II LP v. Commissions Import-Export S.A., Defendant. (2025)

The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 15, 17, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 55, 56, 57, 58, 59, 60, 61 were read on this motion to/for JUDGMENT- SUMMARY IN LIEU OF COMPLAINT.

This is one of two cases  ¹ arising from defendant Commissions Import-Export SA (CMPX)'s attempt to fund litigation to enforce two international arbitration awards, and the debts they took out to do so. In this action, plaintiff Montreux Partners II LP (Montreux) moves for summary judgment in lieu of complaint to enforce a 2016 and 2021 Letter Agreement against CMPX. For the reasons below, the motion is denied.

Background  2

Defendant CMPX is the holder of two outstanding arbitral awards issued by the International Chamber of Commerce (ICC) against the Republic of Congo (Congo): (1) Arbitral Award Number 9899, which was issued in 2000 and has a face value of €290 million (Award 9899); and (2) Arbitral Award Number 16257, which was issued in 2013 and has a face value of "more than €1.5 billion" (Award 16257, and together with Award 9899, the Arbitral Awards or the Awards) (NYSCEF # 35, Hajaij SJILC Aff, ¶ 3).³ Both awards have been reduced to "final and unappealable judgments in multiple jurisdictions, including the United States as well as France, England and Belgium" (NYSCEF # 22, Straus PI Aff, ¶ 5).⁴ ,⁵ CMPX is currently pursuing enforcement actions in various jurisdictions around the world (see Missouri NYSCEF # 32, Schlesinger Vacate Aff, ¶¶ 12-14, 8, 15 [listing upcoming enforcement deadlines]).⁶

Enforcing awards against a sovereign nation is expensive, and so at various times, CMPX sought litigation funding from outside sources (NYSCEF # 35 ¶ 5). As relevant here, one litigation funder was non-party Michael Straus and his company, plaintiff Montreux (id.). Montreux is a partnership organized under Delaware law (Montreux NYSCEF # 3, Hermann Aff, ¶ 1). Montreux's general partner is the non-party Montreux Partners (GP) II LP (Montreux GP) (NYSCEF # 57, Straus SJILC Aff, ¶ 1). Montreux GP is managed by Eric Hermann and Straus (id.; NYSCEF # 3 ¶ 1). Straus is also an attorney certified in New York and operates a law firm in his name (NYSCEF # 57 ¶ 1; NYSCEF # 37, Invoices at *15 [invoice from "Law Office of Michael Straus"]).

Montreux first began providing litigation funding in 2009 (Missouri NYSCEF # 33, Hajaij Vacate Aff, ¶ 5).⁷ CMPX's principal Mohsen Hajaij claims Montreux's "initial involvement was hidden from him by" another litigation funder, although Montreux eventually began working with CMPX directly (id.). Hajaij claims that Montreux and CMPX initially had a contingent fee arrangement which apparently gave Montreux some sort of interest in the Arbitral Awards (id.).

In 2016, two important agreements were signed. First, on March 20, 2016, Montreux and CMPX entered a letter agreement by which CMPX agreed to purchase Montreux's interests in the Awards for $20 million (2016 Letter Agreement or 2016 Agreement) (NYSCEF # 4, 2016 Agreement). This is one of two agreements at the center of Montreux's claims. Per this 2016 Agreement, Montreux's interests would be transferred immediately while the $20 million would be paid out of future recovery on the Awards (see id.). Specifically, Montreux would get priority interest in and 20% of the gross proceeds of future recovery under CMPX's claims against Congo (id. at 2). The agreement did not provide for any interest payments (see generally id.). The maturity date was set for nine months later on December 31, 2016 (id.; NYSCEF # 3 ¶¶ 5-6). CMPX claims that under these terms, it would have had to recover $100 million in less than a year to fully pay off Montreux (NYSCEF # 29, Defs SJILC Opp, at 3). Predictably, CMPX failed to do so (NYSCEF # 3 ¶ 9).

Second, the very next day Straus personally entered an agreement with CMPX and its principal, Mohsen Hajaij  ⁸ (Oversight Agreement) (NYSCEF # 36, Oversight Agreement). Straus agreed to "undertake the oversight and where appropriate coordination of proceedings concerning the collection, settlement or other resolution of [CMPX's] claims of any nature against Republic of Congo" (id. ¶ 1). In exchange, CMPX agreed to make various payments to Straus including: (1) $250,000 immediately; (2) $10,000,000 total paid from future proceeds of CMPX's claims against Congo, which included (3) €250,000 if CMPX obtained €3.5 million from a claim in France; and finally (4) "Straus' reasonable transportation, accommodation and similar expenses of a kind normally incurred in connection with the continuing prosecution of such claims" (id. ¶¶ 1-4). The parties agreed that Straus would not be responsible for any attorney fees or costs (id. ¶ 5).

The Oversight Agreement is at the center of CMPX's defenses in large part because the parties dispute whether it is an attorney engagement letter. CMPX believes it to be such a letter, and Montreux asserts it is not. There is no dispute that Straus would have had a conflict of interests if he had been representing CMPX given that his company was funding the litigation efforts. There is also no dispute that the Oversight Agreement does not include any language disclosing or waiving this conflict or otherwise advising CMPX to obtain separate New York/American counsel — language typical of engagement agreements.

Regardless, over the next several years, from 2017 through 2024, Straus and Montreux charged CMPX and Hajaij hundreds of thousands of dollars (and euros) for their services. CMPX submits a compilation of 29 invoices from Straus and Montreux over the years (NYSCEF # 37 [compiled invoices]). One of those invoices was from Montreux requesting reimbursement for fees paid to an outside law firm (id. at *6-*11 [Montreux's invoices for services from Linklaters]). Another was on Straus's personal letterhead and stated it was for "Travel Expenses" relating to flights between the US and Europe at CMPX's request (id. at *40). The vast majority—a total of 24 out of 29—were on letterhead from the "Law Office of Michael Straus" or simply the "Office of Michael Straus" for "legal services" or "legal and consulting services" (id. at *12-13, *15, *17, *19, *21, *23, *25-27, *29, *31-34, *36, *37, *39, *42-44, *47-49). Several of those invoices were specifically for enforcement actions in New York and France (id. at *39, *42-44, *47-49).

Meanwhile, by January 2021 CMPX had paid off only a few million dollars of the $20 million owed under the 2016 Agreement, leaving an outstanding balance of $16,860,587.38 (NYSCEF # 5, 2021 Letter Agreement, § 2). Therefore, on January 14, 2021, Montreux and CMPX entered another letter agreement (2021 Letter Agreement) (id.). The new agreement acknowledged CMPX's default, increased the outstanding debt by $2 million, but reduced Montreux's share of certain recovered funds (id. § 2). The new agreement also fully integrated the 2016 Letter Agreement, effectively making them one (id.). CMPX continued to make payments under the 2016 and 2021 Agreements but has yet to fully pay them off. The current outstanding principal on both Agreements is $15,469,164.18 (NYSCEF # 3 ¶ 21).

In that same period, CMPX found another avenue to enforce the Arbitral Awards: CMPX was able to seize a "Dassault Falcon 7X" private jet owned by the "Presidency of Congo" while it was stationed in France (Dassault Aircraft or the Aircraft) (Missouri NYSCEF # 32 ¶ 10). CMPX also intended to purchase the Aircraft at auction in order to repair and sell it (see id. ¶ 10; NYSCEF # 35 ¶ 10). However, the purchase would cost money, and CMPX did not have any. CMPX therefore again sought additional financing in June 2022 (NYSCEF # 35 ¶ 10). Straus brought that financing in August 2022 by introducing CMPX to Missouri Partners Capital LLC (Missouri) (id.; see also NYSCEF # 38, August 12, 2022 Note and Security Agreement).

Between August 2022 and October 2023, Missouri and CMPX entered three loan agreements for various amounts (see NYSCEF # 38; NYSCEF # 39, June 2023 Note and Security Agreement; NYSCEF # 40, January 2024 Promissory Note and Security Agreement, at *40 [attaching as an exhibit an Aviation Financing Promissory Note dated October 2, 2023]). Each agreement was signed by Tyler Korn, Missouri's "attorney-in-fact" (see NYSCEF # 39 at *7; NYSCEF # 40 at *10).⁹ Each contained a nearly identical integration clause (see NYSCEF # 38 § 12 [k]; NYSCEF # 39 § 10 [k]; NYSCEF # 40 § 14 [j]; NYSCEF # 41 § 8 [k]). Each also carried a "high interest rate," which Straus claimed, "the lenders insisted on" (NYSCEF # 35 ¶ 11).

Unbeknownst to CMPX at the time, Straus was actually behind Missouri (see NYSCEF # 29 at 5-6). Missouri was wholly owned by non-party Montreux Partners III LP (MP3), which in turn was managed by the same two managers as non-party Montreux GP—Hermann and Straus (NYSCEF # 42, MP3 Letter). Moreover, based on a public records search performed by CMPX's counsel, Missouri was incorporated on August 3, 2022, nine days before the first loan agreement with CMPX (compare NYSCEF # 31, Screenshot of DE State Dept Website re: Missouri ["Incorporation date/formation date: 8/3/2022"], with NYSCEF # 38 [first loan dated 8/12/22]).

It is not clear when CMPX learned that Straus (and Hermann) had an interest in Missouri. CMPX implies it discovered the connection after Hermann sent a letter on behalf of MP3 laying out Missouri and MP3's ownership structure, but the letter is undated (see NYSCEF # 42). Montreux does not offer any evidence relating to the start of Missouri's relationship with CMPX.

CMPX was ultimately able to purchase the Aircraft in October 2023 (NYSCEF # 35 ¶ 14). CMPX quickly transferred the Aircraft to Dove Aviations Limited (Dove), an entity created to hold it. Hajaij avers that Dove (a defendant in the companion action) is owned by himself, his son Rida, and Straus (id.).¹⁰

From 2022 through early 2024, CMPX and Dove entered several more agreements with Montreux and Missouri as they struggled to make repayments. As already mentioned, CMPX and Dove entered three loan agreements with Missouri, along with at least two more in January and March 2024 (see NYSCEF # 41, March 2024 Agreement; NYSCEF # 40). As for Montreux, the parties signed two tolling agreements that acknowledged CMPX was still in default on the 2016 and 2021 Agreements (NYSCEF # 6, First Tolling Agreement, § 2; NYSCEF # 7, Second Tolling Agreement, § 3).

CMPX claims its payment troubles came from a combination of the difficulties enforcing arbitration awards against sovereign nations and obstacles in selling the Aircraft. According to CMPX, not only did it need to spend millions repairing and maintaining the Aircraft, but they also needed to change the Aircraft's international registration, which involved forcing Congo to de-register first (NYSCEF # 35 ¶¶ 15-16). CMPX claims this obstacle was largely out of its control.

In April 2024, it became clear that CMPX and Dove would need more time to sell the Aircraft. In an email dated April 5, 2024, Korn (Missouri's attorney-in-fact) informed CMPX's Lebanon counsel that his "client" was willing to extend the maturity date for the first Missouri agreement to September 30, 2024 "to give CMPX some additional months to refurbish the [Aircraft] and sell it" (NYSCEF # 58, Emails from Korn, at *3). CMPX agreed and even asked to set the maturity dates for some of the other agreements to the same date (id. at * 2). The parties executed the extension on May 30, 2024 (NYSCEF # 59, Missouri Extension).

Despite the extension, by August 2024 Dove was running out of money to spend on the Aircraft, and so the parties began negotiating yet another loan (NYSCEF # 35 ¶ 18). Unlike the previous agreements, this time Montreux and Missouri intended to consolidate the various prior loans into one.

On August 24, 2024, at Hermann and Straus's request, Thomas McDonald—an attorney for both Montreux and Missouri—emailed CMPX a draft promissory note consolidating Missouri's previous debts and parts of Montreux's debts of CMPX (Consolidated Note or Note) (NYSCEF # 43, Email dated 8/24/2024 and Draft Note; see also NYSCEF # 8, Signed Consolidated Note). The Note provided that Missouri would be paid out of proceeds from the future sale of the Aircraft while Montreux would receive 10% of whatever was left (id. §§ 6, 7). The Note also set a 25% interest rate after an event of default for Missouri only (id. § 11). Additionally, the Note included provisions allowing CMPX and Dove to draw down further amounts (id. § 2), and an integration clause that was nearly identical to the prior Missouri agreements (id. § 13 [j]). McDonald also attached a draft security agreement pledging the Aircraft as collateral for both Missouri and Montreux (NYSCEF # 43 at *17). This was significant because Montreux's debt had not been secured up to that point.

Most importantly, the Note did not extend the September 30, 2024 maturity date, which at that point was just over a month away. Instead, the Note kept the same date but allowed the parties to "agree in writing to extend the Maturity Date for up to an additional three (3) months, based on terms that are mutually agreed upon by them in writing (including, without limitation, an increase in the Facility Fee)." (3-Month Clause) (id. § 8).

The Note's terms were unacceptable to CMPX and Dove, and so Hajaij responded with several demands including, most relevantly, extending the maturity date to December 31, 2024 (NYSCEF # 35 ¶¶ 19-20). Hajaij avers that he also contacted Straus directly with his concerns, but before they could be addressed, CMPX's foreign counsel emailed Hermann and Straus letting them know that work would stop on the Aircraft by the end of the week unless the workers were paid (NYSCEF # 35 ¶ 20). Hajaij further avers Montreux and Missouri took advantage of the situation by sending CMPX a notice of default although that notice has not been filed here (id. ¶ 21)

On September 7, 2024, Hajaij again contacted Straus directly with his concerns, and the two apparently exchanged a series of voice-messages via WhatsApp (id. ¶¶ 21-23). Hajaij transcribed the contents of those messages in his affirmations. Hajaij first said to Straus:

"Always I told you, you are my partner, I am not the one, when I want to do something, always I leave something to you, even if tomorrow the settlement, not only I will give you your money. I am going to give you more. Why you are creating problem, why? You said I am your brother so what happened you are changing your mind."

(id. ¶ 21). Straus responded:

"You have not done anything, Mohsen, please don't say that. I am exactly the same—loyalty and brotherhood, just as I have always been. We are simply in a very difficult position with the lenders."

(id. ¶ 22).

At some point on September 8, Straus sent Hajaij another voice message on WhatsApp:

"Mr. Mac Donald [sic] has just sent the [new] draft to you, and Nicolas [CMPX's Lebanon counsel], and Rida [Hajaij's son], and us, and we are prepared to sign and fund immediately as soon as Dassault agrees. There is truly no time to waste on this, our agreements are fine and you have every input into every stage, and this is just one of those times you have to have confidence in me to"

(NYSCEF # 35 ¶ 23).

Hajaij avers that "[d]espite [his] concerns that the repairs, registration and sale [of the Aircraft] were not likely to happen in a mere three weeks," he decided to "trust[ ] Straus and sign[ ]" the Note on September 9, 2024 (id. ¶ 24). Missouri and Montreux, however, did not sign, and instead, Korn sent Hajaij the next day, a brand new 2024 Pledge and Security Agreement that pledged Arbitral Award 9899 as collateral to the Note, not the Aircraft as had been previously agreed (Security Agreement) (see NYSCEF # 44, Korn Email & Unsigned Security Agreement; see also NYSCEF # 9, Signed Security Agreement). The Security Agreement also imposed the Note's 25% default interest rate on Montreux's 2016 and 2021 Agreements, not just Missouri's debts (id. § 4.01). This was significant because Montreux's debts previously had not contemplated interest rates.

Hajaij once again contacted Straus directly with his concerns, and avers Straus responded by telling him the Security Agreement was required by New York law (NYSCEF # 35 ¶ 26). Hajaij also avers Straus sent the following WhatsApp voice message:

"I don't know how to begin. The language that you are looking at, is standard ordinary language in New York security agreements. Yes, he added that in, but that's already part of what New York law is . . . Mohsen you have to trust me on this, If you don't want to sign it, or refuse to sign it, then we are back where we were, and there will be no money for the plane, That it is not a threat, you know me I don't talk like that, I'm saying this is something you have to trust me . . . This is one that's absolutely has to be done in accordance with New York Law, and that's all this is. . . ."

(id.). Hajaij continued to hold out against signing the Security Agreement (id. ¶ 27), and so in a final effort to mollify him, Straus sent Hajaij the following "Side Letter":

"Dear Mohsen,

This letter is my personal commitment that if the security agreements are signed today in their current form, the following will happen:

1. The lenders will immediately countersign the Consolidated Promissory Note and the New Pledge. They have not signed yet because they are waiting for the security agreements.

2. Upon full execution, the lenders will immediately pay all unpaid bills of Dassault and Pratt & Whitney as sent yesterday by Dassault and will continue to fund the necessary work until the plane is completed for purposes of airworthiness.

3. The only reason that Dassault sent that letter yesterday is that I was able to have someone speak at the highest levels to Dassault in order to get them to agree to provide invoices and payment instructions to Missouri. That was not easy.

4. While the work is being done, the lenders are relying on you to obtain a new registration or commitment to register.

5. Again, if the security agreements are signed, the maturity date in the Consolidated Promissory Note of September 30, 2024 will be extended to December 31, 2024, in accordance with the "3 month clause" that I inserted.

6. If for some reason we are not able to finally conclude the sale of the plane by the end of the year (and I believe if we start paying Dassault we will be able to do so), then I will continue to take all steps we can on our side towards enforcement of the claims against Congo.

This is my personal word and you can rely on it. If the security agreements are not signed, I will have no ability to do anything and any further steps will be out of my hands.

Sincerely,

Michael Straus"

(NYSCEF # 45, Side Letter [emphasis added]).

Hajaij avers that in reliance on this Side Letter and Straus's voice messages calling Hajaij brother and asking for trust, Hajaij signed the Security Agreement (NYSCEF # 35 ¶ 28). Missouri and Montreux signed on September 12 (NYSCEF # 9 at Signature Pages).

September 30 came and went, and CMPX and Dove failed to pay (NYSCEF # 3 ¶¶ 20-21). CMPX and Dove asked for the extension Straus promised under the Side Letter (NYSCEF # 35 ¶ 29). Straus responded on November 8, 2024, that he had "shared with Missouri and Montreux [CMPX's] request for an extension," but that the "lenders" refused because CMPX and Dove would not agree to make interest payments during the extension (NYSCEF # 22 at *10). Straus explained that the choice not to extend was in "their [the lenders'] sole authority" (id. [emphasis added]).

Hajaij, betrayed, spoke to Straus on December 5, 2024 to voice his feelings on the matter (see NYSCEF # 22 ¶¶ 9-10). Straus avers that Hajaij went on a "rant" accusing Straus of "playing games," "chang[ing]" and breaching trust, and reiterating that CMPX and Dove could not pay without selling the Aircraft (id. ¶ 9). Straus further avers Hajaij threatened to take several specific steps to frustrate Montreux and Missouri's potential recovery by torpedoing the awards, including:

• Instructing CMPX's French counsel to stop prosecuting (1) "claims against Air France as a third-party garnishee of amounts owed by Air France to [Congo]," and (2) "claims against the major oil company Total under a guarantee issued by Total to CMPX, whereby Total had agreed to pay amounts otherwise payable to Congo to CMPX;"

• Instructing "Dassault Aviation" to stop repairing the Aircraft;

• Settling the Arbitral Awards with Congo for $100 million instead of $2 billion—roughly "5¢ on the dollar."

(id. ¶ 10).

It is unclear whether Hajaij truly meant these threats or if he was simply frustrated. Regardless, Montreux and Missouri took him at his word and responded by both accelerating CMPX and Dove's debt (NYSCEF # 10, Notice of Acceleration 12/11/2024) and by filing this and the companion action. Missouri filed the companion action first on December 9, 2024 (Missouri NYSCEF # 1, Summons). Montreux then filed this action three days later on December 12, 2024 (NYSCEF # 1, Summons and SJILC). Montreux and Missouri are represented by the same counsel. The parties also argued both cases together in a hearing on February 20, 2025.

The parties have now filed a total of seven motions across the two cases. Only one is addressed here: Montreux's motion summary judgment in lieu of complaint (SJILC) for CMPX's breach of the 2016 and 2021 Agreements (NYSCEF # 2, Notice of SJILC Motion). Defendants oppose the motion.

Discussion

Montreux moves for summary judgment in lieu of complaint based on breach of the 2016 and 2021 Agreements (NYSCEF # 2). Montreux requests interest at the statutory rate from January 1, 2017 through the December 11, 2024 date of acceleration and then at the default rate from there (NYSCEF # 11, Montreux SJILC MOL at 11-12). Montreux argues that this case presents a straightforward application of the rules in that there are instruments for the payment of money only (the 2016/2021 Agreements) and CMPX failed to pay (id. at 9).

CMPX argues that the Note and Security Agreement are unenforceable as either unconscionable or obtained via fraud (NYSCEF # 29). Regarding fraud, CMPX argues that Straus had been acting as their lawyer since 2016 per the Oversight Agreement and invoices for legal services over the years (id. at 13-15). CMPX argues Straus took advantage of its trust by bringing in Missouri and other fictitious lenders that buried CMPX in debt with the goal of eventually taking ownership of the Awards (id. at 15-16). CMPX further argues Straus fraudulently induced it to sign the Security Agreement and Note via the Side Letter (id. at 16-18). Finally, CMPX argues that Montreux aided and abetted because it had actual knowledge via Straus and also served as the instrument of his fraud (id.).

As for unconscionability, CMPX argues the Note and Security Agreement were unconscionable because (a) CMPX only had three weeks to finish selling the Aircraft; (b) CMPX received no due consideration under the Note; (c) there was no mutuality of obligation; and (d) the Note was negotiated in a procedurally unfair way because CMPX effectively had no choice in the matter (id. at 18-20).

Montreux replies that CMPX does not dispute Montreux's prima facie case and instead only brings vague and unsupported defenses (NYSCEF # 55, Pltf's SJILC Reply, at 2). Montreux argues the fraud claims fail because Straus was never CMPX's lawyer and the Side Letter makes mere statements of future intent that cannot be the basis of a fraud claim (id. at 3, citing Non-Linear Trading Co., Inc. v Braddis Assoc., Inc., 243 AD2d 107, 118 [1st Dept 1998]). Montreux next argues that the Side Letter cannot "be read to support the view that the Note would be extended no matter what" given the integration clause and text of the 3-Month Clause (id.). Montreux also argues CMPX ratified the Note by making use of the drawdown provisions (id. at 4). Montreux further argue that there is no evidence of reliance or injury (id. at 4-5).

As for unconscionability, Montreux first argues that CMPX clearly received consideration because the Note "consolidated amounts already owed, and cancelled prior promissory notes," as well as extended the maturity date for some (but obviously not all) of the agreements (id. at 5). Finally, Montreux argues that there is neither procedural nor substantive unconscionability (id. at 6-13).

"CPLR 3213 is intended to provide a speedy and effective means of securing a judgment on claims presumptively meritorious" (Interman Indus. Prods., Ltd. v R.S.M. Electron Power, Inc., 37 NY2d 151, 154 [1975]). To demonstrate that a written instrument qualifies for summary judgment under CPLR 3213, a plaintiff "must prove a prima facie case by the instrument and a failure to make the payments called for by its terms" (Maglich v Saxe, Bacon & Bolan, P.C., 97 AD2d 19, 21 [1st Dept 1983]; see also PDL Biopharma v Wohlstadter, 147 AD3d 494, 494-495 [1st Dept 2017]). If it is necessary to look outside the document for proof of the debt, then CPLR 3213 procedure is inapplicable (PDL, 147 AD3d at 495). In other words, the defendant must explicitly acknowledge the indebtedness, and the fact of the debt must be apparent from the agreement alone (Weissman v Sinorm Deli, Inc., 88 NY2d 437, 444 [1996]). "Once the plaintiff submits evidence establishing these elements, the burden shifts to the defendant to submit evidence establishing the existence of a triable issue with respect to a bona fide defense" (Zyskind v FaceCake Mktg. Tech., Inc., 101 AD3d 550, 551 [1st Dept 2012]).

Montreux's motion is denied for failure to establish a prima facie case. Montreux requests recovery under the 2016 and 2021 Letter Agreements, submitting both to establish CMPX's underlying debt (NYSCEF #s 4 & 5). However, Montreux also relies on (1) two documents purporting to toll the statute of limitations (NYSCEF #s 6, 7), (2) the Consolidated Note which does not integrate or otherwise include the 2016 and 2021 Letter Agreements (NYSCEF # 8 § 1 [listing only Missouri agreements as being consolidated]), and (3) the Security Agreement which imposes the Note's default interest rate on the 2016 and 2021 Letter Agreements and secures them with Award 9899 (NYSCEF # 9 §§ 4.01, & "The Collateral" section).

Summary judgment in lieu of complaint is inappropriate where a note refers to other agreements to define an event of default (see Manufacturers Hanover Tr. Co. v Hixon, 124 AD2d 488, 489 [1st Dept 1986]). Here, the Security Agreement refers to the Note for two of its five definitions of "Event of Default," and also imposes the consequences for said default on the 2016 and 2021 Agreements (NYSCEF # 9 §§ 2.03 [a] [i], [iv]). Given that the Note does not integrate the 2016 or 2021 Agreements, any reference to the Note constitutes outside evidence defeating summary judgment in lieu of complaint (see Bonds Fin., Inc. v Kestrel Tech., LLC, 48 AD3d 230, 231 [1st Dept 2008] [denying summary judgment in lieu of complaint where promissory note required reference to "an acceleration clause in a revolving credit agreement" to define event of default]). Thus, Montreux failed to meet its prima facie burden.

Moreover, the fact that this complex web of cross-references relies on the two tolling agreements may also constitute more than a mere "de minimis deviation from the face of the document" (see Weissman, 88 NY2d at 444). The tolling agreements are necessary to show that Montreux did not lose its right to enforce the underlying debt. Montreux and CMPX largely do not address whether these documents are outside proof, mere de minimis deviations, or otherwise are unrelated to analysis.

In any event, even if, for argument's sake, Montreux were found to have presented a prima facie case, defendants sufficiently raised a triable issues of fact and submitted sufficient evidence to support their fraudulent inducement and aiding and abetting fraud defenses to defeat Montreaux's prima facie case.¹¹ At bottom, defendants raise a question of fact as to whether Michael Straus—the manager of the entity serving as general partner of Montreux and a partner of the entity that owns Missouri fraudulently induced defendants to enter into the loan and security agreements.

Conclusion

Pursuant to the above, it is hereby

ORDERED that plaintiff Montreux Partners II LP's motion for summary judgment in lieu of complaint is denied and this action is converted into a plenary action; and it is further

ORDERED that plaintiff Montreux Partners II LP shall file a complaint within 20 days of the filing of this order, and defendant Commissions Import-Export SA shall file an answer within 20 days of service thereof; and it is further

ORDERED that the defendant Commissions Import-Export SA shall serve a copy of this Decision and Order with notice of entry on the Clerk of the Court in accordance with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the "E-Filing" page and on the court's website at the address www.nycourts.gov/supctmanh.

DATE 3/20/2025

MARGARET A. CHAN, J.S.C.

FOOTNOTES

1.   The companion case is Missouri Partners Capital LLC v Commissions Import-Export S.A. (Index 659487/2024). Many of the facts in the Missouri case and the case at hand are interrelated.

3.   Unless otherwise stated, all citations are to the record in this case. Citations to records in Missouri will be denoted by "Missouri NYSCEF # —."

4.   Straus integrated all his prior affirmations into his affirmation in support of summary judgment (see Montreux NYSCEF # 57 & Missouri NYSCEF # 93, Straus SJILC Aff, ¶ 3 ["I hereby fully restate and reaffirm the contents of my prior affirmations in Missouri, Dkts. 12, 51, and Montreux, Dkt. 21."]).

5.   Award 9899 was recognized in Commission Import Export, S.A. v The Republic of Congo et al., 17-mc-00175 (SD NY) entered May 26, 2017, registering judgment granted in No. 12-cv-743 (D DC) (NYSCEF # 22 ¶ 5). Award 16257 was recognized in Commissions Import Export S.A. v. Republic of the Congo, Case No. 13-cv-00713-RJL (D.D.C.), Dkt. 18, and Commissions Import Export S.A. v Republic of the Congo, Case No. 14-mc-00187-AJN (SD NY), Dkt. 20 (NYSCEF # 22 ¶ 5).

6.   This document from Missouri was incorporated by reference in Montreux's reply (see NYSCEF # 55 at Table of Abbreviations [referencing and linking the Schlesinger Aff]).

7.   Incorporated by reference in Montreux's reply (see NYSCEF # 55 at Table of Abbreviations [referencing and linking the First Hajaij Aff]).

8.   Sometimes written "Mohsin Hojeij."

9.   The court has been unable to locate a fully executed version of the August 12, 2022 Note on either docket. The versions available are signed only by CMPX (see NYSCEF # 38 at *7).

10.   While not relevant to this action, it is unclear whether Straus remains an owner of Dove. In the companion action, Missouri filed a document showing he transferred 40 shares of Dove stock to Hajaij on May 25, 2024 (Missouri NYSCEF # 58, J30 Transfer Form). However, Straus does not claim that this constituted all his stock in Dove.

11.   See the related case, Missouri Partners Capital, LLC v Commissions Import-Export S.A. (Index 659487/2024) MS002 for a detailed discussion on defendants' defenses.

Margaret A. Chan, J.