The financial titans could be heading back to court.
(September 26, 2013) -- The largest Abu Dhabi sovereign
wealth fund could be about to haul Citigroup back to court with further claims to
recover some of the bank's bailout, after its prior attempts were thwarted in March.
In a document unsealed in a New York court this week, Citigroup
said that a claim filed in August by the Abu Dhabi Investment Authority (ADIA) had
made an "assault" on a federal court ruling in March, Reuters
The March ruling saw ADIA’s claim—and subsequent appeal—to
recover $4 billon of the investment it made in the bank during the crisis refused.
Citi’s deposition said only after losing the battle for the $4
billion did ADIA discover it had further grievances against the bank. It is now
seeking $2 billion for each claim against it, citing breach of contract and of the
implied covenant of good faith and fair dealing.
“ADIA's new arbitration is nothing more than an improper
attempt to litigate claims that ADIA knew about, could have brought, and in
significant part did bring to light in the first arbitration," Reuters cited from Citigroup’s lawsuit.
The bank is seeking an injunction against the new ADIA
arbitration, which was filed last month with the American Arbitration
Association. A week later, Citigroup filed a lawsuit against the fund, with
ADIA moving this week to try and have the lawsuit dismissed claiming arbitrators,
rather than a court, should hear the bank’s arguments.
The case has been on-going for several months.
ADIA initially claimed
in late 2009 that its November 2007 investment of $7.5 billion into Citigroup
was based on fraudulent statements by the US bank. At the time, Citigroup
battled record losses tied to subprime mortgages. If the investment was unable
to be canceled, the Abu Dhabi fund had sought $4 billion in damages. Meanwhile,
the bank had asserted that the suit lacked merit, promising to
"vigorously" defend itself.
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