RCBC loses in tort lawsuit against Bangladesh Central Bank

The Regional Court of First Instance (RTC) in Makati City has ordered the dismissal of a compensation claim of more than $100 million filed against Bangladesh Bank by Rizal Commercial Banking Corp (RCBC).

In a 9-page order, Judge Renald C. Bagao, Chairman of the Makati City Branch, approved the request for reconsideration of the Central Bank of Bangladesh on October 28, 2021. The bank sought to overturn the court orders issued on July 19, 2019, and October 18, 2021, which announced The summons has been duly filed against Bangladesh Bank through its Chief Executive Officer Hana Muhammad Razi Hasan. However, Hassan refused to sign the summons when it was presented on March 12, 2019, at the Conrad Manila Hotel in Pasay.

The Court of First Instance held that it had no jurisdiction over the Bangladesh Bank due to the lack of provisions in the court’s bylaws for servicing subpoenas for a foreign public company.

He did not give weight to the argument that since Bangko Sentral ng Pilipinas (BSP) is not immune from lawsuits under its charter, therefore, the respondent Bangladesh Bank is also not immune from lawsuit.

“That may be. However, subpoena service is an entirely different matter and is based on express and specific judgments under court rules.” In short, which some domestic procedural procedural may be legally supposed to reflect with foreign procedural, the said principle cannot be properly applied when the domestic procedural provision itself does not provide for a legal form which may be considered with little effect on the assumption that they have foreign counterparts.

“If our special rules do not provide for subpoena service for foreign public companies, there is no procedural presumption to apply it in favor of the plaintiffs here and against the defendants here,” she added.

The court also said that the RCBC’s notion that the extraterritorial summons service might be taken against the Bangladesh Bank had no legal basis to stand on it.

Join RCBC as plaintiff in the case Bank National Sales Manager Ismail S. Reyes who accused the Bangladeshi bank of defaming RCBC when he called a press conference to implicate the bank in the robbery.

The court noted that the rule for extraterritorial subpoena service is set out in Section 15 of the Civil Procedure Act of 1997 and Section 17 of the Rules of Civil Procedure of 2019.

She noted that based on the said provisions, it is not sufficient to claim that the defendant “does not reside and is not in the Philippines” for the court to authorize extraterritorial subpoena service.

The court said it must also be claimed that “the claim affects the personal status of the plaintiff or relates to, or the subject matter of, property within the Philippines.”

The foregoing discussions inevitably lead to the conclusion that this court has no jurisdiction over the person of the respondent (Bangladesh Bank), and will not have it at all within the provisions of the present rules in relation to summons and service,” the court said.

RCBC and Bangladesh Bank became entangled after $81 million of the latter reached a number of Filipino accounts under the names Michael Cruz ($6 million), Jesse Christopher Lagrosas ($30 million), Alfred Vergara ($20 million) and Enrico Vazquez ($25 million). ) despite requests to stop payment from Bangladesh Bank.

In 2021, the Bangladesh Bank also filed a complaint with the New York Supreme Court regarding the incident.

The Department of Justice also filed anti-money laundering charges against five RCBC executives in connection with the theft.

The plaintiffs cited the “intentional blindness principle” as “the willful avoidance or knowledge of a crime, particularly by failing to make a reasonable investigation of suspected wrongdoing, despite their awareness of it as highly likely” in filing the complaint.

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