Friday, July 30, 2010

USA Judge Throws Out Lawsuits

Just days after a similar judgement in the Cayman Islands (see our previous post), New York's Supreme Court has dealt a further blow to AHAB in its dispute against Maan Al-Sanea, with the judge "throwing out" several lawsuits relating to it.

As The National newspapers reports, "Justice Richard B Lowe III of the New York Supreme Court ruled that an action brought by the UAE's Mashreqbank should be heard in the Emirates, where parallel action is already taking place, and not in New York. He also said Saudi Arabia could be the appropriate place for other parts of the allegations to be tested."

And as The Wall Street Journal reports, "The U.A.E. (United Arab Emirates) is the more appropriate forum for determination of the primary actions, and they will be decided in the case that Mashreqbank has already commenced there," the judge said. "Ahab can decide whether it prefers to bring its third-party action in the U.A.E. as well, or to seek redress in Saudia Arabia." Part of Justice Lowe's ruling was based upon the fact that many witnesses were not residing in New York and that it would be more convenient for them to appear in a Middle Eastern court.

In response to the judgement, AHAB's lawyer, Eric Lewis, made the point that his clients had not chosen to litigate in the USA, but rather that decision was taken by Mashreqbank, when it decided to sue Mr Lewis's clients. The National goes on to report that "Mr Lewis stated that AHAB believes the decision is wrong as a matter of both law and policy and that it is considering its options."

According to the WSJ, Robert Serio - a lawyer for Mr Al-Sanea, said: "We are pleased with the court's ruling and, in particular, with its recognition that the Kingdom of Saudi Arabia is the better forum for the resolution of the parties' differences."

Mashreqbank said in a statement that its claims "remain indisputable and we will continue to aggressively pursue those claims in the U.A.E. courts."

So, this lengthy American chapter of events appears to have drawn to a close (although Mr Lewis did say his clients would consider an appeal). Questions will now be asked not only as to what happens next - in Saudi Arabia - but also how quickly a resolution to this dispute can be found, especially as the argument over jurisdiction has already taken some time.

Taif Info Center will be summarising Justice Lowe's judgement in the coming days, with a story appearing in our Legalities page.

Meanwhile, the original National report can be read here, while the Wall Street Journal can be read here.

Thursday, July 29, 2010

Al Gosaibis suffer Cayman 'blow'

News agencies have reported a major disappointment for AHAB in its dispute against the Saad Group and Maan Al-Sanea. As Asa Fitch in The National writes: “A Cayman Islands judge has put a multibillion-dollar fraud claim against Maan al Sanea on hold until authorities in Saudi Arabia reach a decision on the main allegations against the financier. The ruling is a blow to the al Gosaibi family, which has accused Mr al Sanea of running an immense Ponzi scheme.”

The Cayman Islands judge, Chief Justice of the Cayman Islands Grand Court Anthony Smellie, ruled that although Mr al Sanea was properly included in the Cayman lawsuit, “Saudi Arabia may be an available forum, and if so, would be the more appropriate forum for the trial of the underlying allegations of fraud raised personally against him”.

As Taif Info Center has reported in the past, the question of jurisdiction was always likely to be an important factor, with lawyers for Mr Al Sanea arguing all along that the cases should be heard in Saudi. This decision, therefore, could have big consequences and all eyes will now turn to the other jurisdictions – especially New York – where AHAB has launched lawsuits against Maan Al-Sanea.

Chief Justice Smellie upheld the worldwide $9.2 billion freezing order on Al Sanea's assets, ruling that it would remain in effect during the stay in proceedings that he had ordered.

According to Camilla Hall of Bloomberg, AHAB said in a statement that it was “considering the scope” of Smellie’s decision, which directed it to explore whether some of the issues in the case could be tried in Saudi Arabia.

Bloomberg reports that the Saad Group “applauded the decision”, saying in an e-mailed statement that “Saudi Arabia is the correct forum for the principal issues in this dispute to be resolved.”

It seems the Cayman Court has agreed with the Group.

Read The National report here.

Read Bloomberg's story here.

Wednesday, July 28, 2010

Saad Group Must Pay $33.1m Over Swaps

Bloomberg has reported that the Saad Group must pay $33.1 million to Abu Dhabi Commercial Bank PGSC for "defaulting on a foreign currency swap agreement."

The ruling was made by a UK Judge in London this week and is believed to be the first such ruling. Bloomberg reports that Saad defaulted when its credit rating was withdrawn in July 2009.

Bloomberg says that Saad argued in court that the default "applied to other deals between the companies and not to the 2008 swap created for Saad to hedge against future currency fluctuations." Their defenses were reportedly dismissed by the Judge as 'hopeless'.

Read the original Bloomberg report here.

Thursday, July 15, 2010

Saudi court dismisses AHAB claim

Saudi Arabian news outlets have reported a new development in the Al Gosaibi - Saad Group dispute, that comes as a blow to AHAB's claims against Maan Al-Sanea.

The Al Sharq El Awsat newspaper reports that the country's Administrative Court in the Eastern Province has dismissed the AHAB claim against Maan Al-Sanea that he acted fradulently with regards the acquisition and profits from shares in Samba Financial Group. The newspaper states that the verdict was delivered because of a 'lack of claim'.

Al Sharq El Awsat reports that laywer, Bader el Bassis, commented to the paper that this verdict represents the almost the final decision on this matter, though the Al Gosaibis may lodge an appeal during the period of objection. Though they may well do so, it is hard to deny that this verdict in the Saudi court must be a major disappointment.

Read the original Al Sharq report (in Arabic) here.

Thursday, July 8, 2010

Al Gosaibi prepared to sell assets to pay debt

An article published in Abu Dhabi's The National, June 26, claimed that the al Gosaibi family of Saudi Arabia was prepared to sell "much of its 70-year-old business empire to help pay its creditors, informed sources say."

The article by The National's Frank Kane stated "The family behind Ahmad Hamad Al Gosaibi and Brothers is offering creditors 20 cents on the dollar on US$9 billion (Dh33.05bn) of liabilities, funded by a disposal of assets, plus any proceeds of the family’s lawsuits against Maan al Sanea, a businessman and relative by marriage whom they accuse of defrauding the Al Gosaibi business. Mr al Sanea, the head of the Saad Group, has denied the allegations."

Read the full article here.