backOn July 10, 2024, the Commercial Division of the New York County Supreme Court dismissed, for forum non conveniens, the UK and UAE member firms of the Ernst & Young network in a case alleging the firms’ participation in a fraud within a UAE-based healthcare company. In 2020, NMC Health Plc, a UAE-based healthcare company listed on the London Stock Exchange, went into administration in England after the discovery of an alleged multi-billion-dollar roundtripping fraud by executives of the company and certain of its UAE-based affiliates. Alleging they were victims of the fraud, B.R. Shetty, an Indian national who founded NMC, and an affiliated UAE entity filed suit in New York against the executives (Indian nationals living in the UAE), two allegedly complicit banks (based in India and the Netherlands), and the company’s auditors EY-UK and EY-UAE, which the plaintiffs claimed had aided the fraud.
The banks and auditors moved to dismiss on numerous grounds, including forum non conveniens because none of the parties is based in the U.S. and nearly all of the allegedly fraudulent conduct occurred overseas. The plaintiffs countered that U.S.-dollar transactions, constituting a substantial amount of the fraud, necessarily involved wire transfers through New York-based correspondent banks, thus constituting a sufficient nexus to the U.S. forum. During a June 4, 2024 hearing, the court disagreed, finding that the factors favoring dismissal were “overwhelming” and that the dollar transfers were “incidental” and “way too thin of a reed to justify keeping this enormous case in New York.” The court announced its intention to dismiss the case, on the condition that the defendants agree not to dispute personal jurisdiction in their home jurisdictions if the plaintiffs choose to sue them there. The court entered its written order on July 10.
The case is Shetty v. Bank of Baroda, No. 654399/2021 (N.Y. Sup. Ct. Comm. Div. July 10, 2024). The plaintiffs are represented by Meister Seelig & Fein PLLC. EY-UK is represented by King & Spalding LLP. EY-UAE is represented by Kramer Levin Natfalis & Frankel LLP. The bank defendants are represented by Alston & Bird LLP and Glenn Agre Bergman & Fuentes LLP. A copy of the order can be found here.