Khobragade, 39, was arrested on December 12 on visa fraud charges, strip-searched and held with criminals, triggering a row between the two countries with India retaliating by downgrading privileges of certain category of US diplomats among other steps.
Khobragade was indicted on visa fraud and making false statements by a US grand jury. She returned to India after she was asked to leave the US by the State Department.
Arshack said the "pertinent" facts in the case are that Khobragade was given full diplomatic status by the Department of State at 5:47 pm (local time) on January 8 when it approved her appointment as Counsellor to the Permanent Mission of India to the UN.
The grand jury returned the indictment on January 9 "after she was already cloaked with diplomatic immunity".
"It is acknowledged that the prosecution is not forever precluded from prosecuting the defendant. Our application is only that this proceeding must be dismissed. The prosecution is clearly legally able to seek a new indictment at this time or at some point in the future now that Khobragade no longer possesses such diplomatic status and immunity, but it may not proceed further with this case," Arshack said.
He said in accordance with the Vienna Convention on Diplomatic Relations, the case should have been dismissed on January 9, because Khobragade did not become a "former" diplomat until later that evening when she left the country.
"The proceeding must be dismissed for lack of jurisdiction because at the time the indictment was issued, the US did not have criminal jurisdiction over Khobragade," he said.
Arshack rebutted Bharara's allegation that Khobragade had employed her domestic worker in her personal capacity and not as India's Deputy Consul General in New York, which made her not immune to criminal prosecution.
"The prosecution goes to great lengths in its opposition to make inapposite distinctions between the immunity conferred upon consular officials versus diplomats under the respective Vienna Conventions as the ostensible basis to deny the requested relief. Such distinctions are a clear effort to obfuscate, are irrelevant and do not assist the Court in resolving this matter," Arshack argued.
