02a0273p.06

7KH +RQRUDEOH :LOOOLDP 6WDIIRUG 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH 1RUWKHUQ 'LVWULFW RI )ORULGD VLWWLQJ E\ GHVLJQDWLRQ

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
0,//¶6 35,'( ,1&D
&RQQHFWLFXW&RUSRUDWLRQDQG
0,//¶6 35,'( /,0,7('
3$571(56+,3
3ODLQWLIIV$SSHOOHHV
Y
&217,1(17$/ ,1685$1&(
&203$1<
'HIHQGDQW$SSHOODQW
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQDW*UDQG5DSLGV
1R²'DYLG:0F.HDJXH'LVWULFW-XGJH
$UJXHG-XQH
'HFLGHGDQG)LOHG$XJXVW
%HIRUH6,/(5DQG0225(&LUFXLW-XGJHV67$))25'
'LVWULFW-XGJH

-- 1 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 7KRPDV -RH .HHQHU .((1(5 '28&+(5
&85/(<3$77(5621&ROXPEXV2KLRIRU$SSHOODQW
5REHUW / 'H-RQJ 0,//(5 &$1),(/' 3$''2&.
6721( *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOOHHV
21%5,()7KRPDV-RH.HHQHU.((1(5'28&+(5
&85/(<3$77(5621&ROXPEXV2KLRIRU$SSHOODQW
5REHUW / 'H-RQJ 0,//(5 &$1),(/' 3$''2&.
6721(*UDQG5DSLGV0LFKLJDQIRU$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
67$))25''LVWULFW-XGJH$SSHOODQWDSSHDOVWKHGLVWULFW
FRXUW¶V UXOLQJ WKDW 0LFKLJDQ ODZ JRYHUQV WKLV GLYHUVLW\
FRQWUDFWDFWLRQ:HUHYHUVH
,%$&.*5281'
0LOO¶V3ULGH,QFDQG0LOO¶V3ULGH/LPLWHG3DUWQHUVKLSDUH
LQYROYHGLQWKHSXUFKDVHPDQXIDFWXUHDQGZKROHVDOHVHOOLQJ
RIIXUQLWXUHWKURXJKRXWWKHFRQWLQHQWDO8QLWHG6WDWHV0LOO¶V
3ULGH ,QF LV D &RQQHFWLFXW FRUSRUDWLRQ ZLWK LWV SULQFLSDO
SODFHRIEXVLQHVVLQ:HVW3DOP%HDFK)ORULGD0LOO¶V3ULGH
/LPLWHG3DUWQHUVKLSLVDQ2KLROLPLWHGSDUWQHUVKLSLQZKLFK
0LOO¶V3ULGH,QFLVDJHQHUDOSDUWQHU/LNH0LOO¶V3ULGH,QF
WKHSDUWQHUVKLSPDLQWDLQVLWVDGPLQLVWUDWLYHRIILFHVLQ:HVW
3DOP %HDFK 7KH SDUWQHUVKLS DOVR RZQV DQG RSHUDWHV D
PDQXIDFWXULQJ IDFLOLW\LWV RQO\ PDQXIDFWXULQJ IDFLOLOW\LQ
:DYHUO\ 2KLR ZKHUH LW PDQXIDFWXUHV IXUQLWXUH WKDW LV
GLVWULEXWHG QDWLRQDOO\ 0LOO¶V 3ULGH ,QF GRHV QRW
PDQXIDFWXUHIXUQLWXUHEXWLVLQYROYHGLQWKHGLVWULEXWLRQRIWKH
IXUQLWXUHPDQXIDFWXUHGE\WKHSDUWQHUVKLS

-- 2 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
9&21&/86,21
+DYLQJ FRQFOXGHG WKDW WKH FRQWDFWV DQG SROLF\ JRDOV
GHOLQHDWHGLQVHFWLRQVDQGRIWKH6HFRQG5HVWDWHPHQW
IDYRU DSSOLFDWLRQ RI 2KLR ODZ JLYHQ WKH IDFWV DQG
FLUFXPVWDQFHV SUHVHQWHG KHUH ZH 5(9(56( WKH GLVWULFW
FRXUW¶VGHFLVLRQWRDSSO\0LFKLJDQODZ7KHGLVWULFWFRXUW¶V
6WLSXODWHG )LQDO 2UGHU LV DFFRUGLQJO\ 9$&$7(' DQG WKH
FDVH LV 5(0$1'(' WR WKH GLVWULFW FRXUW IRU SURFHHGLQJV
DQGRUHQWU\RIMXGJPHQWFRQVLVWHQWZLWKWKLVRSLQLRQ
1R 0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R

2Q 6HSWHPEHU &RQWLQHQWDO ,QVXUDQFH &RPSDQ\
³&RQWLQHQWDO´ ZKRVHKRPHRIILFHLVORFDWHG LQ &KLFDJR
,OOLQRLVLVVXHG 0LOO¶V 3ULGH ,QF D FRPPHUFLDO JHQHUDO
OLDELOLW\SROLF\ ³&*/3ROLF\´ FRYHULQJWKHSHULRGEHWZHHQ
6HSWHPEHU DQG $XJXVW 0LOO¶V 3ULGH
/LPLWHG 3DUWQHUVKLS ZDV D QDPHG LQVXUHG XQGHU WKH &*/
3ROLF\7KHSROLF\GLGQRWLQFOXGHDFKRLFHRIODZFODXVH
7KH QHJRWLDWLRQV OHDGLQJ WR LVVXDQFH RI WKH &*/ 3ROLF\
ZHUHFRQGXFWHGE\-DPHV)$USHWUHDVXUHUIRU0LOO¶V3ULGH
,QF%LOO)DLORU6HQLRU$FFRXQW5HSUHVHQWDWLYHIRU-RKQVRQ
+LJJLQV DQ LQVXUDQFH DJHQF\ LQ &OHYHODQG 2KLR WKDW
SODFHGWKHFRYHUDJHDQG6DQGUD%LOORZDEURNHUIRU-RKQVRQ
+LJJLQV:KLOHVRPHRIWKHQHJRWLDWLRQVZHUHFRQGXFWHG
LQ:HVW3DOP%HDFKZKHUH$USHKDGKLVRIILFHVPRVWRIWKH
PHHWLQJV ZHUH FRQGXFWHG LQ :DYHUO\ 2KLR DW WKH
SDUWQHUVKLS¶VPDQXIDFWXULQJIDFLOLW\7KHSDUWLHVDSSDUHQWO\
XQGHUVWRRGWKDWDQ\FODLPVDULVLQJXQGHUWKHSROLF\ZHUHWREH
UHSRUWHG WR WKH LQVXUDQFH DJHQF\ LQ &OHYHODQG 2KLR WKHQ
WUDQVIHUUHGWR&RQWLQHQWDO¶VFODLPVRIILFHLQ&ROXPEXV2KLR
IRULQYHVWLJDWLRQDQGKDQGOLQJ-RLQW$SSHQGL[ ³-$´ DW

7KHXQGHUO\LQJODZVXLWWKDWJDYHULVHWRWKHGLVSXWHLQWKLV
OLWLJDWLRQZDVEURXJKWE\$PHULZRRG,QGXVWULHV,QWHUQDWLRQDO
&RUSRUDWLRQ ³$PHULZRRG´ DJDLQVW0LOO¶V3ULGH,QFDQG
0LOO¶V3ULGH/LPLWHG3DUWQHUVKLSLQWKH8QLWHG6WDWHV'LVWULFW
&RXUWIRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQ$VDOOHJHGLQLWV
FRPSODLQW$PHULZRRGZDVWKHRZQHURIWKHWUDGHPDUN.,'6
μ1¶.2/25DOLQHRIUHDG\WRDVVHPEOHFKLOGUHQ¶VIXUQLWXUH
VROGZLWKDGLVWLQFWLYHQRQIXQFWLRQDOWUDGHGUHVV,QODWH
$PHULZRRG GLVFRYHUHG WKDW IXUQLWXUH LGHQWLFDO LQ
DSSHDUDQFHWRLWV.,'6μ1¶.2/25OLQHZDVEHLQJVROGLQ
0LFKLJDQDQG,OOLQRLVXQGHUWKHWUDGHPDUN.,'=&2/25=
.,'=&2/25=ZDVPDQXIDFWXUHGE\0LOO¶V3ULGH/LPLWHG
3DUWQHUVKLSDQGVROGE\0LOO¶V3ULGH ,QFLQDWUDGHGUHVV
VXEVWDQWLDOO\LGHQWLFDOWR$PHULZRRG¶VGLVWLQFWLYHWUDGHGUHVV
$PHULZRRG VRXJKW GDPDJHV IURP 0LOO¶V 3ULGH ,QF DQG
0LOO¶V 3ULGH /LPLWHG 3DUWQHUVKLS IRU IDOVH GHVLJQDWLRQ RI

-- 3 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
RULJLQ WUDGHPDUN LQIULQJHPHQW WUDGH GUHVV LQIULQJHPHQW
XQIDLUFRPSHWLWLRQDQGGLOXWLRQRIWUDGHPDUNDQGWUDGHGUHVV
7KHSDUWLHVXOWLPDWHO\VHWWOHGWKHVXLWDWDQ$SULO
IDFLOLWDWLYH PHGLDWLRQ VFKHGXOHG E\ WKH 0LFKLJDQ GLVWULFW
FRXUW
2Q2FWREHU0LOO¶V3ULGH,QFDQG0LOO¶V3ULGH
/LPLWHG 3DUWQHUVKLS FROOHFWLYHO\ ³3ODLQWLIIV´ EURXJKW WKLV
GLYHUVLW\ VXLW DOOHJLQJ WKDW &RQWLQHQWDO EUHDFKHG WKH &*/
3ROLF\E\UHIXVLQJWRSD\GHIHQVHDQGLQGHPQLILFDWLRQFRVWV
DVVRFLDWHGZLWKWKH$PHULZRRGODZVXLW3ODLQWLIIVVRXJKW
ERWK D GHFODUDWLRQ DV WR WKHLU ULJKW WR UHFRYHU WKH FRVW RI
DWWRUQH\V¶IHHVDQGOLWLJDWLRQH[SHQVHVLQFXUUHGLQGHIHQGLQJ
WKH $PHULZRRG ODZVXLW DV ZHOO DV D GHFODUDWLRQ UHJDUGLQJ
WKHLUULJKWWRREWDLQUHLPEXUVHPHQWRIWKHVXPWKH\SDLGLQ
VHWWOHPHQWRIWKHXQGHUO\LQJVXLW&RQWLQHQWDODUJXHGWKDWLW
ZDV QRW REOLJDWHG WR SD\ 3ODLQWLIIV¶ GHIHQVH DQG
LQGHPQLILFDWLRQFRVWVEHFDXVH3ODLQWLIIVIDLOHGWRFRPSO\ZLWK
WKH WHUPV DQG FRQGLWLRQV RI WKH &*/ 3ROLF\QDPHO\ WKH
SURYLVLRQ UHTXLULQJ 3ODLQWLIIV WR FRRSHUDWH ZLWK DQG WR JHW
FRQVHQW WR VHWWOH IURP &RQWLQHQWDO $FFRUGLQJ WR
&RQWLQHQWDO3ODLQWLIIVQRWRQO\IDLOHGWRQRWLI\&RQWLQHQWDO
DERXWDQGSHUPLW&RQWLQHQWDOWRSDUWLFLSDWHLQWKHPHGLDWLRQ
VFKHGXOHG E\ WKH $PHULZRRG WULDO FRXUW EXW WKH\ DOVR
XOWLPDWHO\VHWWOHGWKHFDVHZLWKRXW&RQWLQHQWDO¶VFRQVHQWRU
DSSURYDO
,WEHFDPHDSSDUHQWGXULQJWKHFRXUVHRIWKLVOLWLJDWLRQLQWKH
GLVWULFWFRXUWWKDWDGHFLVLRQDVWRZKLFKVWDWH¶VODZVKRXOGEH
DSSOLHGZRXOGEHRXWFRPHGHWHUPLQDWLYH$VH[SODLQHGE\
FRXQVHOIRU0LOO¶V3ULGH,QFDWDKHDULQJEHIRUHWKHGLVWULFW
FRXUW
>7@KHUHLVDXWKRULW\XQGHU2KLRODZWKDWLI\RXIDLOWR
PDNHWKHQRWLILFDWLRQ\RX¶UHMXVWRXW7RREDG\RXJHW
QR FODLP 7KH\ WUHDW LW DV D FRQGLWLRQ SUHFHGHQW WR
FRYHUDJH7KH0LFKLJDQODZRQWKHRWKHUKDQGVD\V
ZHOOZH¶UHJRLQJWRFRQVLGHUWKDWDVDIDFWRUEXWUHDOO\
1R 0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R

3ODLQWLIIVVKRXOGH[SHFWGLIIHUHQWUHVXOWVIURPVWDWHWRVWDWH
ZKHQWKH\IDLOWRSHUIRUPWKHLUGXWLHVWR&RQWLQHQWDO
2QWKHRWKHUKDQGZHWKLQNERWK&RQWLQHQWDODQG3ODLQWLIIV
KDG VRXQG UHDVRQ WR H[SHFW D XQLIRUP DQG FRQVLVWHQW
LQWHUSUHWDWLRQ RI WKH SROLF\ ODQJXDJH VHWWLQJ RXW 3ODLQWLIIV¶
GXWLHV LQ WKH HYHQW RI DQ RFFXUUHQFH :LWK XQLIRUPLW\ RI
LQWHUSUHWDWLRQ&RQWLQHQWDODQG3ODLQWLIIVDOLNHZRXOGEHDEOH
WRIRUHWHOOZLWKDFFXUDF\WKHLUULJKWVDQGUHVSRQVLELOLWLHVXQGHU
WKHFRQWUDFW0RUHRYHULIWKHVLWXDWLRQZHUHUHYHUVHGDQG
2KLRKDGEHHQWKHSODFHRILQIULQJHPHQWDQG0LFKLJDQWKH
SODFHRIFRQWUDFWQHJRWLDWLRQZHDUHFRQILGHQWWKDW3ODLQWLIIV
ZRXOGQRWEHXUJLQJXVWRDSSO\WKHODZRIWKHVWDWHZKHUHWKH
LQMXU\RFFXUUHGEXWLQVWHDGZRXOGEHDUJXLQJIRUDSSOLFDWLRQ
RIWKHPRUHSUHGLFWDEOHOH[ORFLFRQWUDFWXVUXOH7REHVXUH
3ODLQWLIIVPLJKWIRUWXLWRXVO\EHQHILWIURPDSSOLFDWLRQRIWKH
ODZRIWKHVWDWHZKHUHWKHLQMXU\RFFXUUHGLQWKLVLQVWDQFHEXW
ZHFDQQRWDJUHHWKDW3ODLQWLIIVKDGDUHDVRQDEOHH[SHFWDWLRQ
WRVXFKEHQHILW7RWKHFRQWUDU\&RQWLQHQWDOZDVHQWLWOHGWR
H[SHFW DQG 3ODLQWLIIV VKRXOG KDYH H[SHFWHG D XQLIRUP
LQWHUSUHWDWLRQRIWKHODQJXDJHUHJDUGLQJ3ODLQWLIIV¶GXWLHVWR
&RQWLQHQWDO
,QVXPJLYHQWKHFLUFXPVWDQFHVDVWKH\UHODWHWRWKHLVVXH
EHIRUHXVZHFRQFOXGHWKDWWKHDSSURSULDWHFKRLFHRIODZLQ
WKLVFDVHLVWKHODZRI2KLR:KHUHDVKHUHWKHLVVXHLVDQ
LQVXUHG¶VGXW\WRSURYLGHQRWLFHWRFRRSHUDWHZLWKDQGREWDLQ
FRQVHQW WR VHWWOH IURP LWV LQVXUHU WKH JRDOV RI ³FHUWDLQW\
SUHGLFWDELOLOW\DQGXQLIRUPLW\RIUHVXOW´DQG³WKHSURWHFWLRQRI
MXVWLILHGH[SHFWDWLRQV´DUHIXUWKHUHGE\WKHDSSOLFDWLRQRIRQH
VWDWH¶VODZWRPDWWHUVRIFRQWUDFWLQWHUSUHWDWLRQ5HVWDWHPHQW
6HFRQG RI&RQIOLFWRI/DZV† G I 7KLVLQWXUQ
SURGXFHVRQHUXOHRIQDWLRQZLGHHIIHFW%HFDXVHWKHSDUWLHV¶
FRQWUDFWZDVODUJHO\QHJRWLDWHGLQ2KLREHFDXVHFODLPVXQGHU
WKHFRQWUDFWZHUHWREHUHSRUWHGLQYHVWLJDWHGDQGKDQGOHGLQ
2KLRDQGEHFDXVH3ODLQWLIIV¶SURGXFWZDVPDQXIDFWXUHGLQ
2KLRWKHFRQWDFWVOLVWHGLQVHFWLRQ SRLQWWR2KLRDVWKH
RQHVWDWHZKRVHODZVVKRXOGJRYHUQWKHLVVXHKHUHSUHVHQWHG

-- 4 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
EDODQFH SULQFLSOHV SROLFLHV IDFWRUV ZHLJKWV DQG
HPSKDVHVWRUHDFKDUHVXOWWKHGHULYDWLRQRIZKLFKLQDOO
KRQHVW\GRHVQRWSURFHHGZLWKPDWKHPDWLFDOSUHFLVLRQ
,QW¶O,QV)GDW
0RUHRYHU FRQWUDU\ WR WKH VXJJHVWLRQ RI 3ODLQWLIIV WKH
,QWHUQDWLRQDO,QVXUDQFHFRXUWGLGQRWLJQRUHWKHSDUWLHV¶VWDWH
FRQWDFWVZKLOHLWLQVWHDGIRFXVHGRQWKH SURWHFWLRQRIWKH
SDUWLHV¶MXVWLILHGH[SHFWDWLRQV7KHFRXUWPHUHO\GHFOLQHGWR
DGGUHVVHDFKFRQWDFWLQLWVRSLQLRQEHFDXVHWKHGLVWULFWMXGJH
LQDSXEOLVKHGRSLQLRQSDUVHGHDFKRIWKHFRQWDFWVLWHPE\
LWHPILQGLQJWKDW³VRPHIDFWRUVIDYRUHGWKHDSSOLFDWLRQRI
2KLRODZEXWWKDWWDNHQDVDZKROHWKHEDODQFHZDVLQIDYRU
RIDSSO\LQJ/RXLVLDQDODZ´,QW¶O,QV)GDW/LNH
WKH GLVWULFW FRXUW EXW ZLWKRXW GLVFXVVLRQ WKH FLUFXLW FRXUW
FRQFOXGHGWKDWWKHEDODQFHRIFRQWDFWVIDYRUHGDSSOLFDWLRQRI
/RXLVLDQDODZWKHVDPHODZWKDWEHVWSURWHFWHGWKHSDUWLHV¶
MXVWLILHGH[SHFWDWLRQV
$OVR FRQWUDU\ WR WKH VXJJHVWLRQ RI 3ODLQWLIIV WKH
FLUFXPVWDQFHV LQ WKLV FDVH DUH QRW WKH VDPH DV WKRVH LQ
,QWHUQDWLRQDO,QVXUDQFH+HUHZHDUHQRWFRQFHUQHGDVZDV
WKH FRXUW LQ ,QWHUQDWLRQDO ,QVXUDQFHZLWK DQ LQVXUHG¶V
H[SHFWDWLRQRIFRYHUDJHIRU³ZKDWHYHUDVWDWHDOORZ>V@E\ZD\
RI UHFRYHU\ WR D WRUW SODLQWLII´ ,QW¶O ,QV )G DW
,QVWHDGZHDUHFRQFHUQHGZLWKSROLF\ODQJXDJHWKDWVSHOOVRXW
3ODLQWLIIV¶GXWLHVWR&RQWLQHQWDOLQWKHHYHQWRIDQRFFXUUHQFH
RU VXLW )XUWKHUPRUH XQOLNH WKH SODLQWLII LQ ,QWHUQDWLRQDO
,QVXUDQFH3ODLQWLIIVLQWKLVFDVHDUHXUJLQJXVWRDSSO\WKHODZ
RI D VWDWH WKDW ZLWK UHVSHFW WR WKH LVVXH EHIRUH XV LV QRW
IDYRUHG E\ DQ\ RI WKH FRQWDFWV OLVWHG LQ VHFWLRQ
0RUHRYHUZKLOHWKHSROLF\ODQJXDJHDQGFLUFXPVWDQFHVLQ
,QWHUQDWLRQDO,QVXUDQFHUHYHDOHGJRRGUHDVRQZK\WKHSDUWLHV
PLJKWH[SHFWFRYHUDJHWRYDU\IURPVWDWHWRVWDWH3ODLQWLIIV
KHUH KDYH QRW DUWLFXODWHG QRU FDQ ZH LPDJLQH DQ\ JRRG
UHDVRQZK\WKH\VKRXOGH[SHFWWKHLUGXWLHVWR&RQWLQHQWDOWR
YDU\IURPVWDWHWRVWDWHGHSHQGLQJXSRQWKHORFDWLRQRIDQ
RFFXUUHQFH6LPLODUO\ZHFDQGLVFHUQQRJRRGUHDVRQZK\
1R 0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R

LW¶VJRLQJWREHXSWRWKHLQVXUDQFHFRPSDQ\WRVKRZWKDW
WKH\ZHUHSUHMXGLFHGE\WKHODFNRIWLPHO\QRWLFH
-$DW
$SSO\LQJ0LFKLJDQ¶VFKRLFHRIODZUXOHVDQGUHO\LQJRQ
,QWHUQDWLRQDO,QVXUDQFH&RY6WRQHZDOO,QVXUDQFH&R
)G WK &LU WKH GLVWULFW FRXUW UXOHG WKDW WKH
VXEVWDQWLYHODZRI0LFKLJDQJRYHUQHGWKHSDUWLHV¶GLVSXWH
7KH SDUWLHV WKHUHDIWHU HQWHUHG LQWR D ³3DUWLDO 6HWWOHPHQW
$JUHHPHQW´WKDWUHVROYHGDOOIDFWXDODQGOHJDOGLVSXWHVH[FHSW
IRUWKHVLQJOHOHJDOLVVXHUHJDUGLQJWKHDSSURSULDWHFKRLFHRI
ODZ7KHGLVWULFWFRXUWVRRQDIWHUHQWHUHGD³6WLSXODWHG)LQDO
2UGHU´ SUHVHUYLQJ WKH FKRLFH RI ODZ LVVXH IRU DSSHDO DQG
VWDWLQJWKDWWKHRUGHU³FRQVWLWXWHVDILQDORUGHUDGMXGLFDWLQJ
WKH ULJKWV DQG REOLJDWLRQV RI WKH SDUWLHV´ -$ DW
3ODLQWLIIV¶WLPHO\DSSHDORI WKHFKRLFHRIODZLVVXHLVQRZ
EHIRUHWKLVFRXUW
,,67$1'$5'2)5(9,(:
7KH GLVWULFW FRXUW¶V UXOLQJ RQ WKH FKRLFH RI ODZ LVVXH LV
UHYLHZHGGHQRYR6DOYH5HJLQD&ROOHJHY5XVVHOO86
6 &W / (G G
&KDUDVKY2EHUOLQ&ROOHJH)G WK
&LU
,,,&+2,&(2)/$:58/(6
,WLVZHOOHVWDEOLVKHGWKDWLQDGLYHUVLW\FDVHVXFKDVWKLV
RQHDIHGHUDOFRXUWPXVWDSSO\WKHVXEVWDQWLYHODZRIWKHVWDWH
LQZKLFKWKHFRXUWVLWV(ULH55&RY7RPSNLQV86
6&W/(G 7KLVUXOH
H[WHQGV WR WKHIRUXPVWDWH¶VODZUHJDUGLQJFKRLFHRIODZV
.OD[RQ&RY6WHQWRU(OHF0IJ&R86
6&W/(G %HFDXVHWKLVDFWLRQ
ZDVEURXJKWLQIHGHUDOFRXUWLQ0LFKLJDQ0LFKLJDQ¶VFKRLFH
RIODZUXOHVDSSO\

-- 5 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
7KH0LFKLJDQ6XSUHPH&RXUWPRVWUHFHQWO\DGGUHVVHGWKH
VWDWH¶VFKRLFHRIODZUXOHVLQFRQWUDFWGLVSXWHVLQ&KU\VOHU
&RUSRUDWLRQY6N\OLQH,QGXVWULDO6HUYLFHV,QF0LFK
1:G ,Q WKDW FDVH &KU\VOHU
&RUSRUDWLRQD'HODZDUHFRUSRUDWLRQZLWKLWVSULQFLSDOSODFH
RIEXVLQHVVLQ0LFKLJDQDQG6N\OLQH,QGXVWULDO6HUYLFHV,QF
³6N\OLQH´ D0LFKLJDQFRUSRUDWLRQHQWHUHGLQWRDFRQWUDFW
IRU FRQVWUXFWLRQ VHUYLFHV WR EH SHUIRUPHG E\ 6N\OLQH LQ
,OOLQRLV 1HJRWLDWHG PDLQO\ LQ 0LFKLJDQ WKH FRQWUDFW
SURYLGHG WKDW 6N\OLQH ZRXOG LQGHPQLI\ DQG KROG &KU\VOHU
KDUPOHVV IURP &KU\VOHU¶V QHJOLJHQFH 6XFK DQ
LQGHPQLILFDWLRQSURYLVLRQLQDFRQVWUXFWLRQFRQWUDFWZDVYRLG
XQGHU,OOLQRLVODZEXWZDVYDOLGXQGHU0LFKLJDQODZXQOHVV
WKHLQGHPQLWHHZDVVROHO\QHJOLJHQW
$IWHUD6N\OLQHHPSOR\HHZDVLQMXUHGZKLOHZRUNLQJDWDQ
,OOLQRLVFRQVWUXFWLRQVLWH&KU\VOHUFRPPHQFHGDQDFWLRQLQ
0LFKLJDQVHHNLQJDGHFODUDWRU\MXGJPHQWWKDW6N\OLQHZDV
OLDEOHXQGHUWKHLQGHPQLILFDWLRQFODXVH7KHWULDOFRXUWIRXQG
WKDW DSSO\LQJ 0LFKLJDQ ODZ ZRXOG EHVW JLYH HIIHFW WR WKH
SDUWLHV¶LQWHQWLRQVDWWKHWLPHRIFRQWUDFWLQJ$QDO\]LQJWKH
FKRLFH RI ODZ LVVXH XQGHU WKH 5HVWDWHPHQW 6HFRQG RI
&RQIOLFWRI/DZV ³6HFRQG5HVWDWHPHQW´ DQDSSHOODWHFRXUW
UHYHUVHG FRQFOXGLQJ WKDW WKH ODZ RI ,OOLQRLV VKRXOG DSSO\
EHFDXVH,OOLQRLVZDVERWKWKHSODFHRISHUIRUPDQFHDQGWKH
ORFDWLRQRIWKHVXEMHFWPDWWHURIWKHFRQWUDFW:KLOHUHMHFWLQJ
WKH FRQFOXVLRQ RI WKH DSSHOODWH FRXUW ILQGLQJ LQVWHDG WKDW
0LFKLJDQ ODZ DSSOLHG WKH VXSUHPH FRXUW HQGRUVHG WKH
DSSHOODWHFRXUW¶VUHOLDQFHRQWKH6HFRQG5HVWDWHPHQWVWDWLQJ
7KHWUHQGLQWKLV&RXUWKDVEHHQWRPRYHDZD\IURP
WUDGLWLRQDO FKRLFHRIODZ FRQFHSWLRQV WRZDUG D PRUH
SROLF\FHQWHUHGDSSURDFK

>6HFWLRQV@DQGRIWKH6HFRQG5HVWDWHPHQW
ZLWKWKHLUHPSKDVLVRQH[DPLQLQJWKHUHOHYDQWFRQWDFWV
DQG SROLFLHV RI WKH LQWHUHVWHG VWDWHV SURYLGH D VRXQG
1R 0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R

WKH ODZ RI WKH ORFDWLRQ RI WKH RFFXUUHQFH JRYHUQV WKH
LQVXUDQFHFRQWUDFWZLWKUHJDUGWRWKDWRFFXUUHQFH
3OV¶%UDW
3ODLQWLIIV KRZHYHU KDYH PLVLQWHUSUHWHG WKH ODZ RI WKLV
FLUFXLW 7R EH VXUH LQ ,QWHUQDWLRQDO ,QVXUDQFH WKH FRXUW
FRQFOXGHGWKDW³WKHPRVWVLJQLILFDQWIDFWRUWREHFRQVLGHUHG
XQGHUWKHIDFWVSUHVHQWHGKHUHLVIRXQGLQVHFWLRQ G WKH
SURWHFWLRQRIMXVWLILHG H[SHFWDWLRQV´,QW¶O,QV)GDW
7KHFRXUW¶VFRQFOXVLRQKRZHYHUZDVGULYHQE\WKH
LVVXHDQGWKHIDFWVSUHVHQWHGLQWKDWFDVH:KHUHWKHLVVXH
LQYROYHGFRYHUDJHIRUDPRXQWVUHFRYHUHGE\DWRUWSODLQWLII
WKH ,QWHUQDWLRQDO ,QVXUDQFH FRXUW GHWHUPLQHG WKDW WKH
UHDVRQDEOH H[SHFWDWLRQV RI ERWK DQ LQVXUHG DQG DQ LQVXUHU
ZRXOGEHWKDWZKDWHYHUDVWDWHDOORZHGE\ZD\RIUHFRYHU\WR
DWRUWSODLQWLIILWZRXOGEHFRYHUHGE\LQVXUDQFH,PSRUWDQWO\
WKH FRXUW¶V FRQFOXVLRQ LQ ,QWHUQDWLRQDO ,QVXUDQFH ZDV
EROVWHUHGE\ODQJXDJHLQWKHSROLF\H[SUHVVO\SURYLGLQJWKDW
WKHLQVXUHUZRXOGSD\WKHXOWLPDWHQHWORVVLPSRVHGXSRQWKH
LQVXUHGE\ODZ,QW¶O,QV)GDW7KH,QWHUQDWLRQDO
,QVXUDQFHFRXUWGLGQRWVXJJHVWWKDWLQDQLQVXUDQFHGLVSXWH
LQYROYLQJDGLIIHUHQWLVVXHDQGGLIIHUHQWIDFWVDFRXUWVKRXOG
IRFXV RQ WKH SURWHFWLRQ RI MXVWLILHG H[SHFWDWLRQV WR WKH
H[FOXVLRQRIWKHRWKHUSROLF\JRDOVVHWRXWLQVHFWLRQRUWR
WKHH[FOXVLRQRIWKHVWDWHFRQWDFWVOLVWHGLQVHFWLRQ
1RU GLG WKH FRXUW HQGRUVHDV 3ODLQWLIIV VXJJHVWDQ
LQIOH[LEOH ODZRIWKHORFDWLRQRIWKHRFFXUUHQFH UXOH IRU
LQVXUDQFHFRQWUDFWV,QGHHGWKHFRXUWGLGTXLWHWKHRSSRVLWH
UHSHDWHGO\ HPSKDVL]LQJ WKDW FKRLFH RI ODZ SULQFLSOHV DUH
HODVWLFDQGWKDWμ>U@HVROYLQJDFKRLFHRIODZLVVXHLVQRWDQ
H[DFWVFLHQFHEXWDQDUWIRUP´,QW¶O,QV)GDW,Q
WKHFRXUW¶VZRUGV
>(@YHQZKHQVHFWLRQVDQGDUHUHDGWRJHWKHULWLV
FOHDUWKH\RQO\SURYLGHDEURDGJHQHUDOIUDPHZRUNIRUWKH
UHVROXWLRQ RI FKRLFH RI ODZ LVVXHV LQ WKH FRQWH[W RI D
FRQWUDFWGLVSXWH:LWKLQWKDWIUDPHZRUNDMXGJHPXVW

-- 6 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
FRQWDFWVWKHSODFHRIQHJRWLDWLRQWKHSODFHRISHUIRUPDQFH
DW OHDVW ZLWK UHVSHFW WR WKH LVVXH RI 3ODLQWLIIV¶ GXWLHV WR
&RQWLQHQWDO DQGWKHSODFHRIEXVLQHVVRIWKHSDUWLHVSRLQWWR
WKH6WDWHRI2KLR:KHWKHUWKHUHPDLQLQJWZRFRQWDFWVWKH
SODFHRIFRQWUDFWLQJDQGWKHORFDWLRQRIWKHFRQWUDFW¶VVXEMHFW
PDWWHUSRLQWWR2KLRRUWRVRPHRWKHUVWDWHLVOHVVFHUWDLQ
,Q FRQWUDVW QRQH RI WKH IDFWRUV SRLQWV WR WKH 6WDWH RI
0LFKLJDQ ,QGHHG WKH RQO\ WKLQJ WKDW WLHV WKLV FDVH WR
0LFKLJDQLVDQXQGHUO\LQJWRUWFDVHWKDWZDVILOHGLQ0LFKLJDQ
DQGWKDWKDVDOUHDG\EHHQVHWWOHGWRWKH0LFKLJDQSODLQWLII¶V
VDWLVIDFWLRQ7KHLVVXHWKDWQRZUHPDLQVQRWRQO\LQYROYHVQR
RQHIURP0LFKLJDQEXWUHVROXWLRQRIWKHLVVXHZLOODOVRKDYH
QRLPSDFWRQDQ\RQHIURP0LFKLJDQ7KHSDUWLHV¶LQVXUDQFH
SROLF\ZDVQRWQHJRWLDWHGLQ0LFKLJDQLWZDVQRWH[HFXWHGLQ
0LFKLJDQLWPDNHVQRPHQWLRQRI0LFKLJDQODZLWFRYHUVQR
LQVXUHGWKDWLVLQFRUSRUDWHGLQ0LFKLJDQRUWKDWKDVDSODFHRI
EXVLQHVV LQ 0LFKLJDQ DQG LW REOLJDWHV QR FRPSDQ\ ZLWK
0LFKLJDQWLHV
3ODLQWLIIVVXJJHVWWKDWZHVKRXOGUHVROYHWKHFKRLFHRIODZ
LVVXH E\ LJQRULQJ WKH SDUWLHV¶ VWDWH FRQWDFWV ZKLOH WXUQLQJ
LQVWHDGWRWKHSROLF\JRDOVOLVWHGLQVHFWLRQRIWKH6HFRQG
5HVWDWHPHQW 2I WKH VHYHQ SROLF\ JRDOV OLVWHG 3ODLQWLIIV
ZRXOGKDYHXVIRFXVRQRQO\RQHWKHSURWHFWLRQRIMXVWLILHG
H[SHFWDWLRQVWKHSROLF\JRDOIRXQGWREHPRVWVLJQLILFDQWE\
WKH6L[WK&LUFXLWLQ,QWHUQDWLRQDO,QVXUDQFH,QWKHZRUGVRI
3ODLQWLIIV¶FRXQVHO
5HVWDWHPHQW † GRHV QRW UHTXLUH WKDW WKH &RXUW
DFFRXQW IRU HYHU\ SRVVLEOH LQWHUHVW RU FRQWDFW,Q WKH
FRQWH[WRILQVXUDQFHFRQWUDFWVWKH6L[WK&LUFXLWIRFXVHV
XSRQWKHMXVWLILHGH[SHFWDWLRQVRIWKHSDUWLHV
*LYHQ WKH QDWXUH RI LQVXUDQFH FRYHUDJH IRU QDWLRQDO
FRPSDQLHV WKH 6L[WK &LUFXLW KDV FRQFOXGHG WKDW LQ
FLUFXPVWDQFHV VXFK DV WKRVH IRXQG LQ WKLV FDVH WKH
UHDVRQDEOHH[SHFWDWLRQRIWKHFRQWUDFWLQJSDUWLHVLVWKDW
1R 0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R

EDVLVIRUPRYLQJEH\RQGIRUPDOLVPWRDQDSSURDFKPRUH
LQOLQHZLWKPRGHUQGD\FRQWUDFWLQJUHDOLWLHV
$VWKHFRPPHQWVWR†RIWKH6HFRQG5HVWDWHPHQW
VWDWH³3ULPHREMHFWLYHVRIFRQWUDFWODZDUHWRSURWHFWWKH
MXVWLILHG H[SHFWDWLRQV RI WKH SDUWLHV DQG WR PDNH LW
SRVVLEOHIRUWKHPWRIRUHWHOOZLWKDFFXUDF\ZKDWZLOOEH
WKHLU ULJKWV DQG OLDELOLWLHV XQGHU WKH FRQWUDFW´ %XW
³>I@XOILOOPHQWRIWKHSDUWLHV¶H[SHFWDWLRQVLVQRWWKHRQO\
YDOXHLQFRQWUDFWODZUHJDUGPXVWDOVREHKDGIRUVWDWH
LQWHUHVWVDQGIRUVWDWHUHJXODWLRQ´
&KU\VOHU 1:G DW IRRWQRWHV RPLWWHG
*XLGHG E\ WKH FRQFHUQV IRU FHUWDLQW\ DQG SXEOLF SROLF\
H[SUHVVHG LQ WKH 6HFRQG 5HVWDWHPHQW WKH VXSUHPH FRXUW
EDODQFHGWKHUHOHYDQWLQWHUHVWVFRQFOXGLQJ
7KLVODZVXLWFRQFHUQVWZR0LFKLJDQFRUSRUDWLRQVZLWK
DORQJVWDQGLQJEXVLQHVVUHODWLRQVKLSZKRFRQWUDFWHGLQ
0LFKLJDQ DQG FKRVH 0LFKLJDQ ODZ WR JRYHUQ WKHLU
FRQWUDFWXDOUHODWLRQVKLS%RWKSDUWLHVDSSDUHQWO\DFWHG
DVLI0LFKLJDQODZZRXOGDSSO\:HGHFOLQHWRYRLGWKH
SDUWLHV¶ H[SUHVV SUHIHUHQFH IRU 0LFKLJDQ ODZ LQ WKH
DEVHQFH RI FRPSHOOLQJ HYLGHQFH WKDW ,OOLQRLV KDV D
PDWHULDOO\JUHDWHULQWHUHVWWKDQ0LFKLJDQ
&KU\VOHU1:GDW IRRWQRWHRPLWWHG
:KLOHDGRSWLQJWKH6HFRQG5HVWDWHPHQWDSSURDFKWRFKRLFH
RI ODZ TXHVWLRQV LQ &KU\VOHU WKH 6XSUHPH &RXUW RI
0LFKLJDQH[SOLFLWO\VWDWHGWKDWLWGHFOLQHGWRDEDQGRQZKDW
KDGORQJEHHQWKHSUHGRPLQDQWYLHZLQ0LFKLJDQQDPHO\WKH
OH[ ORFL FRQWUDFWXV UXOH WKDW D FRQWUDFW LV WR EH FRQVWUXHG
DFFRUGLQJ WR WKH ODZ RI WKH SODFH ZKHUH WKH FRQWUDFW ZDV
HQWHUHG LQWR 5DWKHU WKH FRXUW VDLG ³>,@W LV LPSRUWDQW WR
FODULI\ WKDW WKDW >OH[ ORFL FRQWUDFWXV@ UXOH PD\ SURYH WR EH
XQZRUNDEOH XQGHU FHUWDLQ IDFWXDO VLWXDWLRQV VXFK DV WKRVH
SUHVHQWHGKHUHZKLFKGHPDQGDPRUHH[WHQVLYHUHYLHZRIWKH
UHODWLYH LQWHUHVWV RI WKH SDUWLHV DQG WKH LQWHUHVWHG VWDWHV´
&KU\VOHU6:GDWQ

-- 7 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
&LWLQJ&KU\VOHUWKH6L[WK&LUFXLWKDVVDLGWKDW³0LFKLJDQ
FKRLFH RI ODZ UXOHVUHTXLUH D FRXUW WR EDODQFH WKH
H[SHFWDWLRQVRIWKHSDUWLHVWRDFRQWUDFWZLWKWKHLQWHUHVWVRI
WKHVWDWHVLQYROYHGWRGHWHUPLQHZKLFKVWDWH VODZWRDSSO\´
(TXLWDEOH/LIH$VVXUDQFH6RF¶\RIWKH8QLWHG6WDWHVY3RH
)G WK &LU 6XFK D EDODQFLQJ
DSSURDFKLVFRQVLVWHQWZLWKWKH6HFRQG5HVWDWHPHQWDSSURDFK
HQGRUVHGE\WKH6XSUHPH&RXUWRI0LFKLJDQLQ&KU\VOHU
6HFWLRQRIWKH6HFRQG5HVWDWHPHQWSURYLGHV
7KHULJKWVDQGGXWLHVRIWKHSDUWLHVZLWKUHVSHFWWRDQ
LVVXHLQFRQWUDFWDUHGHWHUPLQHGE\WKHORFDOODZRIWKH
VWDWH ZKLFK ZLWK UHVSHFW WR WKDW LVVXH KDV WKH PRVW
VLJQLILFDQW UHODWLRQVKLS WR WKH WUDQVDFWLRQ DQG SDUWLHV
XQGHUWKHSULQFLSOHVVWDWHGLQV
,QWKHDEVHQFHRIDQHIIHFWLYHFKRLFHRIODZE\WKH
SDUWLHV WKH FRQWDFWV WR EH WDNHQ LQWR DFFRXQW LQ
DSSO\LQJ WKH SULQFLSOHV RI V WR GHWHUPLQH WKH ODZ
DSSOLFDEOHWRDQLVVXHLQFOXGH
D WKHSODFHRIFRQWUDFWLQJ
E WKHSODFHRIQHJRWLDWLRQRIWKHFRQWUDFW
F WKHSODFHRISHUIRUPDQFH
G WKHORFDWLRQRIWKHVXEMHFWPDWWHURIWKHFRQWUDFW
DQG
H WKH GRPLFLO UHVLGHQFH QDWLRQDOLW\ SODFH RI
LQFRUSRUDWLRQDQGSODFHRIEXVLQHVVRIWKHSDUWLHV
7KHVH FRQWDFWV DUH WR EH HYDOXDWHG DFFRUGLQJ WR WKHLU
UHODWLYHLPSRUWDQFHZLWKUHVSHFWWRWKHSDUWLFXODULVVXH
5HVWDWHPHQW 6HFRQG RI&RQIOLFWRI/DZV†
8QGHUO\LQJWKHIDFWRUVVHWRXWLQVHFWLRQDUHWKHJHQHUDO
SROLF\FRQVLGHUDWLRQVIRXQGLQVHFWLRQ
1R 0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R

)RU SXUSRVHV RI WKLV ODZVXLW ZH DFFHSW WKH SDUWLHV¶ UHSUHVHQWDWLRQV
DERXW WKH HIIHFW JLYHQ WR DQ LQVXUDQFH SROLF\¶V QRWLFH UHTXLUHPHQWV XQGHU
2KLR ODZ :H GR QRW GHFLGH ZKHWKHU WKRVH UHSUHVHQWDWLRQV DUH FRUUHFW
WLPHO\ QRWLFH RI FODLPV WR &RQWLQHQWDO WR LPPHGLDWHO\
VHQG &RQWLQHQWDO FRSLHV RI DQ\ OHJDO SDSHUV UHFHLYHG LQ
FRQQHFWLRQZLWKDFODLP WRFRRSHUDWHZLWK&RQWLQHQWDOLQ
WKHLQYHVWLJDWLRQVHWWOHPHQWRUGHIHQVHRIDQ\FODLPVRUVXLWV
DJDLQVW3ODLQWLIIVDQG WRREWDLQFRQVHQWIURP&RQWLQHQWDO
EHIRUH YROXQWDULO\ PDNLQJ D SD\PHQW RU DVVXPLQJ DQ\
REOLJDWLRQUHODWHGWRDFODLP-$DW$
6XFKODQJXDJH
ZDV NQRZLQJO\ DQG LQWHQWLRQDOO\ LQFOXGHG LQ WKH SDUWLHV¶
LQVXUDQFH FRQWUDFW D FRQWUDFW QHJRWLDWHG DW DUPVOHQJWK
SULPDULO\ LQ 2KLR ZKHUH DFFRUGLQJ WR WKH SDUWLHV
SHUIRUPDQFHRIDQLQVXUHG¶VGXWLHVWRLWVLQVXUHULVWUHDWHGDV
DFRQGLWLRQSUHFHGHQWWRFRYHUDJHXQGHUWKHSROLF\
1RW RQO\ ZDV WKH FRQWUDFW ODUJHO\ QHJRWLDWHG LQ 2KLR E\
SDUWLHVZLWKLPSRUWDQWWLHVWR2KLRWKHSDUWLHVXQGHUVWRRGWKDW
FODLPV XQGHU WKH SROLF\ ZHUH WR EH UHSRUWHG WR D FODLPV
FRQVXOWDQWZLWK-RKQVRQ +LJJLQVLQ&OHYHODQG2KLRWKHQ
WUDQVIHUUHGWR&RQWLQHQWDO¶VFODLPVRIILFHLQ&ROXPEXV2KLR
IRULQYHVWLJDWLRQDQGKDQGOLQJ3ODLQWLIIVZHUHWKXVUHTXLUHG
WR SHUIRUP WKHLU GXWLHV WR &RQWLQHQWDO LQ 2KLR DQG LI DV
DOOHJHG3ODLQWLIIVIDLOHGWRSHUIRUPWKRVHGXWLHVWKH\IDLOHG
WRSHUIRUPWKRVHGXWLHVLQ2KLR
6HFWLRQ RI WKH 6HFRQG 5HVWDWHPHQW SURYLGHV WKDW
³>W@KHULJKWVDQGGXWLHVRIWKHSDUWLHVZLWKUHVSHFWWRDQLVVXH
LQFRQWUDFWDUHGHWHUPLQHGE\WKHORFDOODZRIWKHVWDWHZKLFK
ZLWKUHVSHFWWRWKDWLVVXHKDVWKHPRVWVLJQLILFDQWUHODWLRQVKLS
WRWKHWUDQVDFWLRQDQGSDUWLHVXQGHUWKHSULQFLSOHVVWDWHGLQV
´ 5HVWDWHPHQW 6HFRQG RI &RQIOLFW RI /DZV †
HPSKDVLV DGGHG :KHQ DV KHUH WKH SDUWLHV KDYH QRW
VSHFLILHG ZKLFK VWDWH¶V ODZ VKRXOG JRYHUQ D FRQWUDFW WKH
6HFRQG5HVWDWHPHQWGLUHFWVDFRXUWWRFRQVLGHUILYHFRQWDFWV
LQGHFLGLQJZKLFKVWDWHKDVWKHPRVWVLJQLILFDQWUHODWLRQVKLS
WR WKH WUDQVDFWLRQ DQG SDUWLHV 5HVWDWHPHQW 6HFRQG RI
&RQIOLFW RI /DZV † ,Q WKLV FDVH WKUHH RI WKRVH

-- 8 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
:HDUHFRQILGHQWWKDWWKHUHDVRQDEOHH[SHFWDWLRQVRIDQ
LQVXUHGVXFKDV&URZQZRXOGEHWKDWZKDWHYHUDVWDWH
DOORZHGE\ZD\RIUHFRYHU\WRDWRUWSODLQWLIILWZRXOGEH
FRYHUHGE\LWVLQVXUDQFH1RUGRZHVHHWKLVDVDRQH
VLGHGHTXDWLRQ8QGHUIDFWVVXFKDVDUHSUHVHQWHGKHUH
DQ LQVXUDQFH FDUULHU FDQQRW UHDVRQDEO\ H[SHFW WKDW DQ
LQVXUHGZRXOGZDQWVRPHW\SHRIIOXFWXDWLQJFRYHUDJH
ZKLFKZRXOGDIIRUGIXOOSURWHFWLRQLQRQHORFDOHEXWQRW
LQDQRWKHU
,QWHUQDWLRQDO,QVXUDQFH)GDW
7KHFRXUWLQ,QWHUQDWLRQDO,QVXUDQFHGLGQRWVD\RULQDQ\
ZD\VXJJHVWWKDWLQWKHDEVHQFHRIDFKRLFHRIODZSURYLVLRQ
LQWKHFRQWUDFWRILQVXUDQFH WKHODZRIWKHSODFHRILQMXU\
ZRXOG DOZD\V JRYHUQ PDWWHUV RI LQVXUDQFH SROLF\
LQWHUSUHWDWLRQ,QGHHGLQ,QWHUQDWLRQDO,QVXUDQFHWKHFRXUW
DSSURYHG WKH GHFLVLRQ UHDFKHG LQ 5HYFR '6 ,QF Y
*RYHUQPHQW(PSOR\HHV,QVXUDQFH&R)6XSS
1' 2KLR DII¶G )G WK &LU
ZKHUHLQ WKH FRXUW FRQFOXGHG WKDW XQGHU WKH IDFWV DQG
FLUFXPVWDQFHV WKHUH SUHVHQWHG WKH VWDWH ODZ ZKHUH WKH
XQGHUO\LQJLQMXU\RFFXUUHGKDGDOHVVVLJQLILFDQWLQWHUHVWLQWKH
FRQWURYHUV\WKDQGLGWKHSODFHRILQFRUSRUDWLRQDQGSODFHRI
EXVLQHVVRIWKHLQVXUHG,QW¶O,QV)GDW QRWLQJWKDW
³>I@RUZKDWLWLVZRUWKZHEHOLHYHWKDWWKHFRUUHFWUHVXOWZDV
UHDFKHG LQ5HYFR´ 7KDW WKH UHVXOWV LQ 5HYFR DQG
,QWHUQDWLRQDO ,QVXUDQFH DSSHDU RQ WKH VXUIDFH WR EH
LQFRQVLVWHQWVLPSO\HPSKDVL]HVZKDWWKH6L[WK&LUFXLWKDV
VDLGWKDWHDFKFKRLFHRIODZFRQWURYHUV\³KDVWREHDQDO\]HG
ZLWKLQLWVRZQIDFWXDOFRQWH[W´DQG³WKHUHVXOWLVKHDYLO\IDFW
GULYHQ´,QW¶O,QV)GDW
8QOLNH WKH GLVSXWH LQ ,QWHUQDWLRQDO ,QVXUDQFH ZKLFK
LQYROYHGDTXHVWLRQRIFRYHUDJHIRUDQLQVXUHG¶VOLDELOLW\WRD
WRUWSODLQWLIIWKHGLVSXWHLQWKLVFDVHLQYROYHVWKHHIIHFWWREH
JLYHQSROLF\ODQJXDJHWKDWVHWVRXWDQLQVXUHG¶VGXWLHVWRLWV
LQVXUHULQWKHHYHQWRIDQRFFXUUHQFH6SHFLILFDOO\WKHGLVSXWH
LQYROYHVSROLF\ODQJXDJHWKDWUHTXLUHV3ODLQWLIIV WRJLYH
1R 0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R

$ FRXUW VXEMHFW WR FRQVWLWXWLRQDO UHVWULFWLRQV ZLOO
IROORZDVWDWXWRU\GLUHFWLYHRILWVRZQVWDWHRQFKRLFHRI
ODZ
:KHQWKHUHLVQRVXFKGLUHFWLYHWKHIDFWRUVUHOHYDQW
WRWKHFKRLFHRIWKHDSSOLFDEOHUXOHRIODZLQFOXGH
D WKH QHHGV RI WKH LQWHUVWDWH DQG LQWHUQDWLRQDO
V\VWHPV
E WKHUHOHYDQWSROLFLHVRIWKHIRUXP
F WKHUHOHYDQWSROLFLHVRIRWKHULQWHUHVWHGVWDWHVDQG
WKH UHODWLYH LQWHUHVWV RI WKRVH VWDWHV LQ WKH
GHWHUPLQDWLRQRIWKHSDUWLFXODULVVXH
G WKHSURWHFWLRQRIMXVWLILHGH[SHFWDWLRQV
H WKHEDVLFSROLFLHVXQGHUO\LQJWKHSDUWLFXODUILHOG
RIODZ
I FHUWDLQW\SUHGLFWDELOLW\DQGXQLIRUPLW\RIUHVXOW
DQG
J HDVHLQWKHGHWHUPLQDWLRQDQGDSSOLFDWLRQRIWKH
ODZWREHDSSOLHG
5HVWDWHPHQW 6HFRQG &RQIOLFWRI/DZ†
,9',6&866,21
5HO\LQJRQ,QWHUQDWLRQDO,QVXUDQFH&RPSDQ\Y6WRQHZDOO
,QVXUDQFH&RPSDQ\)G WK&LU WKHGLVWULFW
FRXUWLQWKLVFDVHGHWHUPLQHGWKDW0LFKLJDQODZDSSOLHGWRWKH
GLVSXWHEHWZHHQ3ODLQWLIIVDQG&RQWLQHQWDO$FFRUGLQJWRWKH
GLVWULFWFRXUW³,QWHUQDWLRQDO,QVXUDQFHWHDFKHVWKDWWKHODZRI
WKHORFDWLRQRIWKHRFFXUUHQFHJRYHUQVWKHLQVXUDQFHFRQWUDFW
ZLWKUHJDUGWRWKDWRFFXUUHQFHXQOHVVWKHSDUWLHVKDYHDJUHHG
RWKHUZLVHE\FRQWUDFW´-$DW%HFDXVHWKHSDUWLHV
GLGQRWLQFOXGHDFKRLFHRIODZSURYLVLRQLQWKH&*/SROLF\
DQGEHFDXVHWKHUHOHYDQWRFFXUUHQFHDOOHJHGO\WRRNSODFHDW
OHDVWLQSDUWLQ0LFKLJDQWKHGLVWULFWFRXUWFRQFOXGHGWKDW
³&RQWLQHQWDOXQGHUVWRRGDQG0LOO¶V3ULGHUHDVRQDEO\FRXOG
KDYHH[SHFWHGWKDWWKHODZ>RI0LFKLJDQ@ZRXOGJRYHUQWKH
FRQWUDFWXDOUHODWLRQVKLSEHWZHHQWKHVHSDUWLHV´-$DW

-- 9 of 10 --

0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R
1R
&RQWUDU\ WR WKH GLVWULFW FRXUW¶V DVVHUWLRQV ,QWHUQDWLRQDO
,QVXUDQFHGRHVQRWWHDFKWKDW³WKHODZRIWKHORFDWLRQRIWKH
RFFXUUHQFHJRYHUQVWKHLQVXUDQFHFRQWUDFWZLWKUHJDUGWRWKDW
RFFXUUHQFH XQOHVV WKH SDUWLHV KDYH DJUHHG RWKHUZLVH E\
FRQWUDFW´-$DW,QGHHGWKHFRXUWLQ,QWHUQDWLRQDO
,QVXUDQFH HVSRXVHG QR VXFK EULJKWOLQH UXOH EXW LQVWHDG
ZDUQHGWKDWFKRLFHRIODZFRQWURYHUVLHVDUH³IDFWGULYHQDQG
HDFKFDVHKDVWREHDQDO\]HGZLWKLQLWVRZQIDFWXDOFRQWH[W´
,QW¶O,QV)GDW
,QWHUQDWLRQDO,QVXUDQFHDURVHRXWRID/RXLVLDQDVWDWHFRXUW
FDVHILOHGE\DQLQGLYLGXDOLQMXUHGE\DGHIHFWLYHIRUNOLIWLQ
/RXLVLDQDZKHUHSUHMXGJPHQWLQWHUHVWLVDVVHVVHGDVDPDWWHU
RI ULJKW DQG ZKHUH SDUWLHV UHVSRQVLEOH IRU SD\PHQW RI
MXGJPHQWDUHDOVRUHVSRQVLEOHIRUSD\PHQWRISUHMXGJPHQW
LQWHUHVW 7KH SDUW\ FDXVLQJ WKH LQMXU\ &URZQ (TXLSPHQW
&RUSRUDWLRQ ³&URZQ´ ZDV DQ 2KLR FRUSRUDWLRQ WKDW GLG
EXVLQHVVLQ/RXLVLDQD$/RXLVLDQDMXU\DZDUGHGWKHLQMXUHG
SODLQWLII7RWKHMXU\¶VDZDUGWKHVWDWHFRXUW
DGGHGDQDZDUGRISUHMXGJPHQWLQWHUHVWEULQJLQJWKHHQWLUH
DZDUG WR D WRWDO RI RYHU &URZQ¶V LQVXUHU
,QWHUQDWLRQDO,QVXUDQFH&RPSDQ\ ³,QWHUQDWLRQDO´ WKHUHDIWHU
ILOHGVXLWLQIHGHUDOFRXUWLQ2KLRVHHNLQJDGHFODUDWLRQDVWR
LWVREOLJDWLRQRQWKHMXGJPHQWLQWKHXQGHUO\LQJWRUWDFWLRQ
8UJLQJ WKH DSSOLFDWLRQ RI 2KLR ODZ ZKLFK SURYLGHV WKDW
LQVXUHUVDUHQRWOLDEOHIRULQWHUHVWLQH[FHVVRISROLF\OLPLWV
,QWHUQDWLRQDO DUJXHG WKDW EHFDXVH WKH UHOHYDQW LQVXUDQFH
SROLF\OLPLWHGWKHFRPSDQ\¶VOLDELOLW\WRSHU
RFFXUUHQFHLWVREOLJDWLRQRQWKHMXGJPHQWZDVOLPLWHGWR
PLOOLRQ
5HO\LQJ RQ VHFWLRQV DQG RI WKH 5HVWDWHPHQW WKH
GLVWULFW FRXUW LQ 2KLR FRQFOXGHG WKDW ,QWHUQDWLRQDO¶V
GHFODUDWRU\MXGJPHQWDFWLRQZDVJRYHUQHGE\/RXLVLDQDODZ
DQG QRW E\ 2KLR ODZ DV DUJXHG E\ ,QWHUQDWLRQDO %HFDXVH
/RXLVLDQDODZPDNHVLQVXUHUVOLDEOHIRUSUHMXGJPHQWLQWHUHVW
LQH[FHVVRIDQ\SROLF\OLPLWWKHGLVWULFWFRXUWGHFODUHGWKDW
,QWHUQDWLRQDOZDVREOLJDWHGWRSD\ERWKWKHGDPDJHDZDUGDV
ZHOODVWKHSUHMXGJPHQWLQWHUHVWRQWKDWDZDUG
1R 0LOO¶V3ULGHHWDOY
&RQWLQHQWDO,QV&R

2QDSSHDOWKLVFRXUWDIILUPHGVWDWLQJ
7KH NH\ WR RXU DQDO\VLV LV WKDW WKH FKRLFH RI ODZ
SULQFLSOHVIRXQGLQWKH5HVWDWHPHQWQHHGQRWEHJLYHQ
HTXDOZHLJKWLQHYHU\FLUFXPVWDQFHQRUDUHWKH\LQWHQGHG
WREHH[FOXVLYH7KH\DOVRDUHUHODWLYHO\HODVWLFDQGLQ
VRPHFDVHVHTXLYRFDO
:LWK WKHVH LQVWUXFWLYH FRPPHQWV LQ PLQG ZH KDYH
FRQFOXGHG WKDW WKH PRVW VLJQLILFDQW IDFWRU WR EH
FRQVLGHUHG XQGHU WKH IDFWV SUHVHQWHG KHUH LV IRXQG LQ
VHFWLRQ G WKHSURWHFWLRQRIMXVWLILHGH[SHFWDWLRQV
&URZQLVDODUJHQDWLRQDOFRPSDQ\ZKRVHSURGXFWVDUH
VROGDQGXVHGWKURXJKRXWWKH8QLWHG6WDWHV,WLVEH\RQG
SHUDGYHQWXUH WKDW &URZQ ZDQWHG FRPSOHWH OLDELOLW\
SURWHFWLRQ ZLWKLQ WKH SROLF\ OLPLWV RI WKH LQVXUDQFH LW
SXUFKDVHG
,QW¶O,QV)GDW
$PRQJRWKHUWKLQJVWKHDSSHOODWHFRXUWIRXQGVLJQLILFDQW
WKH IDFW WKDW WKH LQVXUDQFH SROLF\ UHTXLUHG ,QWHUQDWLRQDO WR
³SD\RQEHKDOIRIWKHLQVXUHGWKHXOWLPDWHQHWORVVZKLFK
WKH LQVXUHG PD\ VXVWDLQ E\ UHDVRQ RI WKH OLDELOLW\ LPSRVHG
XSRQ WKH LQVXUHG E\ ODZ´ ,QW¶O ,QV )G DW
0RUHRYHUWKHFRXUWQRWHGWKDWWKHSDUWLHVLQFOXGHGDFODXVHLQ
WKHSROLF\VWDWLQJWKDW³>L@QDMXULVGLFWLRQZKHUHE\UHDVRQRI
ODZRUVWDWXWHWKLVSROLF\LVLQYDOLGDVDμSD\RQEHKDOIRI¶
FRQWUDFW>,QWHUQDWLRQDO@DJUHHVWRLQGHPQLI\WKHLQVXUHGIRU
XOWLPDWHQHWORVVLQH[FHVVRIWKHLUUHWDLQHGOLPLWV´,QW¶O,QV
)G DW $FFRUGLQJ WR WKH FRXUW WKHVH SROLF\
SURYLVLRQVUHYHDOHGWKDWWKHSDUWLHVDQWLFLSDWHGWKDWWKHODZV
RI YDULRXV MXULVGLFWLRQV ZRXOG DIIHFW ,QWHUQDWLRQDO¶V
SHUIRUPDQFH XQGHU WKH FRQWUDFW VWUHQJWKHQLQJ WKH FRXUW¶V
FRQFOXVLRQWKDWWKHSDUWLHV¶H[SHFWDWLRQVJLYHQWKHSDUWLFXODU
IDFWVSUHVHQWHGZHUHEHVWSUHVHUYHGWKURXJKDSSOLFDWLRQRI
/RXLVLDQDODZ
6WUHVVLQJWKHIDFWGULYHQQDWXUHRIDFKRLFHRIODZTXHVWLRQ
WKH,QWHUQDWLRQDO,QVXUDQFHFRXUWFRQFOXGHG

-- 10 of 10 --