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AWB Wins Appeal Dismissing Suit over Iraq Oil‑for‑Food Programme

On September 18, 2014, the Second Circuit Court of Appeals affirmed the trial court’s decision dismissing an action against AWB Limited, the corporate successor to the Australian Wheat Board, which is now known as Agrium Asia Pacific Limited. The trial court’s decision is one of five dismissals -- and one of seven favorable court decisions -- Cravath obtained for AWB in actions related to the United Nations Oil-for-Food Programme since 2008.

The Republic of Iraq, in its sovereign capacity and as parens patriae on behalf of the people of Iraq, brought this action against 93 defendants who allegedly participated in a conspiracy to corrupt the Oil-for-Food Programme by diverting billions of dollars in cash, goods and services from humanitarian purposes to enrich defendants and the Saddam Hussein regime. Iraq alleged violations of the Racketeer Influenced and Corrupt Organization Act (“RICO”) and Foreign Corrupt Practices Act (“FCPA”) as well as various state law claims including fraud, breach of fiduciary duty, breach of contract and unjust enrichment. The U.S. District Court for the Southern District of New York dismissed the suit on February 6, 2013. For the prior related news item, click here.

Consistent with the district court decision, the majority of the appellate panel concluded that (1) the RICO claims were properly dismissed on the basis of the in pari delicto doctrine because the alleged wrongdoing by the Hussein regime must be attributed to the Iraqi state; (2) Iraq does not have a right of action under the FCPA; and (3) because the federal claims were properly dismissed, the district court properly declined to exercise supplemental jurisdiction over the state law claims.

The AWB team includes partners Robert H. Baron and Timothy G. Cameron and associate Alexander J. Scolnik. The case is Republic of Iraq v. ABB AG, et al., No. 13-0618, 2014 WL 4637201 (2d Cir. Sept. 18, 2014).

Please click herehere and here to view the news items regarding the dismissals of the other actions against AWB relating to the Oil-for-Food Programme.