The opinion of the court was delivered by: Motley, District Judge.
OPINION ON MOTION TO REMAND
Plaintiff has submitted a motion to this court asking that
this case be remanded to the state court from which it was
removed by The Committee of Receivers for Abdul Wahab Bin
Ebrahim Galadari and A.W. Galadari Commodities (The Committee).
The facts of this case are complex and for the purpose of
this motion it is not necessary to state them in detail.
Galadari is a citizen of Dubai, United Arab Emirates who
controlled a vast business empire. In February 1983, Galadari
and Galadari Commodities (Galadari) opened a number of trading
accounts with Refco, an Illinois corporation. As of November
1983, Refco alleges that Galadari owed a debt of $4,609,664.20.
In 1984, Refco commenced action against Galadari in the State
Supreme Court in New York County by order to show cause
containing a temporary restraining order which directed
defendant to show cause why an order should not be entered
granting Refco an order of attachment and directing the sheriff
to levy on defendants' property to satisfy any judgement which
might be obtained by Refco. See Refco v. Galadari, No. 18541/84
(Sup.Ct. New York Cty., August 10, 1984).
After two stipulations of adjournment, Galadari and the
Committee opposed Refco's motion and in March 1985, the state
court denied Refco's motion for an order of attachment but
continued the restraining order as it pertained to a
condominium in New York which Galadari maintained. In May 1985,
the Committee filed a notice of appeal and a pre-argument
statement. In September 1985, Galadari and the Committee moved
for an order of dismissal, however, the above motions were
withdrawn by stipulation in December 1985. In February 1986,
the Committee moved for enlarging the time for perfection of
the appeal. By stipulation between the parties, defendants had
until March 27, 1990 to answer the complaint or to otherwise
Meanwhile in Dubai, Galadari was having severe financial
problems stemming from the mismanagement of the Union Bank. On
November 12, 1983 pursuant to a decree from the sovereign of
Dubai (Decree Number 5), a provisional board was created to
manage the Union Bank. This board was established, in part, to
avert the "dire financial consequences to countless entities
and many thousands of individuals in Dubai and in the region."
See Drexel Burnham Lambert Group v. A.W. Galadari and A.W.
Galadari Commodities, No. 84 Civ. 2602 (S.D.N.Y. January 29,
1987) at ¶ 13, 1987 WL 6164. The provisional Board also imposed
a moratorium freezing all liabilities and began the liquidation
of Galadari's assets.
In order to assure the fair and orderly liquidation and
distribution of Galadari's business assets, the Government of
Dubai issued Decree Number 3 on April 17, 1984.*fn1 Decree
Number 3 established a Committee of Receivers to continue the
work of the Provisional Board in managing and liquidating the
non-banking business of Galadari. The Committee established a
set of procedures which would allow for the submission of
Since the Committee's inception it has marshalled and
liquidated the assets of the estate and processed creditors
claims. Id. at ¶ 72. When a claim is disallowed by the
Committee an appeal may be taken to the Judicial Committee
which is a special court established pursuant to the Decree.
Id. Since the Committee's inception over 700 claims have been
submitted in the aggregate amount of $770,000,000. See Aff.
Aref at ¶ 6. Refco has participated in the proceedings before
the Committee in Dubai and has asked for relief similar to that
requested in this suit.
In January of 1987, this court in a substantially similar
case ruled that the Dubai proceedings were entitled to comity
and stayed the action filed in this court. Drexel Burnham
Lambert Group, Inc. v. Galadari, 84 Civ. 2602 (S.D.N.Y.,
January 29, 1987).
On March 27, 1990, over five years after the action was first
commenced in state court, the Committee removed the action to
this court. Plaintiff presently has a motion before this court
asking that the case be remanded to state court.
The Committee has removed this action pursuant to 28 U.S.C. § 1441(d)
Any civil action brought in a State court against
a foreign state as defined in 1603(a) of this
title may be removed by the foreign state to the
district court of the United States for the
district and division embracing the place where
such action is pending. Upon removal the action
shall be tried by the court without a jury. Where
removal is based upon this subsection, the ...