United States District Court, D. Massachusetts
ORDER ON REPORT AND RECOMMENDATION (DOC. NO.
SOROKIN UNITED STATES DISTRICT JUDGE.
Anatolie Stati, Gabriel Stati, Ascom Group, S.A., and Terra
Raf Trans Traiding Ltd. (the “Statis”) object to
a Report and Recommendation issued by Magistrate Judge Bowler
(Doc. No. 44) recommending that the Court allow
Petitioner State Street Corporation's application to stay
a subpoena pending resolution of related proceedings in
England. Doc. No. 46.For the reasons articulated by
Judge Bowler and further discussed below, the Court ADOPTS
Judge Bowler's Report and Recommendation (Doc. No.
2013, a Swedish arbitral tribunal awarded the Statis
approximately $500 million against the Republic of Kazakhstan
(the “Award”). Doc. No. 32 (Statement of
Common Ground and List of Issues approved by the court in the
English proceedings on February 15, 2019) at 9 ¶ 12. In
October 2017, a Belgian Court issued an ex parte order
authorizing the Statis to attach assets belonging to the
National Bank of Kazakhstan (“Kazakhstan Bank” or
“NBK”), which were held by a London branch of the
Bank of New York Mellon (“BNYM”), to permit
satisfaction of the Award (the “Belgian
Attachment”). Id. at 11 ¶ 19. The
Kazakhstan Bank carries out services with respect to assets
of the Republic, comprising the National Fund of Kazakhstan
(“National Fund”). Doc. No. 23-3
(Amended Particulars of Claim by Order of Mr. Justice Teare
dated February 15, 2019) at 3. Pursuant to the Belgian
Attachment, BNYM froze approximately $530 million dollars in
cash assets of the Kazakhstan Bank. Id. 12 ¶ 21.
The Belgian Court also held that because BNYM held these
assets under the terms of a Global Custody Agreement
(“GCA”) that is subject to English law, English
courts should decide whether the Statis were, in the first
instance, permitted to attach assets belonging to the
Kazakhstan Bank to satisfy their Award against a different
entity-the Republic of Kazakhstan. Id. at 12-13
¶¶ 21-23. The Republic of Kazakhstan is not a party
to the GCA. Id. at 5 ¶ 8.
Kazakhstan Bank and the Republic of Kazakhstan initiated
proceedings before the High Court of Justice of England and
Wales (the “English Court”) to obtain a
declaration that the Belgian Attachment did not authorize the
Statis to freeze assets belonging to the Kazakhstan Bank in
London (the “English proceedings”). Among other
things, the English proceedings concern the relationship
between the Kazakhstan Bank and the Republic of Kazakhstan,
and between each of them and the National Fund. Doc. No.
32 at 16 ¶ 5(d). A trial in the English proceedings
is scheduled for March 2020. See Docs. No. 48-51.
BNYM froze $530 million of its cash assets, the Kazakhstan
Bank transferred the remaining assets it had deposited with
BNYM-assets valued in the billions of dollars-to an
as-yet-unnamed custodian. Doc. No. 32 at 13-14
March 23, 2018, the United States District Court for the
District of Columbia issued a judgment confirming the Award
(“D.C. Court Judgment”). Stati v. Republic of
Kazakhstan, 302 F.Supp.3d 187 (D.C.D. 2018). The D.C.
Circuit affirmed that judgment. See Stati v. Republic of
Kazakhstan, 773 Fed.Appx. 627 (D.C. Cir. 2019). The D.C.
District Court denied the Republic's request for an
unsecured stay of execution of the judgment, declined to
authorize registration of its judgment in other districts,
and has limited enforcement of its judgment to assets within
the United States. See Doc. No. 7-6.
the D.C. Court Judgment, the Statis served State Street, a
non-party to the dispute between the Statis and the Republic,
a subpoena for a Rule 30(b)(6) deposition and a related
document subpoena under Fed.R.Civ.P. 69, which provides for
post-judgment discovery in aid of executing on a judgment.
Fed.R.Civ.P. 69 (“In aid of the judgment or execution,
the judgment creditor or a successor in interest whose
interest appears of record may obtain discovery from any
person-including the judgment debtor-as provided in these
rules or by the procedure of the state where the court is
located”). The subpoena seeks information regarding
assets State Street manages for, the Kazakhstan Bank, the
National Fund, and the National Investment Corporation of the
National Bank of Kazakhstan, transactions and transfers
involving those assets, as well information concerning any
asset of the Republic of Kazakhstan. See Doc.
Street sought a protective order or, alternatively, an order
to quash the subpoena. Doc. No. 2. After briefing
and hearing, Judge Bowler recommended that the Court allow
the application for a protective order to the extent that the
subpoena is stayed pending resolution of the English
proceedings, and deny without prejudice the request to quash
the subpoena, which request can be renewed upon a lifting of
the stay. Doc. No. 44 at 9-10. Judge Bowler also
directed the parties to file status reports regarding the
English proceedings every 90 days. Id. at 10.
Statis object to Judge Bowler's Report and
Recommendation. Doc. No. 46. State Street filed a
response supporting it. Doc. No. 47.
from magistrate judges on dispositive matters under 28 U.S.C.
§ 636(b) require de novo review, while all other rulings
or orders are subject to clearly erroneous review.
Fed.R.Civ.P. 72(b) (As to dispositive motions, “[t]he
district judge must determine de novo any part of the
magistrate judge's disposition that has been properly
objected to.”); Fed.R.Civ.P. 72(a) (As to
non-dispositive matters, “[t]he district judge in the
case must consider timely objections and modify or set aside
any part of the order that is clearly erroneous or is
contrary to law.”). Some case law holds that the final
ruling on a discovery matter in a miscellaneous business
docket matter such as this one qualifies as dispositive,
In re Admin. Subpoena Blue Cross Blue Shield of Mass.,
Inc., 400 F.Supp.2d 386, 389 (D. Mass. 2005) (Saris,
C.J.), even though such a ruling made in the course of
pretrial management of civil litigation does not,
somewhat-unresolved legal question, which Judge Bowler
properly recognized, Doc. No. 44 at 8-9, does not
now require resolution. Judge Bowler did not finally and
conclusively determine the rights of the parties as to State
Street's request. Rather, she simply stayed the discovery
sought by the Statis, subject to review every ninety days
after receipt of the required status reports. Under these
circumstances, the clearly erroneous standard of review
applies. See, e.g., Powershare, Inc. v.
Syntel, 597 F.3d 10, 14 (1st Cir. 2010) (A ruling on a
motion to stay litigation “is not dispositive of either
the case or any claim or defense ...