Jurisdiction(s):
United Kingdom

SDNY confirms New York-seated award: non-signatories bound by veil-piercing and equitable estoppel; collateral estoppel upheld; non-payment of fees leads to dismissal without merits review

Published on: 14 January 2025

Published by a Law360 reporter

Legal News

Article summary

Senior US District Judge Loretta A. Preska has also approved long-awaited enforcement applications by respondents in Switzerland, the United Arab Emirates and Oman, who had initially initiated arbitration in 2006 following a default on US$100m Eurobonds issued by Lakah Funding, operated by brothers Michel and Ramy Lakah. This represents the final chapter in the brothers' efforts to resist being held personally liable under the arbitration provisions contained in the bond documentation governing the transaction, and to elude the corporate veil-piercing remedies available under the laws of New York, where the arbitration was seated. In this piece, we set out the dispute's background and analyse the court's conclusions and their implications.

Background

On 8 June 2006, UBS AG, Exporters Insurance Co, National Bank of Abu Dhabi, National Bank of Oman and Arab Banking Corp formally began an arbitration against the Lakah brothers and other related companies and entities, arising from the issuance of US$100m in Eurobonds. The Lakahs petitioned the Supreme Court of New York to stay the arbitration on the basis that they were not obliged to arbitrate because they had not signed the Eurobond transaction documents in their individual capacities...

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