On December 5, the United States Court of Appeals for the Second Circuit issued an opinion affirming an order of the United States District Court for the Southern District of New York in Bulgartabac Holdings v. Republic of Iraq, dismissing a complaint against Cleary Gottlieb’s clients the Republic of Iraq, the Central Bank of Iraq and Rafidain Bank in an action for breach of Saddam-era contracts for the sale of cigarettes from Bulgaria to Iraq and related letters of credit. The court held that the plaintiff’s claims were barred by the New York statute of limitations, without reaching the alternative defense of lack of subject matter jurisdiction under the “commercial activity” exception of the Foreign Sovereign Immunities Act because the alleged breach did not have a “direct effect” in the United States. This represents the latest in a series of cases in the courts in the United States, the United Kingdom and international arbitrations, in which Cleary Gottlieb has successfully defended the new government of Iraq against claims by Saddam-era contractors and others.