Dec 05, 2011

On December 5, the United States Court of Appeals for the Second Circuit issued an opinion affirming an order of the United States District Court for the Southern District of New York in Bulgartabac Holdings v. Republic of Iraq, dismissing a complaint against Cleary Gottlieb's clients the Republic of Iraq, the Central Bank of Iraq and Rafidain Bank in an action for breach of Saddam-era contracts for the sale of cigarettes from Bulgaria to Iraq and related letters of credit. The court held that the plaintiff's claims were barred by the New York statute of limitations, without reaching the alternative defense of lack of subject matter jurisdiction under the "commercial activity" exception of the Foreign Sovereign Immunities Act because the alleged breach did not have a "direct effect" in the United States. This represents the latest in a series of cases in the courts in the United States, the United Kingdom and international arbitrations, in which Cleary Gottlieb has successfully defended the new government of Iraq against claims by Saddam-era contractors and others.

Aug 17, 2012

Cleary Gottlieb has successfully defended the Republic of Iraq's sovereign immunity in the UK Supreme Court, in relation to a $35 million claim by a Saddam era creditor.

The claim arose in the context of the liquidation of Rafidain Bank. SerVaas Incorporated, a contractual counterparty of Iraq, sought to intercept monies due to Iraq in the liquidation and to enforce a judgment against Iraq's entitlement to those monies in the English courts. SerVaas applied for a Third Party Debt Order over the monies due to Iraq and an injunction restraining the liquidators from making payments to Iraq.

On August 17, the Supreme Court Justices upheld the November 2011 decision of the English Court of Appeal, which in turn affirmed the judgment of Mr. Justice Arnold in the English High Court, to the effect that the monies were protected by Iraq's sovereign immunity.

Nov 27, 2011

Cleary Gottlieb is acting as counsel to the Ministry of Oil of the Republic of Iraq in connection with the Basrah Gas Company project, a joint venture between South Gas Company (an Oil Ministry affiliate), and affiliates of Royal Dutch Shell and Mitsubishi Corporation. The transaction agreements were signed on November 27, 2011.

The purpose of the 25-year project is to gather and process associated natural gas that is produced at three giant oil fields near Basrah, in the southern part of Iraq. Currently, most of the associated gas is flared due to a lack of processing capacity, resulting in significant environmental damage and economic waste. The problem will become more acute as oil production from the fields is increased – studies show that associated gas production from the three fields could increase from its current level of 700 million standard cubic feet per day to over 2 billion standard cubic feet per day.

Under the transaction agreements, the parties will create a new company, Basrah Gas Company, in which South Gas Company will hold a 51% interest, Shell 44% and Mitsubishi 5%. BGC will process associated gas from the three fields, extracting liquids such as condensate, propane and butane for sale in Iraq and for export. The remaining dry natural gas will be used in Iraq, primarily to product electric power. If the volume of gas produced is greater than domestic requirements, BGC may construct a Liquefied Natural Gas plant or other export facilities. The total investment requirement is currently estimated at $17 billion.

May 24, 2011

Cleary Gottlieb represented TPG in connection with its sale of several hundred million dollars of equity in private placements to the Government of Singapore Investment Corporation and the Kuwait Investment Authority. According to the press, the sale of the approximately 5% stake implies a valuation of nearly $11 billion for TPG. The transaction completed in March 2011.

Mar 29, 2010

Cleary Gottlieb represented Orascom Construction Industries, an Egyptian construction and fertilizer company that ranks among the top nitrogen-based fertilizer producers in the world, in its acquisition of DSM Agro and DSM Melamine from Royal DSM (DSM), a Dutch life sciences and material sciences company, for €310 million on a cash-free and debt-free basis. The transaction was entered into on March 29 and is expected to close on May 31, subject to regulatory, antitrust and other customary approvals and notifications.

DSM Agro is a producer of ammonia and high-nitrogen fertilizers for grasslands and agricultural crops. DSM Melamine is the world’s largest producer of melamine, a chemical product used mainly as an adhesive in wood-based panels and as a laminate in furniture and flooring.

OCI’s acquisition of DSM Agro and DSM Melamine is structured as a share purchase following an internal reorganization within DSM of the assets and shares comprising the businesses of DSM Agro and DSM Melamine. In addition, certain assets and liabilities related to the sales activities of DSM Melamine in Spain and the United Kingdom will be sold to Orascom Nitrogen or its designees as part of the transaction.

Feb 21, 2011

Cleary Gottlieb represented TPG in the sale of Mey İçki Sanayi ve Ticaret, Turkey’s leading spirits manufacturer, to the drinks group Diageo PLC.

Diageo has agreed to acquire Mey İçki from TPG and Actera, a private equity group focused on investments in Turkey, for approximately £1.3 billion. As part of the transaction, management is re-investing in the company. The deal signed on February 21. Closing is subject to regulatory approvals.

TPG had initiated a dual track exit strategy, and Cleary Gottlieb advised TPG in connection with a proposed partial floatation of Mey İçki on the Istanbul Stock Exchange.

Cleary Gottlieb also acted for TPG on its original acquisition of Mey İçki in 2006.

Sep 30, 2009

On September 30, Judge Richard J. Holwell of the United States District Court for the Southern District of New York granted Cleary Gottlieb’s motion to dismiss all claims against our clients the Republic of Iraq, the Central Bank of Iraq and Rafidain Bank as barred by the statute of limitations. The suit brought by Bulgartabac Holding AD, a Bulgarian company, sought damages of $30 million for alleged breach of contracts and dishonor of letters of credit issued in connection with sales of cigarettes from communist Bulgaria to Saddam-era Iraq during the 1980s. The district court rejected various claims of equitable tolling and other theories of extension of the statute of limitations asserted by the plaintiff, and held that the claims were time-barred under New York’s six-year statute of limitations, which applied by virtue of New York’s borrowing statute.

This is the second case in which Cleary Gottlieb has defended Iraq against suits brought by a Bulgarian company. The first, filed in the United States District Court for the District of Columbia by Agrocomplect, a Bulgarian company that provided engineering and land reclamation services, was dismissed in November 2007. That holding was affirmed by D.C. Circuit Court in November 2008. Cleary Gottlieb has also represented the new government of Iraq in a number of international arbitrations.