x Abu Dhabi, UAESaturday 22 July 2017

Judge puts brake on al Sanea case

A judge has ordered a halt to evidence gathering in a dispute between Ahmad Hamad Al Gosaibi and Brothers and the Saudi billionaire Maan al Sanea.

NEW YORK // A judge has ordered a halt to evidence gathering in a dispute between Ahmad Hamad Al Gosaibi and Brothers and the Saudi billionaire Maan al Sanea, saying he was not convinced the hearing should be in his court. "I am very, very concerned that these cases do not belong here," said the New York state Judge Richard B Lowe at a hearing late on Tuesday, according to a Zawya Dow Jones report.

The judge's demand relates to cases originally filed last summer by the Dubai-based Mashreqbank against Al Gosaibi and a Bahraini banking subsidiary called The International Banking Corporation (TIBC). Mashreq alleged that Al Gosaibi defaulted on currency exchange transactions worth US$150 million (Dh550.9m) and claimed TIBC defaulted on another $75m transaction. Mashreq filed in New York because the transactions were routed through banks there. Judge Lowe is presiding over two cases.

Al Gosaibi has admitted the defaults, but allege in a New York counterclaim that they were due to a $10 billion fraud allegedly perpetrated by Mr al Sanea, who worked for years as the head of Al Gosaibi's remittance business. Mr al Sanea has denied those accusations and is waging a legal battle to counter them in numerous jurisdictions, including New York, London and the Cayman Islands. A representative of Mr al Sanea declined to comment yesterday and a representative for Al Gosaibi could not be reached for comment prior to publication.

On Tuesday, Judge Lowe stopped attempts by Al Gosaibi to question witnesses and gather evidence until a decision is reached over whether New York is the right jurisdiction for the counterclaims. It was an apparent victory for Mr al Sanea, who has pushed for the dispute to be heard in Saudi Arabia. The defaults on financial obligations at Al Gosaibi and the Saad Group, founded and owned by Mr al Sanea, began last summer, prompting large write-downs and a rash of lawsuits by banks seeking to recover their money.

Both Al Gosaibi and Saad have extensive dealings with lenders across the region and elsewhere, and some international bankers have previously expressed reservations about a Saudi-brokered resolution. After Saudi authorities announced a deal last September settling debts between local banks, Al Gosaibi and Saad, a top official at the British Bankers' Association sent a letter to Mervyn Davies, the UK trade minister, saying "the Saudi authorities have refused repeated requests by international banks to help. The Saudi authorities maintain that this is a private family feud".

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