ALKHOBAR: The New York Supreme Court's dismissals of a series of suits filed by Ahmed Hamad Al-Gosaibi & Brothers Co. (AHAB) against Maan Al-Sanea of the Alkhobar-based Saad Group alleging the misappropriation of billions of dollars could still move forward in the courts of GCC (Gulf Cooperation Council) states.
In a written statement e-mailed to Arab News from Washington last week, AHAB attorney Eric Lewis said the court's July 29 decision was not based on the merits of Al-Gosaibi's claims against Al-Sanea. "The court simply decided that the case would be more conveniently heard elsewhere," he said.
According to a copy of the court verdict, Presiding Justice Richard B. Lowe III found that "the exercise of long-arm jurisdiction over Al-Sanea and Saad Trading comports with due process notions of fair play and substantial justice."
The judge explained that the court had jurisdiction because Al-Sanea and Saad Trading "made New York the epicenter of several large scale financial transfers" and "having made the choice to use New York banks, they may not escape the imposition of jurisdiction."
"Despite this finding, the judge decided the case between Al-Gosaibi and Al-Sanea would more conveniently be tried elsewhere than New York," said Lewis.
Justice Lowe said that the New York Supreme Court should not be the place to resolve the dispute, adding that such cases should be heard in a Middle East venue. The justice also noted that many of the witnesses do not reside in New York and it may be more convenient for them to appear in a Middle Eastern court.
"(The justice's) dismissal (of the lawsuit) is on grounds of 'forum non conveniens,' which is a purely procedural decision and not a ruling in any way on the merits of Al-Gosaibi's claims against Al-Sanea," Lewis said.
Some of the documents at issue in the case were drafted under the laws of the United Arab Emirates and Kuwait, and both the plaintiff and defendant are based in Saudi Arabia, which led the New York Supreme Court to recommend that any suits be initiated in those court systems dependent on the specific litigation.
According to Al-Gosaibi's lawyer, "the New York court's ruling highlights a dangerous gap in oversight of the US financial system, where foreign parties can use New York banks to perpetrate massive financial fraud but escape scrutiny simply by residing abroad and engineering the wrongdoing from there."
Al-Gosaibi took action against Al-Sanea after the UAE's Al-Mashreq Bank filed a lawsuit claiming AHAB owed them $225 million in foreign-exchange transactions, which could not be completed after the group reportedly posted disastrous results in the first quarter of 2009.
The Saad Group welcomed the New York court's decision, claiming that it had frequently requested to refer the case to Saudi courts.
Lewis said he would seek redress of the verdict in the United States but did not comment about filings in the GCC states.
By Siraj Wahab
© Arab News 2010
