New York Law Review

Tag: Artoc Bank

  • Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Ltd., 62 N.Y.2d 65 (1984): Quasi-in-Rem Jurisdiction and Minimum Contacts

    Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Ltd., 62 N.Y.2d 65 (1984)

    Quasi-in-rem jurisdiction over a non-domiciliary defendant is permissible in New York when the defendant has minimum contacts with the state, and the cause of action is related to property located within the state, even if CPLR 302 does not authorize in personam jurisdiction.

    Summary

    Banco Ambrosiano, an Italian bank, sued Artoc Bank, a Bahamian bank, in New York to recover $15 million allegedly loaned to Artoc. Ambrosiano attached Artoc’s New York bank account. The New York Court of Appeals held that quasi-in-rem jurisdiction was proper because Artoc had sufficient minimum contacts with New York through its regular use of a New York bank account to effectuate international transactions, and because the lawsuit arose directly from transactions involving that account. The court emphasized that while CPLR 302 may not always provide for in personam jurisdiction to the full extent permitted by due process, quasi-in-rem jurisdiction could fill this gap when minimum contacts are present.

    Facts

    Banco Ambrosiano (Ambrosiano), an Italian bank, loaned $15 million to Artoc Bank & Trust Limited (Artoc), a Bahamian bank. The loan consisted of three $5 million transactions. Artoc directed Ambrosiano to deposit the funds into Artoc’s account at Brown Brothers Harriman in New York. Repayment, according to Artoc’s documentation, was to be made to Ambrosiano’s account at its New York correspondent bank. Artoc argued the loans were intended for Ambrosiano’s Peruvian subsidiary, and repayment was contingent on the subsidiary’s repayment to Artoc. Artoc’s only contact with New York was its maintenance of the correspondent bank account at Brown Brothers.

    Procedural History

    Ambrosiano commenced the action by obtaining an ex parte order restraining Brown Brothers from transferring funds in Artoc’s account. Ambrosiano moved to confirm the attachment; Artoc challenged the jurisdiction. Special Term granted Ambrosiano’s motion, finding a reasonable relationship between the property and the cause of action, sufficient for quasi-in-rem jurisdiction. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the exercise of quasi-in-rem jurisdiction over Artoc’s New York bank account is consistent with due process, given that Artoc’s sole contact with New York is the maintenance of this account and the loan transactions involved deposits into and repayments to accounts within the state.

    Holding

    Yes, because Artoc’s New York bank account was closely related to Ambrosiano’s claim, Artoc regularly used the account for international banking, and Artoc directed funds to be deposited into and repaid to New York accounts, thus establishing sufficient minimum contacts with New York to satisfy due process for quasi-in-rem jurisdiction.

    Court’s Reasoning

    The Court of Appeals analyzed the impact of Shaffer v. Heitner, which extended the minimum contacts analysis of International Shoe to quasi-in-rem jurisdiction. The court acknowledged that Shaffer limited the use of quasi-in-rem jurisdiction. However, it emphasized that a “gap” exists in New York law because CPLR 302 doesn’t extend in personam jurisdiction to the constitutional limit. The court stated that in such cases, quasi-in-rem jurisdiction is appropriate. The court found that Artoc’s contact with New York was not merely the presence of property. “This is not a case in which property is coincidentally located within the State’s borders and forms the only relevant link to defendant; rather, Artoc’s account with Brown Brothers is closely related to plaintiff’s claim.” The court also pointed out Artoc’s regular use of the account for international banking and the fact that Artoc directed funds to be deposited and repaid through New York accounts. These factors, taken together, establish sufficient minimum contacts to satisfy due process. The court further held that the lower courts did not abuse their discretion in refusing to dismiss the action on the grounds of forum non conveniens and that Ambrosiano, as a foreign banking corporation, could maintain the action under Banking Law § 200-b (subd 2, par [a]).

  • Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Ltd., 33 N.Y.2d 524 (1973): Forum Non Conveniens and Prior Use of New York Courts

    Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Ltd., 33 N.Y.2d 524 (1973)

    The doctrine of forum non conveniens permits a court to dismiss a case where, although jurisdiction is proper, the court determines that the matter would be better adjudicated in another forum considering the interests of justice and the convenience of the parties; a party’s prior use of New York courts is a factor to consider, but not controlling.

    Summary

    Banco Ambrosiano, an Italian bank, sued Artoc Bank, a Swiss corporation, in New York regarding a dispute over bills of exchange. Artoc Bank moved to dismiss based on forum non conveniens, arguing Switzerland was a more appropriate forum. The lower court denied the motion, but the Appellate Division reversed. The New York Court of Appeals affirmed the Appellate Division’s decision, holding that while Artoc’s prior attempt to sue Banco Ambrosiano in New York was a factor to consider, it was not determinative. The court emphasized the Swiss connections to the underlying agreement, the location of witnesses and documents, and a forum selection clause favoring Swiss courts, making New York an inconvenient forum.

    Facts

    Banco Ambrosiano, an Italian bank, and Artoc Bank, a Swiss corporation, entered into an agreement in 1971. The agreement was designed to recapitalize Artoc Bank, which was experiencing financial difficulties. Banco Ambrosiano agreed to take a minority stock position in Artoc, take over Artoc’s stock in two Spanish subsidiaries, and draw five bills of exchange against itself to Artoc’s order. When Banco Ambrosiano refused to pay the first bill of exchange, Artoc Bank initiated a motion for summary judgment in lieu of complaint in New York. Banco Ambrosiano opposed, claiming defenses and counterclaims arising from breaches of the 1971 agreement. The lower court denied Artoc’s motion and directed it to serve a formal complaint. Instead, Artoc attempted to discontinue the action. Banco Ambrosiano then commenced this action, leading to Artoc’s motion to dismiss based on forum non conveniens.

    Procedural History

    Artoc Bank initially moved for summary judgment in lieu of complaint in New York, which was denied. Subsequently, Banco Ambrosiano initiated this action. Artoc moved to dismiss based on lack of jurisdiction and forum non conveniens. Special Term (trial court) denied the motion. The Appellate Division reversed, granting the motion to dismiss based on forum non conveniens. Banco Ambrosiano appealed to the New York Court of Appeals.

    Issue(s)

    Whether the Appellate Division abused its discretion by dismissing the action on the ground of forum non conveniens, considering that Artoc Bank had previously sought relief in New York courts for the same underlying claim.

    Holding

    No, the Appellate Division did not abuse its discretion because while Artoc Bank’s prior use of New York courts is a factor to consider in a forum non conveniens analysis, it is not controlling; the overall focus must be whether New York is an inconvenient forum and whether another forum is available that better serves the ends of justice and the convenience of the parties.

    Court’s Reasoning

    The Court of Appeals acknowledged that the Appellate Division has broad discretion in forum non conveniens determinations, and the Court of Appeals will only interfere if there’s an abuse of discretion or failure to consider all relevant factors. The court stated that the fact that Artoc Bank initially chose New York courts to pursue a claim was a factor to be considered, but not the only one. The court emphasized that the “court’s overall focus must relate to the question of whether New York is an inconvenient forum and whether another is available ‘which will best serve the ends of justice and the convenience of the parties.’” (Silver v Great Amer. Ins. Co., 29 NY2d 356, 361, supra.) The Appellate Division properly considered the following factors: Banco Ambrosiano dealt extensively with foreign corporations in Europe, while Artoc Bank did no business in the United States; the 1971 agreement was negotiated and executed in Switzerland; one party to the agreement was not subject to jurisdiction in New York; the agreement provided for Swiss jurisdiction; performance occurred in Europe and North Africa; and the trial and discovery would primarily involve European witnesses and documents located in Switzerland. The court concluded that, given these factors, the Appellate Division did not abuse its discretion in determining that New York was an inconvenient forum. In sum, the court reinforced that forum non conveniens requires a holistic analysis weighing multiple factors related to convenience and the interests of justice, even when a party previously invoked the jurisdiction of the forum court.