AL KHAYAL AL DHAHABI JEWELRY, LLC VS. KAVVERI TELECOMPRODUCTS LIMITED(L-6202-13, MIDDLESEX COUNTY AND STATEWIDE)

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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0876-15T3
AL KHAYAL AL DHAHABI
JEWELRY, LLC,
Plaintiff-Appellant,
v.
KAVVERI TELECOM PRODUCTS
LIMITED; QUALITY COMMUNICATIONS
SYSTEMS, INC. d/b/a KAVVERI
TECHNOLOGIES AMERICAS; C.
SHIVAKUMAR REDDY,
Defendants-Respondents,
and
NEW ENGLAND COMMUNICATIONS,
INC. d/b/a KAVVERI TECHNOLOGIES
AMERICAS; RH KASTURI; CHENNAREDDY
UMA REDDY,
Defendants.
___________________________________
Telephonically argued May 1, 2017 –
Decided June 1, 2017
Before Judges Lihotz, Hoffman and O'Connor.
On appeal from Superior Court of New Jersey,
Law Division, Middlesex County, Docket No. L-
6206-13.
Michael S. Horn argued the cause for
appellants (Archer & Greiner, P.C., attorneys;
Mr. Horn and Patrick Papalia, on the briefs).
Philip J. Cohen argued the cause for
respondents (Kamensky, Cohen & Riechelson,
attorneys; Mr. Cohen, on the brief).
PER CURIAM
Plaintiff Al Khayal Al Dhahabi Jewelry, LLC, a corporation
organized and operating in Dubai, United Arab Emirates, appeals
from a series of orders, which ultimately resulted in the dismissal
without prejudice of its complaint. Defendants, Kavveri Telecom
Products Ltd., Kavveri Technologies Americas, and Quality
Communications Systems, Inc., d/b/a Kavveri Technologies Americas,
are related corporate entities. The parent company Kavveri Telecom
Products, Ltd., which is organized and based in Bangalore, India,
allegedly guaranteed payment of a $3.1 million loan transferred
in July 2012 by plaintiff to Kavveri Technologies Americas, a
Delaware corporation, to purchase business assets in New Jersey,
which became defendant Quality Communications Systems, Inc. The
loan was to be secured by defendants' pledge of 50% of the
outstanding stock of Kavveri Technologies Americas and personally
guaranteed by defendants' corporate directors, C. Shivakumar
Reddy, R.H. Kasturi, and Chennareddy Uma Reddy. Defendants raise
various defenses, including denying that the money purportedly
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loaned by plaintiff was received by Quality Communications
Systems, Inc.
The complicated transaction is unaccompanied by documents
typical to commercial loans. Email correspondence in the record
suggests the money transfer was pursuant to "hawala."
The hawala system is widely used in Middle
Eastern and South Asian countries, and is
primarily used to make international fund[]
transfers. Though there are many forms of
hawala, in the paradigmatic hawala system,
funds are transferred from one country to
another through a network of hawala brokers
(i.e., "hawaladars"), with one hawaladar
located in the transferor's country and one
in the transferee's country. In this form, a
hawala works as follows: If Person A in
Country A wants to send $1,000 to Person B in
Country B, Person A contacts Hawaladar A in
Country A and pays him $1,000. Hawaladar A
then contacts Hawaladar B in Country B and
asks Hawaladar B to pay $1,000 in Country B
currency, minus any fees, to Person B. The
effect of this transaction is that Person A
has remitted $1,000 (minus any fees) to Person
B, although no money has actually crossed the
border between Country A and Country B.
Eventually, Hawaladar B may need to send money
to Country A on behalf of a customer in Country
B; he will then contact Hawaladar A, with whom
he now has a credit due to the previous
transaction. Hawaladar A will remit the money
in Country A to the designated person there,
thus clearing the debt between the two
hawaladars. Typically, Hawaladar A and
Hawaladar B would engage in many parallel
transactions moving in both directions. A
number of transactions might be required
before the books are balanced between the two
hawaladars. If after some period of time
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their ledgers remain imbalanced, the
hawaladars may "settle" via wire transfer or
another, more formal method of money
transmission. The hawala system operates in
large part on trust, since, as in the example
above, a hawaladar will remit money well
before he receives full payment, and he does
so without the benefit of a more formal legal
structure to protect his investment.
[U.S. v. Banki, 685 F.3d 99, 103 (2d. Cir.
2012).]
Plaintiff filed its complaint in the Law Division alleging
numerous causes of action related to the failure to repay the
alleged debt. After extensive motion practice not directed to
plaintiff's substantive causes of action, defendants moved for
summary judgment dismissal, arguing plaintiff lacked standing to
sue in New Jersey because it did not have a certificate of
authority, under N.J.S.A. 14A:13-11. The trial judge agreed and
dismissed the complaint without prejudice. Thereafter, plaintiff
obtained a certificate of authority on September 8, 2015.
Plaintiff moved for reconsideration of the August 28, 2015 order,
and sought to reinstate its complaint. The trial court denied the
motion suggesting a new complaint must be filed. Plaintiff
appealed.
On December 16, 2015, the trial judge issued an amplification
of his opinion, which denied plaintiff's motion to reinstate the
complaint without prejudice. Before this court, plaintiff
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argues the trial judge erred in denying summary judgment to
plaintiff and in dismissing the complaint without prejudice. It
also maintains the order denying plaintiff's motion to restore its
pleadings once a certificate of authority was issued was an abuse
of discretion. In the notice of appeal, plaintiff includes
additional challenges, which also attack interlocutory orders.
During oral argument, we were informed plaintiff filed a
second action and trial in that matter was scheduled. Plaintiff
acknowledged the trial judge had not considered the effect, if
any, of the timing of the new action. Moreover, the record is
silent on this issue.
In light of these facts, we conclude this matter is
interlocutory and must be dismissed. See, e.g., Ruscki v. City
of Bayonne, 356 N.J. Super. 166, 168-69 (App. Div. 2002)
(dismissing as interlocutory a matter dismissed without
prejudice); Richard A. Pulaski Constr. Co. v. Air Frame Hangars,
Inc., 195 N.J. 457, 462 n.5 (2008) (observing, generally, a
dismissal without prejudice is not appealable of right).
Certainly, a denial of summary judgment is interlocutory, and
not appealable of right. A denial of summary judgment "decides
nothing and merely reserves the issue for future disposition."
Gonzales v. Ideal Tile Importing Co., Inc., 371 N.J. Super. 349,
356 (App. Div. 2004). Second, we understand plaintiff maintains
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it may suffer prejudice because of the prior dismissal, cf. Scalza
v. Shop Rite Supermarkets, Inc., 304 N.J. Super. 636, 639 (App.
Div. 1997) (noting a dismissal without prejudice may be appealable
of right if the statute of limitations bars a subsequent action);
however, the question of whether actual prejudice arises was
neither presented to the trial judge nor argued on appeal.
Accordingly, we decline to consider the matter at this stage,
noting trial is imminent.
Appeal dismissed.
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