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Arbitrator fights bribery suit in New York

08 September 2016

An Italian arbitrator has instructed counsel to defend him in a US lawsuit where he is accused of taking a bribe to determine the outcome of a €3 billion dispute between former insurance partners. 

Marco Lacchini has turned to Dechert’s New York office to defend the lawsuit brought by US insurer AmTrust Financial Services in the US District Court for the Southern District of New York.

The lawsuit concerns Lacchini’s alleged conduct as tribunal chair in a pair of Milan-seated ad hoc arbitrations brought by Trust Risk Group, an Italian insurance broker owned by Milan-based Antonio Somma, following the collapse of its partnership with AmTrust.  

The US insurer originally filed the lawsuit against Lacchini and Somma under the Racketeering Influenced and Corrupt Organizations Act (RICO) in April. It cited audio recordings obtained by undercover investigators in which Somma allegedly said that Lacchini would issue a €400 million award in Trust Risk Group’s favour in return for 10 per cent of any settlement.

In a separate recording, Lacchini allegedly said it was possible to assure the outcome of arbitrations that he chairs and boasting of achieving “amazing results” for a party asserting claims against Deutsche Bank.

In July, AmTrust withdrew its RICO claims against Somma after settling the arbitrations but indicated that the case against Lacchini would continue.

Lacchini, a professor of economics at the University of Cassino, last month filed a memorandum with the New York district court arguing that the RICO suit should be dismissed for lack of jurisdiction, as he is an Italian citizen who has never resided or conducted business anywhere in the United States.  

He also argued that AmTrust has failed to state a substantive violation of RICO’s provisions, and that he was not properly served as it had been attempted at a previous residential address.

AmTrust also lodged an English High Court action against Somma and Lacchini for tortious conspiracy in relation to the arbitrations. A US filing by a lawyer from Dechert’s London office confirms that AmTrust withdrew the English action against both defendants in July, shortly after Lacchini applied for an order declaring that the High Court lacked jurisdiction.

GAR understands that Lacchini is still pursuing an appeal before the Italian Supreme Court against a decision by the Ordinary Court of Milan in May that disqualified him from the now-settled arbitrations.

The Milan court, which had appointed Lacchini to the cases, did not make any findings on the merits of the bribery allegations but said the arbitrator should be removed because there was evidence of “serious hostility” between him and AmTrust. Lacchini had asked the court for exemplary damages from AmTrust, saying that the corruption allegations were “slanderous and untrue” and part of a “shameful plan” to derail the arbitrations.

Dechert declined to comment.

AmTrust is using a team from Quinn Emanuel Urquhart & Sullivan in the US, UK and Italian proceedings. The firm did not respond to a request for comment.Milan boutique ArbLit – Radicati di Brozolo Sabatini Benedettelli also advised it in the arbitrations and disqualification proceedings.  

In the Southern District of New York (RICO lawsuit)

  • Judge Paul Engelmayer

Counsel to AmTrust Financial Services

  • Quinn Emanuel Urquhart & Sullivan

Kevin Reed and Michael Carlinsky in New York

Counsel to Marco Lacchini

  • Dechert

Partners Gary Mennitt and Robert Jossen in New York

Before the Ordinary Court of Milan (disqualification proceedings)

  • Judge Laura Cosentini

Counsel to AmTrust and ATEL

  • ArbLit – Radicati di Brozolo Sabatini Benedettelli

Massimo BenedettelliMarco Torsello and Fabio Santacroce in Milan

  • Quinn Emanuel Urquhart & Sullivan

Stephen Jagusch QC and Nick Marsh in London

Counsel to Trust Risk Group and Trust Risk Italia

  • Studio Legale Vaccarella

Romano VaccarellaValerio Di Gravio and Gianluigi Malandrino

Counsel to Marco Lacchini

  • Studio Legale Agnoli e Giuggioli

Pier Filippo Giacomo Giuggioli, Savino Mondello and Antonio Conte

Trust Risk Group v AmTrust Financial Services and AmTrust Europe Limited (first Milan arbitration)

Ad hoc tribunal

  • Nicola Alessandro Saldutti (Italy) (appointed by TRG)
  • Antonio Gambaro (Italy) (appointed by AmTrust and ATEL)
  • Chair position became vacant following disqualification of Marco Lacchini of Italy in May 2016

Counsel to Trust Risk Group

  • Studio Legale Vaccarella

Romano VaccarellaValerio Di Gravio and Gianluigi Malandrino

Counsel to AmTrust and ATEL

  • ArbLit – Radicati di Brozolo Sabatini Benedettelli (as of 2016)

Massimo Benedettelli, Michele Sabatini and Fabio Santacroce

  • Quinn Emanuel Urquhart & Sullivan (as of 2016)

Stephen Jagusch QC and Nick Marsh in London

  • Clearly Gottlieb Steen & Hamilton (until 2016)

Carlo Santoro in Milan

Trust Risk Italia v AmTrust Europe Limited (second Milan arbitration)

  • Nicola Alessandro Saldutti (Italy) (appointed by TRI)
  • Paolo Montalenti (Italy) (appointed by ATEL)
  • Chair position vacant following disqualification of Marco Lacchini of Italy in May 2016

Counsel as in first arbitration

In the English High Court proceedings

Counsel to AmTrust Europe Limited

  • Paul Downes QC and Joseph Sullivan of 2 Temple Gardens
  • Clyde & Co

Partner Chris Burdett

  • Quinn Emanuel Urquhart & Sullivan

Stephen Jagusch QC and Nick Marsh in London

Counsel to Trust Risk Group

  • Charles Samek QC and Alexander Robson of Littleton Chambers in London
  • Daniel Shapiro of Crown Office Chambers in London
  • Lewis Silkin

Mark Lim in London

Counsel to Lacchini

  • Dechert

Partner David Hughes with associate Abdul Azeem

 

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