Judge Lorna G. Schofield of the New York Southern District Court agreed with the banks that the case must be arbitrated.
The “Last Look” case brought by now-defunct Forex broker Alpari (US) against a number of major banks has reached a crucial point, as Judge Lorna G. Schofield of the New York Southern District Court has agreed to grant the banks’ motion to compel arbitration.
The respective order, seen by FinanceFeeds, was signed on June 12, 2018.
The Judge agreed with a motion by the banks filed in December last year. Back then, Credit Suisse Group AG (VTX:CSGN), Credit Suisse AG, Credit Suisse Securities (USA), LLC, Royal Bank of Scotland Group plc (LON:RBS), RBS Securities Inc., and BNP Paribas SA (EPA:BNP), moved the Court to either compel arbitration on Alpari’s complaints or to dismiss the case altogether.
The defendants noted that Alpari (US) was a registered member of the National Futures Association (NFA) from November 14, 2007 to April 21, 2015. As a member, they said, Alpari is bound by the NFA Member Arbitration Rules. Under those rules, the dispute between Alpari and the defendants, which are also NFA members, or principals of members, shall be arbitrated. Accordingly, the Court should compel arbitration.
Even if the NFA rules did not mandate arbitration, the defendants argue, Alpari (US) would be precluded by contract from prosecuting its claims in the New York Southern District Court. Alpari’s dealings with the defendants were pursuant to written agreements, including pricing and liquidity agreements and prime brokerage agreements, that govern the resolution of disputes. Although the terms of the agreements with each defendant differ in certain aspects, a common thread is that they require Alpari to resolve its claims in arbitration or the courts of England.
This is the so-called “forum non conveniens” doctrine. It means “an inconvenient forum” or “a forum not agreeing” and typically implies an argument about jurisdiction, that is, that there is a court better suited to hear the case than the current one.
All of the banks are alleged to have caused damage to Alpari (US) and other FX market participants as a result of the use of “Last Look” practices. All of the defendants are accused of breach of contracts on their proprietary trading platforms, breach of contracts on ECNs, as well as of unjust enrichment.
The list of defendants in “Last Look” cases brought by Alpari (US) had been longer but the broker dropped the action against Citi and Morgan Stanley in September last year. In October, it abandoned the “Last Look” action against Goldman Sachs.
The Clerk of Court is now directed to stay the cases against RBS, BNP Paribas and Credit Suisse.