Home / Exclusive / UAE bank at centre of attempt to freeze Turkish family’s assets

UAE bank at centre of attempt to freeze Turkish family’s assets

THE LEVANT – An attorney for a Motorola subsidiary asked New York’s top state court on Tuesday to allow it to freeze the assets of a Turkish family held by a branch of an international bank in the United Arab Emirates.

US District Judge Jed Rakoff in Manhattan in 2003 ruled that the Uzan family owed Motorola Credit Corp more than $2 billion and tacked on $1 billion in punitive damages in 2006. It was found that the Uzans siphoned off loans that Motorola Credit made more than a decade ago to Turkish mobile phone company Telsim, which the family controlled at the time.

Last year, however, Rakoff ruled in favour of defendant Standard Chartered Bank, who was holding $30 million for the Uzans in a branch in the United Arab Emirates. Rakoff said New York law precluded Motorola from ordering a freeze on that money. A federal appeals court asked the New York Court of Appeals to decide whether Rakoff was right.

Motorola attorney Howard Stahl told the Court of Appeals in Albany on Tuesday that a ruling against Motorola would give the Uzans, whom Rakoff called “fugitives,” an opportunity to put the money out of the company’s reach.

“By the time we got done (in the United Arab Emirates), the money would be moved to Switzerland or the Cook Islands,” said Stahl.

Several banking trade groups, along with the governments of the United Kingdom and Jordan, submitted friend-of-the-court briefs backing Standard Chartered. They warned that a ruling in favour of Motorola could undermine New York’s role as a global banking centre.

Bruce Clark, who represents Standard Chartered, told the court that ordering the bank to turn over the Uzans’ money would violate a rule created by New York courts that treats individual bank branches as separate legal entities.

The so-called separate entity rule, he said, was designed to ensure that foreign banks only have to be concerned with complying with the laws in their respective countries.

“We have specifically suggested that Motorola bring the judgment to (the United Arab Emirates) and have it resolved under their laws,” Clark said.

Stahl urged the court to ignore the argument that a ruling in Motorola’s favour would impact New York’s role in international banking. He said prior unfavourable court rulings and hefty fines had not chased banks away.

“New York is here to stay as a financial capital of the world,” he said.

Check Also

Several hurt in chopper crash on US carrier in Pacific

A US Navy helicopter crashed on board a US aircraft carrier patrolling the Pacific on …

Leave a Reply

Your email address will not be published. Required fields are marked *