(January 13, 2014) -- Two of the largest financial institutions
in the world may again be heading
back to court as one of the most toughly fought battles since the financial
crisis began looks set for another round.
On December 23 last year, Citigroup
lodged an appeal against a decision that had been handed down on November 26.
This decision had gone against the bank, which had appealed against a previous
decision to dismiss an earlier claim and compelled arbitration between it and the
Abu Dhabi Investment Authority (ADIA).
Citi had lodged the appeal to the United States Courts of Appeals
for the Second Circuit, according to publically available documents. There has
been no published indication as to whether this appeal has been granted.
The case has now entered its sixth year, and for the last
two years has seen the two parties locked in an appeal and counter-appeal dogfight.
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 said
it would seek $4 billion in damages. Meanwhile, the bank had asserted that the
suit lacked merit, promising to "vigorously" defend itself.
Several attempts at arbitration since 2009 have seen
independent specialists brought on board to try and settle the argument between
the two parties. However, much of these events have seen more information coming
to light and led to even more financial damage being claimed by the sovereign
At different points, each
side had thought to be been successful
in its claims, only to be thwarted by the other side with an appeal.
In 2013 alone, some 46 separate incidents—with swathes of
legal documentation attached—were lodged with the US courts by the two parties,
with no apparent closure possible.
The case continues.
Spokespeople from Citi and ADIA declined to comment.
Related content: Profile of Jean-Paul Villain,
ADIA & Abu
Dhabi Moves Further from External Fund Managers…