Case of the Day: In re VUZ-Bank JSC

The case of the day is In re VUZ-Bank JSC (W.D. Va. 2022). VUZ is a Russian bank. It sought discovery in Virginia for use in potential criminal proceedings in Dubai, that it said arose out of a fraud on the bank by Rus-AgroExport LLC, Hakan Holdings Ltd., and Hakan Agro DMMC. VUZ brought a Section 1782 application, and the court authorized the issuance of subpoenas to Agropex International and Hakan USA.

Deniz Yelda Bahçeci and Alettin Bahçeci sought leave to intervene to quash the subpoenas. Deniz was the guardian of her minor children, who owned a majority stake in Hakan Agro. Alettin was allegedly a target of the prospective criminal case in Dubai. The two argued that VUZ’s lawyers, Baker McKenzie, should be disqualified from the representation for a conflict of interest.

The issue was that Baker McKenzie had met with Hakan Agro’s agent concerning its insolvency and possible liquidation. Hakan Agro was, therefore, a prospective client. The matter discussed was apparently at least “substantially related” to the claims VUZ raised. And Hakan Agro had not consented to the conflict. On these facts, the court held that there was a conflict, which under Virginia law is imputed to all members of the firm. It also rejected an argument that Deniz and Alettin lacked standing, and it vacated its order granting the application.

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