In a seminal event in US legal history, the nation’s Supreme Court has permitted a foreign plaintiff to bring a Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit for purposefully dodging the enforcement of an international arbitration award. The development emerged from a 6-3 opinion in the cases of Yegiazaryan v. Smagin and CMB Monaco v. Smagin.
RICO is a potent piece of legislation, with the capacity to enable the recovery of treble damages and attorneys’ fees for unlawful acts executed by an organization or enterprise. As reported by JD Supra, the Supreme Court decision paves the way for foreign plaintiffs to take advantage of RICO in the pursuit of just enforcement of international arbitral awards.
Issued on June 22, 2023, the Supreme Court’s opinion is foreseen to have substantial ramifications for how and when RICO can be used. Under this ruling, not only is the scope of potential plaintiffs expanded, but it also broadens types of cases for which RICO can be employed, encapsulating those that encompass international law and arbitration.
While this development is indeed noteworthy, it is essential to consider its potential challenges and implications, especially concerning international business transactions and dispute resolution mechanisms. It seems the US legal landscape is set for notable shifts in its dealings with foreign entities and cross-border legal issues.