| NEW YORK
NEW YORK Oct 25 A U.S. judge on Friday narrowed
Mashreq PSC's claims in a lawsuit that alleged ING
Groep NV lost more than $40 million of the Dubai bank's
money by investing it in "toxic" securities.
U.S. District Judge Lorna Schofield denied ING's bid to
dismiss the complaint in its entirety, ruling that Mashreq's
breach of contract claim should stand.
However, she dismissed the bank's breach of fiduciary duty
and fraud claims as duplicative of the contract claim. As a
result, she said, Mashreq cannot pursue punitive damages in
addition to the $43 million it claims it is owed, as New York
law does not generally allow for punitive damages on a breach of
"Mashreq's claim for breach of contract is plausible based
on the facts alleged, and there is nothing in the plain language
of the agreement or the revised guidelines that negates this
plausibility as a matter of law," Schofield wrote.
A spokesman and a lawyer for Netherlands-based ING did not
immediately respond to a call for comment on Friday evening.
Mashreq's attorney, Azra Mehdi, said the bank was pleased
that its "primary claim" was preserved.
"We're very happy that Judge Schofield felt that our claims
were timely and meritorious," she said. "We're looking forward
to continuing on."
The lawsuit alleged that ING put more than two-thirds of a
$108 million investment into "toxic, illiquid structured
securities" in 2007 and hid the move in part by mixing the loans
in reports with more reputable securities.
Mashreq said it had lost at least $60 million at one point
before recouping some of it through its own efforts.
The case is MashreqBank PSC v. ING Group NV, U.S. District
Court, Southern District of New York, No. 13-2318.