Lazare Kaplan International Inc. v. KBC Bank N.V. et al

Filing 62

OPINION & ORDER re: 24 FIRST MOTION to Dismiss the complaint filed by Antwerp Diamond Bank N.V., 27 MOTION to Dismiss filed by KBC Bank N.V. Based on the above, the Defendants' motion to dismiss the Complaint for forum non conveniens is GRANTED. (Signed by Judge Andrew L. Carter, Jr on 9/5/2012) (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

x

LAZARE KAPLAN INTERNATIONAL, INC.,
11 Civ. 9490 (ALC)

Plaintiff,

OPINION & ORDER

-againstKBC BANK N.V. and ANTWERP DIAMOND BANK,
N.V.,
Defendants.

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USDCSDNY
DOCUMENT

ELECTRONICALLY FILED

ANDREW L. CARTER, JR., District Judge:

DOCf:

DATE FILED:

9· S-/L==

INTRODUCTION
Plaintiff Lazare Kaplan International brings the present suit against Defendants KBC
Bank N.V. and Antwerp Diamond Bank, N.V. alleging racketeering, fraud, money-laundering,
tortious interference with prospective business advantage, commercial bad faith, conversion,
negligence, breach of the covenant of good faith and fair dealing, and unjust enrichment.
Plaintiff asserts that this Court has subject matter jurisdiction over Defendants pursuant to the
Racketeer Influenced and Corrupt Organizations Act ("RICO"), 28 U.S.C. § 1961, et seq.
Defendants challenge subject matter jurisdiction and move for dismissal of the Complaint
pursuant to Rules 8 and 9(b) or in the alternative, 12(e) and (f) of the Federal Rules of Civil
Procedure. Defendants seek to dismiss the Complaint pursuant to the doctrine of forum non
conveniens. Defendants also move to dismiss the charges in the Complaint for failure to state a
claim upon which relief can be granted pursuantto Rule 12(b)(6). On April 5, 2012, the Court
stayed discovery pending Defendants' motions.

For the reasons stated below, the Court grants Defendants' motion to dismiss the
Complaint pursuant to the doctrine of forum non conveniens.

BACKGROUND
Plaintiff is a diamond company named Lazare Kaplan International Inc. ("Lazare" or
"Plaintiff'). Lazare is headquartered in New York. Lazare did business in Belgium through its
Belgian subsidiary, Lazare Kaplan Belgium, N.V. ("LKB"). (See Compl.

~~

15,98.)

Defendant Antwerp Diamond bank N.V. ("ADB") is a Belgian bank corporation
headquartered in Belgium. (See Compl.

~~

7, 101.) ADB has been one of Lazare's primary

lenders for more than a decade. Defendant KBC Bank N.V. ("KBC"), ADB's parent, is one of
the largest banks located in Belgium. (See Compl. ~~ 8, 101.) Both ADB and KBC were
established under Belgian laws, separately incorporated and organized, and report separately to
Belgian banking authorities. Both banks maintain representative offices in New York State. (See
Comp1. ~~ 102, 111.) ADB's New York office has five employees and originates loans to New
York-based businesses, but has no lending authority. All extensions of credits are made at
ADB's Antwerp headquarters. (Weiss Aff. ~ 2.)
In 1999, ADB agreed to provide LKB a line of credit pursuant to a loan agreement that
provided that the obligations of the parties are "governed solely by the laws of Belgium" and the
"courts of Antwerp have sole competence." In December 2000, Lazare submitted an application
to open a bank account at ADB. Lazare had been approved for a $10 million line of credit at
ADB. In 2008, ADB agreed to continue Lazare's unsecured line of credit to a maximum of$45
million. Lazare renewed its most recent unsecured $45 million credit facility with ADB in New
York as the "Lazare Credit Facility." (See Compl. ~ 139.)

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In 2009, ADB became concerned about Lazare's financial condition because Lazare had
not provided financial statements to regulators or ADB despite multiple requests. ADB requested
that Lazare devise a plan to restructure its debt, which at that time was close to the maximum
approved by ADB. Lazare and LKB's principals insisted that KBC become involved in
discussions among those entities and ADB.
Lazare alleges that a Belgian bank dealer, Erez Daleyot, misappropriated Angolan
diamonds and diamond sales proceeds through affiliates around the world. The property in
question allegedly belonged to LKB and Gulfdiam DMCC, a Dubai company partly owned by
Lazare's subsidiary. Lazare alleges that ADB, its banker, facilitated the misappropriation and
allowed Mr. Daleyot to use funds taken from LKB and Gulfdiam to repay Mr. Daleyot's debts to
ADB. Lazare furthers that ADB was acting at the direction ofKBC to make large loans to the
Daleyot Entities. Lazare alleges that "KBC exercised such control and domination over [ADB]
that [ADB] became a mere instrumentality ofKBC ...." (See, e.g., Compl.

~~

696, 712, 726,

741, 753, 772, 781).
Lazare engaged in numerous transactions with the Daleyot Entities in Belgium and other
foreign jurisdictions. Lazare consigned diamonds to LKB, financed Gulfdiam, and guaranteed
each of their debts. (Compl.

~~

42-43,98, 141,316.)

Lazare also describes foreign diamonds that LKB consigned to two Belgian entities, DD
and KT, in Belgium. (Compl.

~

361.) Lazare alleges that DD and KT sold the diamonds, stole

the proceeds, and used those funds to pay their debts to ADB. (Compl. ~ 361.) These debts were
allegedly incurred through failed investments in Belgian, Cypriot, and various Eastern European
ventures. (Compl.

~

375.) U.S. dollar denominated transactions allegedly cleared through KBC

in New York. (Compl. ~~ 100, 107.)

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As a consequence of the alleged wrongful acts relating to the purported diamond theft,
and the resulting losses, Lazare was unable to repay its own debt obligations to ADB. Lazare
owed ADB $45 million pursuant to an unsecured credit line extended to Lazare that ADB
terminated in December 2009.
Lazare acknowledges that this "Illegal Scheme" or RICO "enterprise" occurred in
Belgium and countries other than the United States. (See CompI.

~~

262 (chart), 313 (chart), 353­

90.) In the Complaint, Lazare identified 24 non-parties as participants in the "Illegal Scheme"
allegedly located principally, ifnot entirely, outside of the United States. (Compi.

~~

101,110,

120-21.) All or virtually all of the alleged diamond thefts, diversions of diamond sales proceeds,
and money-laundering, through transactions allegedly originating and terminating with foreign
entities and banks, occurred either in Belgium or elsewhere outside of the United States. (See
Compi.

~

320.) One chart in the Complaint illustrates the flow of Angolan diamonds through the

United Arab Emirates, Hong Kong, Switzerland, Israel, and Belgium. (See CompI.

~

313.)

Lazare, LKB, and ADB are already parties to parallel proceedings in Belgium that arise
from the same facts alleged in the Complaint. In March 20 I 0, under the provisions in the
operative agreement between ADB and Lazare that expressly permits ADB to bring "any legal
action or proceeding with respect to any obligation owed to the Bank in the courts of Antwerp,
Belgium," ADB commended proceedings against Lazare in Antwerp to recover the $45 million
lent to Lazare. In responding to the Belgian action, both Lazare and LKB have asserted
counterclaims against ADB based on virtually the same allegations and seeking similar relief as
Lazare's Complaint at issue here, with the exception that Lazare did not name KBC as a party.
LKB also has had separate ongoing litigation involving the same facts between Daleyot and

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certain of the Daleyot Entities for several years in Belgium. (Comp. tjftjf 439,550; Declaration of
Bob Delbaere, dated April 4, 2012 ("Delbaere Declaration"), tjftjf 19-24, 35-39.)
On December 23,2011, Lazare sued ADB and KBC in the Southern District ofNew
York for more than $500 million in damages. Lazare claims that this Court has subject matter
jurisdiction under both federal question jurisdiction pursuant to 28 U.S.C. § 1331 and diversity
jurisdiction pursuant to 28 U.S.C. § 1332, as well as supplemental jurisdiction over state law
claims. Both defendants moved to dismiss all causes of action for many reasons: ADB's
mandatory forum selection provision provides Belgium with exclusive jurisdiction; lack of
subject matter jurisdiction; improper venue; failure to state a claim under Fed. R. Civ. P 12(b)(6);
the doctrine of forum non conveniens; the inapplicability of RICO to conduct committed outside
the United States; lack of standing; and failure to comply with Fed. Civ. R. 8 and 9(b).
Defendants argued that the mandatory forum selection provision in the Credit Agreement
requires that all of Lazare's claims against ADB be brought in Antwerp. (Declaration of Cynthia
Okrent, Esq., dated April 6, 2012 ("Okrent Declaration"), tjf 7.) Finally, in the alternative,
defendants moved for a more definite statement and to strike redundant, immaterial, prejudicial,
and scandalous matter for failure to comply with Fed. Civ. R. 12(e) and (t). For its part, Lazare
opposes these motions and petitions the Court to enjoin ADB's legal action in the Belgian courts.
A Belgian court is scheduled to hear the very issues disputed in this action in March 2013.

DISCUSSION
A. Motion to Dismiss based on Forum Selection Clause
Lazare's agreements with ADB contain a mandatory forum selection provision providing
that "the courts of Antwerp shall have exclusive jurisdiction with respect to any action against
the Bank." Delbaere Declaration, tjf 10, Ex. C at Art. 37. These agreements also provide: the

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Credit Conditions and any loan extended pursuant to them are governed and construed under
New York law; Belgian law governs any other obligations of the borrower or the bank; the bank
may bring any legal action relating to the loan in the courts of the State of New York, New York
County, the United States District Court for the Southern District of New York, the courts of
Antwerp, Belgium, or any other court having jurisdiction under applicable law. Article 37 of the
Banking Conditions provides that the bank may bring legal proceedings against Lazare in the
courts of Antwerp, Belgium and grants that those courts shall have exclusive jurisdiction of
claims against the bank.
Where parties to an international commercial contract agree that claims will be subject to
the exclusive jurisdiction of a foreign court, the forum selection provision shall be enforced,
unless the party seeking the escape its contractual commitment meets the heavy burden of
showing that it will be deprived of its day in court or the provision was procured by fraud. MIS
Bremen v. Zapata Off~Shore Co., 407 U.S. 1 (1972); Scherk v. Alberto-Culver Co., 417 U.S. 506
(1974); Roby v. Corporation of Lloyd's, 996 F.2d 1353 (2d Cir. 1993); AVC Nederland B.V. v.
Atrium Investment Partnership, 740 F.2d 148 (2d Cir. 1984). The Supreme Court found that "in
the light of present-day commercial realities and expanding international trade we conclude that
the forum clause should control absent a strong showing that it should be set aside." Bremen, 407
U.S. at 15. The Second Circuit has also enforced forum selection clauses "even if that agreement
tacitly includes the forfeiture of some claims that could have been brought in a different forum."
Roby, 996 F.2d at 1360. The court further reasoned: "Forum selection and choice oflaw clauses
eliminate uncertainty in international commerce and insure that the parties are not unexpectedly
subjected to hostile forums and laws." Roby, 996 F.2d at 1363.

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In dismissing a case pursuant to a forum selection clause, the Second Circuit explains that
the court must detennine that the clause (i) was reasonably communicated to the party resisting
enforcement; (ii) has mandatory language requiring suit in a particular jurisdiction; and (iii)
encompasses the plaintiffs claims. S.KoL Beer Corp. v. Baltika Brewery, 612 F.3d 705 (2d Cir.
2010). First, ADB's forum selection clause was reasonably communicated to Lazare. Second,
Lazare acknowledged receipt of the General Banking Conditions and confinned its agreement
with their tenns at least five times. (Declaration ofVeerle Snyers, dated April 4, 2012 ("Snyers
Declaration"), ~~ 20-25.) The forum selection clause requires "any action" against ADB to be
brought in Antwerp, thereby encompassing Lazare's claims in this Complaint. Third, the Court
does not find that the clause was achieved by fraud or overreaching or that Lazare would lose its
day in court due to any inadequacy of Antwerp as the chosen forum.
Lazare argues that the mandatory forum selection provision in the agreements
memorializing the Lazare Credit Facility is inapplicable to Lazare's claims. In support of that
argument, Lazare points to its account with KBC, which provides the Southern District of New
York with exclusive jurisdiction over agreements with KBC Bank "relating to any accounts or
disputes arising thereunder." While Lazare argues that the forum selection clause in the KBC
Banking Conditions dismisses Defendants' jurisdictional objections, KBC counters that the
narrow choice-of-Iaw and forum clauses in the KBC Account Agreement do not encompass
Lazare's claims, which are grounded in fraud, diversion of funds, and RICO. KBC further seeks
to enforce ADB's forum selection clause, arguing that "a range of transaction participants,
parties and non-parties, should benefit from and be subject to forum selection clauses."
Weingrad v. Telepathy, Inc., No. 05-cv-2024 (MBM), 2005 WL 2990645, at *5 (S.D.N.Y. Nov.
7,2005) (citations omitted). KBC argues that it meets the Second Circuit's criteria for when "a

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forum selection clause in a contract may encompass claims made against a non-signatory where

(1) those claims are 'nearly identical to' claims against the signatory, (2) 'arise out of the same
transaction as those claims, and (3) the non-signatory consents to the foreign jurisdiction.
Horvath v. Banco Comercial Portegues. S.A., 461 Fed. Appx. 61, 62-63 (2d Cir. 2012). These
criteria are met here.
In sum, the conflicting forum selection clauses between ADB and KBC do not weigh
heavily in either direction. In light of the conflicting forum selection clauses, the Court proceeds
to a forum non conveniens analysis. The Court considers the inclusion of the mandatory forum
selection clause of Belgium in Article 37 of the ADB Banking Conditions as a factor for
dismissal for forum non conveniens.

B. Motion to Dismiss for Forum Non Conveniens
Under the common law doctrine of forum non conveniens, a district court has broad
discretion to "dismiss a claim even if the court is a permissible venue with proper jurisdiction
over the claim." PT United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 73 (2d Cir. 1998).
'" [I]n the determination of a motion to dismiss for forum non conveniens, the court may consider
affidavits submitted by the moving and opposing parties. '" Base Metal Trading SA v. Russian
Aluminum, 253 F.Supp.2d 681, 699 n. 13 (S.D.N.Y. 2003) (quoting Vanity Fair Mills. Inc. v. T.
Eaton Co., 234 F.2d 633,645 (2d Cir. 1956», affd, 98 Fed.Appx. 47 (2d Cir. 2004). The Second
Circuit has "outlined a three-step process to guide the exercise of that discretion":
At step one, a court determines the degree of deference properly accorded the
plaintiffs choice of forum. At step two, it considers whether the alternative
forum proposed by the defendants is adequate to adjudicate the parties' dispute.
Finally, at step three, a court balances the private and public interests implicated
in the choice of forum.

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Norex Petroleum Ltd. v. Access Indus., Inc., 416 FJd 146, 153 (2d CiT. 2005) (citing Iragorri v.
United Techs. Corp., 274 F.3d 65, 73-74 (2d Cir. 2001) (en banc)).
"[A] court reviewing a motion to dismiss for forum non conveniens should begin with the
assumption that the plaintiff's choice for forum will stand." In re Optimal U.S. Litig., 837 F.
Supp.2d 244,251 (S.D.N.Y. 2011) (quoting Iragorri, 274 FJd at 71). "However, 'the degree of
deference given to a plaintiff's forum choice varies with the circumstances,'" id. (quoting
Iragorri, 274 F.3d at 71), and "the greatest deference is [usual1y] afforded a plaintiff's choice of
home forum." Norex Petroleum, 416 F.3d at 153 (citing Iragorri, 274 F.3d at 71). "In assessing
the proper measure of deference," courts look to several factors, including, "the convenience of
the plaintiff's residence in relation to the chosen forum, the availability of witnesses or evidence
to the forum district, the defendant's amenability to suit in the forum district," and whether
plaintiff's choice was motivated by tactical forum shopping. In re Optimal, 837 F. Supp. 2d at
250-51. Ultimately, "the greater the plaintiff's or the lawsuit's bona fine connection to the
United States and to the forum of choice and the more it appears that considerations of
convenience favor the conduct of the lawsuit in the United States, the more difficult it will be to
gain dismissal whereas the more it appears that the plaintiff's choice of a U.S. forum was
motivated by forum-shopping reasons the less deference the plaintiff's choice commands." Id.
(quoting Palacios v. Coca-Cola Co., 757 F. Supp.2d 347,352 (S.D.N.Y. 2010)) (quotation marks
and ellipses omitted).
With regard to step two, "[t]he defendant bears the burden of establishing that a presently
available and adequate alternative forum exists." Abdullahi v. Pfizer, Inc., 562 FJd 163, 189
(2d Cir. 2009). "[A] forum may ... be inadequate ifi! does not permit the reasonably prompt
adjudication of a dispute, if the forum is not presently available, or if the forum provides a

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remedy so clearly unsatisfactory or inadequate that it is tantamount to no remedy at alL" Id.
Although the ultimate burden rests with the defendant, courts will not "adversely judg[e] the
quality of a foreign justice system," unless the plaintiff, for example, "produc[es] evidence of
corruption, delay or lack of due process in the foreign forum." Id. (citing PT United Can Co.,
138 F.3d at 73). "An alternative forum is adequate if the defendants are amenable to service of
process there, and if it permits litigation of the subject matter of the dispute." Pollux Holding
Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 75 (2d Cir. 2003). "Moreover, '[t]he availability of
an adequate alternative forum does not depend on the existence of the identical cause of action in
the other forum, nor on identical remedies. '" In re Optimal, 837 F. Supp. 2d at 251 (quoting
Norex Petroleum, 416 F.3d at 158).
At step three, the "burden is on the defendant to show 'the balance of private and public
interest factors tilts heavily in favor ofthe alternative forum.'" Id. at 252 (quoting Abdullahl,
562 F.3d at 189). The private interest factors include: "(1) the relative ease of access to
evidence; (2) the cost to transport witnesses to trial; (3) the availability of compulsory process
for unwilling witnesses; and (4) other factors that make the trial more expeditious or less
expensive." Id. These factors help the court balance "the hardships defendant would suffer
through the retention ofjurisdiction and the hardships the plaintiff would suffer as the result of
dismissal" and having to bring suit in another jurisdiction. Id. (quoting Iragorri, 274 F.3d at 74).
The public interest factors include: "(1) settling local disputes in a local forum; (2)
avoiding the difficulties of applying foreign law; (3) avoiding the burden on jurors by having
them decide cases that have no impact on their community." Id. No single factor is dispositive,
and "each case turns on its facts." Piper Aircraft v. Reyno, 454 U.S. 235, 249, 102 S.Ct. 252
(1981). "In sum, '[t]he action should be dismissed only if the forum is shown to be genuinely

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inconvenient and the selected forum significantly preferable." Id. (quoting Iragorri, 274 F.3d at
74-75).
1.

Level of Deference Afforded to Plaintiff's Choice
Plaintiff's choice of forum here is accorded a moderate level of deference. First, the

"convenience of the plaintiff s residence in relation to the chosen forum" weighs in favor of
according deference to Plaintiff's home forum. Norex Petroleum Ltd. v. Access Industries, Inc.
416 F.3d 146, 154 (2nd Cir. 2005). However, Plaintiffs home forum is given less deference
because circumstances generally indicate forum shopping, a "pursuit not simply ofjustice but of
justice blended with some harassment." Id. at 155. In 2010, Lazare threatened Defendants with a
"high visibility legal battle" in the form of a RICO action if ADB did not drop its Belgian
lawsuit. (Snyers Declaration, ~ 17 and Letter from Maurice Tempelsman, Chairman ofthe Board
of Lazare, to Jan Vanhevel, Chief Executive Officer ofKBC (May 26, 2010)). Indeed, Courts
have recognized that the possibility of a RICO treble damages award might attract plaintiffs to a
United States forum regardless of convenience. Norex Petroleum Ltd. v. Access Industries, Inc.,
416 F.3d 146, 155 (2nd Cir. 2005) (citing Iragorri v. United Techs. Corp., 274 F.3d at 71).
The substantive issues and conduct have a greater relation to Belgium than the United
States. Although ADB's New York office administered and extended the Lazare Credit Facility
in New York, Lazare's relationship with ADB began in Belgium when LKB first obtained credit
from ADB in 1988 before ADB had a representative office in New York. (Okrent Declaration, ~
5 (Apr. 6, 2012); see also Snyers Declaration, ~~ 6, 7 (Apr. 4, 2012). All of the activities related
to the alleged misappropriated diamonds consigned to LKB's own separate overdraft facility
occurred in Belgium. (Snyers Declaration, ~ 7). While New York may be a convenient location

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for the Plaintiff to bring suit, the factual allegations are attenuated and weigh against according
deference to Plaintiff s choice of forum.
Second, "the availability of witnesses or evidence to the forum district" does not strongly
weigh in favor of deferring to Plaintiff s choice of forum. Plaintiff claims that it filed its lawsuit
in New York City because all parties do business in New York and the Lazare Credit Facility
was negotiated, executed, extended, administered, paid, and ultimately terminated in New York.
(Memorandum of Law in Opposition to Defendants' Motion to Dismiss ("Opp.") at 36.) While
Plaintiff asserts that "[m]ost of the documents necessary to prove the allegations in the
Complaint are in Defendants' possession here in New York ... and are in English," (Opp. at 40)
Defendants declare otherwise. Accordingly, this second factor does not strongly weigh in favor
of deferring to Plaintiff s choice of forum.
The third factor, "the defendant's amenability to the suit in the forum district," weighs in
favor of according deference to Plaintiffs choice of forum, but not by much. ADB and KBC are
subject to personal jurisdiction in New York. Compare Norex Petroleum, 416 F.3d at 155
(noting that New York was a convenient, not tactical, choice of forum, where it was doubtful that
plaintiff could have perfected jurisdiction over all defendants in any of the "presumptively
convenient home forums" or "even in defendants' preferred forum"). The parties are subject to
suit in Belgium. As such, this is not the case where a plaintiffs choice of forum is "made to
obtain jurisdiction over defendant," Norex Petroleum, 416 F.3d at 156 (quoting Iragorri, 329
F.3d at 74), which cuts against a finding of deference on this factor.
Fourth, courts must ask whether the plaintiffs choice of forum was motivated by tactical
reasons. In light of the other deference factors above, and given that U.S. RICO allows for treble
damages, an inference that forum shopping motivated Plaintiffs choice of New York forum is

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not far-fetched. Real evidence exists that Plaintiff was motivated to choose New York to take
advantage of federal laws. Lazare waited nearly two years after making its threats to file this suit,
during which time this litigation progressed in Belgium, until months from the conclusion of that
Belgian proceeding. Thus, the Court finds that Plaintiff engaged in forum shopping. See, e.g., In
re Herald, Primeo & Thema Sec. Litig., No. 09 Civ 289 (RMB), 2011 WL 5928952, at *12
(S.D.N.Y.2011).
In sum, Plaintiff is afforded a moderate level of deference because the lawsuit does have
a bona fide connection to New York, but New York is not convenient for Defendants or the
majority of available witnesses.
2.

Adequacy of Alternative Fora
Belgium is an adequate forum. See Calavo Growers of Cal. v. Generali Belgium, 632

F.2d 963,968 (2d Cir. 1980). "An alternative forum is adequate if the defendants are amenable
to service of process there, and if it permits litigation of the subject matter of the dispute."
Pollux Holding, 329 F.3d at 75. Here, both ADB and KBC are amenable to service of process in
Belgium. Belgium is the only place where all the parties and non-parties, including LKB,
Gulfdiam, Daleyot and the 24 members of the alleged "enterprise" can be brought before a single
court. While the Court need not definitively resolve the choice of law issue on a forum non
conveniens motion, Belgium can adequately adjudicate Lazare's claims even under New York
law. Belgian courts apply foreign law according to the actual interpretation of the rule in the
country of origin. (Belgian Supreme Court (Nov. 4, 2010) http://www.cass.be). Belgium is an
adequate forum despite the fact that RICO, and its treble damages, are unavailable in Belgium.
PT United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 73-75 (2d. Cir. 1998) (Indonesia
held to be an adequate forum despite unavailability of RICO).

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3.

Private and Public Factors

a. Private Interests
First, the "relative ease of access to evidence" weighs significantly in favor of Belgium.
Few potential witnesses are located in the United States. (Snyers Declaration, ~~ 26 (Apr. 4,
2012); Declaration of Walter Haeck, dated April 4, 2012 ("Haeck Declaration"), ~ 11-17.)
Most witnesses with potentially relevant knowledge are located in Europe. (Haeck Declaration,
~~

13-17.) Current and fonner employees of KBC and ADB and much of the relevant

documentary evidence are located in Belgium. (Snyers Declaration, ~~ 25-27 (Apr. 4, 2012);
Haeck Declaration, ~~. 11, 15-17.) Many witnesses speak Dutch and a substantial amount of the
documents are in Dutch, including most internal ADB and KBC electronic communications.
(Snyers Declaration, ~~ 27 (Apr. 4, 2012); Haeck Declaration, ~ 17.) These documents must be
collected in Belgium and translated into English for use in this litigation, increasing the
Defendants' litigation costs.
Second, the "cost to transport witnesses to trial" weighs slightly in Defendants' favor.
Lazare's Chainnan, Mr. Tempelsman, resides in New York and may testify. Nevertheless,
Defendants will have to fly its witnesses from Belgium to New York, but given that Defendants
conduct other business in N ew York and conceded to personal jurisdiction here, "any
inconvenience caused by travel to New York for this litigation will not be oppressive." In re
Optimal, 837 F. Supp. 2d at 258. Messrs. Daleyot and Fass and Daleyot Entities employees
reside outside of the United States. Many witnesses will require interpreters, thereby incurring
additional expenses. (See Haeck Declaration, ~ 18; Snyers Declaration, ~~ 29 (Apr. 4, 2012).
Regardless, the Court does not find the cost to transport and lodge witnesses to have much
bearing on this analysis.

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Third, the "availability of compulsory process for unwilling witnesses" weighs
significantly in favor of Belgium. Most of the individuals and entities identified in the
Complaint reside in Belgium or other foreign jurisdictions outside the Court's subpoena power
and cannot be compelled to give evidence in this case. See Allstate Life Ins. Co. v. Linter Grp.
Ltd., 994 F.2d 996, 1001 (2d. Cir. 1993) (private factors favored dismissal where "key witnesses
no longer are within the subpoena power of the federal court and therefore cannot be compelled
to appear at trial in New York."). Daleyot and Raphael Fass, the alleged perpetrators of the
"Illegal Scheme," are Belgian nationals. (See CompI.

~~

120(a), (j).) They allegedly direct many

Belgian corporate entities, including DD, KT, and DDM Holding. (See Compl.

~~

120(b)- (c).)

The "scheme" participants who are not subject to this Court's compUlsion can be joined as
parties and compelled to give evidence in Belgium. (Vanlerberghe Declaration, ~ 40.) Certain of
the Daleyot Entities that are located in countries that are not party to the Hague Convention on
the Taking of Evidence Abroad in Civil and Commercial Matters, including the United Arab
Emirates, and cannot be subject to any discovery in connection with a U.S. proceeding, are
subject to Belgian jurisdiction. (Id. at ~~ 36-41.) In sum, the private interests in this case do not
favor maintaining this suit in New York.
b. Public Interests
First, the fora's relative interests weigh in favor of dismissal. Despite Plaintiffs
contentions to the contrary, New York does not ultimately have a stronger interest than Belgium
in this particular lawsuit. Both Belgium and New York have strong interests in determining the
truth of whether Belgian citizens committed fraud, theft, misconduct, and conspiracy against a
New York entity. New York does not have an interest in the alleged misappropriation of
diamonds and sales proceeds and banking activities occurring in Belgium or other counties

15

outside the United States. Nonetheless, New York is interested in protecting New York residents
who do business with foreign banks in New York. Belgium also has a strong interest in
regulating its own banks and holding a Belgium bank liable for allegedly harming a New York
company. LaSala v. UBS, AG, 510 F. Supp. 2d 213, 228-29 (S.D.N.Y. 2007).
Where a U.S. plaintiff does business with foreign entities, it can reasonably expect to
litigate in foreign courts. Here, Lazare actively conducted its diamond business, including the
activities alleged in the Complaint, outside of the United States, with and through foreign
affiliates. Lazare's executives traveled to Belgium repeatedly to meet with ADB and KBC to
discuss Lazare's dispute with the Daleyot Entities and Lazare's $45 million debt to ADB.
(Snyers Declaration,

~

13.) Lazare can reasonably expect to continue to litigate the Belgian case.

Moreover, New York also has an interest in "avoiding the burden on [its] jurors by
having them decide cases that have no impact on their community." Maersk, 554 F. Supp.2d at
454. This especially pertains to jurors before this Court: "It is well-recognized that the Southern
District of New York is a congested district ... and there is a legitimate interest in ensuring that
disputes with little connection to the district be litigated elsewhere." Albert, 2002 WL 272408, at
*6.
The doctrine of international comity militates against litigation in this country when an
American citizen has voluntarily conducted business in a foreign country, and parallel litigation
is proceeding abroad. Sussman v. Bank ofIsrael, 801 F.Supp. 1068, 1073 (S.D.N.Y. 1992).
International comity also dictates that American courts enforce forum selection clauses out of
respect for the integrity and competence of foreign tribunals. Roby, 996 F.2d at 1363.
Finally, the enforceability of any judgment rendered in the United States is relevant to the
ease, expediency, and the expense of litigation in this forum. Albert Trading, Inc. v. Kipling

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Belgium N.V.lS.A., 2002 WL 272408, at *4 (S.D.N.Y. 2002). The fact of the exclusive
jurisdiction clause and the pendency of the Belgian proceeding could render any judgment of this
Court unenforceable in Belgium. Under similar circumstances, the Southern District of New
York has found that "[j]udicial efficiency and avoidance of duplicative litigation argue in favor
of [litigation] in Belgium," particularly where, as here, such litigation is pending. Albert, 2002
WL 272408, at *4 (dismissing complaint in favor of litigation pending for 18 months in
Belgium). The public interests factors prefer dismissal.
Considering the moderate level of deference afforded Plaintiff s choice of forum, that
Belgium is an adequate alternative forum, and that New York has minimal interest in this
litigation, Defendants have sufficiently shown that a balance of the hardships in this case favors
dismissal. Accordingly, this action is dismissed for forum non conveniens. The Court need not
address Defendants' motion to dismiss for failure to state a claim or the motion for a more
definite statement and to strike. The Court declines to enjoin ADB from continuing to pursue its
claims against Lazare in pending Belgian proceedings.
CONCLUSION
Based on the above, the Defendants' motion to dismiss the Complaint for forum non
conveniens is GRANTED.

SO ORDERED.

Dated:

New York, New York

September 5, 2012

ANDREW L. CARTER, JR.
United States District Judge

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