MEMORANDUM OPINION AND ORDER

RICHARD CASEY, District Judge

Hyundai Corporation and Hyundai Engineering Construction Co., Ltd. (collectively, "Hyundai" or "Plaintiff's") commenced this action against the Republic of Iraq, Electrical Projects Company, and the Central Bank of Iraq (collectively, "Defendants") for breach of contract four years ago in the Supreme Court of the State of New York. Following Defendants' removal to this court, Plaintiff's filed a motion to remand the case to state court. For the reasons set forth below, Plaintiff's' motion is GRANTED.

I. Background

This action arises out of various agreements between Plaintiff's and Defendants. The Central Bank of Iraq ("CBI") is the central banking authority of defendant Republic of Iraq, and is wholly owned by it. Defendant Electrical Projects Company is a department of the government of Iraq. The Republic of Iraq and the Electrical Projects Company will be referred to collectively as Iraq.

In 1984, Hyundai and Iraq entered into the Almus Credit Agreement, whereby Hyundai would loan Iraq up to $109,921,000 to purchase from Hyundai materials needed to build a power station. The Almus Agreement provided that each time a loan was made, Iraq would execute a promissory note in the amount of the loan, and CBI would guarantee to pay under the note, if Iraq defaulted. Under the Almus Agreement and the guarantees issued by CBI, Defendants consented to the jurisdiction of any court in the state of New York, agreed to be governed by New York law, and waived sovereign immunity. See Decision of Judge Ramos, Elliot Aff., Ex. B ("Ramos Decision").

In December of 1997, Hyundai filed suit in the New York State Supreme Court to enforce the credit agreement, the promissory notes, and the letters of guarantee. As a result of ongoing settlement negotiations, Plaintiff's granted CBI several extensions of time to answer or otherwise move against the complaint. CBI failed to answer, and the final time extension expired on December 20, 1998. On August 27, 1999, Plaintiff's moved for default judgment against CBI, and on December 31, 1999, the state court awarded Plaintiff's $66,254,966.95, plus interest. See id.

On January 9, 2001, CBI moved to vacate the default judgment and dismiss the case as barred by the statute of limitations. On November 26, 2002, CBI's motions were denied. On or about January 28, 2002, CBI filed a motion with the state court to renew and to reargue the motion to vacate the default judgment, on the basis that: (1) the court failed to correctly apply the default provisions of the Foreign Sovereign Immunities Act and federal law governing the entry and vacatur of default judgments against sovereign parties, and (2) Plaintiff's failed to establish their claim by evidence satisfactory to the court. Additionally, CBI appealed the denial of the motion to vacate. The appeal and the motion to reargue and renew remain pending in state court. See Elliott Aff. ¶¶ 8-10.

II. Discussion

Removal of a case to federal court is governed by 28 U.S.C. § 1446(b), which provides that a "notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based . . ." Where the defendant is a foreign state, the Foreign Sovereign Immunities Act ("FSIA") provides that the time limitations for removal "may be enlarged at any time for cause shown." 28 U.S.C. § 1441(d).

CBI has clearly removed this case in violation of the thirty day deadline. Plaintiff's filed this action in state court on December 2, 1997 and CBI received the complaint in April 1998. CBI did not file for removal until September 2002; therefore, it must show cause for a delay of four and one-half years.

The factors to be considered in determining whether cause exists to justify an enlargement of the removal deadline under Section 1441(d) include the purpose of the FSIA; the extent of prior activity in the state system; the prejudice to both parties; the effect on the substantive rights of the parties; and any intervening equities. See Steadman v. Sinclair, 1996 WL 257664, at *3 (S.D.N. Y. May 16, 1996). Where, as here, there is a lengthy delay in removing a case, the defendant must demonstrate the "outermost limits of good cause." Refco v. Galadari, 755 F. Supp. 79, 83 (quoting Alvarez v. Nat'l Shipping Corp. 1980 U.S. Dist. LEXIS 9421 (S.D.N.Y. Oct. 2, 1980)).

CBI claims that its delay in filing for removal is due to a deterioration of foreign relations between the Republic of Iraq and the United States. CBI contends that the September 11, 2001 terrorist attacks on the World Trade Center, together with subsequent allegations that the Iraqi government was involved in the attacks, constitute intervening events justifying CBI's delay in filing for removal. According to CBI, it will suffer bias in New York state courts due to the alleged connection between the Republic of Iraq and the terrorist attacks in New York City and that these circumstances constitute "cause" under section 1441(d).

The general purposes of section 1441(d) are to channel claims against foreign states to federal court and to allow for a uniform body of law concerning foreign states to emerge in the federal courts. See Steadman, 1996 WL 257664, at *3; Refco, 755 F. Supp. at 83 (S.D.N.Y. 1991). This Court has held, however, that the desire to provide a federal forum to foreign states does not alone constitute cause warranting enlargement of the time for removal. See Steadman, 1996 WL 257664, at *3. Such a rule would entitle all foreign state defendants to an enlargement of time, regardless of the reason for the delay in filing a notice of removal. See id.

The extent of prior state court proceedings weighs heavily in a determination of whether a delay in removal is justified. CBI removed this case after extensive proceedings in state court. The state court entered a default judgment against CBI in the amount of approximately $66 million on December 13, 1999. See Ramos Decision. On or about January 9, 2001, CBI filed a motion to vacate the judgment and dismiss the case, which the state court denied on November 26, 2001. See Notice of Motion to Vacate, Elliot Aff. Ex. A; Ramos Decision. CBI appealed the denial of its motion for vacatur on January 8, 2002 and also filed a motion to reargue and renew the motion with the trial court. See Notice of Motion to Reargue, Elliott Aff. Ex. C. The motion to reargue and renew was fully briefed and argued before the New York State Supreme Court on June 7, 2002. See Elliott Aff. ¶ 7. The appeal and the motion to reargue and renew remain pending in state court. See Elliott Aff. ¶¶ 8-10.

The Court finds that CBFs reliance on the events of September 11, 2001 and subsequent events do not justify a delay of four and one-half years. Although the political relationship between the United States and the Republic of Iraq has indeed declined since the commencement of this action in 1997, relations between the United States and Iraq have been hostile for more than a decade. The United States waged a war against Iraq in 1991, and the two countries have had no diplomatic relations since that time. CBI's claim that recent circumstances will result in newly-developed prejudice therefore rings hallow.

Perhaps most importantly, the circumstances in this case indicate an attempt by CBI to evade a default judgment in state court. After entry of the default judgment, CBI continued to proceed in state court, moving for vacatur of the judgment against it. After the motion to vacate was denied, CBI proceeded to appeal the denial to the state Appellate Division and simultaneously moved to reargue and renew the motion for vacatur in the state Supreme Court. The motion to reargue and renew was fully briefed and argued before the New York State Supreme Court on June 7, 2002. See Elliott Aff. ¶ 7. Having taken their chances in state court, CBI cannot now remove the case because it would be advantageous to do so. See Boskoff v. Boeing Co., 1984 WL 1066, at *3-4 (S.D.N.Y. Oct. 19, 1984). Such forum shopping would prejudice Plaintiff's by providing CBI a "second bite at the apple." Boland v. Bank Sepah-Iran, 614 F. Supp. 1166, 1170 n. 5 (S.D.N.Y. 1985).

A. Conclusion

For the foregoing reasons, Plaintiff's' motion is GRANTED, and this case is remanded to state court. The Clerk of the Court is directed to close the file and remove the case from the active docket.