Banque Libanaise Pour le Commerce v. Khreich

Banque Libanaise Pour le Commerce (Banque) (plaintiff), a French banking corporation operating in Abu Dhabi, sued Hanna Elias Khreich (defendant), a former Abu Dhabi resident who had relocated to Texas. The suit, filed in federal district court, was related to an advance made by Banque to a common debtor of both Banque and Khreich, whom they believed would become solvent upon completion of a defense project. However, Banque was unable to advance any more money to the common debtor due to Banque’s debt limits. According to Khreich, Khreich and Banque agreed to an arrangement under which Khreich would fill out certain agreements to permit Banque to extend additional credit to the debtor. These agreements obligated Khreich for those amounts; however, according to Khreich, Banque promised that Khreich would not actually be liable for any of the funds extended to the debtor. Khreich further alleged that Banque agreed to serve as a collecting agent on his behalf, and that Banque agreed to pay Khreich the amount owed by the debtor upon recovery of funds from their common debtor. Banque eventually recovered funds from their common debtor, but it did not pay any of those funds to Khreich. Instead, Banque sued Khreich in Texas federal district court, alleging that Khreich owed money to Banque under the terms of the advance. Khreich sued Banque in Abu Dhabi court, asserting that Banque had breached its agreement to collect the debt on his behalf. The Abu Dhabi court entered a money judgment in favor of Banque, and Banque moved for summary judgment in the Texas federal district court action, seeking recognition of the Abu Dhabi judgment. The district court, receiving evidence that Abu Dhabi would not likely provide reciprocal recognition of judgments issues by a United States court, denied the motion. Following a jury verdict in favor of Khreich, Banque appealed.