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ADIA vs Citigroup – the Battle Continues…

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 reported.

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.

Related content: Abu Dhabi Hauls Citi Back to Court over Bailout Claim & SWFs Building up to Go It Alone

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