Harrison et al v. The Republic of Sudan

Filing 573

STIPULATION, ORDER, AND JUDGEMENT DIRECTING THE TURNOVER OF FUNDS AND THE DISCHARGE AND RELEASE OF GARNISHEE THE BANK OF NEW YORK MELLON: NOW, THEREFORE, it is hereby STIPULATED, ORDERED, ADJUDGED AND DECREED as follows: a. Within 20 days afte r SLID obtains either (i) a written determination by OF AC that no such license is required, or (ii) a license from OFAC authorizing BNY Mellon to pay the funds in the Blocked Account to SLID, BNY Mellon shall transfer the funds in the Blocked Account, in the amount of $513,608.19, to SLID in accordance with wire or other payment instructions that SLID's counsel provides to BNY Mellon's counsel. b. Upon its payment of the funds in the Blocked Account to SLID, BNY Mellon, including its parent company and all affiliated companies: 1. Shall be fully discharged, pursuant to CPLR §§ 5209 and 6204, from any and all liability with respect to the funds in the Blocked Account, and shall be fully discharged from an y and all obligations or other liabilities to the Central Bank, the Federal Reserve, the Harrison plaintiffs, Al Shamal, SLID, and any other person or entity with respect to the Blocked Account and the funds therein; and ii. Shall be released by SLID, for itself and on behalf of all its affiliated entities, from any and all actions, causes of action, suits, claims and demands, in law or equity, arising from or relating to the Blocked Account, the funds therein, and the turnover of those funds to SLID. c. All pending claims of any persons or entities against BNY Mellon, as to the Blocked Account and the funds therein, are hereby dismissed with prejudice, and any such claims brought in the future shall be dismissed with prejudice as a violation of this paragraph and of the permanent injunction provisions set forth in paragraph e below. d. In the event any person or entity asserts a future claim against BNY Mellon, in any court, tribunal or arbitration forum, as to the Blocked Account, the funds therein, or the turnover of those funds to SLID, and notwithstanding that any such claim would be in violation of the permanent injunction provisions set forth in paragraph e below, SLID shall indemnify BNY Mellon for any liab ility, reasonable attorneys' fees and costs that BNY Mellon incurs in any such proceeding. e. The Central Bank, the Federal Reserve, the Harrison plaintiffs, Al Shamal, SLID, and all other persons or entities are hereby permanently restra ined and enjoined from instituting or pursuing any other pending or future legal actions or proceedings, in any court, tribunal or arbitration forum, against BNY Mellon with respect to the Blocked Account and the funds therein. f. Subject only to BNY Mellon's payment of the funds in the Blocked Account to SLID, all writs of execution, citations, restraining notices or other judgment enforcement devices, to the extent they remain pending, that cover or otherwise apply to the Blocked Account are hereby permanently terminated and deemed vacated and null and void. g. This Stipulation, Order and Judgment is intended to apply solely to the funds in the Blocked Account and is not intended to affect any other determination in this or any other proceeding involving blocked funds held by BNY Mellon. h. This Stipulation, Order and Judgment is a final and appealable judgment within the meaning of Fed. R. Civ. P. 54(b), and there is no just cause for delay of the enforcement o f or appeal from this Stipulation, Order and Judgment. This Stipulation, Order and Judgment finally disposes of all claims that have been, or that could have been, asserted by the Harrison plaintiffs, the Central Bank, the Federal Reserve, Al Shama l, SLID or any other person or entity for the turnover of the funds in the Blocked Account. i. This Court shall retain jurisdiction over this proceeding to enforce any violation of one or more of the terms of this Stipulation, Order and Judgment, including any breach of the indemnification obligations set forth in paragraph d above. SO ORDRED AND ADJUGED. (Signed by Judge P. Kevin Castel on 2/16/2021) (ks) Transmission to Finance Unit (Cashiers) for processing.

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UNITED STA TES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

RICK HARRISON, et al.,
Plaintiffs,
-againstREPUBLIC OF SUDAN,
Defendant.

Case No. 1: 13-cv-03 I 27 (PKC)
STIPULATION, ORDER ,:lliI)
JUDGMENT DIRECTING THE
TURL"\/OVER OF FUNDS AND THE
DISCHARGE AND RELEASE OF
GARNISHEE THE BANK OF
NEW YORK MELLON

This Stipulation, Order, and Judgment is entered into between respondent/garnishee The
Bank of New York Mellon ("BNY Mellon") and third-party respondent Sudanese Libyan
Investment and Development Co. Ltd. ("SLID"), by their respective undersigned counsel.
WHEREAS:
1.

Petitioners Rick Harrison et al. ("Petitioners" or the "Harrison plaintiffs") were the

plaintiffs in an action in the United States District Court for the District of Columbia (the "D.C.
District Court") entitled Harrison, et al. v. Republic ofSudan, No. 10-cv-1689 (RCL) (D.D.C.), in
which a default judgment was entered against the Republic of the Sudan (the "Sudan") on March
30, 2012, in the amount of$314,705,896.
2.

As explained further below, that default judgment has since been vacated as a result

ofa decision by the U.S. Supreme Court dated March 26, 2019. Sudan and the Harrison plaintiffs
subsequently settled the case and jointly dismissed the underlying action predicate for this action -

which was the

by a stipulation that was endorsed by the D.C. District Court on April

6, 2020. Harrison, et al. v. Republic of Sudan, No. 1:10-cv-01689 (D.D.C.) (Doc. No. 75)
(Stipulation of Dismissal).

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3.

Petitioners registered the default judgment in this Court on October 2, 2012, in the

related miscellaneous proceeding entitled Harrison, et al. v. Republic ofSudan, No. 12-mc-0328p I (Judgment No. 12, 1727).
4.

Petitioners thereafter commenced this proceeding and, on June 19, 2014, filed an

Amended Omnibus Petition for Turnover Order (ECF No. 138) seeking an order directing the
turnover ot: among other assets, funds held by BNY Mellon in a blocked account with account
number ending in 51900 (the "Blocked Account").
5.

The funds held in the Blocked Account consist of the proceeds, plus interest, in

the total amount of $513,608.19 as of February 3, 2021. The Blocked Account was originally
established upon BNY Mellon's block of an underlying electronic funds transfer ("EFT"), in the
amount of $300,000, on June I, 1992, pursuant to certain sanctions regulations administered by
the Office of Foreign Assets Control ("OFAC") of the United States Depmtment of the Treasury.
6.

The parties to the EFT were (i) the Central Bank of Sudan (the "Central Bank");

(ii) the Federal Reserve Bank of New York (the "Federal Reserve"); (iii) BNY Mellon; (iv) Al
Shamal Islamic Bank ("Al Shamal"); and (iv) SLID, which was the beneficiary of the EFT.
7.

On August 4, 2014, BNY Mellon filed a Third-Party Petition for Interpleader and

Other Relief (the "Interpleader Petition") (ECF No. 217) for a determination of the rights, if any,
of Petitioners and the third-party respondents as to multiple blocked assets, including the Blocked
Account.
8.

By Order and Judgment entered on January 4, 2017 (the "Turnover Judgment,"

ECF No. 506), the Court ruled that the Blocked Account was subject to execution and directed
BNY Mellon to pay the Blocked Account's funds to Petitioners within 30 days of the entry of the
Turnover Judgment.
2

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9.

On February 3, 2017, before the Turnover Judgment had been complied with, the

Central Bank appeared in the case and filed an appeal from the Turnover Judgment in the U.S.
Court of Appeals for the Second Circuit. By stipulation dated May 30, 2017 among the Central
Bank, Petitioners and BNY Mellon, the Central Bank withdrew that appeal, and the Central Bank
moved to vacate the Turnover Order on June 23,2017 under Fed. R. Civ. P. 60(b)(4) (ECF No.
532).
10.

By Order dated October 24, 2017 (ECF No. 544), the Court directed the Federal

Reserve to submit its position on the motion. In its submission, filed on November 21, 2017 (ECF
No. 549), the Federal Reserve disclaimed an interest in the Blocked Account.
1 I.

By Order dated January 5, 2018 (ECF No. 550), the Court denied the Central

Bank's motion to vacate the Turnover Judgment, and on February I, 2018, the Central Bank filed
an appeal from that Order.
12.

While the Central Bank's appeal was pending, the U.S. Supreme Court, in Republic

ofSudan v. Harrison, 139 S. Ct. 1048 (2019), ruled that the Harrison plaintiffs had failed to effect
service on the Sudan pursuant to Section 1608 of the Foreign Sovereign Immunities Act, and that
the D.C. District Court had thus lacked jurisdiction to enter the Harrison plaintiffs' default
judgment against the Sudan -

the default judgment on which the Turnover Judgment was later

based.
13.

By Order dated September 11, 2019, the D.C. District Conrt in Harrison, on

remand, vacated the default judgment against the Sudan.
14.

As a result of the U.S. Supreme Court's decision voiding the underlying default

judgment, by Order dated February 14, 2020, the Second Circuit vacated both the Turnover

3

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Judgment and this Court's January 5, 2018 Order denying the Central Bank's motion to vacate the
Turnover Judgment.
15.

After the Second Circuit issued its February 14, 2020 Order, the Harrison plaintiffs

and the Sudan reached a settlement of the Harrison plaintiffs' underlying action in the D.C. District
Court and, on April 3, 2020, filed a joint stipulation of dismissal with prejudice that the D.C.
District Court endorsed on April 6, 2020. (See Harrison v. Republic ofSudan, Doc. No. 75.)
16.

The Central Bank and the Harrison plaintiffs wrote a joint letter to this Court on

August 12, 2020 (Doc. No. 561), stating that in view of the U.S. Supreme Court's March 2019
decision, the September 2019 Order of the D.C. District Coutt vacating the default judgment
against the Sudan, the February 14, 2020 Order of the Second Circuit vacating the Turnover
Judgment, and the parties' April 2020 joint stipulation of dismissal endorsed by the D.C. District
Comt, the parties agreed that the enforcement proceedings in this Court should be closed and stood
ready to submit a stipulation of dismissal with prejudice pending disposition of the Blocked Funds.
In that letter, the Central Bank stated its intention to work with BNY Mellon to return the funds in
the Blocked Account to the beneficiary of the blocked EFT underlying the Account.
17.

The Central Bank wrote another letter to this Court on November 2, 2020 (Doc No.

567), stating that the Central Bank had no claim to the funds in the Blocked Account, and that the
blocked funds should be returned to SLID as the beneficiary of the original wire transfer. The
Central Bank reaffirmed that it would continue to work with BNY Mellon to facilitate the return
of the blocked funds to SLID. As a result, undersigned counsel entered an appearance for SLID
on February 11, 2021.
18.

SLID is a private Sudanese company that is indirectly owned by a Libyan

governmental entity, the Libyan Investment Authority ("LIA"). The LIA's assets in the United
4

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States had been subject to blocking under the Libyan Sanctions Regulations, 31 C.F.R. Part 570,
until the issuance by OFAC of General License 11 on December 16, 2011. General License 11
unblocked all Government of Libya assets, with the exception of funds and precious metals of the
LIA that had previously been blocked. Accordingly, due to the LIA's upstream ownership of
SLID, SLID will be seeking OFAC's formal guidance and a specific license, as necessary, with
respect to the funds in the Blocked Account.
19.

Subject to the terms set forth in the paragraphs below and OFAC's formal guidance

or a specific license, BNY Mellon has agreed to turn over the funds in the Blocked Account to
SLID. Such turnover is appropriate in view of the express disclaimer ofany interest in the Blocked
Account by the Harrison plaintiffs the Central Bank and the Federal Reserve, and Al Shamal's
lack of a property interest in the Blocked Account under the law in this Circuit.
NOW, THEREFORE, it is hereby STIPULATED, ORDERED, ADJUDGED AND
DECREED as follows:
a.

Within 20 days after SLID obtains either (i) a written determination by OF AC that

no such license is required, or (ii) a license from OF AC authorizing BNY Mellon to pay the funds
in the Blocked Account to SLID, BNY Mellon shall transfer the funds in the Blocked Account, in
the amount of $513,608.19, to SLID in accordance with wire or other payment instructions that
SLID's counsel provides to BNY Mellon's counsel.
b.

Upon its payment of the fonds in the Blocked Account to SLID, BNY Mellon,

including its parent company and all affiliated companies:
1.

Shall be fully discharged, pursuant to CPLR §§ 5209 and 6204, from any

and all liability with respect to the funds in the Blocked Account, and shall be fully discharged
from any and all obligations or other liabilities to the Central Bank, the Federal Reserve, the

5

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Harrison plaintiffs, Al Shamal, SLID, and any other person or entity with respect to the Blocked

Account and the funds therein; and
ii.

Shall be released by SLID, for itself and on behalf of all its affiliated

entities, from any and all actions, causes of action, suits, claims and demands, in law or equity,
arising from or relating to the Blocked Account, the funds therein, and the turnover of those funds
to SLID.
c.

All pending claims of any persons or entities against BNY Mellon, as to the

Blocked Account and the funds therein, are hereby dismissed with prejudice, and any such claims
brought in the future shall be dismissed with prejudice as a violation of this paragraph and of the
permanent injunction provisions set forth in paragraph e below.
d.

In the event any person or entity asserts a future claim against BNY Mellon, in any

couti, tribunal or arbitration forum, as to the Blocked Account, the funds therein, or the turnover
of those funds to SLID, and notwithstanding that any such claim would be in violation of the
permanent injunction provisions set fo1ih in paragraph e below, SLID shall indemnify BNY
Mellon for any liability, reasonable attorneys' fees and costs that BNY Mellon incurs in any such
proceeding.
e.

The Central Bank, the Federal Reserve, the Harrison plaintiffs, Al Shamal, SLID,

and all other persons or entities are hereby permanently restrained and enjoined from instituting or
pursuing any other pending or future legal actions or proceedings, in any court, tribunal or
arbitration forum, against BNY Mellon with respect to the Blocked Account and the funds therein.
f.

Subject only to BNY Mellon's payment of the funds in the Blocked Account to

SLID, all writs of execution, citations, restraining notices or other judgment enforcement devices,

6

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to the extent they remain pending, that cover or otherwise apply to the Blocked Account are hereby
permanently terminated and deemed vacated and null and void.
g.

This Stipulation, Order and Judgment is intended to apply solely to the funds in the

Blocked Account and is not intended to affect any other determination in this or any other
proceeding involving blocked fonds held by BNY Mellon.
h.

This Stipulation, Order and Judgment is a final and appealable judgment within the

meaning of Fed. R. Civ. P. 54(6), and there is no just cause for delay of the enforcement of or
appeal from this Stipulation, Order and Judgment. This Stipulation, Order and Judgment finally
disposes of all claims that have been, or that could have been, asserted by the Harrison plaintiffs,
the Central Bank, the Federal Reserve, Al Shamal, SLID or any other person or entity for the
turnover of the funds in the Blocked Account.

i.

This Court shall retain jurisdiction over this proceeding to enforce any violation of

one or more of the terms of this Stipulation, Order and Judgment, including any breach of the
indemnification obligations set forth in paragraph d above.
Dated: Febmary 11, 2021
THE BANK OF NEW YORK MELLON

SUDANESE LIBYAN INVESTMENT
DEVELOPMENT CO.LTD.

sf Steven B. Feigenbaum
Steven B. Feigenbaum
Katsky Karins LLP
605 Third A venue
New York, NY 10158
[phone]
[e-mail]

s/ Claire DeLelle
Claire DeLelle
Nicole Erb
White & Case LLP
70 I Thitteenth Street, NW
Washington, DC 20005
[phone]
[e-mail]
[e-mail]

Counsel for The Bank ofNnv York Mellon

Counsel for Sudanese Libyan Investment
Development Co. Ltd.
7

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Dated: NewYork,~ewYork
February j_i_, 2021

S0~11
P. 'Kevin
United States District Judge

8