The chances of Aramco listing in New York just slumped to close to zero after a U.S. District Judge in Manhattan ruled against Riyadh's bid to dismiss a series of lawsuits against the Kingdom for its alleged involvement in the 9/11 attacks that killed almost 3,000 people 17 years ago.
Saudi Arabia stands to pay billions of dollars in compensation to the families of the victims should the court find it guilty.
The lawsuits were made possible by a legislative change enabling U.S. citizens to sue Saudi citizens. The change-the Justice Against Sponsors of Terrorism Act- was approved by Congress despite a warning from President Obama that it would set an unpleasant precedent, allowing other jurisdictions to sue American businesses, soldiers and other individuals.
Now Judge George Daniels says he has found "reasonable basis" in the allegations of the plaintiffs against Saudi Arabia to assert jurisdiction against the Kingdom and give the go-ahead to the cases.
Saudi Arabia has so far claimed there is no way for the plaintiffs to prove that any Saudi citizen was involved in the attacks; however, now they will be allowed to conduct discovery, as one of the lawyers for the plaintiffs told Reuters, "so that the full story can come to light, and expose the Saudi role in the 9/11 attacks."
JASTA represented perhaps the biggest stumbling block for Aramco's listing in New York: the preferred venue of Crown Prince Mohammed. Mohammed's favoritism of New York was not shared by other government officials, notably Energy Minister Khalid al-Falih, who said that he would be wary of picking New York for Aramco's international listing venue because of the litigious culture in the United States.
In any case, the news from the Manhattan court won't have any significant effect on the IPO since the company earlier this month said it would shelve the international leg of its listing without specifying a period. The news about the shelving came on the heels of another one, suggesting a delay of the primary listing on Tadawul, the Saudi exchange.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More