Cargill Financial Services International, Inc. v. Bank Finance & Credit Ltd.

Appellate Division of the Supreme Court of New York

Cargill Financial Services International, Inc. v. Bank Finance & Credit Ltd.

70 A.D.3d 456, 896 N.Y.S.2d 317

CourtAppellate Division of the Supreme Court of the State of New York

DecidedFebruary 11, 2010

StatusPublished

Cited by2 cases

This text of 70 A.D.3d 456 (Cargill Financial Services International, Inc. v. Bank Finance & Credit Ltd.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Cargill Financial Services International, Inc. v. Bank Finance & Credit Ltd., 70 A.D.3d 456, 896 N.Y.S.2d 317 (N.Y. Ct. App. 2010).

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Opinion

Three orders, Supreme Court, New York County (Charles E. Ramos, J.), entered July 7, 2009, which, as corrected and memorialized in an order entered August 5, 2009, denied plaintiffs application for an order of attachment of all funds contained in defendant’s correspondent accounts located in New York and vacated a temporary restraining order previously granted by the court, unanimously affirmed, with costs. The June 18, 2009 temporary restraining order, which was extended by order of this Court entered September 8, 2009, is vacated.

Contrary to the motion court’s conclusion, plaintiffs evidence established a basis for quasi in rem jurisdiction, in that defendant, a Ukranian bank, utilized its New York correspondent accounts to receive funds and make interest payments pursuant to the terms of the parties’ loan agreements and associated letters of credit (see generally Banco Ambrosiano v Artoc Bank & Trust, 62 NY2d 65 [1984]). Even if plaintiff established a statutory basis for attachment of the accounts, given the nature of correspondent banking and its importance in international transactions, the court did not abuse its discretion by denying plaintiffs broad request to restrain all funds in the accounts. The evidence showed that a substantial part of the funds therein was held for the benefit of third-party clients of defendant who used the accounts to transact foreign business in U.S. currency. Thus, the wholesale attachment of all funds in the accounts would have interfered with innocent third parties’ access to their money. As such, it was within the court’s discretion to deny plaintiffs attachment application (see Morgenthau v Avion Resources Ltd., 49 AD3d 50 [2007], mod on other grounds 11 NY3d 383 [2008]; J.V.W. Inv. Ltd. v Kelleher, 41 AD3d 233 [2007]). Concur—Mazzarelli, J.E, Andrias, Moskowitz, Renwick and Richter, JJ.

The decision and order of this Court entered herein on October 27, 2009 (66 AD3d 589 [2009]) is hereby recalled and [457]*457vacated (see 2010 NY Slip Op 63106[U] [decided simultaneously herewith]).

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Three orders, Supreme Court, New York County (Charles E. Ramos, J.), entered July 7, 2009, which, as corrected and memorialized in an order entered August 5, 2009, denied plaintiffs application for an order of attachment of all funds contained in defendant’s correspondent accounts located in New York and vacated a temporary restraining order previously granted by the court, unanimously affirmed, with costs. The June 18, 2009 temporary restraining order, which was extended by order of this Court entered September 8, 2009, is vacated.

Contrary to the motion court’s conclusion, plaintiffs evidence established a basis for quasi in rem jurisdiction, in that defendant, a Ukranian bank, utilized its New York correspondent accounts to receive funds and make interest payments pursuant to the terms of the parties’ loan agreements and associated letters of credit (see generally Banco Ambrosiano v Artoc Bank & Trust, 62 NY2d 65 [1984]). Even if plaintiff established a statutory basis for attachment of the accounts, given the nature of correspondent banking and its importance in international transactions, the court did not abuse its discretion by denying plaintiffs broad request to restrain all funds in the accounts. The evidence showed that a substantial part of the funds therein was held for the benefit of third-party clients of defendant who used the accounts to transact foreign business in U.S. currency. Thus, the wholesale attachment of all funds in the accounts would have interfered with innocent third parties’ access to their money. As such, it was within the court’s discretion to deny plaintiffs attachment application (see Morgenthau v Avion Resources Ltd., 49 AD3d 50 [2007], mod on other grounds 11 NY3d 383 [2008]; J.V.W. Inv. Ltd. v Kelleher, 41 AD3d 233 [2007]). Concur—Mazzarelli, J.E, Andrias, Moskowitz, Renwick and Richter, JJ.

The decision and order of this Court entered herein on October 27, 2009 (66 AD3d 589 [2009]) is hereby recalled and [457]*457vacated (see 2010 NY Slip Op 63106[U] [decided simultaneously herewith]).

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70 A.D.3d 456, 896 N.Y.S.2d 317, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cargill-financial-services-international-inc-v-bank-finance-credit-nyappdiv-2010.

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