Court battle for Deutsche in New York
DEUTSCHE Bank and a banking unit of Saudi Arabia’s Algosaibi family battled in court yesterday over whether to throw out a $74.2m (£45.3m) claim by the German bank, part of a flurry of lawsuits involving billions of dollars and allegations of fraud.
New York State Supreme Court Justice Bernard Fried said he expects to rule by 9 December whether The International Banking Corp, a Bahrain bank whose controlling shareholder is the Ahmad Hamad Algosaibi and Brothers conglomerate, did sufficient business in New York to subject it to litigation in the state.
Several large Middle Eastern companies are caught up in a variety of litigation amid a feud between Algosaibi and the billionaire Maan al-Sanea, who married into the family.
Regulators and bankers are trying to address up to $22bn of debt restructurings at Algosaibi and al-Sanea’s Saad Group. Last week, Kuwait’s Al Ahli Bank of Kuwait KSC sued Saadand al-Sanea for $125m, alleging breach of contract and fraud.
The issue at yesterday’s hearing was whether Deutsche Bank can recover damages for TIBC’s failure to make good on its portion of two foreign exchange transactions, under which the German bank agreed to swap $59.8m for £40m.
A ruling favouring TIBC would free up assets that Deutsch Bank attached after it sued in May, court papers show. H Barry Vasios, a partner at Holland & Knight who represents TIBC, said his client had only “incidental” contact with New York, and that its correspondent banking activity in the state is not relevant to Deutsche Bank’s argument.
Urging Fried to look at the “totality” of circumstances, Vasios said, “Our performance is entirely outside the US. The deal was negotiated there. The deal was completed there.”