Order issued in favour of SL in HRB dispute

Court issues order on 23 March
Both parties agree to in-person depositions in New York
Parties agree any challenges will be addressed in supplementary briefing

The United States District Court for the Southern District of New York has on Monday (23) issued an order in favour of Sri Lanka on the dispute with Hamilton Reserve Bank (HRB) concerning the schedule for filing supplementary briefs in relation to HRB’s motion for summary judgment.

The dispute was brought to the attention of Judge Denise L. Cote by a joint letter dated 23 March filed by both parties, informing that while they had reached agreement on the guidelines and limitations governing the supplementary briefing, they were unable to agree on the timeline and page limits for such filings. As a result, the parties sought the Judge’s intervention.

According to the joint letter, both parties agreed that any expert witness providing supplementary or rebuttal testimony would be made available for in-person depositions in New York. They also agreed that any challenges regarding the admissibility of such expert evidence would be addressed within the supplementary briefing.

In its submissions, Sri Lanka brought to the court’s attention the conduct of HRB, specifically that HRB had earlier this month raised a dispute seeking court intervention by raising the already stale argument against Sri Lanka’s experts. The country noted that HRB was once again insisting on having the court address the minutiae of what should have been a mutually agreed schedule for filing of supplementary briefs.

Sri Lanka further informed the court: “HRB has proposed an elaborate expert discovery schedule, which includes an initial exchange of expert reports, a subsequent exchange of rebuttal expert reports, and then expert depositions. This proposal was surprising.

“Unlike Sri Lanka, HRB has never previously indicated any interest in designating its own experts. And HRB apparently seeks not only to introduce experts in rebuttal to Sri Lanka’s experts, but entirely new affirmative experts (though it has not yet identified them or explained what topics they would cover).”

Sri Lanka further noted that while it did not object to HRB’s proposal in principle, it had put forward a reasonable compromise schedule that would accommodate the bank’s request to expedite proceedings. However, this compromise was rejected by HRB, which reverted to what Sri Lanka described as an even more unreasonable proposal.

“HRB’s proposed schedule does not allow adequate time to bring this matter to a close. For example, HRB would have Sri Lanka’s experts submit their reports just one week after Mr. Kenyatta’s deposition, and would have Sri Lanka submit its supplemental brief just one week after the conclusion of expert depositions,” Sri Lanka stated.

Sri Lanka proposed that it be permitted to file its supplementary brief by 24 June, subject to a word limit of 7,500 words, with HRB to file its response by 15 July under the same word limit, and Sri Lanka to file its reply by 29 July subject to a word limit of 2,500 words.

Sri Lanka maintained that its proposed timeline included modest extensions to ensure sufficient time for expert discovery and preparation of submissions.

Sri Lanka also expressed regret that judicial intervention was required, noting that its proposal represented a significant compromise to accommodate HRB’s recent push for an expedited process.

In contrast, HRB proposed that Sri Lanka file its supplementary brief by 5 June, limited to 6,000 words, arguing that this would be sufficient given that the issue in question was limited to determining the beneficial ownership of Sri Lanka’s International Sovereign Bonds (ISBs), which form the basis of its claim.

HRB further argued that it was not necessary to complete expert depositions prior to the filing of Sri Lanka’s supplementary brief.

Under HRB’s proposed schedule, it would file its supplementary brief by 19 June, subject to a 7,000 word limit, with Sri Lanka to respond by 26 June under a 1,000 word limit.

The court ultimately ruled in favour of Sri Lanka’s proposed approach to the scheduling dispute.

Source: The morning