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AWB Wins Dismissal of Fourth Suit over Iraq Oil-for-Food Programme

On February 6, 2013, the U.S. District Court for the Southern District of New York granted Cravath’s motion to dismiss with prejudice an action against AWB Limited, the corporate successor to the Australian Wheat Board. This is the fourth time Cravath successfully represented AWB in a suit concerning the United Nations Oil-for-Food Programme. 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 state law claims including fraud, breach of fiduciary duty, breach of contract and unjust enrichment. In his opinion, Judge Sidney H. Stein dismissed the RICO claims on three grounds. First, he held that the RICO claims were an impermissible attempt to apply the statute extraterritorially. Second, he determined that even if the statute could be applied, the claims were barred by the defense of in pari delicto because the alleged wrongdoing by the Hussein regime must be attributed to the Iraqi state. Third, he found that Iraq failed to allege that the pattern of racketeering activity had proximately caused Iraq’s injury. Judge Stein further held that the FCPA does not afford a private right of action. Having dismissed the federal claims, the court declined to exercise supplemental jurisdiction over Iraq’s state law claims.

Cravath previously obtained the dismissal of three separate class action suits against AWB Limited and AWB (U.S.A.) Limited in the U.S. District Court for the Southern District of New York regarding their participation in the United Nations Oil-for-Food Programme. One suit was brought by American wheat farmers and two others were brought by Iraqi citizens. The suits alleged various claims, including antitrust, RICO, FCPA, Alien Tort Statute and Torture Victim Protection Act claims. Please click here and here to view the related news items.

The AWB team includes partners Robert H. Baron and Timothy G. Cameron. The case is Republic of Iraq v. ABB AG, et al., No. 08-cv-05951-SHS, 2013 WL 441959 (S.D.N.Y., Feb. 6, 2013).