BoNY Fails in Bid to Have Judge Replaced

The Moscow Arbitration Court on Friday rejected a motion by lawyers for the Bank of New York to dismiss the judge in the Russian government's $22.5 billion lawsuit against the bank, lawyers for both sides said.

The Federal Customs Service is seeking compensation after a rogue employee at the bank was convicted in the United States of helping launder $7 billion from Russia.

Ivan Marisin, lead lawyer for the bank, said he had put forward a motion to have Judge Lyudmila Pulova dismissed from the case.

He said he had asked for her removal on the grounds that she was receiving documents and communiques from lawyers for the Federal Customs Service.

Judges are not supposed to have contact with any of the parties to a case outside the courtroom.

The customs service "is unofficially communicating with the judge, which is against all norms and principles," Marisin said in an interview.

He cited a customs service document presented to the court with the judge's pencil markings already on it.

Marisin and Steven Marks, a lawyer representing the customs service, said the two judges sitting alongside Pulova, the chief judge, had rejected the motion.

"The procedural motions have been denied, and the next hearing is going to proceed with the merits of the case. ... That is where our attention is directed," said Marks, who is from the Florida-based firm Podhurst Orseck.

Marisin, however, said he would continue to seek a dismissal of the case on procedural grounds.

"We have many more procedural issues to raise. These issues deserve careful and thorough review," he said.

Along with the motion to dismiss Pulova, the court on Friday also rejected two other procedural motions from the bank, including one that accused Marks of falsifying his power of attorney document.

Asked whether he feared having agitated the judge with Friday's motion, Marisin said, "She cannot possibly be any more antagonistic to us than she already is, so I'm glad that we at least voiced our concerns."

Marks said it would be more difficult to reach a settlement in the case after the accusations.

"What the bank has done is making it more difficult and far more expensive for the bank if it ever chooses to go that route, but our focus now is on obtaining the judgment," Marks said.

The next court hearing will be held on April 17.

The star witness for the customs service in this case is Lucy Edwards, a former Bank of New York vice president who confessed in 2000 to being part of what is thought to be the largest money-laundering operation in history.

A U.S. court sentenced her and her husband to six months of house arrest, now served, and $725,000 in fines and restitutions.

The bank, for its part, paid a total of $38 million in penalties under a deal with the U.S. Justice Department.

The customs service claims that this deal did not compensate the Russian government for losses that resulted from the illegal transfer of funds. The bank has said the case has no merit.