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Citi wins mortgage crisis arbitration against Abu Dhabi fund


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Citi wins mortgage crisis arbitration against Abu Dhabi fund

Citigroup Inc. won the arbitration case pursued by Abu Dhabi Investment Authority over losses related to the U.S. mortgage crisis, Reuters reported March 29.

Citing court documents unsealed on March 20, the news outlet wrote that the arbitrators' ruling in the claim indicated that Citi did not have any continuing obligations on the "commercial reasonableness of its decision-making." Citi was also awarded $9.5 million in legal fees and expenses.

The first claim was filed in 2009, with Abu Dhabi Investment Authority accusing Citi of misrepresentation in a 2007 sale of equity units. The sovereign fund, which invested $7.5 billion in the New York-based bank in exchange for a 4.9% stake, sought to revoke its investment agreement with the bank or damages in excess of $4 billion. An arbitration panel issued a final award in favor of Citigroup in 2011.

In 2013, the Abu Dhabi fund again sought arbitration. Citi asked the court to block the request, but the Court of Appeals in 2015 dismissed Citi's request to block the fund's second arbitration.