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Case of the Day: Manco Contracting Co. v. Bezdikian

The case of the day is Manco Contracting Co. v. Bezdikian (Cal. Ct. App. 2013). Manco Contracting Co. was a construction and engineering company operating in Qatar. Krikor Bezdikian owned 40% of the company, and Omar Al-Mana, a Qatari national, owned the remaining 60%. In 1988, Bezdikian and Al-Mana had a dispute that led to Bezdikian’s departure from Qatar for Los Angeles, “never to return.” In 1991, Manco sued Bezdikian in Qatar, alleging that Bezdikian had stolen money from the company. Bezdikian counterclaimed for an accounting and Manco’s disolution. In 1997, the Qatari court entered judgment in favor of Manco. Bezdikian appealed, but in 2000 the appellate court entered a final judgment for Manco in the amount of nearly 13.7 million riyals (or about $3.76 million in 2000 dollars).

In 2004, Manco sought recognition and enforcement of the judgment in the Los Angeles Superior Court. The judge, after a trial on the merits, entered a judgment for Manco in the full amount of the judgment, excluding post-judgment interest—the judge found that Manco had failed to prove that Qatari law provides for post-judgment interest. Both parties appealed. 1

On appeal, the court affirmed. Bezdikian’s main argument was that the Qatari judgment was not conclusive under § 4(a) of the UFMJRA because Qatar’s judiciary “does not provide impartial tribunals or procedures compatible with the requirements of due process of law.” The court found that Bezdikian had failed to make his case: his expert, Joseph Kechichian, had opined that “Qatar’s judiciary favored Muslim citizens such as … Al-Mana, over non-Muslim foreigners such as Bezdikian,” but his opinion rested on application of his common sense “to his knowledge of Qatar drawn from his study of the country and personal observations during visits there.” The trial judge rejected the opinion as unsubstantiated, and the Court of Appeals agreed, pointing to the “substantial evidence” that supported the trial judge’s findings that Qatar’s courts were impartial, including the provisions of Qatar’s constitution, protections for judicial independence under Qatari law. While there was evidence of bias against non-Muslim foreigners, the evidence on this question was mixed, and the court held that the trial judge had permissibly decided the question in favor of Manco.

Perhaps the most interesting point in the case was Bezdikian’s argument that the trial judge had erred by excluding from evidence the State Department’s Human Rights Report on Qatar. 2 The question was whether the contents of the report were hearsay. For you civilians out there who fail to appreciate the baroque splendor of our law of evidence, hearsay is a statement that a declarant does not make while testifying at the current trial, and that a party offers in evidence to prove the truth of the matter asserted in the statement. Hearsay is not admissible in evidence, but there is an exception for certain public records. In federal law, the exception extends in civil cases to a record or statement of a public office if it sets out factual findings from a legally authorized investigation, and neither the source of the information nor other circumstances indicate a lack of trustworthiness. (FRE 803(8)). Bezdikian pointed to this rule, somewhat oddly, and the court rightly rejected his argument on the grounds that it was California law, not federal law, that governed. Under California law, one of the conditions for the application of the hearsay exception is that the writing must be “made by and within the scope of duty of a public employee.” The evidence was that non-public employees, including Bezdikian’s expert witness himself, contributed to the report. The testimony was that the State Department relies not just on US embassies, but on “think tank reports from Rand Corporation, from the Brookings Corporation (sic), a variety of sources.” Therefore, the report was inadmissible under California law, even though it would likely have been admissible in federal court. In any case, the court found that no prejudice resulted from the exclusion of the report, because Bezdikian’s expert was permitted to quote from the report during his testimony and in any case the report focused on shortcomings in Qatar’s Shari’a courts, not in the civil courts that heard Manco’s lawsuit.

Last, Bezdikian argued extrinsic fraud, which under § 4 of the UFMJRA is grounds for refusing recognition. He argued that Al-Mana had filed a criminal complaint against him in Qatar for embezzlement, and that in 1992 he had been tried in absentia and sentenced to seven years in prison. Bezdikian had the right to return to Qatar, request a vacation of his conviction, and request a trial, but he believed—perhaps wrongly—that under Qatari law he would be imprisoned without bail pending his trial. But because under Qatar’s legal system Bezdikian’s personal presence was not necessary to presentation of his case (the civil courts in Qatar rarely take viva voce testimony), the court held there had been no complete denial of Bezdikian’s right to present his case and thus no basis for refusing recognition.

Notes:

  1. I don’t deal further about the cross-appeal relating to post-judgment interest.
  2. The link is to the current report, not to the older reports at issue in the case.

Case of the Day: Standard Chartered Bank v. Ahmad Hamad Al Gosaibi & Brothers Co.

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 Resolution 1 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.

Notes:

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

Case of the Day: Khatib v. Murrar

The case of the day is Khatib v. Murrar (Ill. App. Ct. 2012). Lami Khatib and Najat Murrar were married in Jordan in 2000. At the time of the marriage, Khatib paid Murrar’s father a dowry of one golden dinar, and under the marriage contract there was also a deferred dowry of JOD 5,000. Khatib and Murrar moved to the United States in 2009, but they separated and Khatib moved back to Jordan alone. In December 2009, Khatib obtained a certificate of revocable divorce from the Religious Court of Sweileh. The revocable divorce gave Khatib the “right to return [Murrar] to [Khatib’s] matrimonial bond within the legally prescribed waiting period.”

Murrar had no notice of the proceedings and learned of them only when she received a copy of the certificate of revocable divorce. After she had notice of the revocable divorce, a certificate of final divorce was registered in the Jordanian Ministry of the Interior. Murrar sued for divorce in Chicago, and Khatib moved to dismiss for lack of jurisdiction on the grounds that Murrar had already been divorced. Khatib was unsuccessful. He then sought recognition of the Jordanian judgment of divorce, and the Circuit Court certified the question for review by the Appellate Court.

The court held that the judgment could not be recognized. First, it was not entitled to recognition under the UFMJRA, because it was not a money judgment. Easy. Second, it is not entitled to recognition under the UEFJA, which in Illinois apparently applies both to sister-state judgments and to foreign state judgments. Here, the court held that the Jordanian proceedings had denied Murrar due process, which seems also clearly correct. Last, the court refused recognition under non-statutory principles of comity for essentially the same reasons.