse positions. See Daniels v City of
New York, 7 NY3d 825, 822 NYS2d 753 (2006) (party which did not appeal to
Appellate Division is not a party aggrieved); Hecht v City of New York, 60 NY2d
57, 61, 467 NYS2d 187 (1983) (appeal is limited to the provisions of the judgment
that actually aggrieve the appellant).
For the same reason, Mashreq cannot be considered an aggrieved party with
respect to the reinstatement of AHAB’s counterclaim. In arguing that its own
complaint was properly before the New York forum that Mashreq itself had
selected, Mashreq was in no position to argue that AHAB’s counterclaim should
nonetheless be carved off and sent to a different forum, and, indeed, Mashreq
never made such an argument. Mashreq is also not aggrieved by the Appellate
Division’s ruling that Al Sanea is properly sued in New York, because the
presence or absence of Al Sanea is of no import to Mashreq. Mahmood v Gutman,
81 AD3d 792, 916 NYS2d 802 (2d Dept 2011) (plaintiff was not an aggrieved
party with regard to the trial court’s dismissal of the third-party complaint). In
55
short, Mashreq has no standing to be heard on any issue in the instant appeal. By
the same token, Al Sanea cannot be aggrieved by any disposition of the first-party
action. Duffy v Horton Mem. Hosp., 66 NY2d 473, 476 n. 3, 497 NYS2d 890, 892
n. 3 (1985) (where the third-party complaint is not affected, the third-parties “are
not parties aggrieved, and their appeal should be dismissed”).
Accordingly, as neither Mashreq nor Al Sanea is an aggrieved party in
respect of the retention of the first-party claims, whether those claim should have
been reinstated is not properly before this Court. AHAB respectfully submits that
the judgment of the Appellate Division on this issue should be affirmed on this
ground alone.
C. Supreme Court Improperly Acted Sua Sponte in Dismissing the
First-Party Claims.
1. The Procedural Record
It is uncontested that no party ever requested, by formal motion or
otherwise, that Supreme Court dismiss the first-party claims on forum grounds. In
their breezy review of the procedural record, appellants argue that the issue was
“raised” before Supreme Court, but they rather carefully avoid focusing on the fact
that it was Supreme Court that raised it. They also argue that, in all events, the
issue was fully and fairly briefed, but they point to nothing in those briefs that
would substantiate that contention.
56
As appellants note, there were six briefs filed in Supreme Court on the issue
of forum non conveniens. All of them addressed the disposition of AHAB’s third-
party claim against Al Sanea. Al Sanea’s opening brief expressly was limited to
the dismissal of the third-party claim. In it, he even stressed that AHAB’s
counterclaims against Mashreq “have no bearing” on “whether this dispute,
between AHAB and Mr. Al-Sanea, should be litigated in Saudi Arabia rather than
New York.” Al Sanea Mem., Dkt. No. 44, at 6 n 6. AHAB filed an opposition
brief addressed to Al Sanea’s motion, and Al Sanea filed a reply. Having no
interest in the dispute over the third-party claim, Mashreq did not participate in the
briefing.
At a hearing on January 5, 2010, after the briefing was closed,
notwithstanding the statement by Mashreq’s counsel that he had not participated in
the briefing on Al Sanea’s motion because “no one has made a forum non motion
against my client Mashreqbank,” the court asked to hear from Mashreq on Al
Sanea’s motion. Mashreq then filed its own brief arguing that, whatever might be
done with the third-party complaint, its own case should not be dismissed.
Mashreq asserted that New York is the “natural forum” for resolution of its claims,
arguing at length that the suit belongs here (Mashreq Mem., Dkt. No. 103, at 6-8,
citations omitted):
New York was and still is a natural forum for Mashreq to bring its
straightforward claims against AHAB… New York courts defer to a
57
plaintiff’s choice of forum ‘absent a balance of factors strongly
favoring’ dismissal... AHAB also expressly agrees that New York is a
convenient forum to litigate Mashreq’s claims... Nor will Mashreq’s
claims against AHAB require the translation of many documents or
testimony from Arabic to English… Mashreq’s claims…do not
implicate complex issues of foreign law…
AHAB responded to Mashreq’s brief, noting that “[a]s Mashreq’s brief
makes clear, New York is the proper forum for all aspects of this dispute” and
commenting that Mashreq’s position “in no way suggest[s] that New York is an
inconvenient forum for litigation of the counterclaim.” AHAB Mem., Dkt. No.
112, at 1 n. 1. In a subsequent reply, Mashreq affirmed that “New York is a proper
forum” for its first-party claim but, for the first time, offered that, if the court were
to dismiss the third-party complaint, “Mashreq would not object to litigating its
breach-of-contract claims against AHAB and the AHAB partners in the UAE.”
Reply Mem., Dkt. No. 115, at 3.
In sum, Mashreq never asserted that New York is an inconvenient forum. It
never moved or argued in favor of a dismissal of the first-party claims on forum
non conveniens grounds. It never conceded that Al Sanea’s proposed alternative
forum, Saudi Arabia, would be appropriate for Mashreq’s own complaint. Indeed,
when the court sought Mashreq’s views on the propriety of the New York forum –
virtually inviting a motion to dismiss – Mashreq explicitly stated that it continued
to view New York as an appropriate forum. From beginning to end, it urged that
New York is a proper forum for these claims. For his own part, Al Sanea himself
58
never moved to dismiss the first-party claims, despite every opportunity to do so.
At most, Al Sanea, acting as a self-announced amicus, simply invited Supreme
Court to act on its own initiative to dismiss the entire action. And that is precisely
what Supreme Court did.
2. The Legal Effect of this Sua Sponte Action
The Appellate Division ruled that, on this record, the dismissal of the
Mashreq-AHAB dispute on forum grounds was reversible error, in that Supreme
Court improperly acted on its on motion. In doing so, it followed this Court’s
holding in VSL Corp., which instructs that a court may not invoke the doctrine of
forum non conveniens except on motion of a party. VSL Corp., 70 NY2d at 949,
524 NYS2d at 671. Although lower court decisions following VSL Corp. have
held that if there can be substantive compliance with its directive, even in the
absence of a formal motion, this standard, too, was not satisfied here. The parties’
briefs and arguments focused on the third-party claim and paid scant attention to
whether the first-party claims satisfied the Pahlavi factors.
Appellants rely heavily on two cases construing VSL Corp. In Banco Do
Estado De Sao Paulo, S.A. v Mendes Jr. Int’l Co., 249 AD2d 137, 138-39, 672
NYS2d 28, 28-29 (1st Dept 1998), the plaintiff styled its motion as one for
summary judgment on defendant’s unrelated counterclaims but did not formally
specify forum non conveniens as a ground for dismissal, although it had raised it as
59
an affirmative defense. Nonetheless, in its full briefing and argument, plaintiff
clearly sought a forum-based dismissal of the counterclaims. Id. The Appellate
Division found that VSL’s requirement was met because the plaintiff, not Supreme
Court, had put the forum issue into dispute, framing forum non conveniens as “a
clearly articulated motif of plaintiff’s arguments in the motion proceedings.” Id. at
139, 672 NYS2d at 29. Similarly, in Matter of Smith v Miller, 237 AD2d 294, 295,
654 NYS2d 167, 168 (2d Dept 1997), the Appellate Division permitted Supreme
Court to consider a forum issue without a formal motion having been made, not
because it had the authority to do so sua sponte, but on the ground that “the
doctrine was raised before the court, and the parties contested the matter.”11
Here, by contrast, the sole “motif” of Al Sanea’s motion was the propriety of
a New York forum for AHAB’s third-party claim alone, with Mashreq repeatedly
insisting that New York is the proper forum for its first-party claim. While Al
Sanea may have had the right to move to dismiss the entire proceeding, see, e.g.,
Imperial Imports Co. v Neu & Sons, 161 AD2d 411, 555 NYS2d 323 (1st Dept
1990), that did not happen here. Nor is the need for such a motion, formal or
informal, obviated by the trial court affording the parties “a full and fair
opportunity to litigate the issue,” which is the test that the dissenting justices
proposed. R. 1819. First, that is not the test under VSL Corp., which holds
11 The half-page opinion in Smith provides little insight into how the issue was raised, so its
precedential value is limited. Moreover, the Appellate Division reversed the forum dismissal.
60
unambiguously that the court may dismiss “only upon the motion of a party” and,
further, that “a court does not have the authority to invoke the doctrine on its own
motion,” VSL Corp., 70 NY2d at 949, 524 NYS2d at 671 (emphasis supplied).
Second, the proceedings below did not satisfy even this more lenient standard in
respect to whether the first-party claims should be dismissed
There is no reason to modify the VSL rule here. In this case, briefing on the
forum non conveniens issue as respects the third-party claim took place over a
period of six months. Three briefs were filed; the court discussed the issue with
counsel in open court, and the court expressed its view that perhaps the entire case
could be disposed of on forum grounds; then three more briefs were filed, in which
Mashreq repeatedly contended that New York was a proper forum, and Al Sanea
never amended its motion to include a request to dismiss the primary action.
Mashreq and Al Sanea had every opportunity to seek dismissal of the first-party
claims on forum grounds but did not.
Far from being an “inflexible” reading of VSL, this case demonstrates the
beneficial effects of the rule. A rule directing parties to take an unequivocal
position by making a motion is vastly preferable to a rule which permits counsel to
hedge their bets, leaving a window open to argue later that, in hindsight, the parties
had a “full and fair opportunity” to litigate. R. 1819. That sort of rule only
encourages disputes about what “really” happened when the simple act of making
61
a motion would have resolved all doubt. Mashreq’s slow-motion change of
position over the course of this case cannot erase its own advocacy in favor of New
York as a proper forum.
In all events, the proceedings before Supreme Court as respects the first-
party claims did not satisfy any sort of “fall and fair opportunity to litigate”
standard. AHAB was never faced with a brief from either Mashreq or Al Sanea
that advocated a dismissal of the entire action. And while appellants contend here
that the parties’ briefs fully addressed whether the first-party claims should be
dismissed, they have not pointed to any portions of their briefs that actually discuss
that issue. In fact, Mashreq’s briefs marshaled the Pahlavi factors favoring
retaining its complaint in New York, and it offered no evidence concerning the
ability of the UAE courts – to which Mashreq advised it would not object to being
sent – to hear the various claims. As to AHAB’s counterclaim, Mashreq asserted
that the UAE would not even hear it because its courts would consider it non-
actionable absent a prior criminal conviction of Mashreq in that country. Mashreq
Brief, Dkt. No. 103, at 5. Mashreq made no attempt to review access in the UAE
courts to sources of proof, availability of witnesses and documents in that forum,
the impact of choice of law issues, or any of the other Pahlavi factors as effects the
UAE as a potential alternative forum. Mashreq further asserted that Saudi Arabia
62
was not an alternative forum for the first-party claims because, Mashreq
maintained, it was not subject to jurisdiction of Saudi courts. R. 1468.
Similarly, Al Sanea’s briefs are largely devoid of any discussion of the
propriety of dismissing the first-party claims on forum grounds, not surprisingly,
given that he had no interest in them. His submissions, like AHAB’s responses,
dealt only with whether Saudi Arabia is an appropriate forum for the third-party
claim. For the first time in this Court, Al Sanea argues that all of the parties’
claims can be heard in a single forum, either Saudi Arabia or the UAE. Yet, his
assertion that Mashreq could be sued in Saudi Arabia was flatly contradicted by
Mashreq’s counsel below. And his own expressed willingness to defend AHAB’s
claims in the UAE, which he belatedly announced for the first time in this Court
(Al Sanea Brief at 52 n. 18), cannot supply a basis for reversal of the decision
below.
In short, any suggestion that a “full and fair opportunity” standard should
apply here is untenable. The invocation of a mere slogan, one lacking in any real
substance in the circumstances of this case, is no substitute for analysis. There is
no basis, procedurally or substantively, for reversing the Appellate Division’s
decision to reinstate the first-party claims in this New York forum.
63
III. The Court Had Personal Jurisdiction Over Al Sanea.
Al Sanea’s final argument is that the decision below should be reversed
because the court lacked personal jurisdiction over him. Given the extensive
allegations of his personal conduct, directly or through agents he controls, to
misuse New York banks to structure his f/x fraud and to steal $191 million from
one of those banks, this argument is preposterous. It was rejected by Supreme
Court and the Appellate Division, both majority and dissent, and it should be
rejected here. On this issue, even Al Sanea cannot argue that J. Zeevi & Sons is
inapposite.
CONCLUSION
For the foregoing reasons, Defendant-Respondent Third-Party Plaintiff-
Respondent Ahmad Hamad Al Gosaibi & Brothers Co. respectfully submits that
the decision of the Appellate Division should be affirmed.
Respectfully submitted,
L1i:CHPL~:L
Bruce R. Grace
Eric L. Lewis
1899 Pennsylvania Ave., NW, Suite 600
Washington, DC 20006
(202) 833-8900
Bruce. Grace@lewisbaach.com
Eric.Lewis@lewisbaach.com
405 Lexington Ave., 32nd Floor, Suite A
New York, NY 10174
(212) 826-7001
Attorneysfor Defendant-Respondent/
Third-Party Plaintiff-Respondent
Dated: September 12, 2013
64