Mashreqbank PSC, Appellant,v.Ahmed Hamad A1 Gosaibi & Brothers Company, Respondent.---------------------------------Ahmed Hamad Al Gosaibi & Brothers Company, Third-Party Respondent, v. Maan Abdul Waheed Al Sanea, Third-Party Appellant, Awal Bank BSC, Third-Party Defendant.

Brief

N.Y.Feb 19, 2014

APL-2013-00007 To Be Argued By: ERIC L. LEWIS New York County Clerk's Index Nos. 601650/09 & 590643/09 APPELLATE DIVISION-FIRST DEPARTMENT Index No. 601650/09 MASHREQBANK PSC, Plaintiff-Respondent, -against- AHMED HAMAD AL GoSAIBI & BROTHERS COMPANY, Defendant-Appellant. Index No. 590643/09 AHMED HAMAD AL GoSAIBI & BROTHERS COMPANY, Third-Party Plaintiff-Appellant, -against- MAAN ABDUL WAHEED AL SANEA, Third-Party Defendant-Respondent, AWAL BANK BSC, Third-Party Defendant. BRIEF FOR DEFENDANT-APPELLANT! THIRD-PARTY PLAINTIFF-APPELLANT ERIC L. LEWIS BAACH ROBINSON & LEWIS PLLC 1201 F Street, NW, Suite 500 Washington, D.C. 20004 (202) 833-8900 445 Park Avenue New York, N.Y. 10022 (212) 826-7001 eric.lewis@baachrobinson .com Attorneys for Defendant-A ppellant/ Third-Party Plaintiff-Appellant REPRODUCED ON RECYCLED PAPER TABLE OF CONTENTS Page TABLE OF AUTHORITIES............................................................11i QUESTIONS PRESENTED ............................................................ 1 PRELIMINARY STATEMENT.......................................................... 3 STATEMENT OF THE CASE............................................................ 9 1. Factual Background ......................................................... 9 11. Procedural Background.................................................... 12 ARGUMENT .............................................................................. 17 1. The Court Had No Authority to Dismiss the First-Party Actions Sua Sponte on Forum Non Conveniens Grounds....................... 18 11. Dismissal of the Third-Party Action on Forum Grounds Was Also Thereby Improper Since It Is Inseparably Connected to the First-Party Actions.......................................................... 21 111. The Court Misapplied the Pahlavi Factors in Dismissing this Case ..................................................................... 22 A. The Court Failed to Consider this State's Compelling Interest in Policing the Misuse of New York's Banking System ............................................................... 23 B. The Court Failed to Determine Whether There is an Alternative Forum Where These Claims "Would be Better Adjudicated."......................................................... 26 C. The Pahlavi Factors Do Not Support Dismissal of the Actions in Favor of Saudi Arabia and/or the UAE............. 29 1. The Location and Language of Witnesses ............... 31 2. The Location and Language of Documents.............. 36 3. Access to Witnesses and Documents..................... 37 4. Controlling Law ............................................. 42 D. The Court's Analysis of the Forum Non Conveniens Factors Was Based on a False Premise as to the Nature of AHAB's Claims ................................................................ 44 IV. The Court Improperly Precluded AHAB from Taking Forum-Related Discovery in Advance of any Ruling on Al Sanca's Motion.......................................................... 47 CONCLUSION............................................................................ 51 TABLE OF AUTHORITIES rage CASES Am. Banknote Corp. v Daniele, 45 AD3d 338 (1st Dept. 2007) ................ 18, 51 Am. Home Assurance Co. v. Ins. Corp of Ireland Ltd., 603 F Supp 636 (S.D.N.Y. 1984).................................................................... 21 Amigo Foods Corp. v. Marine Midland Bane-N. Y, 3 9 NY2d 3 91 (1976) ............................................................................... 23 Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Ltd., 62 NY2d 65 (1984) ............................................................................... 27 Banco Nacional Ultramarino, S.A. v. Chan, 169 Misc 2d 182 (Sup. Ct. New York Cty. 1996), aff'd 240 AD2d 25 3 (1 st Dept. 1997)....passim Broida v. Bancroft, 103 AD2d 88 (2d Dept. 1984).................................... 18 Creditanstalt Inv. Bank v. Chadbourne & Parke LLP, 4 Misc 3 d 4 81 (Sup. Ct. New York Cty. 2004).............................................. 29, 36 Excel Shipping Corp. v. Seatrain Int'l S.A., 584 F Supp 734 (E.D.N.Y. 1984) ............................................................................... 21 Factors Etc., Inc. & Boxcar Enters. Inc. v. Pro Arts, Inc., 579 F2d 215 (2d Cir. 1978) ...................................................................... 33 Firegreen Ltd. v. Claxton, 160 AD2d 409 (1 st Dept. 1990)......................... 33 Fire quench Inc. v. Kaplan, 25 6 AD2d 213 (1 st Dept. 199 8)......................... 22 Garmendia v. O'Neill, 46 AD3 d 3 61 (1 st Dept. 2007)................................ 49 Gulf Oil Corp. v. Gilbert, 330 US 501 (1947) ..................................... 29, 30 Hayne v. Darden Jr., No. 600971/05, 2005 NY Misc LEXIS 3601 (Sup. Ct. New York Cty. Dec. 6, 2005) ......................................... 51 In re Air Crash Near Nantucket Island, No. 00-MDL-1 344, 2004 US Dist LEXIS 16085 (E.D.N.Y. Aug. 16, 2004).................................. 28 In re Bernz (Widscht), 13 9 AD2d 444 (1 st Dept. 19 88)............................... 18 In re Daniel, 181 Misc 2d 941 (New York Civ. Ct. 1999)........................... 22 Indosuez Int'l Fin. B. V v. Nat'l. Reserve Bank, 279 AD2d 40 8 (1 st Dept. 200 1), aff'd 98 NY2d 23 8 (2002)......................................... 24 Intertec Contracting A/S v. Turner Steiner Int'l S.A., 6 AD3d 1 (1 st Dept. 2004)......................................................................... 18 Islamic Republic of Iran v. Pahlavi, 62 NY~d 474 (1984) .................... passim J Zeevi & Sons, Ltd v. Grindlays Bank (Uganda) Ltd., 37 NY2d 220 (1975)....................................................................... 16, 24, 25 Kings brook Jewish Med Ctr. v. Allstate Ins. Co., 61 AD3 d 13 (2d Dept. 2009)......................................................................... 33 Kissimmee Mem 'l Hosp. v. Wilson, 188 AD2d 802 (3d Dept. 1992) .............. 21 Martinez v. Patel, 126 Misc 2d 985 (Sup. Ct. Kings Cty. 1985).................... 50 Mionis v. Bank Julius Baer & Co., 9 AD3 d 280 (1 st Dept. 2004) .................. 18 O'Connor v. Bonanza Int'l, Inc., 129 AD2d 569 (2d Dept. 1987) .................. 33 Overseas Programming Co. v. Cinematographisce Commerz-Anstalt, 684 F2d 232 (2d Cir. 1982)....................................................... 41 Perez v. N. Y Housing Auth., 47 AD3 d 505 (1 st Dept. 2008) ....................... 33 Perkow v. Frank W, Winne & Sons, Inc., 3 6 AD3 d 1189 (3 d Dept. 2007) ............................................................................... 21 Peterson v. Spartan Indus., Inc., 33 NY2d 463 (1974) .......................... 49, 50 Piper Aircraft Co. v. Reyno, 454 US 235 (199 1) ...................................... 29 Plesch v. Ban que Nationale de la Republique d'Haiti, 273 AD 224 (1st Dept. 1948).................................................................... 43 R. Maganlal & Co. v. MG. Chem. Co., 942 F2d 164 (2d Cir. 199 1)............... 41 Republic of Lebanon v. Sotheby's, 167 AD2d 142 (1st Dept. 1990)..36, 37,38, 42 Rhodes v. ITT Sheraton Corp., No. 97-4530-B, 1999 Mass. Super. LEXIS 2 (Mass. Super. Ct. Jan. 15, 1999) ...................................... 39 Rivera de Enamorado v. Central Am. Steamship Agency, Inc., 160 AD2d 182 (1 st Dept. 1990) .............................................. 49,50,51 Schultz v. Boy Scouts ofAm., 65 NY2d 189 (1985).................................... 43 Silver v. Great Am. Ins. Co., 29 NY2d 3 56 (1972).................................... 27 Todtman, Young, Tunic, Nachamie, Hendler, Spizz & Dro gin, PC v. Richardson, 231 AD2d 1 (1 st Dept. 1997) ...................................... 18 Van Deventer v. CS SCF Mgmt. Ltd., 37 AD3d 280 (1 st Dept. 2007)............. 21 VSL Corp v. Dunes Hotel & Casinos, Inc., 70 NY2d 948 (1988)................ 5, 18 Waterways Ltd. v. Barclays Bank PLC, 174 AD2d 324 (1 st Dept. 1991)............................................................................ 17,42 Wells Fargo Asia Ltd v. Citibank, N.A., 93 6 F2d 723 (2d Cir. 199 1).............. 24 RULES CPLR 327 ................................................................................. 18 CPLR 3214(b) ............................................................................. 49 Uniform Rules for Trial Court (22NYCRR) § 202.70 (11 (d)) ...................... 49 Uniform Rules for Trial Court Practices for Part 56 6 ............................. 49 OTHER AUTHORITIES 6A Carmody-Wait 2d § 38:115 (2011).................................................. 51 7B McKinney's Consol. Laws of N.Y. Ann. Commentary CPLR 3211:03211:48 (McKinney 2011)............................................... 51 QUESTIONS PRESENTED Does Supreme Court have the power to dismiss sua sponte a complaint and counterclaim on forum non conveniens grounds where neither the plaintiff nor the defendant/counterclaimant moves for such dismissal and no record is developed concerning various forum factors pertinent to such a dismissal? The court below answered (implicitly through its dismissal) in the affirmative. Appellant submits that it should have answered in the negative. 2. If Supreme Court lacks the power to dismiss sua sponte first-party actions on forum non conveniens grounds, may it nonetheless dismiss a third-party action on such grounds, where that action arises out of the same factual matrix as the first-party actions? The court below dismissed all of the actions. Appellant submits that it should not have dismissed any of the actions. 3. Is an action properly dismissed on forum non conveniens grounds when it alleges: (i) the massive misuse of the New York banking system as the linchpin of a multi-billion dollar fraud, (ii) resulting in conversion of funds in New York, (iii) where Supreme Court has far superior access to sources of proof from the far-flung witnesses and documents pertinent to the action, (iv) New York law would apply to the fraud and conversion alleged, and (v) the alternative fora identified by the court could not effectively adjudicate the dispute? The court below answered the question in the affirmative. Appellant submits that it should have answered in the negative. 4. Before ruling on a forum non conveniens motion, where the party opposing the motion has properly put in issue facts supporting denial of the motion, should Supreme Court allow the party to take appropriate forum-related discovery? The court below refused to permit such discovery. Appellant submits that forum discovery should have been permitted. PRELIMINARY STATEMENT This appeal raises important issues concerning whether a forum non conveniens dismissal is proper in circumstances where the New York banking system is misused as the vehicle to commit massive fraud and conversion of funds in this State. Mashreqbank PSC ("Mashreq"), a Dubai-based bank with offices in New York, filed the instant action against Ahmad Hamad Algosaibi & Brothers Co. ("AHIAB"), a Saudi Arabian family business partnership. Mashreq's complaint against AHAB sought recovery on a $150 million debt arising out of a U.S. dollar foreign exchange transaction in New York. Subsequently, Al-AB filed a counterclaim 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 was suing. AHAB's third- party complaint alleged that the Mashreq debt was 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 in New York the funds Mashreq had loaned. AHAB also counterclaimed against Mashreq for acting in concert with Al Sanea in furtherance of his unlawful scheme. On Al Sanea's motion, Supreme Court, County of New York, the Honorable Richard B. Lowe, 111, dismissed AHAB's third-party complaint on grounds of forum non conveniens. Notwithstanding that none of the parties had moved for dismissal of Mashreq's first-party complaint or AHAB's counterclaim, the court, acting sua sponte, also dismissed these first-party actions on the same grounds. AHAB hereby appeals both decisions. The court's sua sponte dismissal of the first-party actions was plain error. Not only had none of the parties moved for dismissal of these actions, Mashreq and AHAB had affirmatively argued that the complaint and counterclaim were properly brought in New York. As a consequence, none of the parties sought to develop a record as to the forum non conveniens factors applicable to these first- party actions!' Although Mashreq subsequently informed the court that it had commenced a later-filed action against AHAB in the United Arab Emirates ("4UAE"), it provided the court with no evidence concerning the legal procedures applicable to that proceeding, access to testimony and documents in that court, or the general convenience and efficiency of the UAE as an alternative forum. Moreover, as to AHAB's counterclaim, the only evidence before the court was that a UA-E court would not even hear the counterclaim. Despite this evidentiary 1 Al Sanea's motion was expressly limited to the dismissal of the third-party complaint. (R. 65 T 1). vacuum, the court below dismissed the entire proceeding. Yet under VSL Corp v. Dunes Hotel & Casinos, Inc., 70 NY2d 948 (1988), Supreme Court has no authority on its own motion to dismiss an action, in whole or in part, on forum non conveniens grounds. The court compounded this error by its erroneous dismissal of AHAB's third-party complaint. When a first-party action is properly before the court, it is error to dismiss on forum grounds a third-party complaint that is related to the first-party action. Moreover, had the court properly considered the factors set out by the Court of Appeals in Islamic Republic of Iran v. Pahiavi, 62 NY2d 474 (1984), it would have been evident that neither the first-party actions nor the third- party action should have been dismissed. As set out in AHAB's counterclaim and third-party complaint, Al Sanea's Ponzi scheme, extraordinary in scope but classic in design, necessarily depended on the wholesale use and abuse of New York banking facilities and involved hundreds of currency transactions in New York where billions of U.S. dollars were purchased. Virtually all of the financial conduct, including the currency transactions and conversion of funds, took place, in whole or in part, in New York. Al Sanea's scheme relied on forged documents bearing the apparent signatures of AHAB's chairman. Exercising total control over the money he raised through the improper use of AHAB's credit, Al Sanea used the funds in one of two ways - either to repay prior improper borrowings (in a typical Ponzi arrangement) or to misappropriate the funds to his own personal use. This Court has 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 182, 185 (Sup. Ct. New York Cty. 1996), aff'd 240 AD2d 253 (1st Dept. 1997). The lower court had 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 (id. at 188): 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. The court then used a vivid and apt analogy in explaining its decision to keep the case in New York (id at 188): 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 20th 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. 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 plainly an appropriate forum in which to hold him liable for the damages caused by his criminal conduct in this State. As set forth in the counterclaim, Mashreq assisted Al Sanea by funding his scheme through what were portrayed as foreign exchange transactions but, in fact, were highly unusual short-term loans at extraordinarily high interest rates through which Mashreq advanced billions of U.S. dollars, over a four year period, to Al Sanea in New York. Yet the court below, in its haste to dismiss this case, essentially ignored this compelling New York nexus, misfocusing instead on the planning Al Sanea had conducted outside this State, effectively fixing its gaze on Al Sanea's "boat beyond the three mile limit," while ignoring his tortious conduct onshore in New York. Seemingly preoccupied by the prospect of overseeing a suit involving Middle Eastern parties, the court paid little attention to the fact that the locus of the transaction was New York. Even before any of the opposing briefs had been filed, the court signaled its fuindamental attitude in these words: THE COURT: I find it really incredible. Everyone here represents somebody over there. All of the parties involved, all of the witnesses, all of the documents which have to be translated from Arabic to English, and then I've got to apply in at least some of the actions Saudi law for transactions that occurred between -- are all the parties Saudis or -- MR. LEWIS: No. THE COURT: -- they are Arab Emirates, right? MR. BOCCUZZI: Mashreq is Dubai, which is United Arab Emirates, and has a branch in New York. THE COURT: But you heard of my stellar, you know, judicial acumen. You've decided, hey, let's go to Judge Lowe. (R. 657). But the fact that the parties are "somebody over there" is no basis to dismiss an action otherwise centered in New York. This is particularly so when at its core, the case concerns a fraudulent scheme using U.S. dollar currency transactions, New York banking facilities and a theft from a bank account in New York. The decision to dismiss the actions and send the parties somewhere else (the lower court did not really decide where) to litigate the actions, together or separately, as best they can, violates the Banco Nacional blueprint for forum non conveniens analysis in circumstances where misuse of New York banks is central to the commission of a financial crime in this state. A fraudster should not be permitted to launder and convert billions of dollars in New York and then claim to be "home safe" because he planned the conversion from beyond this State's shores. The decision below should be reversed. STATEMENT OF THE CASE 1. Factual Background In 1981, Maan Al Sanca married into the prominent Algosaibi family. (R. 108 T 12). The Algosaibis owned AHAB, a general partnership, located in Saudi Arabia. (R. 107-08 11). At that time, as was customary in the Algosaibi family, Al Sanea was given a portion of AHAB's business to manage - in his case, a division of AHAB known as the Money Exchange, which was used primarily to provide remittance and foreign exchange services to foreign workers in Saudi Arabia. (R. 107-08 TT 11-12). Al Sanea returned this kindness by fraudulently usurping AHAB's credit and systematically plundering its assets in order surreptitiously to finance his own separate business empire. (R. 104-05 3). Al Sanea's scheme to bilk his benefactor AHAB was complex and multifaceted. While it began in Saudi Arabia, its reach became global. When it finally unraveled, as all Ponzi schemes ultimately do, it left AHAB exposed to nearly ten billion dollars in claims from banks worldwide. (Id.) The instant action concerns Al Sanea's use of foreign exchange ("fi") transactions to obtain funding for his Ponzi scheme. Over a period of four years, Al Sanea and his compatriots engaged in hundreds of these transactions with Mashreq, each of which involved the purchase of U.S. dollars from Mashreq in New York. (R. 1 11- 12 TT 21-22). Mashreq would make a payment in U. S. dollars to an account controlled by Al Sanea (and held in ALHAB's name) in New York, with the expectation that a payment in Saudi riyals would be made, at a later date, to Mashreq's account in Saudi Arabia. (R. 111- 12 T 2 1). According to Mashreq's complaint, the last of these f/x transactions was never completed. (R. 51-52 TT 5- 7). Mashreq paid $150 million into an account at Bank of America ("BOA") in New York. (R. 51 6, 113 25). After failing to complete his part of the currency trade by depositing equivalent Saudi riyals to Mashreq's credit, Al Sanea then stole the funds in the BOA account, which included the funds paid by Mashreq plus an additional $41 million that happened to be in the account, by directing the transfer of these funds to an account in the name of Awal Bank BSC ("Awal") held at HSBC's New York branch. (R. 113-14 TT 26-27). Awal is a Bahraini bank wholly owned by Al Sanea.2 (R. 108 13, 114 28). This final transfer was intended to and did put the funds completely beyond AHAB's control. (R. 113-14 TT 26-28). Al Sanea's conversion of the funds that are the specific subject of the instant action took place entirely in New York. (R. 114 27). Like all Ponzi schemes, Al Sanea's depended on ever-increasing access to funds, both to allow his continuous misappropriations and to service the growing 2 Awal is now in administration in Bahrain. (R. 223).' debt incurred to finance earlier misappropriations. His fix deals with Mashreq were structured to provide extremely high-cost, short-term financing to Al Sanea. (R. 1 10 T 19). Each fix transaction involved the use of Saudi riyals to purchase U.S. dollars in New York. In all but one instance, the U.S. dollars were paid first (by Mashreq), with a gap of up to a week or more before the Saudi riyal payment was due. (R. 1 11- 12 2 1). This huge volume of "split-value" deals had no ostensible currency trade purpose for AHAB 's comparatively meager remittance business .3 (R. 88-89 T 4, 95 22). Mashreq, a UAE corporation with a principal place of business in the United States at 50 Broadway in New York (R. 109 14), chose New York, where all of these f/x transactions were based, as the forum for the instant lawsuit. 4 Throughout the case below, Mashreq asserted repeatedly that it properly brought its complaint 3 "Split-value transactions," such as those at issue here, are typically used to accommodate the differences between Western and Middle Eastern weekends. Instead of a more-or-less simultaneous exchange, in a split-value transaction there is a delay between the payment "legs" usually because the first "leg" of the exchange occurs during a weekday when the counterparty is closed for its weekend. The length of the "split" between the delivery of U.S. dollars and payment of Saudi riyals in the instant transactions, however, went far beyond the usual one-to-two day term. Moreover, Mashreq frequently agreed to renew or "roll over" the transactions, requiring no immediate payment and effectively extending the term of the "loan," albeit at inflated interest rates. (R. 110 18, 111-12 21). 4 Mashreq also suggested that its choice to file in New York was influenced by its understanding that AHAB maintained assets and bank accounts in New York - an understanding no doubt fostered by Mashreq's having made hundreds of transfers of funds to an account in AHAB' s name at BOA in New York. in New York.5 AHAB never challenged this assertion by seeking dismissal of Mashreq's complaint on forum non conveniens grounds. Mashreq performed its part of these currency transactions in New York, using its New York bank account, and New York law will apply to the fraud these transactions implemented.6 Mashreq has no place of business in Saudi Arabia. (R. 657). AHAB's third-party complaint against Al Sanea centers on his liability for any obligation that AH-AB may have to Mashreq and his theft of $191 million derived in large part from these fix transactions, a theft that was accomplished by a transfer of funds that took place entirely within New York County. 1I. Procedural Background In May 2009, Mashreq filed its complaint seeking damages for breach of the purported fix contract and for recovery of the U.S. dollars it delivered under that contract. (R. 49-63). It filed a simultaneous attachment of AHAB's property in this State, including the BOA account maintained by Al Sanea in AHAB's name.7 On July 15, 2009, AH-AB filed its answer and third-party complaint, (R. 140), subsequently amending its answer and adding a counterclaim asserting that Mashreq aided and abetted Al Sanea in the perpetration of his Ponzi scheme. (R. ' Mashreq's Mem. of Law in Conn. with Al Sanea Mot. to Dismiss (Mar. 9, 20 10) at 6; Mashreq's Reply Mem. of Law in Conn. with Al Sanea Mot. to Dismiss (Mar. 23, 2010) at 4. 'AHAB~'s Opp. to Al Sanea Mot. to Dismiss (Feb. 5, 20 10) at 14. 7 Order to Show Cause for Order of Attachment (May 27, 2009). 75). Al Sanea moved to dismiss the third-party complaint on grounds of lack of personal jurisdiction and inconvenient forum. (R. 65). The parties thereafter briefed these jurisdictional and forum issues as to the third-party complaint. Of fundamental significance here, no party moved to dismiss the first-party actions on grounds of inconvenient forum. To the contrary, Mashreq and AHAB repeatedly represented to the court that neither of them was asserting that New York is an inconvenient forum for their dispute.8 For example, in response to Al Sanca's motion to dismiss the third-party complaint, Mashreq stated that "New York was and still is a natural forum for Mashreq to bring its straightforward claims against AHAB." 9 Orally, Mashreq's counsel stated to the court that "if the third-party defendant succeeds in finding his dispute with the defendants to be forum nonable [sic], I don't think it would affect . .. Mashreqbank's case against [AHAB], who [is] here [and] who would be litigating and who asserted a counterclaim against my client. . . ." (R. 654). Although Mashreq later informed the court that it would not object to dismissal of its first-party complaint, because it believed it could proceed against AHAB in a later-filed action it had commenced in the UAE, it never sought to dismiss its own complaint on forum grounds, and it 8 Mashreq moved to dismiss the counterclaim on numerous grounds, but not forum non conveniens. Notice of Mashreq's Mot. to Dismiss the Counterclaims (Sept. 25, 2009). 9 Mashreq's Mem. of Law in Conn. with Al Sanea Mot. to Dismiss (March 9, 2010) at 6. continued to affirm that "New York is a proper forum" for the first-party actions.' 0 Similarly, AHAB never asserted that New York was an inconvenient forum to adjudicate the first-party actions. Accordingly, neither Mashreq nor AHAB provided the court with any evidentiary submissions as to whether a UAE court would better adjudicate the counterclaim. Indeed, Mashreq represented to the court that AHAB could not pursue its counterclaim in the UAE."1 In dismissing the action below, the court nonetheless ruled sua sponte that the Pahlavi factors were satisfied as to the first-party actions as well as the third- party action. (R. 24-27). With respect to the dismissal of AH-AB's third-party action against Al Sanea, the court accepted without analysis Al Sanea's argument that dismissal was justified because a temporary travel ban precluded the principals (AHAB's partners and Al Sanea himself) from traveling to New York and because witnesses were located, inter alia, in Bahrain, the UAIE, and Saudi Arabia. (R. 24). The court below also uncritically accepted Al Sanea's contention that foreign law would govern the fix trades with Mashreq because those trades are subject to a UAE choice of law and forum provision. (R. 24-25). In respect of the first-party actions, the court stated only that none of the witnesses resides in New York or the 10 Mashreq's Reply Mem. of Law in Conn. with Al Sanea Mot. to Dismiss (Mar. 23, 20 10) at 3. '" Mashreq's Reply Mem. in Supp. of Mot. to Dismiss Counterclaim (Nov. 20, 2009) at 2-3. United States (R. 26), a statement which was without basis in the record and demonstrably incorrect. The court thereupon dismissed the first-party and the third-party actions, suggesting that the cases could be tried elsewhere. (R. 26-27). Remarkably, however, with respect to neither set of claims did the court make a finding that an alternative forum actually existed for the trial of the claims. Even more strikingly, the court did not consider, much less make a finding, that any other forum exists that would permit all of the cases (complaint, counterclaim, and third-party complaint) to be resolved in a single efficient proceeding. Two inescapable factors point to New York as a convenient forum for resolution of the instant dispute in its entirety. First, contrary to Al Sanea's unsupported generalizations that this is exclusively a Saudi affair, the very converse is true. The key witnesses to Al Sanea's fraudulent conduct with respect to these transactions are both inside and outside of Saudi Arabia in various locales around the world, including the United States. (R. 938-41 TT 12-14; infra fn. 22). The financial transactions themselves conform to conventions created and well established within the New York financial community. All of the key witnesses, including Al Sanea himself, speak English; many of them speak it exclusively. (R. 938 T 10-1 1). The key documents are written in English, the language of international finance. (R. 941 TT 15-18). Al Sanea's fraudulent conduct with respect to the Mashreq f/x transactions will be governed by the law of New York, the place where his tortious activities caused damage.'12 Moreover, New York is more convenient than Saudi Arabia as a forum because its procedures provide access to the sources of evidence that will permit both sides to fully present their cases.'13 Saudi Arabia does not have procedural mechanisms for compelling testimony from third parties, for compelling production of documents, or for permitting cross-examination that would allow access to the proof necessary to resolve this dispute. (R. 950 T 19, 952 T 22, 953 25). Given the court's sua sponte disposition of the first-party actions, there is no record as to what mechanisms are available in the UAE. Second, New York has "an overriding and paramount interest" in litigation involving fraudulent financial transactions implemented through the misuse of its banking system. See J Zeevi & Sons, Ltd. v. Grindlays Bank (Uganda) Ltd, 37 NY2d 220, 227 (1975). Al Sanea's was not a scheme with mere ancillary effects in New York. Its implementation was dependent upon Al Sanea' s misuse of the New York banking system to obtain U.S. dollars in foreign exchange and then funnel those dollars to his own control. New York is plainly an appropriate forum to adjudicate this dispute and is clearly more appropriate than Saudi Arabia, where Mashreq has no presence, or the UAE, where Al Sanea has no presence. 1AHAB's Opp. to Al Sanea Mot. to Dismiss (Feb. 5, 20 10) at 14. I3 d. at 1- 13. The instant case presents a critical issue of policy for the New York state courts. The question is whether international fraudsters who use the New York financial system as the central and necessary mechanism for effecting that fraud will be held accountable in New York for the consequence of those actions. In a time when billions of dollars move with the blink of an eye and numerous jurisdictions can be pieces of the mosaic of a multi-national fraud, with none having the entire picture of the fraud or the tools to address it, will the New York courts view it as a policy imperative to accept jurisdiction based upon the unique and central role of the New York financial system? If that question is not answered yes, then the Al Saneas of the world will be able to balkanize any fraud into smaller national pieces, where no court has the ability to enforce accountability and police the integrity of the dollar-based financial system. The decision below will be interpreted as a carte blanche for scam artists and money launderers to avoid accountability. ARGUMENT As an initial matter, it is essential to identify the legal framework in which a decision on forum non conveniens must be made. There is a presumption in favor of keeping the action in the court where the party making the claim has filed it: here Mashreq with respect to its complaint and AHAB with respect to its counterclaim and third-party complaint. See, e.g., Waterways Ltd. v. Barclays Bank PLC, 174 AD2d 324, 327 (1 st Dept. 1991). The burden of proof is on the party seeking dismissal: here Al Sanea. See, e.g., Am. Banknote Corp. v Daniele, 45 AD3d 338, 342 (1st Dept. 2007); Mionis v. Bank Julius Baer & Co., 9 AD3d 280, 282-83 (1st Dept. 2004). The Appellate Division is not limited to an "abuse of discretion" standard in reviewing a Supreme Court decision to dismiss on forum grounds but may independently exercise its own discretion in determining whether dismissal is appropriate. See, e.g., Intertec Contracting A/S v. Turner Steiner Int'l S.A., 6 AD3d 1, 3-4 (1 st Dept. 2004); Broida v. Bancroft, 103 AD2d 88, 93-94 (2d Dept. 1984); CPLR 327. 1. The Court Had No Authority to Dismiss the First-Party Actions Sua Sponte on Forum Non Conveniens Grounds. The lower court committed clear error when, sua sponte and without any developed record, it dismissed the first-party actions on grounds of forum non conveniens. It has long been held that the court may not dismiss any part of an action sua sponte on forum grounds. See VSL Corp v. Dunes Hotel & Casinos, Inc., 70 NY2d 948, 948 (1988); Todtman, Young, Tunic, Nachamie, Hendler, Spizz & Drogin, PC v. Richardson, 231 AD2d 1, 5 (1st Dept. 1997); In re Bernz (Widscht), 139 AD2d 444, 444 (1st Dept. 1988). As these decisions recognize, CPLR 327(a) precludes Supreme Court from dismissing an action, "in whole or in part," on forum non conveniens grounds absent a motion seeking such relief by one of the parties. In the instant case, while Al Sanea moved to dismiss the third-party action, neither AHAB nor Mashreq moved to dismiss either the complaint or the counterclaim on the basis of inconvenient forum. Indeed, both Mashreq and Al-AB agreed that New York was a convenient forum for the litigation of their dispute. While Mashreq did advise the court that it had commenced a later-filed action against AHAB in the UAE, 14 Mashreq did not ask that the court dismiss its complaint here in favor of the UAE as a more convenient forum. To the contrary, it continued to insist that New York is an appropriate forum for its complaint, noting that AHAB had not contested New York as inconvenient. 15 Mashreq also represented to the court that AHAB could not pursue its counterclaim in the UAE because under the law of that country an aiding and abetting claim cannot be brought unless Mashreq is first convicted criminally and claims for commercial bad faith and unjust enrichment are not recognized.'16 Thus, even the dispute between Mashreq and AHAB - claim and counterclaim -cannot be fully litigated in the UAE. "4 Mashreq's Mem. of Law in Conn. with Al Sanea Mot. to Dismiss (Mar. 9, 20 10) at 4. '51d. at 6-7. 16 Mashreq's Reply Mem. in Supp. of Mot. to Dismiss Counterclaim (Nov. 20, 2009) at 2-3. For the first time in his reply brief, Al Sanea suggested that Mashreq's complaint could be litigated more effectively in Saudi Arabia or the UAE ,' but he proffered no evidence in support of that suggestion, much less did he file a motion seeking dismissal of the first-party actions. Even at oral argument on Al Sanea's forum motion, when the court referenced the possibility of dismissal of the entire action, Al Sanea's counsel admitted that Al Sanea's motion addressed only the third-party complaint and that as to the first-party actions he only acted "in a sense, as an amicus of the Court." (R. 145 1). But under New York law, an action can be dismissed only on motion, not on the suggestion of a self- interested, and self- described, amicus. In short, the court's dismissal of the first-party actions was entirely on the court's own motion, and its decision must be reversed. Because it acted on its own motion, the court dismissed the first-party actions without any record evidence on important forum non conveniens factors pertinent to those claims. There is nothing in the record indicating that those claims could be brought in Saudi Arabia, and, while the record supports that the UAE was an available forum for Mashreq's complaint, the only evidence in the record regarding AHAB's counterclaim is that it could not be brought in that conr.18 Even indulging the court's unsupported (and incorrect) suggestion that 17 Sanea's Reply Mem. in Supp. of Mot. to Dismiss (Mar. 9, 20 10) at 8. 1Mashreq's Reply Mem. in Supp. of Mot. to Dismiss Counterclaim (Nov. 20, 2009) at 2-3. AHAB could elect to file its counterclaim in the UA-E, the record is devoid of evidence as to whether the UAIE courts would have access to the testimony and documentary evidence necessary to adjudicate AHAB 's counterclaim. Both Mashreq and AHAB consistently argued that New York was a proper forum for the first-party actions, and Al Sanca's motion was limited to the third-party action. As a result, the court's sua sponte dismissal was not only procedurally improper, it rested on no evidence. 11. Dismissal of the Third-Party Action on Forum Grounds Was Also Thereby Improper Since It Is Inseparably Connected to the First-Party Actions. Given that the first-party actions were not properly dismissible, the third- party action also should not have been dismissed, since it arises from the same transactions that are at issue in the first-party actions. Numerous decisions so recognize. See, e.g., Van Deventer v. CS SCF Mgmt. Ltd, 37 AD3d 280, 281 (1 st Dept. 2007); Perkow v. Frank W Winne & Sons, Inc., 36 AD3d 1189, 1190 (3d Dept. 2007); Kissimmee Mem '1 Hosp. v. Wilson, 188 AD2d 802, 803 (3d Dept. 1992); Am. Home Assurance Co. v. Ins. Corp. of Ireland Ltd., 603 F Supp 63 6, 642 (S.D.N.Y. 1984). As the federal district court put it in Excel Shipping Corp. v. Seatrain Int'l S.A., 584 F Supp 734, 743-44 (E.D.N.Y. 1984), dismissal is not appropriate where there is an inseparable factual and legal connection between the first-party and third-party claims. AHAB 's claim against Al Sanea seeks indemnification for any liability it may have to Mashreq. It therefore necessarily arises out of the same f/x transaction that is the subject of Mashreq's first-party complaint and is indisputably interrelated to its defense of Mashreq's claim and its counterclaim against Mashreq. Indeed, AHAB's answer and counterclaim assert that Mashreq was complicit in Al Sanea's fraud, and the same core facts must be litigated in both the first-party and third-party actions. Any inconveniences that may be encountered in litigating this entire case in New York arise not as a result of any conduct by AHAB but rather from the nature of Al Sanea's fraud and his strategy of spreading his wrongdoing around the globe. Wherever it is litigated, some inconveniences will doubtless arise, but New York is plainly a proper forum and is certainly far better situated than Saudi Arabia to accommodate those inconveniences. In these circumstances, maintenance of AHAB's third-party suit here reaffirms New York's public policy of encouraging the consolidation of cases presenting common questions of law and fact. See Firequench Inc. v. Kaplan, 256 AD2d 213, 213 (1 st Dept. 1998); In re Daniel, 181 Misc 2d 94 1, 953-54 (New York Civ. Ct. 1999). Ill. The Court Misapplied the Pahlavi Factors in Dismissing this Case. Apart from its procedural error in dismissing the first-party actions sua sponte and its resulting error in dismissing a fundamentally intertwined third-party action, in considering the merits of keeping this case in New York, the court misapplied the Pahlavi factors in several critically important respects, each of which independently requires reversal. A. The Court Failed to Consider this State's Compelling Interest in Policing the Misuse of New York's Banking System. One of the five factors listed in Pahlavi is whether the action imposes a burden on New York's courts. 62 NY2d at 479. The burden issue, of course, deals with the potential complexities, including the expenditure of judicial time and administrative expense, that the action is likely to entail. But the test is not whether a case imposes any burden on the New York courts. All cases impose some burden. Whether that burden is undue or one that New York courts should undertake thus inherently requires a weighing of the burden posed by the case against the State's interest in the particular dispute. Yet here, the court simply ignored New York's overarching policy interest in the dispute and examined the issue of burden in a vacuum. 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-NY, 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. When,, however, as here, 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 220, 227 (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 of Appeals 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. 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, NA., 936 F2d 723, 726-27 (2d Cir. 1991) (citing J1 Zeevi & Sons); Indosuez Int'l Fin. B. V v. Nat'l. Reserve Bank, 279 AD2d 408, 408-09 (1st Dept. 2001), aff'd 98 NY2d 238 (2002) (also citing J Zeevi & Sons in the personal jurisdiction setting). In the years since J Zeevi & Sons was decided, the ongoing technological and financial growth of the New York banking system has made the Court of Appeals' observation even more compelling. Al Sanea argued that because he is alleged to have planned his scheme outside of New York and because he asserts he never personally ventured into this State, New York is an inconvenient forum.'9 There is no case that adopts such perverse reasoning, and Banco Nacional precludes such an argument. Al Sanea and his agents and Mashreq engaged in billions of dollars worth of f/x transactions, all of which were performed in the State of New York. (R. I1 I 2 1). Mashreq's complaint further alleges a default on the last of these transactions, in which Mashreq delivered its "goods" - U.S. dol1lars - in New York, but failed to receive payment for them. (R. 51-52 TT 5-7). And the third-party complaint alleges that Al Sanea stole the "goods" delivered by Mashreq (along with another $41 million) in New York - by transferring these funds from one New York bank to another New York bank. (R. 113-14 TT 26-27). This case is thus indistinguishable from Banco Nacional. As that decision teaches, New York's compelling interest in "~ Al Sanea's Mem. of Law in Supp. of Mot. to Dismiss (Oct. 30, 2009) at 5-7, 17- 18. policing the use of its banking system does not come to a screeching halt because the offender hatches his scheme offshore. In its haste to dismiss this entire case, the court below inexplicably gave no consideration to New York's "overriding and paramount" interest in controversies that implicate the misuse of this State's central role in the international banking system, much less did the court make any finding as to how that interest affected its decision. The transaction alleged in the complaint is the sale of U.S. dollars (as a commodity) in New York. Such a transaction must be a matter of vital interest to New York. Yet the lower court ignored well-pleaded facts of AHAB's counterclaim and third-party complaint, which describe in detail Al Sanea' s misuse of New York's banking system, which was the critical instrumentality of the fraud and conversion that occurred here. B. The Court Failed to Determine Whether There is an Alternative Forum Where These Claims "Would be Better Adjudicated." Although the Court of Appeals ruled in Pahlavi that the existence of an alternative forum is not an absolute requirement, particularly where, as in that case, the party opposing dismissal was a foreign government that had engineered the absence of such a forum, it made clear that a determination of whether the case "would be better adjudicated elsewhere," 62 NY2d at 479, is "a most important factor" in the forum analysis, id. at 481. In the instant case, the court treated the issue as a matter of so little consequence that, in effect, it did not even bother to decide whether an alternative forum actually existed that would have jurisdiction over this case much less where it would be "better adjudicated." It was Al Sanea's burden to satisfy this factor by demonstrating that litigation of AHAB's third-party action in Saudi Arabia, which he proffered as a superior alternative forum, "will best serve the ends of justice." See Silver v. Great Am. Ins. Co., 29 NY2d 356, 361 (1972). This burden could not be satisfied by generalities; it required Al Sanea to provide "specific information" showing why the alternative forum should be preferred. Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Ltd, 62 NY2d 65, 74 (1984). Al Sanea utterly failed to do so. Indeed, the record below unequivocally established that Saudi Arabia cannot possibly better adjudicate this particular international dispute. Tellingly, the court below did not find otherwise. While it listed numerous factors, like availability of witnesses and documents and issues of foreign law, that have a bearing on determining whether Saudi Arabia is a more suitable forum, (R. 24-27), it made no fi nding that this action could be effectively litigated in that country. Ultimately, the court abandoned any real analysis of the suitability of Saudi Arabia as an alternative. Instead, the court suggested a multiple-choice approach. In respect of the first-party actions, the court offered that AHAB should bring its counterclaim in the UAE, where Mashreq had "already commenced" an action. (R. 27). The court made no finding, however, that the UAE was available as a forum for the counterclaim, much less that it would be "better adjudicated" there. The only evidence was that the counterclaim could not be adjudicated in the UAE. With respect to the third-party complaint, the court was even more cavalier, stating only that "several alternative locations are available to resolve the disputes," (R. 24), and that AHAB could "decide whether it prefers to bring its third-party action in the UAE as well, or to seek redress in Saudi Arabia," (R. 27). The court undertook no analysis concerning whether the UAE was an available and more convenient forum for the third-party complaint. This proceeding, of course, involves three cases and three parties: Mashreq, AHAB, and Al Sanea. Mashreq made no offer to submit its claims to Saudi jurisdiction and, at the hearing on this motion, argued that it was not subject to jurisdiction in that country. (R. 1468). Al Sanea never made an offer to submit to UAE jurisdiction, insisting that the claims against him should only be brought in Saudi Arabia. (R. 622-23 27). And the court made no finding, and had no record basis for such a finding, that all three parties were subject to suit in either of these countries. This multiple-choice solution manifestly demonstrates the lack of any factual basis in the record for a finding that the action as a whole could be pursued in a single alternative forum, as contemplated by In re Air Crash Near Nantucket Island, No. O-MiDL-1344, 2004 US Dist LEXIS 16085, at * 11, * 17, * 20, * 23 (E.D.N.Y. Aug. 16, 2004). C. The Pahlavi Factors Do Not Support Dismissal of the Actions in Favor of Saudi Arabia and/or the UAE. In all events, the availability of an alternative forum is not determined just by answering the simple question whether AHAB can sue Al Sanea or Mashreq on these claims somewhere else. As held in Pahlavi, the touchstone is whether the dispute "would be better adjudicated" in the other forum, and this necessarily turns on access to evidence in that forum that would allow the parties to develop their claims and defenses. Thus Pahlavi cited with approval the "relevant private or public interest factors" first announced in Gulf Oil Corp. v. Gilbert, 330 US 501, 508-09 (1947), and reaffirmed in Piper Aircraft Co. v. Reyno, 454 US 235, 241, n.6 (1991). Pahlavi, 62 NY2d at 479. These factors include: "relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses." Gulf Oil, 330 US at 508. Numerousforum non conveniens decisions in the New York courts have turned on precisely these factors. See, e.g., Banco Nacional, 169 Misc 2d at 192 (forum dismissal precluded by absence of discovery procedures and inability "to marshal . . . proof' in Nigeria in connection with an action for fraud and conspiracy); Creditanstalt Inv. Bank v. Chadbourne & Parke LLP, 4 Misc 3 d 4 81, 485-86 (Sup. Ct. New York Cty. 2004) (absence of pretrial discovery, right to jury trial, and recognition of tort of legal malpractice as making Russia an unsuitable alternative forum). Demonstrably, the court's initial review of the Gulf Oil factors was colored by a self-serving and highly misleading affidavit submitted by Al Sanea. In that affidavit, Al Sanea swore that "to my knowledge, all of AHAB's witnesses (except its professional advisors) and documentary evidence are all in Saudi Arabia" and that "[m]any if not all of the witnesses speak Arabic as a first language and many of the relevant documents are in Arabic, necessitating extensive translations." (R. 620 T 19, 622-23 27). AHAB submitted competent evidence demonstrating beyond doubt that Al Sanca's statements were false, but the court never wavered from its initial view that this case belonged somewhere ''over there."~ While the court made various observations on forum non conveniens factors dealing with location of documents and witnesses and governing law, it ultimately made no actual findings on these factors. It is impossible to tell from the court's opinion whether it even considered which potential witnesses are likely to have testimony pertinent to the issues in dispute and which are makeweight. Similarly, the court acknowledged that there are issues concerning the language of witnesses and documents and possible questions of foreign law, (R. 18-19, 24-25), but again it did not reveal whether or how it might have weighed the evidence on those issues. We examine the evidence actually presented in this case with respect to these Pahlavi factors. 1. The Location and Language of Witnesses. The court noted that a Saudi travel ban currently precludes the attendance of the parties at trial in New York. (R. 24). But the court took this analysis no further, failing to consider whether the travel ban would preclude the parties' testimony in New York and equally failing to consider whether they could testify in Saudi Arabia. The court also found that potential non-party witnesses are located largely in the UAE, Kuwait, Saudi Arabia, and Bahrain. (R. 24). Yet the court made no attempt to identify who these witnesses are, to assess which of them are likely to have testimony that is actually important to this dispute, or to evaluate whether they will be able to testify in New York or in either of the court's two suggested alternative fora. The court's conclusory finding that the witnesses are largely located in the UAE, Kuwait, Saudi Arabia, and Bahrain does not speak to the principal factor in respect of these witnesses - indeed the only matter germane to forum non conveniens - the availability and competence to testify of witnesses who have evidence truly pertinent to issues in dispute. As to the parties themselves, the travel ban imposed by the Saudi government equally precludes attendance of the parties at trial in the UAE, the alternative forum that the court sua sponte found to be more convenient, at least for Mashreq's debt claim. While the travel ban would not preclude attendance by the parties at trial in Saudi Arabia, as discussed more fully below, it was uncontested that Saudi Arabia's evidentiary rules would preclude, on grounds of bias, testimony by the parties on their own behalf in that country as well as testimony by the parties' present or former employees on their principals' behalf (R. 952 T 23), a fact of foreign law that the court below simply ignored. The court also ignored the fact that the travel ban, while it may preclude the parties' attendance, will not preclude their testimony in New York where, unlike Saudi Arabia, there exist procedures that will permit both party and non-party witnesses to testify live through video-links or by depositions de bene esse. 2 As to non-party witnesses, AHAB proffered that two of the witnesses most closely involved with Al Sanea's operation of the Money Exchange and Awal Bank, and especially the f/x transactions here at issue, are Mark Hayley, the Money -Exchange's General Manager, and Glenn Stewart, the CEO of The International Banking Corporation, another central figure in Al Sanca's scheme .2 '1 Mark Hayley lives in England. (R. 936 1). Glenn Stewart, previously located in 20 AHAB's Opp. to Al Sanea Mot. to Dismiss (Feb. 5, 20 10) at 11. There is no record as to the availability of such procedures in the UAE, and, hence, no basis for an inference that it is a suitable alternative forum on that ground. 2AHAB's Opp. to Al Sanea Mot. to Dsis(Feb. 5, 2010) at12. Hayley, Al Sanea's principal accomplice, later turned whistleblower, who has since moved back to his native England, has provide an affidavit that sets forth specifically and in detail information regarding the key witnesses in this action, their native countries and languages, and their locations. (R. 936). Bahrain, (R. 939 T 12b), now lives in Los Angeles. 22 Both witnesses can be compelled to testify in New York, in person or by deposition. AHAB listed nine other non-party witnesses with knowledge of Al Sanea's misuse of the Money Exchange to arrange f/x and other financial transactions for his own purposes. (R. 93 9-40 T 12c-k). Of these nine, three live in England, two in India, and one each in Saudi Arabia, Bahrain, Canada, and Jordan. (Id.) One is now deceased. 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 (1 st Dept. 1990); O'Connor v. Bonanza Int'l, Inc., 129 AD2d 569, 569-70 (2d Dept. 1987); Factors Etc., Inc. & Boxcar Enters. Inc. v. Pro Arts, Inc., 579 F2d 215, 218 (2d Cir. 1978). Notwithstanding this requirement, in his opening brief, Al Sanea made no effort to identify any witnesses. Not until he filed his reply brief below did he eventually provide an affidavit - his own - identifying non-party witnesses he asserts may have relevant testimony. (R. 1295-1304 5). But on close inspection of this 22 AIIAB recently filed suit against Stewart and served him at his home in Los Angeles, California. Proof of Service (filed April 5, 2011), D.J. 7, Ahmad Hamad Al Gosaibi & Brothers Co. v. Stewart, I1-cv-2596 (DEF). This Court may take judicial notice of the California judicial record as to Stewart's current location. See Perez v. N. Y Housing Auth., 47 AD3d 505, 506 (1 st Dept. 2008); Kings brook Jewish Med Ctr. v. Allstate Ins. Co., 61 AD3d 13, 20 (2d Dept. 2009). affidavit, few, if any, of Al Sanea's purported witnesses are represented to have testimony germane to the Mashreq fix transactions. They are proffered instead on a variety of irrelevant topics, such as Al Sanea's general authority to act on AHAB's behalf, the practices of AHAB partners in executing documents, AHAB's accounting procedures, unspecified transactions between AHAB and Awal, and the like."3 (R. 1295-1304 T 5). That is plainly not what this case is about, suggesting that Al Sanea prepared his makeweight list to distract from analysis of the witnesses who likely have testimony actually relevant to these claims. Moreover, quite apart from the irrelevancy of their likely testimony, of the 27 purported witnesses he identified, 17 are (or were) Al Sanea's own employees, either through his personal business organization (the Saad Group) or the bank he owns (Awal), (R. 1295-1304 5b-j, r-z), and, hence, are available to him if he wants their testimony. Five are (or were) AHAB employees, (R. 1300-01 T 5m-p), and similarly can be expected to cooperate with a proceeding in New York if their testimony were required. Of the remaining five, three are said to be in the UAE, (R. 1303 T 5aa), one is an outside accountant living in Saudi Arabia, (R. 1301 5q), and the role of the fifth is not specified (R. 1303-04 T Sbb). As with the parties themselves, it was uncontested that their respective current and former 23 Al Sanea's effort to shift the focus from the core issues of fraud and conversion to non-issues such as his general authority to act for AHAB is discussed infra at section JJJ.D. employees are not qualified to testify' in Saudi Arabia for reasons of potential bias. And 24 of the 27 live outside the UAE, (R. 1295-1304 T 5), the other country that the court below considered as a possible alternative forum. The court also curiously conflates three different Middle East countries and seems to suggest that the presence of a witness in one of them supports a forum non dismissal in favor of another country. It is difficult to deduce how, on the basis of the record in front of it, the court could have concluded that the presence of witnesses in Saudi Arabia or Bahrain could make the UAE a convenient forum for adjudicating these claims, or vice versa. No evidence was submitted below concerning, for example, the ability of a UAE court to obtain or compel testimony from a witness in Bahrain or Saudi Arabia. And yet the court below appears to have weighed the fact that there are witnesses resident in other Middle East countries as a factor favoring dismissal in favor of Saudi Arabia and/or the UA-E. That each of these - the UAE, Bahrain, and Saudi Arabia - is an entirely separate country with its own separate legal system, appears to have been either overlooked or discounted by the court below. Moreover, contrary to Al Sanea's sweeping claim that "many if not all of the witnesses speak Arabic as a first language," (R. 622 27), the very reverse is true. The key witnesses with knowledge of Al Sanea's Ponzi scheme, including Al Sanea himself, speak English, many as their first language, and most do not speak any Arabic. (R. 93 8 TT 10- 11). This fact also weighed in favor of keeping this case in New York. See Republic of Lebanon v. Sotheby 's, 167 AD2d 142, 145 (1 st Dept. 1990); Creditanstalt, 4 Misc 3d at 485.2 Unfortunately, the court never appeared to abandon its initial, but unsupported, impression, as stated at the hearing held in advance of the forum hearing, that this is a dispute among exclusively Arab speakers over transactions taking place in far-off undifferentiated Middle Eastern countries. The evidence is otherwise. 2. The Location and Language of Documents. Similarly, Al Sanea's affidavit broadly asserted that "all of AHAB's documentary evidence [is] all in Saudi Arabia" and that many of these documents "6are in Arabic, necessitating extensive translations." (R. 620 T 19, 623 27). These sworn statements, too, were misleading. In the proceedings below, AR-AB provided an affidavit listing the key documents pertinent to this dispute and identifyiing the language in which they are written. (R. 738). Al Sanea furnished no list of documents in response, content to rest on his unsupported assertions. While there are certain documents located in Saudi Arabia that may 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 24 No evidence was adduced below concerning the language skills of Mashreq's employees involved in the scheme. the UAE. The BOA and HSBC records that document these transactions are all in 25 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 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 .2 (R. 668 29, 738- 42, 941 15-18). Indeed, 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. 3. Access to Witnesses and Documents. The current location of key witnesses and documents is pertinent to the ultimate issue of whether and how the competing fora can actually access the relevant evidence. Al Sanea struggled below to portray AHAB's submissions on this issue as motivated by its desire to take advantage of New York's liberal discovery rules, despite the fact that this lawsuit was initiated by Mashreq and not 25 See AHAB's Opp. to Al Sanca Mot. to Dismiss (Feb. 5, 20 10) at 10. 26 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 TT 16-17) (documents regarding fix business, operating documents, internal memoranda, facilities and similar agreements, account statements, wire transfer and other instructions to banks all in English); (R. 941 15) ("The [Money Exchange] carried out [its] business almost entirely in English"). by AHAB. While the availability of discovery in the competing fora has its own role to play in a forum analysis,27 the more important issue is a functional one - namely which forum provides superior access to testimony and documentary evidence for use at trial, since absent such access in the forum under consideration, a dispute plainly cannot be "better adjudicated" there. Since here the witnesses are scattered, no court, least of all a Saudi or UAE court, will be able to compel all of them personally to appear for trial. New York can compel the testimony of the parties - Mashreq, the AHAB partners, and Al Sanea - and through the parties can obtain pertinent testimony by their present employees. 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, that AHAB submitted in the court below, Saudi Arabia cannot compel Mashreq and its non-Saudi employees to come to Saudi Arabia for trial, since they are not subject to process in that country. (R. 950-5 1 19). Similarly, Saudi Arabia cannot compel BOA or HSBC employees or the former AHAB employees who have departed Saudi Arabia and moved back to their home countries to come to trial. (Md) Further, Saudi Arabia does not permit compulsory process to be served on any non-party witnesses, wherever they are located, if they are unwilling 27 Eg. Banco Nacional, 169 Misc 2d at 192; Sotheby 's, 167 AD2d at 145. to testify voluntarily. (1d.) Finally, and most importantly, 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 T 23); e.g., Rhodes v. ITT Sheraton Corp., No. 97-4530-B, 1999 Mass. Super. LEXIS 2, at *6 (Mass. Super. Ct. 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. These provisions of Saudi law also point to a fundamental fallacy in the court's reference to the temporary travel ban Saudi Arabia has imposed on Al Sanea and the AHAB partners. Because Saudi Arabia's evidentiary rules admittedly would preclude, on grounds of bias, testimony by the parties on their own behalf as well as by the parties' present or former employees, the existence of the travel ban 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 conveniently testify (or testify at all).2 Moreover, in New York alone are there procedures that provide for taking their testimony live through video-links or by depositions de bene esse.2 Thus, New York, and not Saudi Arabia, is the one forum where sworn testimony can most conveniently be taken from virtually all relevant witnesses. Access to non-party witnesses who are no longer or never were employees of the parties also favors New York over Saudi Arabia. Non-party witnesses located in New York who were in charge of the correspondent bank accounts at BOA and HSBC and who can attest to the ownership of these accounts and the flow of funds through them can be compelled to appear here. BOA had a significant role in operating extremely active bank accounts (more than $160 billion post-September 11) and has highly relevant testimony; this is not simply the testimony of administrative functionaries monitoring computerized transactions, Because the United States is a signatory to the Hague Evidence Convention and has adopted other international procedures such as letters rogatory for taking evidence, New York also has established facilities in place for the taking of 28 The travel ban equally precludes attendance of the parties at trial in the UAE, the alternative forum that the court ultimately found to be more convenient, at least for Mashreq's debt claim. 29 Again, there is no record as to the availability of such procedures in the UAE, and, hence, no basis for an inference that it is a suitable alternative forum on that ground. depositions of non-party witnesses abroad. Nor is there a bar on taking voluntary depositions in Saudi Arabia. The most important witness to Al Sanea's fraudulent conduct, Mark Hayley, who managed the Money Exchange's operations and implemented Al Sanea's instructions regarding these f/x transactions, is located in London and will be available for deposition and likely will agree to come to New York to testify. Glenn Stewart, another Al Sanea co-conspirator, now lives in California and is subject to process in that state at the behest of a New York court. In contrast, Saudi Arabia is not a Hague signatory, and its courts have no procedures for compelling the testimony of non-party witnesses by depositions outside of Saudi Arabia. (R. 950 T 19). It is fanciful to think that these individuals would return there. The ability of New York courts to compel testimony of foreign witnesses via letters rogatory or international conventions, by itself, justifies retaining this action in New York, particularly where such devices are unavailable in the competing fora, like Saudi Arabia. See R. Maganlal & Co. v. M G. Chem. Co., 942 F72d 164, 169 (2d Cir. 1991); Overseas Programming Co. v. Cinematographisce Commerz-Anstalt, 684 F72d 232, 235 (2d Cir. 1982). The same is true as to documents. The documents showing the flow of funds through the New York bank accounts are here. Wherever the originals of other pertinent documents are located' 30 New York has procedures that can require their production and authentication. Again, Saudi Arabia has no equivalent procedures for accessing documents outside that country for use in trial in its courts. (R. 952 22). Especially in an action for fraud, where the success of the defendant's scheme depends on his ability to shroud the fraud in secrecy, hide documents, maneuver across national borders, and prevent its victims from learning the facts, access to proof is essential to uncovering the full extent of the defrauder's wrongdoing. In matters like this one involving complex facts, New York has recognized the importance of both discovery and access to proof at trial in retaining jurisdiction here. See, e.g., Waterways Ltd v. Barclays Bank PLC, 174 AD2d 324, 328 (1 st Dept. 199 1); Sotheby's, 167 AD2d at 145. 4. Controlling Law. New York law will apply to the Mashreq fraud because it involves a tort that occurred within this state - the misuse of New York banks in carrying out fraudulent f/x transactions resulting in the theft of the proceeds of a New York 30 One reason AHAB sought Al Sanea's deposition in advance of the disposition of his forum motion was to explore whether he has removed or arranged for the removal of original documents from files previously maintained in Saudi Arabia, Bahrain, Switzerland, and the Cayman Islands and to determine where he has secreted them. For example, an important finding in the Hibis report to the Public Prosecutor of Bahrain, who is investigating criminal charges against Al Sanea in that country, is that Al Sanea removed loan files from Awal in order to hide evidence of his fraudulent activity there. (R. 840-4 1). bank account. 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 ofAm., 65 NY2d 189, 195 (1985). Under New York law, a tort occurs "where the last event necessary to make the actor liable occurred." Id 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 T 27). This last event necessary to Al Sanca'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 AD3d at 187; Plesch v. Banque Nationale de la Republique d'Haiti, 273 AD 224, 227 (1 st Dept. 1948).1 The one issue identified by Al Sanea as possibly raising an issue of foreign law is his contention that this action will turn on principles of agency under Saudi law. This manufactured contention is incomprehensible particularly at this stage of the proceedings where the allegations of the third-party complaint must be accepted as true. 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 as is alleged in the complaint. He provided no evidence below as to how Saudi law on agency might differ from New 3 1 Al Sanea's conversion was complete when he caused the funds on deposit in AHAB's account at BOA to be transferred to Awal's account at HSBC and thereby placed them beyond AHAB's control. 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. In sum, the court below ultimately made no finding that this dispute would be "better adjudicated" (or even could be adjudicated at all) in Saudi Arabia or the UAE. Nor would there have been a basis for such a finding. As to the UA-E, the parties did not address, and the court did not attempt to analyze, the Pahlavi factors in respect of whether AHAB's counterclaim and third-party complaint could be pursued in that country. The court simply noted that Mashreq had a later-filed action on its own claim there, but it did not inquire whether the UAE was an available, much less a better, forum for adjudicating AHAB's claims. Mashreq conceded the counterclaim could not be litigated there. As to Saudi Arabia, there was substantial evidence presented concerning its unsuitability as an alternative forum. But the court never weighed this evidence. Its failure to make any finding on this "most important" factor constitutes reversible error. D. The Court's Analysis of the Forum Non Conveniens Factors Was Based on a False Premise as to the Nature of AHAB's Claims. It is the complaint's well-pleaded allegations against which the forum evidence must be measured. It is plainly not open to the party seeking a forum dismissal to unilaterally recast the claim, conjuring up allegations more to his liking, and then proffer forum evidence that is only pertinent to those imagined allegations. Yet that is precisely what Al Sanea did here, and the court below accepted it, improperly deciding what was pertinent to its forum analysis based on Al Sanea's mischaracterization of AHAB's claims. This alone is reversible error. AiHAB's third-party complaint alleges fraud, forgery, improper use of AHAB's credit to borrow money not for AHAB's benefit but to line Al Sanea's pockets, and outright theft of funds from a bank account at BOA in New York. This is not a case about a simple breach of authority. But in Al Sanea's remaking, the complaint focuses solely on his having engaged in these financial transactions without first receiving proper authority from AHAB as his principal. Undoubtedly, he prefers that made-up claim to the fraud and theft claims actually pleaded. That the court accepted Al Sanea's recharacterization of AHAB's claims is evident in the way it framed the issue in its written opinion: for the court the question was "whether or not Mr. Al Sanea was authorized to do what he did." (R. 24). Rather than define the claim by the well-pleaded allegations of the third-party complaint, the court instead adopted Al Sanea's self-interested recasting of that complaint. The court's acquiescence in this distortion was a fundamental error that affected its entire analysis. Thus, Al Sanea's motion to dismiss presented a truncated version of the case where, according to Al Sanea, the only issue that mattered was his authority and the only basis to determine it was through application of Saudi law. But the third- party complaint asserts that Al Sanea defrauded AHAB and stole its money, conduct that can never be authorized, no more in Saudi Arabia than in New York. Viewed through the correct lens, the most important witnesses whose testimony will be essential are Al Sanea's confederates within the Money Exchange and other nominal AHAB business units with whom he conspired to plan and implement his scheme. As shown in AHAB 's submission,, these witnesses include Mark Hayley and Glenn Stewart, Al Sanea's primary co-conspirators, as well as their main subordinates, who helped Al Sanea orchestrate his fraud, virtually none of whom is still in Saudi Arabia and who could not, in any event, provide evidence in Saudi Arabia. To put the issue in perspective, a claim of embezzlement hardly turns on whether the defalcating employee had authority to write checks on his employer's account. His check-writing authority is typically a given. In the absence of such authority, he likely would have had no opportunity to embezzle funds by writing checks to his own use. The same holds true here, where Al Sanea wrote more than $2 billion in checks payable to himself and his companies. The activities of interest for forum purposes are those pertinent to Al Sanea's use of bogus f/x transactions to line his own pockets and not those pertinent to his general authority to act in AHAB's name and on its behalf in carrying out legitimate AHAB business. In adopting Al Sanca's "authority" straw man, the court below thus focused on the wrong set of activities and drew a correspondingly incorrect conclusion concerning the significance of foreign law in AHAB's case. IV. The Court Improperly Precluded AHAB from Taking Forum-Related Discovery in Advance of any Ruling on Al Sanea's Motion. Al Sanea relied on his own affidavit in support of his highly fact-intensive motion to dismiss on personal jurisdiction and forum non conveniens grounds. Promptly after Al Sanea filed his motion, AHAB noticed his deposition in order to take jurisdictional and forum discovery. (R. 1507). Al Sanea responded with a motion for a protective order to preclude AHAB from taking his deposition or pursuing any other such discovery. (R. 1481). At a scheduling conference on January 5, 2010, the court ordered that "at this juncture, all discovery stops." (R. 659). Thereafter, the court left this prohibition of discovery in place while all briefing and oral argument on the merits of the motion to dismiss were completed, and the court issued its decision dismissing on forum grounds without ever lifting its prohibition of discovery. Ironically, in its forum decision, the court ultimately denied Al Sanea's motion for a protective order as "moot." (R. 28). The court's refusal to permit AHAB to take forum discovery in advance of any decision on the motion to dismiss was clear error. Many of the facts relevant to the forum analysis were within Al Sanea's personal knowledge. These included: (i) Al Sanea's directions to his agents to cause the transfer of hundreds of millions of dollars between New York City bank accounts; (ii) his knowledge of the location of documents and witnesses; (iii) his knowledge about the ownership, control, and operations of the Money Exchange, other AHAB business units over which he exercised control, and his own bank Awal in their dealings with New York banks. The need for such discovery became even more acute when Al Sanea later supplemented his initial affidavit to list numerous witnesses he asserted had important evidence. (R. 1295-1304 T 5). Absent AHAB's ability to cross-examine Al Sanea to explore how little information, if any, many of these so-called key witnesses had about the matters in genuine dispute, its ability to refute Al Sanea's assertion was improperly handicapped. The same was true with respect to documents. Al Sanea swore that the key documents were all located in Saudi Arabia, (R. 620 19), yet the consultant retained by the Public Prosecutor of Bahrain found that Al Sanea had removed files in order to hide evidence of his fraudulent conduct in that country. (R. 840-41). Plainly, Al Sanea's affidavit as to the location of documents in Saudi Arabia was not entitled to go untested. Even taken at face value, Al Sanea's affidavits were carefully crafted to disclose only one extraordinarily narrow slice of the factual picture, and to conceal numerous important facts. The most efficient and least burdensome way to obtain critical information pertinent to the issue of forum was for the court to require Al Sanea to appear in Saudi Arabia for a deposition. Yet it improperly refused such relief and decided the motion based on Al Sanea's untested assertions. The Rules of the Commercial Division allow for discovery to proceed while a motion to dismiss is pending. Uniform Rules for Trial Court (22NYCRR) § 202.70 (11 (d)); Practices for Part 56 6. The Commercial Division has modified the general presumption of an automatic stay of discovery once a motion to dismiss is filed. Compare CPLR 32 14(b) with Commercial Division Rule 11(d) (22NYCRR § 202.70 (11(d)) and Practices for Part 56 6. This modification permitted AHAB to proceed with discovery in aid of its opposition to Al Sanea's forum motion. Defendants are routinely required to submit to jurisdictional and forum discovery, including depositions, while their motions to dismiss on these grounds are pending. See, e.g., Peterson v. Spartan Indus., Inc., 33 NY2d 463, 467 (1974). The most frequently cited decision on the point in this Court is Rivera de Enamorado v. Central Am. Steamship Agency, Inc., 160 AD2d 182 (1st Dept. 1990). As Rivera de Enamorado recognized, permitting discovery prior to a decision on forum non conveniens is entirely proper where the plaintiff makes "the minimal required showing that the requested discovery of [defendant] could adduce facts establishing New York as a proper forum for this action." Id. Compare Garmendia v. O'Neill, 46 AD3d 361, 362 (1st Dept. 2007) (court properly declined to adjourn motion to permit discovery where plaintiff failed to make this minimal showing). The purpose of jurisdictional and forum discovery is to "protect[] the party to whom essential jurisdictional facts are not presently known, especially where those facts are within the exclusive control of the moving party." Peterson, 33 NY2d at 466. Only after conducting jurisdictional and forum discovery and thereby testing the facts within defendant's knowledge is a plaintiff in a fair position to oppose the defendant's motion. See Rivera de Enamorado, 160 AD2d at 182. Jurisdictional discovery is useful to a plaintiff precisely because the plaintiff is able to incorporate the results of its discovery into its opposition to a defendant's motion to dismiss. See Martinez v. Patel, 126 Misc 2d 985, 985-86 (Sup. Ct. Kings Cty. 1985) (discovery appropriate to assist with response to jurisdictional motion). Al Sanea argued below that early jurisdictional and forum discovery is justified only in extraordinary circumstances. The very opposite is true. The legal standard that governs whether a plaintiff is entitled to such discovery is purposely low. The Court of Appeals has held that whenever a plaintiff makes a "sufficient start," i.e., a non-frivolous showing that facts pertinent to an acceptable basis for jurisdiction may exist, a plaintiff is entitled to discovery and thus need not make a prima facie showing at the pre-discovery stage. Peterson, 33 NY2d at 467. The plaintiff must show that such facts may exist, not that they do exist. Id.; see also 6A Carmody-Wait 2d § 38:115 (2011); 7B McKinney's Consol. Laws of N.Y. Ann. Commentary CPLR 3211:C32 11:48 (McKinney 2011). This Court has made clear that it does not permit a defendant to slam shut the door to the courthouse without giving the plaintiff the opportunity to develop a proper factual record on the issue of forum non conveniens. In Rivera de Enamorado, 160 AD2d at 182, this Court ruled as follows: Plaintiff made the minimal required showing that the requested discovery of Victory could adduce facts establishing New York as a proper forum for this action. Since such facts would aid plaintiff in [its] opposition to the motion to dismiss, the court properly adjourned that motion until after completion of discovery. AHAB plainly made more than a "sufficient start" to establish that Al Sanea likely had information pertinent to showing that New York is the proper forum for adjudicating this dispute. See, e.g, Am. BankNote, 45 AD3d at 340; Hayne v. Darden Jr., No. 600971/05, 2005 NY Misc LEXIS 3601, at *4-.5 (Sup. Ct. New York Cty. Dec. 6, 2005). The lower court's refusal to allow AHAB to depose Al Sanea or take any other forum discovery before deciding the motion to dismiss was thus insupportable. CONCLUSION For the foregoing reasons, appellant AHAB respectfully submits that the decision below dismissing this action on grounds of forum non conveniens should be reversed and the action reinstated. This case concerns fraud and theft that occurred in the County of New York. It raises the critical issue of whether New York as a matter of policy will intervene in international fraud where the transactions that constitute the fraud are centered in New York. In the alternative, the decision should be reversed and remanded with instructions that AHAB be permitted to take forum discovery followed by reconsideration of themotion on a fuller record. Respectfully submitted, BAACH ROBINSON & LEWIS PLLC /5/ Eric L. Lewis Eric L. Lewis 1201 F Street, NW, Suite 500 Washington, DC 20004 (202) 833-8900 445 Park Avenue New York, NY 10022 (212) 826-70041 eric. lewis@baachrobinson.com Attorneys for Defendant-Appe/lant/ Third-Party PlaintiffAppellant Dated: May 27, 2011 PRINTING SPECIFICATION STATEMENT This computer generated brief was prepared using a proportionally spaced typeface. Name of Typeface: Times New Roman Point Size: 14 Line Spacing: Double The total number of words in the brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents and certificate of compliance is 12,846. SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK MASHREQBANK PSC, Plaintiff, Index No. 601650/2009 - against - IAS Part 56 (Lowe, J.) AHMED HAMAD AL GOSAIBI & BROTHERS CO., Defendant. PRE-ARGUMENT STATEMENT --------------------------------- - -- ------- x AHMED HAMAD AL GOSAIBI & BROTHERS COMPANY, Index No. 590643/2009 Third Party Plaintiff IAS Part 56 (Lowe, J.) -against- MAAN ABDULWAHEED AL SANEA and AWAL BANK BSC, Third Party Defendants -------------------------------------------x 1 . TITLE OF THE ACTION: Mashreqbank PSC v. Ahmed Hamad Al Gosaibi & Brothers Co. v. Maan Abduiwaheed Al Sanea and Awal Bank BSC. 2. FULL NAME OF ORIGINAL PARTIES: As stated in caption, except that the correct spelling of defendant / third party plaintiff s name is Ahmad Hamad Al Gosaibi & Brothers Co. 3. NAME, ADDRESS. & TELEPHONE NUMBER OF COUNSEL FOR APPELLANT: David Stich 521 Fifth Avenue, 1 7 'h Floor New York, New York 10 175 (646) 554-4421 Eric L. Lewis BAACH ROBINSON & LEWIS PLLC 1201 F Street, NW, Suite 500 Washington, D.C. 20004 (202) 833-8900 4. NAME. ADDRESS. & TELEPHONE NUMBER OF COUNSEL FOR RESPOND)ENTS: Carmine D. Boccuzzi, Jr. Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, NY 10006 (212) 225-2000 Counselfor Plaint iff Mashreqbank PSC Robert F. Serio Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, NY 10166 (212) 351-4000 Counsel for Third Party Defendant Maan AbduiwaheedAl Sanea 5. COURT AND COUNTY FROM WHICH APPEAL IS TAKEN: Supreme Court of the State of New York, County of New York. 6. DECISION AN) ORDER APPEALED FROM: This is an appeal from an order dated July 26, 2010, and filed on July 29, 2010, that granted third party defendant Maan Abduiwaheed Al Sanea's motion to dismiss the third party complaint pursuant to CPLR 3 27(a) and the common law doctrine offorum non conveniens and dismissed, sua sponte on the same grounds, the principal action and counterclaim in this matter; and Judgment entered on August 11, 2010. 7. NATURE AND OBJECT OF THE CASE: The original complaint filed by plaintiff Mashreqbank PSC ("Mashreq") against defendant and third party plaintiff Alimad Hamad Al Gosaibi & Brothers Co. ("AHAB") sought recovery of $150 million that Mashreq allegedly transferred to a New York bank account in the name of AHAB pursuant to a foreign exchange transaction. In addition to answering the complaint and asserting affirmative defenses, AHAB filed a third party complaint against Maan Al Sanea ("Al Sanea") and Awal Bank BSC ("AWAL Bank"'), a bank that is owned and controlled by Al Sanea, for indemnification and damages if AHAB were to be found liable to Mashreq. AHAB also filed a counterclaim against Mashreq. The third party claim and counterclaim allege that the transaction which forms the subject of the principal claim is part of a massive fraudulent scheme that Al Sanca perpetrated, and Mashreq aided and abetted, through which Al Sanea caused unauthorized borrowing of more than $10 billion in the name of AHAB and then transferred the bulk of those funds to the accounts of companies that he owned and controlled. The foreign exchange transaction at issue in Mashreq's complaint was carried out by Al Sanea as part of a sequence of billions of dollars of fraudulent foreign exchange deals through New York over a five year period to hide disguised short term borrowing to keep the enormous Ponzi scheme in operation. The funds received from Mashreq in that exchange were transferred from the Bank of America account in New York to another bank account in New York under Al Sanea's control at AWAL Bank BSC for Al Sanea's personal benefit, which prevented AHAB from having access to funds to close out the transaction on which Mashreq claims an underlying debt. The vast majority of these transactions, and the multi-billion dollar fraud of which this is a part, all took place through the New York financial system and the funds paid into the Bank of America account by Mashreq were converted by Al Sanea to his own use in New York. 8. RESULT REACHED IN THE COURT BELOW: The Court below found that it had jurisdiction over Al Sanea but granted Al Sanea's motion to dismiss the third party complaint pursuant to CPLR 327(a) and the common law doctrine of forum non conveniens. The court ruled sua sponte that the principal action and counterclaim should also be dismissed on the same grounds. 9. GROUNDS FOR SEEKING REVERSAL: The court below improperly dismissed AHAB's claims against Al Sanea, as well as the principal action and counterclaim, even though (i) the Court found that the transactions at issue in the complaint, counterclaim and third party claim constituted the transaction of business in New York sufficient to permit the exercise of jurisdiction over Al Sanea; ii) Al Sanea's overall fraud was accomplished through his enormous and necessary misuse of the New York banking system, and through hundreds of foreign exchange transactions worth billions of dollars carried out in New York; (iii) the transaction at issue in Mashreq's complaint involved the remittance by Mashreq of $150 million to an account in AHAB's name at Bank of America in New York; (iv) Al Sanea converted the $150 million by transferring it from the account in AH-AB's 'name at Bank of America in New York to another account in New York at HSBC; (v) no party moved to dismiss either the principal action or the counterclaim; and (vi) while the instant case would allow the dispute to be decided in a single proceeding in a single forum, the court's ruling fails to consider that there is no single alternative forum for this dispute and that resolution of the dispute would require at least three separate proceedings in separate jurisdictions, if those jurisdictions are able to hear this dispute at all. The Court of Appeals has held that New York has an "overriding and paramount" interest in this type of transaction, to which the New York banking system was instrumental. See J Zeevi and Sons, Ltd. v. Grindlays Bank (Uganda) Ltd., 33 3 N.E.2d 168, 172 (1975). Dated: New York, New York August 27, 2010 DAVID P. STICH, E 5f 1 Fift A--venue, 17h Floor New York, New York 10 175 (646) 554-4421 Eric L. Lewis MAACH ROBINSON & LEWIS PLLC 1201 F Street, NW, Suite 500 Washington, D.C. 20004 (202) 833-8900 Counsel for Defendant IThird Party Plaintiff COPIES TO: Clerk of the Supreme Court of the State of New York County of New York 60 Centre Street New York, New York 10007 Carmine D. Boccuzzi, Jr. Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, NY 10006 Counselfor Plaint iff Robert F. Serio Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, NY 10 166 Counsel for Third Party Defendant RECORD PRESS,, Decades of Expefience QCutt~ng Edge Technology SF.- 1945 229 West 36th Street, New York, N.Y. 10018 - Tel: (212) 619-4948 - Fax: (2121 608-3141 29505 STATE OF NEW YORK,I SS: AFFIDAVIT OF SERVICE COUNTY OF NEW YORKI Daniel Vinci being duly sworn, deposes and says that deponent is not party to the action, and is over 1 8 years of age. That on the 27th day of May 2011 deponent served 2 copies of the within BRIEF FOR DEFENDANT-APPELLANT! T~iRD-PARTY PLAINTIFF-APPELLANT upon the attorneys at the addresses below, and by the following method: BY HAND DELIVERY AND ELECTRONIC MAIL Carmine 0. Boccuzzi, Jr. Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, N.Y. 10006 [212] 225-2000 cboccuzzi~cgsh .com Attorneys for Plaintiff-Respondent Robert F. Serio Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, N.Y. 10166 (212) 351-4000 rserio~gibsondunn.com Attorneys for Third-Party Defendant-Respondent /s/ Nadia R. Oswald Hamnid Sworn to me this May 27, 2011 Is/ Daniel Vinci NADIA R. OSWALD HAMID Case Name: Mashreqbank PSC v. Ahmed Notary Public, State of New York Hamad Al Gosaibi & Brothers Company No. Ol0S6101 366 Qualified in Kings County Commission Expires November 10, 2011