When AIB launched a lawsuit against some of the top names in finance in the Southern District New York State Court on Manhattan's Pearl Street, which hears the biggest cases involving Wall Street firms, the legal bust-up instantly became Ireland's biggest corporate court case.

Seven years later, the lawsuit is still expensively dragging on in claim and counter claim. It has involved the discovery of four million pages of documents, plus sworn statements and depositions expensively taken in jurisdictions around the world from scores of current and former senior employees at AIB, Citigroup and Bank of America. The case has lasted so long that a new high-profile corporate judge – Gabriel Gorenstein – has taken over top billing from the equally prominent Deborah Batts.

In 2003, a year after belatedly detecting the losses of rogue trader John Rusnak in the US, Ireland's biggest bank took on the world's biggest banks, alleging Citi and Bank of America knew all along about the global currency exposures that Rusnak, working out of AIB's Allfirst unit, had foolishly taken on.

AIB claimed the US banks had profitably played along and that $480m of Rusnak's $691m in trading losses could be directly attributed to Citi and Bank of America.

The stakes are certainly high. A posse of lawyers from Manhattan's costliest law firms are working for Citi and Bank of America. They are showing no sign of blinking in the legal stand-off and, moreover, have countersued AIB. This has inevitably involved a bevy of lawyers from third-party plaintiffs, including M&T Bank, in which AIB owns a 22% stake it is in the process of selling. M&T subsumed the scandal-hit Allfirst unit in Baltimore amid the worldwide fall-out from the Rusnak affair.

Apart from the mountain of documents, the legal discovery involves hundreds of depositions and sworn statements from witnesses taken under US oath in numerous jurisdictions from current and former employees of banks around the world. The case, rolling on relentlessly, just keeps getting bigger and bigger. At the best of times, Manhattan corporate legal bust-ups are the most expensive in the world.

But legal tussles involving Wall Street trading goliaths are automatically the most expensive on the planet. The case of AIB vs Citi and Bank of America and the countersuit in the Manhattan court is turning out to be another costly affair for AIB. The final costs can only be guessed at but the bill, which will stretch into many tens of millions of dollars, will, as in many of AIB's other so-called legacy issues, drop into the lap of Irish taxpayers. The Sunday Tribune has exposed the hidden mounting bills that the Irish-supported banks have bequeathed to Irish taxpayers. The Rusnak case in New York is another legacy issue that will likely cost taxpayers dearly.

The scale of the case is revealed in the mountains of documents filed for the first time to Judge Gorenstein's court in recent weeks.

Still under dispute is a handful of over 1,500 special documents Citi and Bank of America lawyers have so far prised from AIB.

The edited documents released so far include AIB emails with the then-senior players at AIB, including numerous notes – edited for attorney-client considerations – written in longhand by former AIB chief executive Michael Buckley.

The documents listed include emails from Colm Doherty, AIB's outgoing managing director and the boss at the time of AIB's capital markets division, numerous other edited documents prepared for AIB reflecting anticipated litigation, and emails from John Rusnak.

The documents also include AIB's so-called crisis management documents: a memo sent in 2003 to AIB's future boss Eugene Sheehy and others regarding directors' insurance in anticipation of litigation; documents sent to Gary Kennedy, the former AIB finance director and newly appointed non-executive director at Anglo Irish Bank, and to others in 2004 regarding an IRS investigation of Allfirst's indemnity liability; advice prepared by AIB for then chairman Lochlann Quinn, the Central Bank, and others showing the state of investigations in April 2002; and documents drawn up for the board members of AIB and its Allfirst unit by AIB Group lawyers in 2002. In this section alone, 1,533 items of correspondence, including edited emails, notes and letters are listed.

Citi now wants AIB to release a handful of the remaining disputed documents. Already this year, the New York lawyers have sparred in expensive legal argument about releasing the final small bundle of documents. Citi has four leading counsel from Cleary Gottlieb Steen and Hamilton, the international law firm giant, on the AIB case.

On its website, Cleary says it was involved in four of the largest corporate global deals in the past year, including advising the Brazilian oil giant Petrobas in its $67bn share issue and representing mining behemoth BHP Billiton in its $40bn offer to acquire Potash. Big legal hitters do not come heavier than this.

The court documents also include a letter from AIB lawyers Cooley Godward Kronish, written in May this year, detailing document-by-document the correspondence that remains in dispute. Cooley's client eBay was successful earlier this year in its legal fight over its shareholding in Craigslist in the US.

The Citi lawyers have long claimed that AIB has failed to rebut arguments as to why it should not hand over the last few documents. They have already gained access to almost all the documents gathered for the Ludwig Report, which AIB commissioned in 2002 into the Rusnak trading scandal.

They successfully argued that Eugene Ludwig and his firm Promontory Financial Group were not law firms and therefore were not subject to the protection of normal client confidentiality. When AIB instructed law firm Watchell Lipton Rosen and Katz to investigate and share its investigations with Ludwig and Promontory in 2002, AIB surrendered the client-lawyer confidentiality principle, it was argued.

"Finally," Citi lawyers had in the past argued according to the splurge of documents filed to the court in recent weeks, "the defendants' (Citi and Bank of America) requests for documents relating to deficiencies in AIB's internal controls during the relevant period, AIB simply mischaracterises what has been requested and why it is necessary."

It is clear that the legal battle in Manhattan over Rusnak's losses is already costing AIB, the now nationalised bank, a lot of money.