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America June 4, 2024 4 mins read

Burford Capital Seeks Arbitration in Dispute with German Entity

America ı By Rochdi Rais

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Burford Capital Seeks Arbitration in Dispute with German Entity

Burford Capital is urging a Delaware court to force a German entity to arbitrate their dispute stemming from a funding agreement for litigation against truck manufacturers that were targeted by European regulators for fixing their prices for more than a decade in the early 2000s.

Alongside German Litigation Solutions LLC, an entity owned by the law firm Hausfeld LLP, Burford Capital and Burford German Funding LLC filed a brief with the court on Friday arguing that litigation initiated by Financialright Claims GmbH must be arbitrated in London under a clause in their funding agreement.

Financialright Claims filed the litigation late last year, asking the court for permission to subpoena Burford, Burford German Funding, and German Litigation Solutions for information to be used in pending litigation filed in Germany. Burford German Funding is jointly owned by Burford and German Litigation Solutions.

The precise nature of the underlying dispute isn't clear from the partially redacted filings in the present suit, but Financialright Claims told the Delaware court that it's seeking information regarding the companies' ownership and corporate structures and Burford's relationship with Hausfeld.

In its brief on Friday, Burford argued that the Financialright Claims' discovery requests "focus heavily" on their funding agreement. These requests ask Burford to turn over the source of the funding that was used for the German truck litigation and to identify individuals who were responsible for negotiating the funding agreement, among other things.

"Both the first-order dispute over [Financialright Claims]' application and the second-order dispute over arbitrability are subject to arbitration, because [Financialright Claims] agreed to arbitrate '(to the exclusion of any other forum)' 'any dispute' relating to the [funding agreement], including disputes over gateway questions of arbitrability," Burford argued.

Hausfeld Germany represented Financialright Claims in litigation filed in Germany against members of a truck manufacturers cartel who were targeted by the European Commission for illegally fixing prices of medium and heavy trucks across Europe between 1997 and 2011. Financialright Claims is pursuing the litigation on behalf of thousands of consumers who signed over their claims to the company.

Burford German Funding and Financialright Claims inked a capital provision agreement in 2017, under which Burford Germany Funding agreed to fund the claims being pursued by the latter company against the German truck manufacturers.

Financialright Claims is asking the court to order Burford to turn over documents and testimony detailing its relationship with Hausfeld. It is also asking the court for permission to subpoena German Litigation Solutions regarding its corporate structure and its interest in Burford German Funding.

The company is looking to track down any economic interest that Hausfeld maintained in Burford German Funding or German Litigation Solutions and any proceeds received by the firm from those entities, particularly in connection with the European truck cartel litigation.

A representative for Burford declined to comment on Monday. Counsel for Financialright Claims did not immediately respond to a request for comment.

Burford German Funding LLC, German Litigation Solutions LLC and Burford Capital LLC are represented by Elena C. Norman, Anne Shea Gaza, Samantha G. Wilson and Rodney Square of Young Conaway Stargatt & Taylor LLP. Burford German Funding LLC and Burford Capital LLC are additionally represented by Derek T. Ho of Kellogg Hansen Todd Figel & Frederick PLLC. German Litigation Solutions LLC is additionally represented by Edward P. Boyle of Venable LLP.

Financialright Claims GmbH is represented by Bindu A. Palapura and Jacqueline A. Rogers of Potter Anderson & Corroon LLP and by Jeffrey A. Rosenthal and Lina Bensman of Cleary Gottlieb Steen & Hamilton LLP.

The case is Financialright Claims GmbH v. Burford German Funding LLC et al., case number 1:23-cv-01481, in the U.S. District Court for the District of Delaware.

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Rochdi Rais

Rochdi Rais is the Head of Growth and financial and legal writer at USA Herald. He has been writing and editing financial, legal and U.S. news for years with over +4000 articles published during his career.

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