Financial Services Litigation & Investigations Group
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Citigroup Confirms Arbitration Award, Defeats Petition to Vacate
- Client News
- March 4, 2013
Paul, Weiss secured another major victory for Citigroup Inc. against the Abu Dhabi Investment Authority (ADIA). In 2009, ADIA commenced an arbitration in the International Centre for Dispute Resolution, claiming that Citigroup had fraudulently induced ADIA to invest $7.5 billion in the bank. ADIA sought rescission of the $7.5 billion investment agreement or, alternatively, more than $4 billion in damages. After a month-long hearing in May 2011, the three-person arbitration panel found for Citigroup on all claims. ADIA then brought a petition to vacate the award in New York State Court. In its petition, ADIA argued that the panel had "manifestly disregarded" the law by applying New York law, rather than the civil law of Abu Dhabi, to ADIA's tort claims and that it had deprived ADIA of due process and fundamental fairness by denying two of ADIA's almost 60 document requests. Citigroup removed the case to the SDNY and cross-moved for confirmation of the award.
After briefing and oral argument, Judge Daniels denied ADIA's petition to vacate and granted Citigroup's motion to confirm the award. As to the choice-of-law issue, Judge Daniels explained that the panel had applied the framework that ADIA itself had suggested. He held that the panel's "thoughtful" application of that framework was not even erroneous, let alone the kind of error that could support vacatur of the award. As to ADIA's discovery objections, Judge Daniels held that the "denial of these two document requests did not render the proceedings fundamentally unfair," explaining that "ADIA had expansive access to discovery materials." He concluded that "ADIA cannot turn this discovery dispute into an issue of fundamental due process sufficient to set aside the award."