Lawyers for billionaire Victor Dahdaleh from Washington, D.C. litigation powerhouse Williams & Connolly have struck back at Bahrain’s Alba and its American attorneys.
Weeks after Dahdaleh was acquitted of criminal charges in London, his team from Williams & Connolly asked a U.S. federal judge to dismiss a civil RICO complaint against him filed by aluminum smelter Alba in 2008.
One reason given by the lawyers is that Alba’s U.S. law firm, Akin Gump, faces a UK hearing for sanctions or an investigation into possible misconduct connected with their work for Alba.
In December, a criminal court in London ordered Dahdaleh’s acquittal after two witnesses from Akin Gump refused to appear and another witness changed his evidence.
Prosecutors from the UK’s Serious Fraud Office identified the Akin Gump lawyers as Mark MacDougall and Randy Teslik. They were slated to testify for the SFO about their investigation into Dahdaleh and his dealings with Alba.
The SFO had accused Dahdaleh of paying $67 million in bribes to former officials at Alba, one of the world’s biggest aluminum smelters, in return for raw material supply contracts for Alcoa and others worth over $3 billion.
The SFO said without the Akin Gump testimony, it couldn’t continue the prosecution.
The judge in London had earlier cited a conflict for the two Akin Gump partners. He said they still worked for Alba on the U.S. civil case against Dahdaleh but would be testifying on behalf of the SFO at the UK criminal trial.
“As you will see from the correspondence,” the SFO told the judge, “[the Akin Gump partners] have attempted to place limits on the extent to which they can be cross-examined. The Serious Fraud Office does not believe it would be appropriate to attempt to persuade the court to agree to such limits . . .”
In their argument for dismissal of Alba’s federal RICO suit, Dahdaleh’s U.S. legal team said a UK court has scheduled a hearing on March 10 “to consider whether Akin Gump should be sanctioned or further investigated for misconduct.”
Dahdaleh is also asking the London court to award his costs against Akin Gump, the Financial Times reported this week.
The lawyers from Williams & Connolly asked U.S. District Court Judge Donetta W. Ambrose to dismiss Alba’s suit and order mandatory arbitration under supply contracts Alba had with Alcoa and a company owned by Dahdaleh.
Alba’s response to Dahdaleh’s motion to dismiss and compel arbitration is due on February 21, according to the court docket.
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Alba’s civil racketeering suit accused Alcoa, Dahdaleh and others of a 15-year conspiracy linked to overcharging, fraud, and bribery.
The 2008 suit was stayed for years after the U.S. government launched a criminal FCPA investigation of Alcoa and some individuals based on Alba’s allegations.
Earlier this month, Alcoa and a subsidiary paid $384 million to resolve an FCPA enforcement action by the DOJ and SEC.
Alcoa settled the civil suit with Alba in 2012 by agreeing to pay $85 million without admitting liability. Alba continued the suit against Dahdaleh.
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Here’s part of Dahdaleh’s argument (without citations and footnotes) from his memorandum of law in support of a motion to dismiss Alba’s civil complaint and for an order compelling mandatory arbitration filed January 16:
In October 2011 the Serious Fraud Office (“SFO”) in the UK brought criminal charges of conspiracy, corruption and money laundering again st Mr. Dahdaleh, based on allegations similar to those in Alba’s Amended Complaint and RICO Case Statement. Mr. Dahdaleh’s trial on those charges began on November 4, 2013, and the SFO presented weeks of evidence, including testimony by current and former representatives of Alba. On December 10, however, the SFO notified the court that it could not fairly proceed with the prosecution and that there was “no longer a realistic prospect of conviction” in the case.
The court directed the jury to acquit Mr. Dahdaleh on all charges that same day.
The SFO invited the court to direct an acquittal of Mr. Dahdaleh because (a) trial testimony by Alba’s former CEO, Bruce Hall, contradicted his prior statements and tended to exculpate Mr. Dahdaleh, and (b) lawyers for Akin Gump, Alba’s counsel here, who had promised to testify at trial, refused to appear and be cross-examined.
As to the latter, the U.K. trial judge found that an SFO Case Officer had “delegated his disclosure enquiries and duties in Bahrain to Akin Gump and in particular to Mr. MacDougall.”
The judge noted: “Neither Mr. MacDougall nor Mr. Teslik, both of whom are fully bound witnesses, are prepared to be questioned about their enquiries or their disclosure role. In fact they have deliberately absented themselves and remain in America.”
In the aftermath of these events, the UK court has scheduled a March 10, 2014, hearing to consider whether Akin Gump should be sanctioned or further investigated for misconduct.
Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.