Judge dismisses Saudi Arabia’s claim of sovereign immunity for PIF

A U.S. District Court judge has ruled in favor of the PGA Tour in a discovery dispute and dismissed the Public Investment Fund of Saudi Arabia’s claims of foreign sovereign immunity and lack of personal jurisdiction.

The dispute was born from the antitrust lawsuit that was filed against the Tour last August by a group of players who had been suspended by the circuit for participating in LIV Golf events. The Tour responded with a counterclaim that LIV Golf interfered with the circuit’s existing contracts with players who joined the breakaway league and subpoenaed the PIF and its governor, Yasir Al-Rumayyan, for information related to the creation of the new league and the recruitment of players.

The heavily redacted 58-page ruling by Judge Susan van Keulen rejected PIF’s claims of sovereign immunity because “it finds that PIF’s conduct falls within the commercial activity exception …” The judge also rejected Al-Rumayyan’s claim of immunity of common law standards and various other legal challenges.

PIF had argued at a Jan. 13 hearing that the fund was nothing more than an “investor” in LIV Golf, albeit with 93% ownership of the new league and “at least $2 billion [in investments] to date,” according to court documents, but the Tour challenged that claiming that the “Shareholders’ Agreement” between the fund and LIV Golf outlined the depth of PIF’s control and the court agreed.

“It is plain that PIF is not a mere investor in LIV; it is the moving force behind the founding, funding, oversight and operation of LIV,” Van Keulen wrote in her ruling.

Under the order, PIF must submit to 25 categories of document discovery and also allow Al-Rumayyan and other fund employees to be deposed either in New York City or Saudi Arabia.

Attorneys for PIF warned the court during the Jan. 13 hearing that a ruling against the fund, which is heavily invested in many companies in the United States, could be “profound” and of “tension being created as a result with respect to future investments.”

“The information sought by the subpoenas has not been shown to involve matters of national security or other information the disclosure of which would adversely affect Saudi Arabia,” Van Keulen wrote. “On the other side of the scale, the United States has an interest in ‘vindicating the rights of American [parties].”