IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK AHMED BAHGAT, et. al. Plaintiffs,

v. Case No. 13-cv-08894 (AT)(AJP)

ARAB REPUBLIC OF EGYPT, et. al. Defendants.

ARAB REPUBLIC OF EGYPT’S MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS’ MOTION

TO CONDUCT LIMITED JURISDICTIONAL DISCOVERY

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Table of Contents

TABLE OF AUTHORITIES ............................................................................................... ii

I. INTRODUCTION .......................................................................................................... 1

II. PERTINENT FACTS .................................................................................................... 3

III. ARGUMENT ................................................................................................................ 6

A. LEGAL STANDARD ....................................................................................................... 6

1. MOTION TO DISMISS FOR LACK OF SUBJECT MATTER AND PERSONAL JURISDICTION UNDER FSIA (FED. R. CIV. P. 12(B)(1)-(2) .......................................... 7

2. PLEADING REQUIREMENTS PURSUANT TO FED. R. CIV. P. 8(A)(2) ............................. 8

B. THE COMPLAINT SHOULD BE DISMISSED FOR WANT OF PERSONAL JURISDICTION ... 10

C. THE COMPLAINT SHOULD BE DISMISSED FOR FAILURE TO OVERCOME THE PRESUMPTION OF SEPARATENESS ....................................................................... 13

D. THE COMPLAINT SHOULD BE DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION ............................................................................................................ 14

1. EGYPT IS ENTITLED TO SOVEREIGN IMMUNITY FROM TRIAL AND THE ATTENDANT BURDENS OF LITIGATION, AND NOT JUST A DEFENSE TO LIABILITY ON THE MERITS ........................................................................... 15 2. PLAINTIFFS FAILED TO PLEAD FACTS SHOWING THAT ANY EXCEPTIONS TO THE FOREIGN SOVEREIGN IMMUNITIES ACT APPLY TO THIS CASE .................... 15 3. THE PLAINTIFFS’ CLAIMS ARE NOT SUBJECT TO EXISTING INTERNATIONAL AGREEMENTS AND ARE NOT IN VIOLATION OF INTERNATIONAL LAW) ........... 25

E. THE COMPLAINT IS BARRED BY THE DOCTRINES OF RES JUDICATA AND COLLATERAL ESTOPPEL ............................................................................................ 26

F. THE COMPLAINT SHOULD BE DISMISSED FOR FORUM NON CONVENIENS ................ 28

CONCLUSION ................................................................................................................. 32

CERTIFICATE OF SERVICE .......................................................................................... 34

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TABLE OF AUTHORITIES

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COMES NOW THE DEFENDANT, the Arab Republic of Egypt, by and through its

undersigned counsel, John Hermina, Esquire, and the HERMINA LAW GROUP, and in

opposition to Plaintiffs’ Motion to Conduct Limited Jurisdictional Discovery submits the

below Memorandum of Law:

I. INTRODUCTION On June 27, 2014, The Government of the Arab Republic of Egypt (“Egypt”)

filed a motion requesting that the above-captioned matter be dismissed against it for a

number of reasons, which included the lack of service of process, the lack of personal

jurisdiction, and the lack of subject matter jurisdiction over the Defendant, which is a

foreign sovereign nation. Realizing the inability to submit a colorable defense to

Defendants’ motions to dismiss, Plaintiffs prayed for jurisdictional discovery. Expressly,

the Plaintiffs are requesting affidavits and/or depositions of the individuals that attended

the ‘bedside” meeting alleged in paragraph 68 of Plaintiffs’ complaint. Given the well-

established jurisdictional precedence, Plaintiffs’ request in connection with this single

meeting is perplexing and bewildering as no action arising out of that meeting is adequate

to confer jurisdiction in New York.

The Plaintiffs, who are citizens of Egypt, have availed themselves of the benefits

of their Egyptian citizenships and have fully litigated and settled the subject claims in

Egypt. Plaintiffs’ claims have no real connection to the United States. All of the

transactions in the underlying case were centered in Egypt. Plaintiffs are Egyptian

citizens and all of their companies are in Egypt. To conduct their businesses, the

Plaintiffs entered into loan agreements to borrow Egyptian pounds. The credit

agreements were in Arabic and called for the resolution of disputes through arbitration in

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Egypt. The dealings of the Plaintiffs were questioned by the Egyptian Parliament. When

Plaintiffs’ businesses declined, the Plaintiffs and National Bank of Egypt expected that

the effect of any collection activity would be felt in Egypt

Moreover, if a collection of assets occurred in Egypt, as Plaintiffs contend, it was to

satisfy indebtedness in Egypt, not the United States.

Plaintiffs acknowledge that beginning in 1999, their manufacturing companies

began to experience severe losses to the point that they defaulted on payments of their

debts to Defendant NBE. The Plaintiffs do not disguise their knowledge and ability to

utilize the various legal forums available to them in Egypt. Plaintiffs have litigated and

arbitrated their claims in Egypt. And, unhappy with the outcome of their legal efforts in

Egypt, they now seek to turn the courts of the United States into courts of last resort.

There is no question in the instant case but that Egypt is immune from suit in the

United States, and the Plaintiffs have failed to set forth any exception to such immunity.

As a result, Plaintiffs’ claims against Egypt must fail and the case against it should be

summarily dismissed. Plaintiffs’ pleading is fatally defective inasmuch as it completely

fails to identify any action on the part of Egypt that would justify a departure from the

general rule that nation states are immunized from being haled into the courts of the

United States for no valid or just reason.

Recognizing that their meritless complaint lacks any factual or legal basis for

jurisdiction in the United States, Plaintiffs are now attempting to engage in fishing

expeditions on issues that even if true would be inadequate to confer jurisdiction in New

York.

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II. ARGUMENT

A. LEGAL STANDARD

With regards to the denial or grant of jurisdictional discovery, the Court’s discretion

is broad and its decisions are reviewable only for an abuse of discretion. Lehigh Valley

Indus., Inc., v. Birenbaum, 527 F.2d 87, 93 (2d Cir. 1975). Such discretion will not be

disturbed “unless there are unusual circumstances showing clear abuse.“ Caribbean

Broadcasting System Ltd v. Cable & Wireless, P.L.C. 148 F.3d 1080, 1089-90 (D.C. Cir.

1998);

B. PLAINTIFFS ARE NOT ENTITLED TO JURISDICTIONAL DISCOVERY THAT WOULD BE, IN ANY EVENT, INCONSEQUENTIAL.

Plaintiffs’ request for jurisdictional discovery should be denied not only because

they have not alleged any facts that would support a finding that Egypt is subject to

jurisdiction in New York but even if discovery is granted, no facts, conversation, or act

uncovered from the single hospital meeting would be adequate to support the “continuous

and systematic” standard for jurisdiction.

In the FSIA context, “discovery should be ordered circumspectly and only to

verify allegations of specific facts crucial to an immunity determination.” First City,

Texas-Houston, N.A. v. Rafidain Bank, 150 F.3d 172, 176 (2d Cir. 1998) (quoting Arriba

Ltd. V. Petroleos Mexicanos, 962 F.2d 528, 534 (5th Cir. 1992). In the instant case, the

lack of personal jurisdiction is clear and the discovery sought cannot add any significant

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facts, discovery serves no purpose and should not be permitted. In other words,

jurisdictional discovery should be denied when the plaintiffs seeks such discovery merely

“in the hopes that it may uncover some evidence supporting jurisdiction. Discovery

should not be used as a fishing expedition” for that purpose. _____ .

Plaintiff acknowledges that in order for this court to exercise general personal

jurisdiction over a defendant the contact with the forum must be “so continuous and

systematic” so as to render it “essentially at home” there. Even if discovery is allowed, it

would be impossible to show continuous and systematic contact on the part of Egypt in

connection with the single meeting held at hospital.

Plaintiffs cannot rely solely on an alleged single meeting to create jurisdiction,

and that Defendants should not be found to have availed themselves of the privilege of

conduction activities in New York. Plaintiffs offered no evidence that any meaningful

contact between Defendants and New York exist even if the Plaintiffs’ allegations in

connection with the single meeting at the hospital are true and accurate.

Plaintiffs are attempting to prove facts that are irrelevant to the Court’s

jurisdictional determination as well as facts that are not in dispute. The fact that a

meeting took place in New York where Plaintiff may have signed a settlement agreement

in the presence of an Egyptian government official acting in his capacity as a notary is

immaterial and could never form the basis for jurisdiction.

Counselor El-Hossaini attended the meeting in his capacity as signature

verification officer, which is the equivalent of a notary in the United States. See affidavit

NBE representative attended the meeting in order to conclude a settlement agreement

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reached between Plaintiff Bahgat and NBE. The claims of threats, even if true, would be

inadequate to confer jurisdiction in New York. Plaintiffs litigated all of the transaction

with NBE including the settlement agreement in Egypt

Plaintiffs’ jurisdictional discovery request is simply a tactic designed to delay the

inevitable and harass this foreign sovereign.

Before the Court are scant, insufficient, and inadequate allegations to sustain

jurisdiction in this Court regardless of the outcome of discovery. By any stretch of the

imagination, Plaintiffs did not, as they could not, make a “sufficient start” towards

establishing personal jurisdiction against either party, and certainly not the Arab

Republic of Egypt. In fact, all of the allegations in the complaint describe the activities

of a sovereign state.

C. PLAINTIFFS’ CONCLUSORY JURISDICTIONAL ALLEGATIONS ARE INSUFFICIENT TO ALLOW DISCOVERY.

Without offering any legitimate foundation for their jurisdictional discovery

request, Plaintiffs’ are seeking a Court order that allow them to conduct a fishing

expedition in the hope that they maybe able to save their jurisdictionally deficient claims.

It is well settled in this Circuit that “[t]he mere commencement of a lawsuit,

without support of a threshold showing of jurisdictional prerequisites, should not entitle

the party to use the court processes to attempt to find support for having commenced the

litigation.” Daval Steel Prods. V. M.V. Jurai Dalmatinac, 718 F.Supp. 159, 162

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(S.D.N.Y. 1989) (quoting Grand Bahama Petroleum Co. v. M.V. Kriti Sky, No. 76 Civ.

4707 (RCL), 1978 A.M.C. 1238, 1240-41 (S.D.N.Y. Dec. 16, 1977), aff’d mem., 580

F.2d 1044 (2d Cir. 1978)); Socialist Workers Party v. Attorney Gen. of the United States,

375 F.Supp.318, 325 (S.D.N.Y. 1974).

Plaintiffs’ own cited authorities are not to the contrary. In their memorandum

supporting their request for jurisdictional discovery, Plaintiffs cite Manhattan Life Ins. V.

AJ Stratton Syndicate, 731 F.Supp. 587, 593 (S.D.NY. 1990) for the proposition that they

have “made a sufficient start” to establishing jurisdiction and “shown their position to be

non-frivolous.” Plaintiffs advance no fact showing how they “made a sufficient start.” In

Manhattan, the plaintiffs provided affidavits and letters showing that defendants solicited

and consummated business in New York prior to the transaction identified in the

complaint. In that case, plaintiffs also advanced facts showing that a meeting held

related to the transaction, which was the subject of the claims. Having failed to provide

any facts supporting jurisdiction, it is disingenuous for the Plaintiffs in this case to make

a factual comparison to Manhattan.

In Jazini v. Nissan Motors Co., Ltd, 148 F.3d 181 (2d Cir. 1998), the Court found

that the District Court properly denied discovery against a foreign defendant where the

plaintiff had offered only conclusory jurisdictional allegations that failed to state facts

sufficient to make a prime facie showing of Jurisdiction.

D. PLAINTIFFS SHOULD NOT BE PERMITTED TO FORCE DEFENDANTS TO ENGAGE IN COSTLY DISCOVERY WITHOUT ADVANCING SUPPORTING ALLEGATIONS.

“[I]t is well settled that a plaintiff cannot put defendant through the costly process

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of discovery, even discovery limited to jurisdictional matters, simply because it thinks

that it can probably show significant contact with the state of New York if discovery

were to proceed.” Royalty Network Inc. v. Dishant.com, LLC, 638 F. Supp. 2d 410, 425

(S.D.N.Y. 2009) (quotation omitted). Here, the Egyptian citizens plaintiffs are

attempting to sue their own country in New York, for events that occurred in Egypt

several years ago. Jurisdictional discovery would be additionally inappropriate in this

case because Plaintiffs’ causes of actions are legally deficient and should be dismissed. It

would be a costly, wasteful, improper, and unjust to require Egypt and its diplomats to

engage in

E. THE ONLY EVIDENCE BEFORE THE COURT WOULD MANDATE THE DISMISSAL OF THE ARAB REPUBLIC OF EGYPT

In their Complaint, Plaintiffs make a single allegation, which they claim forms the

basis for the sufficient contact required to confer Jurisdiction over the Arab Republic of

Egypt. Specifically, in their paragraph 64 of the Complaint, Plaintiffs state:

“64. On January 15, 2007, while still sedated in recovery, Dr. Bahgat received a personal visit at his intensive care bed from a representative of the NBE and Ambassador El Hosseiny Mohamed El Hosseiny Abdelwahab, Egypt’s then Consul General to Houston, Texas. Instead of congratulating Dr. Bahgat on his successful lifesaving heart transplant operation, the NBE’s representative and Egypt’s Consul presented to Dr. Bahgat a draft of NBE’s proposed addendum to the settlement agreement and demanded Dr. Bahgat’s signature thereon, threatening Dr. Bahgat with imprisonment upon return to Egypt and confiscation of all of his remaining assets in Egypt if he refused to sign. Dr. Bahgat, sedated after his heart transplant, nearly unconscious, and, once again, threatened with imprisonment and confiscation signed the settlement addendum at his hospital bed on January 15, 2007.” Complaint at ¶ 64.

This allegation is significant to Plaintiffs because it is the only alleged activity by

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Defendant Egypt in the United States, ostensibly forming the basis for jurisdiction. Not

only was the allegation of duress disposed of and rejected by Arbitration Tribunal, but

there was also a specific finding as to Ambassador El Hosseiny’s role:

“The Egyptian Consul and the Egyptian Consulate is the authority empowered to conduct the procedure of the notary offices in Egypt, and he is empowered to endorse the signature. There was nothing to prove that the Consul requested Claimant to sign. Also, [C]onsul’s moving has not been made by his free will to achieve this, but upon the request of the party concerned in the deed to endorse the signature.” Arbitration Tribunal Ruling, Attachment A, Exhibit 2, page 34 to Egypt’s Motion to Dismiss.

As the attached Affidavit of Ambassador El Hosseiny Mohamed El Hosseiny

Abdelwahab, indicates, he was there in his capacity to verify the signature of the parties

only and did not, at any time, engage in the conversation alleged by Plaintiff Bahgat in

his complaint.

In their motion, Plaintiffs’ requested an “affidavit and/or deposition of the

Egyptian Counsel who visited Dr. Bahgat…” Specifically, Plaintiffs clearly identified

their request for limited jurisdictional discovery to be confined to the following:

“Accordingly, Plaintiffs now request limited jurisdictional discovery in part to obtain evidence tending to establish the relationship between the two Defendants. In particular, Plaintiffs would seek affidavits and/or depositions from the NBE representative and Egyptian Consul who visited Dr. Bahgat, as this would tend to show that both were in fact present at Emory as Plaintiffs have alleged. In deposing or obtaining an affidavit from the Egyptian Consul, we would also seek to show that he was acting under the authority of, and at the behest of, the Egyptian government. In addition, Plaintiffs would seek affidavits and depositions from the then Governor of the Central Bank, his successor, and NBE’s Chariman, all of whom can likely attest to the Governor’s ordering and overseeing of the negotiations between NBE and Dr. Bahgat throughout the relevant period. Thus, allowing jurisdictional discovery as to this point would enable Plaintiffs to meet their burden of producing evidence demonstrating a principal-agent relationship between Defendants for purposes of establishing personal jurisdiction.” Plaintiffs’ Motion to Conduct Limited

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Jurisdictional Discovery at page 5.

In this respect, the Affidavit submitted by Ambassador Abdelwahab, disposes of

any possible contact or action on the part of the Egyptian Government that would confer

jurisdiction or subject Egypt to additional harassment by one of its own citizens.

Even if Plaintiffs’ request for jurisdictional discovery is granted and assuming

Defendant Egypt admits, as true, the allegations contained in Plaintiffs’ complaint, the

factual and the legal basis will remain insufficient to establish jurisdiction.

F. DENAIL OF PLAINTITFS’ REQUEST FOR DISCOVERY WOULD SERVE THE INTEREST OF JUDICIAL ECONOMY ESPECIALLY GIVEN THE EXISTENCE OF NUMEROUS INDEPENDENT BASIS FOR DISMISSAL.

There are numerous independent bases for disposing of Plaintiffs’ action, which include but are not limited to: Res judicata Forum… Service of process alone form the basis of dismissal… Etc.

III. CONCLUSION

The Plaintiffs failed to provide any legitimate factual basis that would serve as the

foundation for their request for jurisdictional discovery, let alone make a “sufficient start”

to establish jurisdiction and shown their position to be non-frivolous. Plaintiffs’ own

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allegations show that other than the single “hospital” meeting in New York, there were no

other facts that would form the basis for adequate contact with the New York. Because the

transactions in question were between a foreign sovereign and its own citizen in took place

abroad, no amount of discovery would support jurisdiction in the United States. Plaintiffs

are seeking to embark on a fishing expedition. Accordingly, jurisdictional discovery

should be denied. For the foregoing reasons and for the reasons stated above, the

Government of Egypt respectfully requests that this Honorable Court deny Plaintiffs’

request for jurisdictional discovery.

Respectfully Submitted,

DEFENDANT ARAB REPUBLIC OF EGYPT, BY: /s/ John Hermina_______________ John Hermina, Esq. (JH7479) HERMINA LAW GROUP Laurel Lakes Executive Park 8327 Cherry Lane Laurel, Maryland 20707 John@herminalaw.com Tel 301-776-2003 Fax 301-490-7913

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 17th day of July 2014, a copy of the above was served via the Court’s Electronic Case Filing system (ECF) to: Ahmed M. Elmokadem, Esq. (via ECF & Email) 4919 Hidden Dune Court San Diego, CA 92130 Tel: (858) 361-0803 Fax: (858) 793-1739 Email: aelmok@elmokademlaw.com Attorney for Plaintiffs &

Karl Geercken, Esq. (via ECF & Email) Alston & Bird LLP 90 Park Avenue New York, New York 10016 Tel: (212) 210-9400 Fax: (212) 922-3931 Email: karl.geercken@alston.com Attorneys for Defendant National Bank of Egypt (NBE)

/s/ John Hermina___________ John Hermina