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In re Application of Yukos Hydrocarbons Investments Ltd.

December 30, 2009


The opinion of the court was delivered by: David E. Peebles U.S. Magistrate Judge


Petitioner Yukos Hydrocarbons Investments Ltd. ("Yukos Hydrocarbons"), a foreign corporation, commenced this proceeding requesting the court's assistance in conducting third-party discovery for use in connection with a foreign proceeding pending in Amsterdam. Based upon petitioner's application, which was filed ex parte, another judge of this court authorized the issuance of a subpoena requiring respondent Robert Foresman, who is not a party to the Dutch litigation, to appear for deposition, and to produce documents for use in connection with the deposition.

Currently before the court is a motion on behalf of respondent Foresman to quash the pending subpoena. In support of that application, Foresman argues that under the controlling test, petitioner has not established a basis for the court to exercise its discretion in favor of issuing and enforcing the requested subpoena, adding that in any event he cannot be compelled to comply with the subpoena since it would require that his deposition be taken beyond the jurisdictional limits specified under Rule 45 of the Federal Rules of Civil Procedure.

For the reasons set forth below I find that while the initial prerequisites for lending the court's assistance for discovery in aid of a foreign proceeding have been met, the subpoena in issue would require Foresman to travel more than 100 miles from the place of his residence, employment, and where he regularly transacts business in person, and that he therefore cannot be compelled to appear for deposition as required by the subject subpoena.


A. The Foreign Litigation*fn1

The circumstances underlying petitioner's application are procedurally and factually complex, and rife with foreign intrigue. The Dutch litigation now in issue was precipitated by a series of occurrences extending back to the allegedly unlawful expropriation by the Russian government of the assets of Yukos Oil Company, which from the time of its formation in the early 1990s until late 2003 was Russia's largest producer and exporter of crude oil. That takeover was followed by initiation of legal proceedings to determine the fate of Yukos Finance B.V. ("Yukos Finance"), a wholly owned Dutch subsidiary of Yukos Oil and the owner of all of the shares in yet another related enterprise, Yukos International UK B.V. ("Yukos International"), which in turn maintained substantial holdings in the oil and gas industry.

As an outgrowth of those events, petitioner Yukos Hydrocarbons commenced suit in the Amsterdam District Court against Yukos International and obtained a favorable judgment from that court on January 30, 2008, requiring Yukos International to repay three loans made by the petitioner in July of 2002 and June, 2004. A second, related action, also commenced in Amsterdam, was filed on March 19, 2009 by OOO Promnefsetroy ("Promnefsetroy"), a Russian "closed joint-stock company", which sought, among other things, a determination that petitioner's claims against Yukos International are invalid and that Promnefsetroy has an interest in any monies allegedly belonging to Yukos International as a result of its purported acquisition of Yukos Finance. It is in connection with this second action that the assistance of this court is now sought by Yukos Hydrocarbons.

At the center of the present controversy is Robert Foresman, a Russian businessman with ties to this district. Prior to September of 2009, Foresman was employed by Renaissance Capital LLC - Financial Consultant ("Renaissance Capital") as an executive based in Moscow, with the title of Deputy Chairman, Head of Organization and Coverage. It is alleged that Renaissance Capital indirectly holds a stake in Promnefstroy, and that Foresman was instrumental in successful efforts by Promnefstroy to bid on and obtain Yukos Finance at an auction conducted in Russia.


Petitioner commenced this proceeding on October 29, 2009 by filing an ex parte application for an order approving the issuance of a subpoena requiring that Foresman appear for deposition and produce certain documents specified in the subpoena.*fn2 Dkt. Nos. 1, 2. That application resulted in the issuance of an order by Chief Magistrate Judge Gustave J. DiBianco on November 4, 2009, authorizing the issuance of the requested subpoena. Dkt. No. 4. The subpoena, which was personally served on Foresman on November 4, 2009 in Auburn, New York, required Foresman's appearance for deposition on November 20, 2009, and the production of the documents falling into seventeen specified categories. Dkt. Nos. 4, 5.

On November 20, 2009, following reassignment of the matter to me due to Chief Magistrate Judge DiBianco's impending retirement, see Dkt. No. 8, Foresman moved to quash the subpoena, arguing that the requirements for requesting this court's assistance for discovery in connection with a foreign proceeding have not been met, and that in any event the subpoena impermissibly requires him to appear for deposition more than 100 miles from where he resides, is employed, and regularly conducts business. Dkt. Nos. 11-15. Petitioner Yukos Hydrocarbons has since responded in opposition to the motion, Dkt. No. 16, and Foresman has submitted a reply, Dkt. Nos. 17-19. Oral argument was conducted with respect to petitioner's motion on December 16, 2009, at which time decision was reserved.*fn3


A. 28 U.S.C. ยง 1782 ...

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