In a dispute involving a Kazakhstani mining company by the name of SK, which was controlled by the plaintiffs, they alleged that the defendants, including EO, leveraged political connections to the former Kazakhstani president to fraudulently strip them of their property rights—specifically, their entitlement to profits and dividends from SK. They further claimed that the defendants laundered the stolen assets through shell companies, using them to purchase real estate in New York and California.
The Appellate Division, First Department, upheld the New York County Supreme Court's decision to dismiss the case under the doctrine of "forum non conveniens." The court emphasized that the plaintiffs, as Kazakhstani citizens residing in Kazakhstan, had their strongest legal ties to that jurisdiction. Additionally, the individual defendants were also Kazakhstani citizens with deep connections to Kazakhstan, further reinforcing the argument that Kazakhstan was the more appropriate forum for litigation. The court noted that Kazakhstani law might need to be applied and that key documents and witnesses were located in Kazakhstan, requiring translation.
While some of the defendant entities were U.S.-based, only two were New York companies, and their relevance to the dispute was limited. The court reasoned that the only evidence likely to be found in New York pertained to the alleged laundering of illicit proceeds through real estate purchases. However, since the plaintiffs did not unequivocally allege that the properties were financed with looted assets—only suggesting that discovery might reveal such a connection—the court found this insufficient to justify keeping the case in New York.
The court also determined that Kazakhstan provided an "adequate alternative forum," despite limitations such as the inability of Kazakhstani courts to reach foreign property or compel foreign documents and witnesses. Even if Kazakhstan was not an available forum for plaintiff GZ due to his status as a beneficial (rather than legal) owner of SK shares, the court ruled that the absence of an alternative forum was not dispositive.
Ultimately, the decision underscores that U.S. courts will not serve as venues for cases with tenuous connections to the United States, especially when a more appropriate forum exists abroad.
Was that an inconvenient truth?
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DECISION