The opinion of the court was delivered by: KAPLAN
LEWIS A. KAPLAN, District Judge.
In the early part of the 1990's, the secession of Slovenia, Croatia, and Bosnia and Herzogovina led to the dissolution of the Socialist Federated Republic of Yugoslavia ("SFRY"). Tidal forces driven by ethnic, religious, and nationalistic rivalries in the wake of that collapse have inflicted an extended period of strife on the region. These four actions are part of that turmoil.
Jugobanka A.D. Belgrade ("Jugobanka"), a banking corporation organized under the laws of the Federal Republic of Yugoslavia (Serbia & Montenegro) ("FRY(S&M)"), claims to be the successor of Jugobanka United Bank ("United") and Jugobanka D.D. Belgrade ("DD Belgrade"), both of which were organized under the laws of the SFRY. It here sues to collect ostensibly ordinary commercial debts and guarantees contracted by the defendants with United and DD Belgrade prior to the dissolution of the SFRY.
The defendants contend that the concededly defaulted obligations may not be pursued here because (1) Jugobanka is an agency or instrumentality of the FRY(S&M), an unrecognized foreign state, and therefore lacks standing, and (2) the adjudication of these claims would require the Court to address non-justiciable political questions relating to the dissolution of the SFRY. They assert, moreover, that the loans at issue were made from the currency reserves of the central bank of the former SFRY in furtherance of a governmental export program and therefore are assets of the SFRY. In defendants' submission, to permit plaintiff, allegedly an instrumentality of the FRY(S&M), to recover would provide these assets to the FRY(S&M) in derogation of the rights of the four other putative successors of the SFRY. One of the defendants, moreover, has asserted counterclaims by which it seeks to hold Jugobanka liable for alleged confiscation by the FRY(S&M) of its assets located in the territory of the FRY(S&M).
As noted, Jugobanka is a banking corporation organized under the laws of the FRY(S&M). It contends that it is the sole successor to DD Belgrade, formerly United, which were organized under the laws of the SFRY.
The defendants in three of the actions (the "Slovenijales Actions") are Slovenijales D.D. ("Slovenijales") and three of its affiliates, U.C.F. International Trading, Inc. ("UCF"), SK Products Corp. ("SK"), and Euro International Pty., Ltd.("Euro"). Although Slovenijales now is a privately owned manufacturing and export corporation organized under the laws of the Republic of Slovenia, its roots are found in the Communist past of the former SFRY. It was organized in 1948 as a "state-owned republic commercial enterprise." It was reconstituted as a "socially-owned" company in 1974 before being privatized in 1996. Its affiliates, UCF, SK and Euro, all are organized under the laws of western nations.
The defendants in the fourth action (the "Sidex Action") are Sidex International Furniture Corporation ("Sidex"), Sipad Export-Import Sarajevo ("SEI"), S.O.U.R. Sipad, Sarajevo ("SOUR"), and Sipad Holding Sarajevo ("SHS"). SEI is organized under the laws of, and owned by, the Federation of Bosnia and Herzegovina ("FBH"). Sidex is a New York corporation and wholly owned subsidiary of SEI. SOUR was a "composite organization of associated labor" organized under the laws of the former SFRY. SHS, successor-in-interest to SOUR, is a company organized under the laws of, and owned by, the FBH.
The Credit Lines and Guarantees
At the heart of these lawsuits are credit facilities and guarantees executed between the various defendants and both United and DD Belgrade. They may be summarized as follows:
Year Credit Facility Lender Obligor Guarantor
1989 $ 300,000 United Euro Slovenijales
1989 $ 6,500,000 United Sidex SEI and SOUR
1990 $ 300,000 DD Belgrade Euro Slovenijales
1990 $ 350,000 DD Belgrade UCF Slovenijales
1990 $ 5,000,000 DD Belgrade SK Slovenijales
1990 $ 6,500,000 DD Belgrade Sidex SEI and SOUR
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