United States: Resolution of International Bank Dispute
Last Updated: September 2 2003
Shartsis, Friese & Ginsburg has just concluded successfully defending British bank National Westminster Bank plc ("NatWest") against a $160 million-dollar claim by a Dutch bank, Rabobank Nederland ("Rabobank").

Rabobank's claim against NatWest pitted two of the 50 largest banks in the world against each other in what was reputed to be the largest inter-bank dispute in Europe. The litigation involved cases in both the United Kingdom and California, with the main portion of the case litigated by Shartsis, Friese & Ginsburg in Contra Costa County Superior Court. NatWest was represented in California by Shartsis, Friese & Ginsburg partners Arthur J. Shartsis, Mary Jo Shartsis (who this year was named as one of the top 50 women litigators in the State of California) and Barbara W. Staman, and associate Erick C. Howard.

The case arose out of a $100 million Credit Facility loan extended by NatWest and Rabobank to the Yorkshire Food Group, a company publicly traded in London which specialized in providing agricultural products. Yorkshire Foods' principal operations eventually moved to California where they were headquartered in Contra Costa County, where the lawsuit was originally filed by Rabobank. Yorkshire Foods went into receivership in England in 1997. Rabobank brought suit in 1999 against NatWest and some of Yorkshire Foods' former officers and directors in Contra Costa County, alleging fraud, misrepresentation and breach of fiduciary duty and breach of contract in the administration of the $100 million Credit Facility loan and subsequent workout of Yorkshire Foods' financial difficulties.

Shartsis, Friese & Ginsburg succeeded in obtaining dismissal on demurrer of all but two of the counts alleged against NatWest. It then obtained summary adjudication of one of the two final counts, and ultimately obtained dismissal of the last claim, for breach of fiduciary duty, on the ground that the last claim should be resolved by the courts of England. NatWest will pursue claims for substantial attorneys' fees and costs against Rabobank in London.

Extensive depositions were conducted in Yorkshire (the borrower's headquarters), London, England (NatWest's headquarters), Utrecht, Holland (Rabobank's headquarters), New York where significant financial events occurred, as well as Texas and California. The case also involved the production of over 2 million documents located on both sides of the Atlantic. Judge David B. Flinn had the interesting challenge of applying English law to substantially all of the legal questions presented in Contra Costa County. Both NatWest's and Rabobank's American lawyers were supported by consulting English barristers.

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SF&G's principal areas of practice are litigation, business, investment funds and advisers, venture capital, securities enforcement, intellectual property, real estate, taxation and distressed investments/venture capital restructuring. More details are available at the Firm's website: www.sfglaw.com.

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