satisfied the reserves and that the original conditions did not require actual submission of the foreign exchange transfer approvals, only confirmation from Petra that such approvals existed.
Centro alleges that on April 14, 1989, it informed AITF that the documentation of the transaction was unsatisfactory and requested that AITF contact Centro for purposes of reversing the transaction. AITF strongly objected to reversing the transaction and stated that it could not understand why Centro did not accept the representation of Petra that it possessed the requisite authority to enter into the transaction and make payment on the Notes upon maturity. Centro claims that AITF continued in its attempt to obtain the documents requested by Centro and Amro, contacting Welfin on April 17, 1989 and requesting copies of actual invoices in the underlying transaction, as well as Welfin's assistance in getting Petra to provide copies of the foreign exchange transfer approvals.
AITF alleges that in a telefax to Amro dated April 17, 1989, Centro affirmed its satisfaction with the documentation provided by AITF and Petra; and that in a further telefax to Amro dated April 25 1989, Centro urged Amro to lift its reserves because the documentation met market requirements for forfaiting transactions. In addition, AITF claims that in correspondence between Centro and Amro in May 1989, Centro, more than once, urged Amro to lift its reserves, arguing that the condition of receiving copies of correspondence between Petra and the Central Bank of Jordan was not justified.
On April 24, 1989, AITF repeated its request that Centro lift its reserves on its transmittal of funds to AITF. Centro refused. On April 25, 1989, Centro stated to AITF that, since the transaction was guaranteed by a bank not domiciled in the country of the issuer of the Notes, Centro insisted on receiving a copy of an acknowledgement by the Central Bank of Jordan to Petra that all approvals necessary for the transaction in Jordan had been obtained. AITF refused to reverse the transaction.
On or about August 3, 1989, control of Petra was seized by the Jordanian authorities. Centro alleges that on October 4, 1989, the Governor of the Central Bank of Jordan announced that an investigation into Petra had uncovered fraud, including violations of Jordanian foreign exchange laws.
On October 17, 1989 -- the maturity date of one of the Notes -- Amro apparently sought payment on the Note, but both Nissilios and Petra dishonored it.
Subsequently, the Central Bank of Jordan stated that it had not acknowledged the issuance of the Notes or approved the transaction, and that a Jordanian commercial bank or financial institution is not permitted to establish any obligation in foreign currency unless it obtains the approval of the Central Bank of Jordan and fulfills certain conditions. On October 25, 1989, the new management of Petra stated that Petra's avals on the Notes had not been approved by the Central Bank of Jordan, and, therefore, constituted a violation of bank regulations.
II. The Legal Proceedings
Centro states that in November 1989, AITF again refused to reverse its transaction with Centro. Instead, AITF commenced this action for a declaratory judgment against Centro. In addition, AITF, as holder of three additional promissory notes issued by Nissilios and avalized by Petra, brought a second action against Petra in the Southern District of New York.
Amro apparently made demands upon Centro for reversal of the Centro-Amro transaction more or less parallel to the demands Centro made upon AITF for reversal of the AITF-Centro transaction. See Answer and Counterclaims P 53. Following the dishonor of the Notes by Petra and Nissilios, Amro commenced an action against Centro in Vienna, Austria, seeking the reversal of its transaction with Centro plus interest and costs (the "Vienna Action"). Amro has not alleged any claims against AITF before any court.
In response to AITF's request for a declaratory judgment of non-liability, Centro asserts eight counterclaims against AITF, sounding in breach of contract, breach of express warranty, breach of implied warranty, misrepresentation, negligence, conversion, unjust enrichment, and mutual mistake of fact. Centro demands judgment as follows:
A. Awarding damages to Centro in an amount in excess of $ 8 million, with the exact amount to be proved at trial, together with interest, costs, and reasonable attorneys' fees; and/or
B. Ordering AITF to make restitution to Centro of all moneys received by AITF from Centro relative to the Transaction, together with interest thereon, in return for restitution to AITF of the Notes, plus costs and reasonable attorneys' fees; and/or