Wednesday, July 28, 2010

AlGosaibi v Maan AlSanea - The "Fix" is In? Caymans Island Case "On Hold" Pending Determination of Saudi Panel


Asa Fitch over at The National reports that the Caymans Island Court has suspended its proceedings pending determination by the special Saudi commission set up earlier to investigate allegations of fraud against Mr. AlSanea.

I had posited a bit earlier that for a variety of reasons various jurisdictions would prefer that this  messy dispute  "go away" - especially given the nature of the claims and counterclaims raised by the two protagonists.

The Caymans Court ruling seems to be another step in that direction.  A similar movement by the New York Supreme Court would, I think, confirm that this is what is happening.  If you've been following that case, you will have noticed that on several occasions the judge has mused (signaled?) whether Saudi is after all the proper forum.

Letting the Saudis make a determination as to who is guilty, if anyone, relieves foreign courts of the burden of decision making.  It also allows these jurisdictions to avoid antagonizing the Saudi Government, which no doubt would prefer that any dirty laundry involving its nationals be washed in private. 

And, if by chance, their proceedings result instead in a compromise solution - or "fix" - a pooling of assets to settle claims with a dropping of allegations of misconduct so much the better. 

The ruling is labeled a setback for the AlGosaibis, who as I noted are probably the party whose acceptance of the Grant Thornton "settlement plan" is key to moving forward.  Indeed it is a setback.  As such then it is a powerful incentive to "make a deal".

However, pressure remains on Mr. AlSanea.  The stay on his US$9.2 billion of assets has been reaffirmed.  And the Caymans Court has said that if the Saudi proceedings prove inadequate, it will reopen its own.  So if AHAB suddenly makes a generous offer of peace, no doubt plenty of incentive for him to reply positively.

And this is the usual appropriate place to note that Mr. AlSanea continues to deny involvement in any wrongdoing.

2 comments:

Laocowboy2 said...

More likely to be Saudi lenders 60(%), foreign unsecured creditors 10(%) if they are lucky.

Abu 'Arqala said...

Laocowboy2

I understood the Saudi banks already fixed (or largely fixed) their exposure problem by realizing their collateral on Saad.

Unclear what they've done on their AHAB exposure.