Tag Archives: UAE

Case of the Day: SEC v. Kumar

The case of the day is Securities and Exchange Commission v. Kumar (N.D. Cal. 2015). The complaint alleged that Vinay Kumar Nevatia, who lived in Palo Alto between 2004 and 2013, solicited investments in shares of CSS Corp. Technologies (Mauritius) Ltd., even though he was not registered with the SEC. Kumar formed a company called VRSBS Investment, LLC, to hold the shares of CSS that he and his investors purchased. Each investor received a stock certificate, presumably registered to VRSBS Investment, if I understand the situation correctly, for his or her portion of the total investment. However, according to the SEC, Kumar later made an agreement to sell half VRSBS’s CSS shares to a venture capital firm. The proceeds of the sale were deposited in his personal bank account rather than in VRSBS’s account. When the venture capitalists requested stock certificates, according to the SEC, Kumar “falsely claimed that new certificates needed to be issued because all his CSS shares were held on a single certificate, which covered a greater number of shares then the [VCs] had purchased.” Kumar tried to get certificates, but CSS’s transfer agent told him he needed to return the original certificates for cancelation. Kumar, again according to the SEC, “falsely told the transfer agent … that all of the original stock certificates issued to VRSBS had been lost,” when in fact the investors were holding the certificates. After Kumar agreed to indemnify the transfer agent, the transfer agent issued the new certificates. Kumar, according to the SEC, never told his original investors about the sale or the proceeds of the sale. Yikes!
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TBS Middle East Carriers v. United Quarries

The case of the day is TBS Middle East Carriers v. United Quarries (S.D.N.Y. 2014). United Quarries charted vessels owned by TBS to carry crushed gabbro aggregate from Fujairah, in the UAE, to Mesaieed, Qatar. Under their contract, 134 shipments were completed. TBS charged United Quarries approximately $30.2 million for freight and $18.2 million for demurrage. There was no dispute about those charges. There was, however, a dispute about much smaller costs: $122,753 for “account reconciliation,” $25,696.78 for “reimbursement of shifting expenses,” $138,162.15 for additional war risk premiums, and $1.36 million for bunker escalations. United Quarries counterclaimed for $605,835.57, or 1.25% on the gross freight and demurrage earned by TBS.
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Case of the Day: Carson v. Griffin

The case of the day is Carson v. Griffin (N.D. Cal. 2013). Fletcher Carson sued several defendants, including Walsh Griffin, Walsh Capital Group, Ivan Ahmed Azziz, Daniel Okwudili Nwankwo, Cisse Abdoulaye, and Ben Aka, on a variety of claims. I don’t attempt to summarize the claims of the pro se complaint. Griffin and Walsh Capital Group were located in Ireland. The others were in Dubai. Carson attempted to serve each of these defendants via email using RPost’s service. You may remember RPost from the case of the day of February 7, 2012, in which RPost was the plaintiff and used its own email technology to effect service. As in the earlier case, Carson did not know the addresses of the foreign defendants, and so the Hague Service Convention did not apply to his attempts at service in Ireland (the UAE is not a party to the Convention in any case).

Carson first sought leave to serve Azziz by email using an email address that he had previously used in corresponding with Azziz. Apparently he sought leave after sending the email—long-time readers know that I think motions for leave to make service by alternate means should come before you effect the service. In any case, the judge rejected his first attempt on the grounds that Carson had not “explicitly state[d]” that he had previously corresponded with Azziz at that address and on theg rounds that the “receipt authentication document” had a field labeled “opened,” but that field was blank. On his second attempt, Carson explained that he had corresponded with Azziz hundreds of times at the address in question, which satisfied the judge. He also provided some additional details about RPost’s service:

There is a delay after the email is sent and before the receipt authentication is sent back to the sender. If the email is opened within that delay period, the “opened” column will indicate that the email has been opened. Otherwise, the “opened” column will be be blank. The system does not continue to query the recipient to determine whether the email is later opened.

The judge was satisfied with this explanation, too, though I’m not sure why. It obviously was important to the judge to know whether the email had been opened (it’s not obvious that the judge’s concern was well-founded, since there’s a case to be made that what should matter is receipt of the email, not whether the defendant actually opens the email). But Carson’s explanation doesn’t show that the email ever was opened. In any event, the judge deemed that Azziz had been served.

The judge rejected Carson’s attempts at service on Nwankwo, Abdoulaye, and Aka, whom he attempted to serve at Azziz’s email address, on the grounds that he had not shown that he had ever communicated with them at that address and it was unclear that they would receive notice of the proceedings.

Finally, the judge granted Carson’s motion with respect to service on Griffin and Walsh Capital. Carson explained that he had corresponded with Griffin many times using the relevant email address, and that the address he used for Walsh Capital was listed on the firm’s website. Interestingly, the judge did not seem concerned about whether Griffin or Walsh Capital had actually opened the emails, noting that “it is reasonable to assume that a business checks, or ought to check, an email address that is listed on its website.”