Judge P. Kevin Castel
Under their 2007 Investment Agreement, the $7.5 billion the Abu Dhabi Investment Authority (ADIA) invested in Citigroup was to be converted into Citigroup shares, on four separate dates, at values dependent on market conditions at the time. On Dec. 15, 2009, pursuant to the agreement’s broad arbitration clause, the ADIA sought arbitration of its claims of fraud, securities fraud, breaches of contract and fiduciary duty, and related claims. The arbitral panel’s October 2011 award in Citigroup’s favor was affirmed by the Southern District on March 4, 2013. Citigroup’s Aug. 28 action sought to enjoin ADIA’s second, Aug. 20 demand to arbitrate claims of contract breach and breach of the implied duty of good faith and fair dealing. Citigroup argued that ADIA’s arbitration proceeding was precluded by the prior arbitral award in its favor. Granting ADIA’s motion to compel arbitration the court held that under the Investment Agreement’s broad arbitration clause—negotiated at arm’s length—the preclusive effect, if any, of the parties’ previous arbitration must be decided by the arbitrators. Thus Citigroup’s complaint failed to state a claim for relief, and must be dismissed. Nor was there any basis to enjoin arbitration under the All Writs Act.
