- Legal experts say New York court’s demand for additional justification is a routine Rule 48(a) process—not a setback to the US Department of Justice’s bid to withdraw the indictment
- Senior US lawyer says there is virtually no modern precedent for a federal court compelling prosecutors to pursue a case once the executive branch has decided to abandon it
- DoJ has until July 13 to submit a fuller explanation, with legal observers expecting the case to be dismissed within weeks rather than months
- Adani’s legal team argues the transactions fall outside US jurisdiction, citing Supreme Court precedent, absence of investor losses and extensive expert-backed submissions to prosecutors
- Developments mark a potentially decisive phase in one of the most closely watched cross-border corporate legal battles involving an Indian conglomerate
NE LEGAL BUREAU
NEW YORK, JUNE 29
The criminal proceedings against industrialist Gautam Adani in the United States appear to be moving closer to closure, with legal experts describing a New York federal judge’s recent request for additional clarification from prosecutors as a routine procedural step rather than a judicial challenge to the Department of Justice’s decision to withdraw the case.
The assessment comes after US District Judge Nicholas Garaufis, who is overseeing the matter in Brooklyn, directed federal prosecutors to provide a more detailed explanation for their request to dismiss the indictment filed against Adani and others.
According to senior US lawyer Chris Man, the court’s latest order should be viewed strictly within the framework of Rule 48(a) of the Federal Rules of Criminal Procedure, under which prosecutors require the court’s permission before formally withdrawing criminal charges.
“The judge’s order is procedural,” Man observed.
Explaining the legal position, he noted that courts frequently seek additional clarification before approving a prosecutor’s request to dismiss an indictment.
“That, by itself, is not unusual,” he said.
Man emphasised that once the Department of Justice determines that a prosecution should not continue, judicial discretion is extremely limited.
“There is effectively no modern precedent for a judge forcing the Department of Justice to prosecute a case that the executive branch has determined should be abandoned,” he said.
He further pointed out that criminal prosecutions in the United States fall primarily within the executive branch’s constitutional authority, with courts traditionally showing substantial deference to prosecutorial decisions.
Judge Seeks Detailed Explanation
Judge Garaufis observed that the Department of Justice’s brief announcement on May 18, stating it would no longer pursue the securities fraud and wire fraud charges arising from the alleged bribery case, did not adequately explain the reasons behind the decision.
The court has granted the Department of Justice time until July 13 to file a comprehensive explanation supporting its motion to dismiss.
Legal observers, however, believe the request is part of the normal judicial process rather than an indication that the dismissal faces serious obstacles.
“DoJ is likely to do that prior to that deadline, and in my opinion, that case is likely to be dismissed within weeks and not months. The judge can do that even without a hearing,” Man said.
He added that the court was merely building a proper judicial record to ensure the government’s request had been made in good faith and complied with Rule 48(a).
Eric Adams Case Cited as Precedent
Drawing parallels with the recent corruption case involving New York City Mayor Eric Adams, Man noted that the Justice Department had similarly sought dismissal of charges, prompting judicial scrutiny and detailed explanations before the motion was eventually approved.
The Adams case, legal experts say, reaffirmed the principle that while judges may examine the government’s reasoning to prevent abuse of process, they possess only limited authority to override the executive branch’s decision to discontinue a prosecution.
Adani’s Defence Highlights Jurisdictional Questions
In a detailed submission filed before the court on June 24, Adani’s legal team argued that the prosecution suffered from fundamental jurisdictional and evidentiary weaknesses.
The defence contended that the transactions involved non-US issuers and lenders, with all offering documents prepared, reviewed and approved outside the United States under English law, placing the matter beyond the reach of US securities legislation under the US Supreme Court’s landmark Morrison v. National Australia Bank ruling.
The legal team also disputed the bribery allegations, citing expert analysis from a former senior Indian regulatory official who concluded that the alleged payments coincided with documented commercial price reductions offered by Adani Green Energy to Indian state electricity utilities as part of legitimate business negotiations.
Another significant argument advanced by the defence was the absence of investor losses.
According to the submissions, none of the financial transactions cited in the indictment resulted in investor losses. The 2021 bond issue matured with all interest obligations honoured, the 2024 bonds remain fully serviced, the 2021 loan has been repaid in full, and the 2023 loan continues without default.
The defence also revealed that between February and April 2026, it had furnished the Department of Justice with nearly 500 pages of legal submissions, factual material and expert opinions, including a 118-page memorandum supported by reports from a Harvard Law School securities law professor, a former US Securities and Exchange Commission Commissioner, and other experts.
A Closely Watched Global Corporate Case
The latest developments are being closely monitored by global legal and financial circles, as the outcome could have important implications for the application of US securities laws to overseas transactions, prosecutorial discretion, and cross-border corporate enforcement.
While the court’s final decision remains pending, legal experts increasingly believe that the proceedings have entered their concluding phase, with the Department of Justice’s formal explanation expected to determine the timing—rather than the direction—of the case.
