The case of the day is Standard Chartered Bank v. Ahmad Hamad Al Gosaibi & Brothers Co. (N.Y. Sup. Ct. 2012). I covered a related § 1782 application, Ahmad Hamad Algosaibi & Brothers Co. v. StandardChartered International (USA) Ltd., in October 2011. The facts of today’s case can be stated much more simply than the facts of the prior case. According to the Bahraini judgment, Standard Charter agreed to sell Saudi Riyals to AHAB for $25 million. It transferred the Riyals to AHAB’s account, and AHAB failed to pay. AHAB’s defense was that Maan Abdulwahid Al Sanea, whom we met in the prior post, forged the documents relating to the transaction and stole the money for his own use.

In the new case, Standard Charter sought recognition and enforcement of a $25 million judgment of the Bahrain Chamber for Dispute Resolution¹ that entered in 2009. AHAB had appeared and defended the Bahraini proceeding but had not appealed in Bahrain. It made three arguments in New York. First, it argued that the complaint was insufficient because it did not allege that the Bahraini court had subject matter or personal jurisdiction or that the Bahraini judiciary provided impartial tribunals and procedures compatible with due process. The judge, citing Narajno and other cases, held that such matters were affirmative defenses and thus that they need not be pleaded.

Second, AHAB argued that it had not had due process in the Bahraini proceedings. It pointed to the fact that much of the fact-finding was done by court-appointed experts rather than by the court itself. The judge rejected this argument on the grounds that this was a common method of fact-finding in the civil law. It’s noteworthy that although the BCDR’s forgery expert accepted the contention that Al Sanea had forged signatures on the relevant documents, it found that Standard Chartered had proved that Al Sanea had acted with authority and held AHAB liable for its agent’s misconduct. AHAB also argued that the BCDR had denied due process in other ways (failing to join Al Sanea or stay the case pending the outcome of the criminal case against him; offering only a direct appeal to the Court of Cassation rather than a first appeal to an intermediate court; failing to offer an opportunity for its witnesses to testify by videoconference from Saudi Arabia, where it was unclear that video testimony would have been forbidden and where it was unclear what additional evidence the witnesses would have offered). The court rejected all of these theories, apparently correctly.

Last, AHAB argued that Bahrain was an inconvenient forum. But AHAB was served with process in Saudi Arabia, and the statute permits a forum non conveniens defense only in cases “of jurisdiction based only on personal service,” i.e., in tag jurisdiction cases.

1. The BCDR was established by royal decree in 2009.