Kazakhstan Opposes Stati Brothers' Motion to Vacate
- Florentina Field
- Apr 21, 2023
- 2 min read
Kazakhstan asked the Southern District of New York on Thursday, April 20, to deny the Stati brothers' Motion to Vacate a December 2022 order granting Kazakhstan's petition for discovery under Section 1782.
In the opposition, that can be downloaded below, the sovereign argued that the Statis have not met their burden to vacate the December 2022 order, and pointed out that their opponents have availed themselves as well of this procedural mechanism before the same Court. Kazakhstan argues that the Statis' Motion to Vacate should be reviewed under Rule 60(b) and explains that the Court"did not err in finding that the Petition satisfies the three requirements of § 1782 [because] (1) the discovery is sought from a person who 'resides or is found' in the Southern District of New York; (2) the request has been made by an 'interested person'; and (3) the discovery is for use in a foreign tribunal." According to the sovereign, the Stati brothers contested only the third prong of this test. As to that prong, Kazakhstan explains that the discovery it seeks is relevant to various foreign legal proceedings and opposes the Statis' argument that the information lacks relevance by pointing out that information obtained in 2019 from Statis’ Rietumu Bank records showed that the Statis' "likely transferred the stolen funds located in these accounts to similar related individuals (i.e., those for which the Republic seeks financial data from TCH)."
Kazakhstan specifically identifies proceedings in Luxembourg, Belgium, and the Netherlands to which the Section 1782 discovery is germain. These proceedings involve "the Statis' money laundering schemes in connection with their attempts to enforce the fraudulent ECT Award, which is part and parcel of the Statis’ long-running fraud schemes to defraud their investors and the Republic." Although some of these proceedings have concluded, appeals are pending. Kazakhstan notest that because "the Statis continue to deny the existence of their overarching fraud schemes in these ongoing proceedings, evidence of these schemes is directly relevant to the Foreign Legal Proceedings."
Kazakstan further rebuts the Stati's claims that "the requested discovery cannot be 'used' in proceedings to execute on cost orders against the Statis in England and the Belgium Damages Proceedings because they are not adjudicative in nature." In addition to challenging the legal basis for their argument, Kazakhstan states that the damages proceedings are actually adjudicative.
The case is In re Application of the Republic of Kazakhstan for Order Directing Discovery from The Clearing House Payments Company L.L.C. Pursuant to 28 U.S.C. § 1782, No. 1:22-mc-00367-JPO. The Intervenors are represented by Berenice Le Diascorn and Thomas Vandenabeele of Kellner Herlihy Getty & Friedman, LLP. Felice Galant, Matthew Kirtland, and Esha Kamboj from Norton Rose Fulbright US LLP represent the Republic of Kazakhstan.
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