Quinn Emanuel Urquhart & Sullivan has won a major derivatives jurisdiction battle against rival Allen & Overy (A&O).
The case brings to the fore the intense rivalry between the firms, with Quinn Emanuel using A&O as a recruitment ground.
Several partners have defected to Quinn Emanuel, including derivatives star Dan Cunningham in March 2009 (19 March 2009), Marcus Grosch in Mannheim (23 February 2010), while Hamburg-based antitrust partner Nadine Herrmann with a team of six lawyers followed in May (1 May 2012). In London A&O’s global international arbitration head Stephen Jagusch and arbitration partner Anthony Sinclair will also join the US firm (9 May 2012).
The firms are also rivals in the derivatives litigation arena, with Quinn Emanuel regularly pursuing claims against A&O clients.
In this latest bout A&O was instructed by English entity Citigroup Global Markets (CGML), to stamp out arbitration proceedings being pursued in the US against its affiliate Citigroup Global Markets Inc (CGMI).
The High Court rejected the bid, stating that the $350m claim against CGMI was already in arbitration with Quinn’s clients, Saudi businessman Ghazi Abbar and his son Abdullah, in New York.
According to the High Court ruling the London-based entity was not specifically named in the claim, although “in their pleading the defendants make allegations against CGMI ‘and its affiliates’, amongst whom they include CGML.”
Mr Justice Andrew Smith said the real dispute was between parties based in the US and that the claimant had no reason to bring the proceedings in the High Court other than to aid it’s affiliate in the US.
The judge said: “I consider that CGML have no significant purpose of their own in claiming these declarations. The real protagonists in the dispute behind this litigation are the defendants and CGMI, against whom the defendants have brought their claim, and the real purpose of these proceedings is to aid CGMI in the claims against them in the FINRA reference. Indeed, CGML have not asserted otherwise.”
In the US Abbar claims he lost $350m of his fortune on investments with Citigroup Inc after he switched banks from Deutsche Bank AG in 2006.
Citigroup denies Abbar’s allegations. The bank has also sued its former client in federal court in Manhattan to block the arbitration, arguing Finra has no jurisdiction because the deals were handled outside the US. The London judgment will have implications for that ruling.
The legal line-up:
For the claimants, Citigroup Global Markets Ltd: Allen & Overy partner Arnondo Chakrabarti instructing Antony Zacaroli QC and David Allison of South Square
For the defendants, Amatra Leveraged Feeder Holdings Ltd; Ghazi Abbar and Abdullah Abbar: Quinn Emanuel partner Matthew Bunting instructing Simon Picken QC and Sushma Ananda of 7 King’s Bench Walk