New Government of Iraq Wins Dismissal of Claims

September 30, 2009

On September 30, Judge Richard J. Holwell of the United States District Court for the Southern District of New York granted Cleary Gottlieb’s motion to dismiss all claims against our clients the Republic of Iraq, the Central Bank of Iraq and Rafidain Bank as barred by the statute of limitations. The suit brought by Bulgartabac Holding AD, a Bulgarian company, sought damages of $30 million for alleged breach of contracts and dishonor of letters of credit issued in connection with sales of cigarettes from communist Bulgaria to Saddam-era Iraq during the 1980s. The district court rejected various claims of equitable tolling and other theories of extension of the statute of limitations asserted by the plaintiff, and held that the claims were time-barred under New York’s six-year statute of limitations, which applied by virtue of New York’s borrowing statute.

This is the second case in which Cleary Gottlieb has defended Iraq against suits brought by a Bulgarian company. The first, filed in the United States District Court for the District of Columbia by Agrocomplect, a Bulgarian company that provided engineering and land reclamation services, was dismissed in November 2007. That holding was affirmed by D.C. Circuit Court in November 2008. Cleary Gottlieb has also represented the new government of Iraq in a number of international arbitrations.