George Soros George Soros

A suit by a Guinea-based mining company against international financier George Soros was stayed Wednesday by a Manhattan federal judge pending arbitration between the company and the Guinean government that Soros allegedly convinced to undermine a pre-existing contract settled with the country’s prior presidential administration.

U.S. District Judge John Keenan for the Southern District of New York ordered the stay in lieu of a dismissal motion sought by the defendants, Soros and a number of his affiliated nonprofits, including the Open Society Foundations.

According to plaintiffs BSG Resources (Guinea) and its subsidiaries, in 2009, the company agreed to iron ore mining rights in the south of the country with the government of then-President Sékouba Konaté.

In 2010, elections were held and Alpha Condé became president. Soros backed Condé. According to Keenan’s order, Condé requested the financier’s help in reforming the country’s mining industry. New mining codes were introduced in 2011 and old claims were set to be re-examined to fall in line with the new codes.

Plaintiffs claim the actions by Soros, in his interactions with Condé, forced them to improperly pay significantly more money than it had agreed to, or be at risk of losing its contracts entirely. BSGR was told in 2011 that it needed to pay $1.25 billion if it wanted to retain its rights. Later, when it refused, a subsidiary was approached about paying $500 million that was characterized as taxes.

According to BSGR, these and other attempts to make the company pay amounted to masterminding attempts to extort and destroy the mining company. A Soros-connected group Global Witness allegedly spread “untrue accusations” that BSGR obtained its rights in Guinea through bribery, according to the plaintiffs.

By 2014, BSGR had its mining rights revoked. The company challenged the move through international arbitration in Paris, which is approaching the final stages.

The suit against Soros was filed in June, alleging five causes, including tortious interference with contract, commercial defamation and prima facie tort. Defendants moved to dismiss the complaint or, in the alternative, stay it pending the outcome of the arbitration, which is solely between BSGR and the government of Guinea.

Keenan’s decision largely avoided the issues raised by the defendants for dismissal. Instead, the order noted that many of plaintiffs’ issues are tied into the issues being dealt with in arbitration.

“Accordingly, judicial economy weighs in favor of a stay to allow for resolution of these underlying issues and to avoid inconsistent results,” Keenan wrote.

Both sides of the suit said they were pleased with the actions.

“We are gratified Judge Keenan went our way,” Willkie Farr & Gallagher partner Joseph Baio, who represents the Soros defendants, said.

What remains to be seen is whether the outcome of the arbitration will allow BSGR to pursue their states-side action. The defendants argued in their dismissal brief, citing the U.S. Supreme Court’s 1990 decision in W.S. Kirkpatrick v. Environmental Tectonics, that the act of state doctrine should apply to the suit, barring a U.S. court from contradicting a foreign sovereign’s findings within its boundaries.

Greenberg Traurig shareholder Louis Solomon, who co-heads the firm’s international litigation practice, represents BSGR. He, too, was pleased with Keenan’s decision, as the dismissal wasn’t granted.

For Solomon, regardless of the arbitration’s outcome, the suit against Soros should go forward. If his clients win, the decision only strengthens their case.

“A win in the arbitration will show that the contracts were breached by Guinea because of the unlawful interference by Soros and his entities,” Solomon said.

If they lose, Solomon said he believed the suit should still move forward, where they will attempt to show that Soros’ involvement resulted in the impossibility of performance.

“Even if it’s not in our favor, i believe we have the right to continue our case,” he said.