| ALBANY, N.Y., April 8
ALBANY, N.Y., April 8 New York's highest state
court has ruled that a lawsuit by the Algosaibi family
conglomerate, claiming that a Saudi billionaire who married into
the family committed a $150 million fraud, should be heard in
In the lawsuit, Ahmed Hamad al Gosaibi & Brothers Co claimed
that Maan al-Sanea, the billionaire head of the Saad Group, used
its accounts with Dubai-based Mashreqbank PSC to commit
fraudulent foreign exchange trades executed in New York.
The suit is part of a global legal battle in which the
Algosaibi family claims that al-Sanea, who married into the
family 30 years ago, defrauded it of billions of dollars after
he was put in charge of its financial businesses.
Al-Sanea and the Saad Group have denied wrongdoing.
Reversing a lower court, the New York Court of Appeals on
Tuesday dismissed the Mashreqbank claims, saying the fact that
the allegedly fraudulent trades were executed in New York did
not give the state's courts jurisdiction over the case.
"New York's interest in its banking system is not a trump to
be played whenever a party to such a transaction seeks to use
our courts for a lawsuit with little or no apparent contact with
New York," Judge Robert Smith wrote for the court.
Because the suit involved a Saudi company, a Saudi citizen
and an alleged fraud committed in Saudi Arabia, he said, "the
jurisdiction with the greatest interest in resolving the
issues...is clearly Saudi Arabia."
Al-Sanea's attorney, Richard Serio of Gibson, Dunn &
Crutcher, said he was pleased with the decision.
"It marks the likely end of nearly five years of burdensome
and unnecessary litigation in New York," he said.
Attorneys for al Gosaibi & Brothers and Mashreqbank did not
immediately return requests for comment.
In 2009, al-Sanea's Awal Bank and Algosaibis' International
Banking Corp collapsed, with an estimated $22 billion owed to
more than 100 banks, including Deutsche Bank,
HSBC and Societe Generale.
Since then, the Algosaibi family and al-Sanea have faced off
in courts in New York, Saudi Arabia, Bahrain, London, the Cayman
Islands and Geneva.
Mashreqbank sued the Algosaibis in New York court in 2009,
seeking to recover $150 million in foreign exchange trades
executed in New York. Those funds eventually were transferred
into an account controlled by al-Sanea, according to the bank's
The Algosaibis then filed a lawsuit in New York against
al-Sanea, claiming he and Awal Bank had used Algosaibi accounts
as part of a massive fraud. The Algosaibis also asserted in
court filings that Mashreqbank aided al-Sanea in the alleged
scheme, according to the Tuesday's decision.
The two lawsuits were dismissed in 2010 by state Supreme
Court Justice Richard Lowe, who granted al-Sanea's request to
toss out the case against him, saying it did not properly belong
in New York state court. As a result, he also dismissed the
lawsuit brought by Mashreqbank, since the two cases were closely
In a 3-2 ruling in 2012, an intermediate state appeals court
reversed that decision, ruling that New York was an appropriate
forum for the complaints. The Court of Appeals on Tuesday
The case is Mashreqbank PSC v. Ahmed Hamad al Gosaibi &
Brothers Company, New York State Court of Appeals No. 54.
(Reporting by Daniel Wiessner; Editing by Ted Botha and Ken