x Abu Dhabi, UAESunday 23 July 2017

NY hearing to focus on venue for fraud case

Lawyers are set to debate today whether New York is the proper forum for claims against Maan al Sanea, the Saudi billionaire accused of a US$10 billion (Dh36.72bn) fraud.

Lawyers are set to debate today whether New York is the proper forum for claims against Maan al Sanea, the Saudi billionaire accused of a US$10 billion (Dh36.72bn) fraud against Ahmad Hamad Al Gosaibi and Brothers, a Saudi family-owned conglomerate. The hearings spring from cases originally brought last summer in New York by the Dubai-based Mashreqbank against the Al Gosaibi group after it defaulted on a foreign exchange transaction worth $150 million. Al Gosaibi has acknowledged the default, but claims it was due to Mr al Sanea's alleged fraud.

Mr al Sanea, who is accused of carrying out the fraud when he headed Al Gosaibi's remittance business, has denied the charges. The fraud allegations and financial turmoil at Al Gosaibi and the Saad Group, a conglomerate owned by Mr al Sanea, have rocked Gulf banks, which are estimated to be owed billions of dollars by the two companies. As banks sue to get their money back, Al Gosaibi is waging a separate legal battle against Mr al Sanea. Cases have been filed in New York, London, Cayman Islands, Bahrain, Saudi Arabia and the UAE.

The New York court is scheduled to hear arguments today on motions to dismiss claims against Mr al Sanea because New York is an "inconvenient forum". The question of jurisdiction has arisen frequently in the case and Mr al Sanea has long asserted that Saudi Arabia is a better place for the matter to be decided. Key witnesses may not be comfortable making testimony in English, he has said, and are subject to travel bans. "I, along with many of the other individuals involved in this dispute, including all of the [Al Gosaibi] partners resident in Saudi Arabia, am currently subject to a travel ban imposed by the Kingdom of Saudi Arabia that prevents me from leaving Saudi Arabia to give evidence or otherwise participate in these New York proceedings," Mr al Sanea wrote in an affidavit filed in the New York court on March 9.

In January, Richard Lowe, the New York judge hearing the case, asked Al Gosaibi to address Mr al Sanea's jurisdictional claims. Al Gosaibi responded last month, arguing that New York was the right place for the case to be heard because the transactions at issue were carried out in English and claimed Mr al Sanea used New York banks in his alleged fraud. A representative for Mr al Sanea and an Al Gosaibi spokesman declined to comment.

@Email:afitch@thenational.ae