Source: https://casetext.com/brief/ebd4c637-mashreqbank-psc-appellantvahmed-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
Timestamp: 2020-04-05 13:22:25
Document Index: 60366475

Matched Legal Cases: ['§ 500', '§ 500', '§ 500', '§ 500', '§ 500', '§ 500', '§ 500', '§ 1352', '§ 1352']

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