Jury Finds MasterCard International Liable for Unauthorized Conversion of Licensee’s Funds
Some breaking news just in from New York as a U.S. federal jury has unanimously awarded $2.78 million in damages to former MasterCard International licensee International Cards Company Ltd. of Amman, Jordan.
The jury found that after just one day before terminating both companies’ successful 13-year business relationship, Mastercard submitted a false certification to draw down on ICC’s standby letter of credit posted as collateral. All together, with statutory interest, the judgement will be $3.8 million.
After an entire week of litigation, the jury in the U.S. District Court for the Southern District of New York found that MasterCard has acted, “intentionally and without authority when it drew down on ICC’s letter of credit.”
It rejected MasterCard’s perspective on the issue, arguing that its system rules superseded the terms of the letter of credit and permitted it to take and retain ICC’s collateral in its own general accounts.
“This case is significant,” says Damian Cavaleri, lead trial counsel for ICC and a partner in ICC’s counsel Hoguet Newman Regal & Kenney LLP, “because MasterCard licensees rarely come forward against this much larger adversary. Case in point, under MasterCard’s rules, ICC executives were forced to travel to New York City multiple times to assert their company’s claims over four years during this hotly-contested litigation.”
“Key,” Cavaleri adds, “is that the jury treated our client fairly and demanded that MasterCard pay back the $2.78 million it took from them. Jurors saw through MasterCard’s attempted power play against ICC and further determined that MasterCard’s rules do not override globally accepted banking standards.”
Notes ICC Chief Executive Officer Khalil Al-Alami, “The jury’s verdict that MasterCard pay ICC damages of $2.78 million, and its finding that ICC owes MasterCard nothing, affirms that the American jury system will reject aggressive bullying tactics.”
The case, International Cards Company, Ltd. v. MasterCard International Inc., was tried before U.S. District Judge Lorna Schofield in the Southern District of New York. Damian Cavaleri, Jeffrey Miller, and Miriam Manber represented ICC at trial.