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 EGYPTS MEMORANDUM OF LAW

IN OPPOSITION TO PLAINTIFFS MOTION
TO CONDUCT LIMITED JURISDICTIONAL DISCOVERY

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

TABLE OF AUTHORITIES

ii

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 wellestablished 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

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.

II. ARGUMENT

A.

LEGAL STANDARD

With regards to the denial or grant of jurisdictional discovery, the Courts 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

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 Courts
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

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

(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), affd 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

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, Egypts then Consul General to Houston, Texas. Instead of
congratulating Dr. Bahgat on his successful lifesaving heart transplant
operation, the NBEs representative and Egypts Consul presented to Dr.
Bahgat a draft of NBEs proposed addendum to the settlement agreement
and demanded Dr. Bahgats 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

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 Hosseinys 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]onsuls 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 Egypts 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 NBEs Chariman, all of
whom can likely attest to the Governors 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

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

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

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 17th day of July 2014, a copy of the above was
served via the Courts 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

10