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Sokol Holdings, Inc. v. BMB Munai

June 15, 2007

SOKOL HOLDINGS, INC., BRIAN SAVAGE, AND THOMAS SINCLAIR, PLAINTIFFS,
v.
BMB MUNAI, INC., ALEXANDRE AGAIAN, BAKHYTBEK BAISEITOV, GEORGES BENARROCH, BORIS CHERDABAYEV, MIRGALI KUNAYEV, CREDIFINANCE CAPITAL, INC., AND CREDIFINANCE | SECURITIES, LTD., DEFENDANTS.



The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.

OPINION AND ORDER

Plaintiffs Sokol Holdings, Inc. ("Sokol"), Brian Savage ("Savage"), and Thomas Sinclair ("Sinclair") bring this diversity action against BMB Munai, Inc. ("BMB"), Alexandre Agaian ("Agaian"), Bakhytbek Baiseitov ("Baiseitov"), Georges Benarroch ("Benarroch"), Boris Cherdabayev ("Cherdabayev"), Mirgali Kunayev ("Kunayev"), Credifinance Capital, Inc. ("CCI") and Credifinance Securities, Ltd. ("CSL") (collectively, "Defendants"), alleging:

(1) tortious interference with contract; (2) breach of contract; (3) unjust enrichment; (4) breach of fiduciary duty; (5) unfair competition; (6) tortious interference with fiduciary duty; and (7) aiding and abetting breach of fiduciary duty. Plaintiffs seek compensatory and punitive damages, and specific performance. Defendants move to dismiss Plaintiffs' Second Amended Complaint or stay the case pending arbitration, which Defendants contend must take place in Kazakhstan. For the reasons set forth below, Defendants' motion is granted in part and denied in part.

I. Background

The Court assumes the following facts, drawn from Plaintiffs' Second Amended Complaint, to be true for the purposes of this motion to dismiss. See Anatian v. Coutts Bank (Switzerland) Ltd., 193 F.3d 85, 88 (2d Cir. 1999); cert. denied, 528 U.S. 1188 (2000).

In March 2003, Savage, a resident of Colorado, and Sinclair, a citizen of New Zealand, formed and incorporated Sokol for the purpose of exploring and developing oil and gas fields in the Republic of Kazakhstan. In forming Sokol, Savage and Sinclair developed a business plan by which Sokol would purchase and develop Kazakhstan's Aksaz-Dolinnaya-Emir oil and gas fields (the "ADE fields"). In February 2003, they discussed with Defendants Benarroch and Agaian their business plan for Sokol.

On April 26, 2003, Sokol entered a contract (the "Emir Contract") with Toleush Tolmakov Kalmukanovitch ("Tolmakov") for the purchase of 70% of Tolmakov's 90% interest in Emir Oil LLP ("Emir"). Defendants Cherdabayev, Kunayev, and Baiseitov agreed to contribute $500,000 each toward that purchase on Sokol's behalf. On March 17, 2003, ANBI -- Agaian's company -- executed a letter of intent (the "Letter of Intent") with Emir on Sokol's behalf for the purchase of 70% of Emir. In May 2003, however, Tolmakov sold 70% of his 90% interest in Emir to BMB. Plaintiffs allege that Defendants formed BMB to misappropriate Sokol's business plan, which culminated in Tolmakov's sale to BMB.

II. Analysis*fn1

Defendants argue that: (1) the Court lacks personal jurisdiction over six of the eight Defendants in this case; (2) the case should be dismissed in favor of Kazakhstan under the doctrine of forum non conveniens; (3) if any New York court is to hear this case, it should be a New York state court; (4) the case should be stayed pending arbitration in Kazakhstan; (5) Counts I and II should be dismissed because Tolmakov is an indispensable party; and (6) Counts VII, VIII, and IX fail to state a claim. The Court addresses each argument in turn.

A. Threshold Matters

1. Personal Jurisdiction

Defendants Baiseitov, Benarroch, Cherdabayev, Kunayev, CCI and CSL (collectively, the "Objecting Defendants") argue that this Court lacks personal jurisdiction over them. The Court disagrees.

Under Federal Rule of Civil Procedure 12(b)(2), Plaintiffs bear the burden of making a prima facie showing of personal jurisdiction over each defendant. In re Magnetic Audiotape Antitrust Litigation, 334 F.3d 204, 206 (2d Cir. 2003) (citing Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996)). Because the Court's subject matter jurisdiction rests upon diversity of citizenship, the Court must apply New York law to determine whether it has personal jurisdiction. DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001). New York's long-arm statute provides jurisdiction over, inter alia, Defendants who "transact[] any business within the state" and whose claims arise from those business transactions, as well as over Defendants who commit tortious acts other than defamation within the state. N.Y. C.P.L.R. § 302(a)(1)-(2).

Here, Plaintiffs allege that each Defendant conducted business in New York, either by traveling to New York to attend meetings related to their own interests and the Sokol plan, and via Agaian, who acted as their agent.*fn2 Decl. of Thomas Sinclair in Supp. of Pls.' Opp'n to Defs.' Mot. to Dismiss or Stay ¶¶ 2(b)-(c)(iii), attached as Ex. C to the Decl. of Tamara L. Bock in Support of Pls.' Opposition to Defs.' Motion to Dismiss or Stay [hereinafter the "Sinclair Decl."].*fn3 These allegations are sufficient to establish that Defendants transacted business related to Sokol in New York. E.g., United Feature Syndicate v. Miller Features Syndicate, Inc., 216 F. Supp. 2d 198, 205-06 (S.D.N.Y. 2002). Because Plaintiffs' theory is that Defendants tortiously interfered with the Emir Contract and usurped Sokol's business plan, Plaintiffs' showing ...


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