U.S. judge rejects Halkbank's special appearance plea

A judge in New York on Thursday rejected an appeal by litigators from law firm King & Spalding to enter a special appearance on behalf of Halkbank in a money laundering and sanctions evasion case filed against it.

U.S. Federal Judge Richard Berman once again rejected King & Spalding partner Andrew Hruska’s request to make a special appearance for the bank after he rejected the same appeal in early November.

“The court denies Halkbank’s request to enter a ‘special appearance,’” Berman said.

Despite his rejection, Berman allowed Hruska to further make its argument by a brief. King & Spalding on Monday said Turkey’s state-owned Halkbank could not be labelled as a fugitive for failing to appear at a Manhattan court to enter a plea against criminal charges since corporations cannot be fugitives.

“Congress has explicitly authorized the applicability of the fugitive disentitlement doctrine to corporations,” Berman wrote in response to law firm's position.

However, Berman found it irrelevant to label Halkbank a fugitive. And, he has left the bank with the choice of appearing in court for arraignment or face the risk of contempt of court.

“If the court were to reach this issue, it would almost certainly conclude that the fugitive disentitlement doctrine applies and that the doctrine’s principles would render Halkbank a fugitive,” Berman said.

U.S. Attorney Michael D. Lockard on Oct 22. said that Halkbank was a fugitive from the charges and is in contempt after providing no representation at the proceedings against the bank.

"The judge did not yet resolve a pending motion from prosecutors to schedule a contempt hearing for Halkbank, whose King & Spalding attorney Andrew Hruska did not immediately respond to an email requesting comment," U.S. Courthouse News Service journalist Adam Klasfeld said.

In a footnote of the ruling, Berman rattled off the top-level Turkish officials engaged in this blitz to prevent the controversy from reigniting in U.S. courts.

“This remarkable campaign involved, among others, Turkish President Recep Tayyip Erdoğan; Turkish Justice Minister Bekir Bozdag; former Turkish Deputy Prime Minister Mehmet Şimşek; Berat Albayrak, President Erdogan’s son-in-law and Turkish Minister of Finance; and Turkish Minister of Foreign Affairs Mevlut Cavusoglu,” the footnotes states.

“Rudolph W. Giuliani, former New York City mayor and former United States attorney for the Southern District of New York, and Michael B. Mukasey, former United States attorney general & former chief district judge of the Southern District of New York, participated on behalf of defendant Reza Zarrab,” the footnotes continues