Justia Banking Opinion Summaries

The government seeks the forfeiture of a trust established by Pavel Lazarenko, a former Prime Minister of Ukraine, located abroad on the island of Guernsey. Since 2004, a Guernsey court order has prohibited Lazarenko from accessing the trust, and a federal district court order has prohibited him from challenging the Guernsey order abroad. Lazarenko contends that the district court lacked statutory authority to issue the latter order and that, in any event, the order violated principles of international comity.   The DC Circuit rejected both challenges on procedural grounds. The daughters claim an interest in being able to litigate in Guernsey themselves, which might be impaired by a decision in favor of the government in this appeal. But Lazarenko himself adequately represents that interest. A would-be intervenor is adequately represented when she “offer[s] no argument not also pressed by” an existing party. Here, the daughters seek to raise precisely the same arguments as their father. Moreover, the daughters have revealed by their conduct that they find his representation adequate. In their cross-motion below, they adopted his arguments wholesale. And in this appeal, they declined the court’s invitation to appear at oral argument. The court, therefore, denied the daughters’ motion to intervene.   Further, the court wrote that Lazarenko could have pressed his current objections more than a decade and a half ago, and excusing his delay would risk wasting the considerable time and resources that the parties have invested in the district court proceedings. Under these circumstances, the district court reasonably denied his motion to modify the restraining order. View "USA v. All Assets Held at Credit Suisse" on Justia Law

Plaintiff Bainbridge Fund Ltd. is the beneficial owner of bonds issued by the Republic of Argentina. Argentina defaulted on these bonds back in 2001, but Bainbridge didn’t sue to recover them until 2016. The district court dismissed Bainbridge’s claims as untimely under New York’s six-year statute of limitations for contract actions and the Second Circuit’s nonprecedential decisions. Bainbridge appealed, asking the Second Circuit to reconsider those decisions. Specifically, Bainbridge argues that (1) the twenty-year statute of limitations for recovery on certain bonds under N.Y. C.P.L.R. 34 Section 211(a) applies to its claims against Argentina; and (2) even if the six-year limitations period for contract actions applies, it was tolled under N.Y. Gen. Oblig Law Section 17-101 because Argentina “acknowledged” this debt when it publicly listed the bonds in its quarterly financial statements (the “Quarterly Reports”).   The Second Circuit rejected Plaintiff’s arguments. First, the twenty-year statute of limitations does not apply to claims on Argentine bonds because a foreign sovereign is not a “person” under N.Y. C.P.L.R. Section 211(a). Second, tolling under N.Y. Gen. Oblig. Law Section 17-101 is inapplicable because the Quarterly Reports did not “acknowledge” the debt at issue in a way that reflected an intention to pay or seek to influence the bondholders’ behavior. To the contrary, Argentina repeatedly stated that the bonds “may remain in default indefinitely.” Bainbridge’s claims are thus time-barred. View "Bainbridge Fund Ltd. v. The Republic of Argentina" on Justia Law

Halkbank, a commercial bank that is majority-owned by the Government of Turkey, was charged with crimes related to its participation in a multi-year scheme to launder billions of dollars' worth of Iranian oil and natural gas proceeds in violation of U.S. sanctions against the Government of Iran and Iranian entities and persons. Halkbank moved to dismiss the indictment but the district court denied the motionThe Second Circuit held that it has jurisdiction over the instant appeal under the collateral order doctrine. The court also held that, even assuming the Foreign Sovereign Immunities Act (FSIA) applies in criminal cases—an issue that the court need not, and did not, decide today—the commercial activity exception to FSIA would nevertheless apply to Halkbank's charged offense conduct. Therefore, the district court did not err in denying Halkbank’s motion to dismiss the Indictment. The court further concluded that Halkbank, an instrumentality of a foreign sovereign, is not entitled to immunity from criminal prosecution at common law. View "United States v. Bankasi" on Justia Law

In 2013, Nike and its subsidiary, Converse, brought a trademark infringement action under the Lanham Act against hundreds of participants in Chinese counterfeiting networks. The district court entered five prejudgment orders, a default judgment, and one postjudgment order against defendants, who never appeared in court. Each order enjoined defendants and all persons acting in concert or in participation with any of them from transferring, withdrawing or disposing of any money or other assets into or out of defendants' accounts regardless of whether such money or assets are held in the U.S. or abroad. In 2019, Nike's successor-in-interest, Next, moved to hold appellees—six nonparty Chinese banks—in contempt for failure to implement the asset restraints and for failure to produce certain documents sought in discovery.The Second Circuit affirmed the district court's judgment, holding that the district court did not abuse its discretion in denying Next's motion for contempt sanctions against the Banks because (1) until the contempt motion, Nike and Next never sought to enforce the asset restraints against the Banks; (2) there is a fair ground of doubt as to whether, in light of New York's separate entity rule and principles of international comity, the orders could reach assets held at foreign bank branches; (3) there is a fair ground of doubt as to whether the Banks' activities amounted to "active concert or participation" in defendants' violation of the asset restraints that could be enjoined under Federal Rule of Civil Procedure 65(d); and (4) Next failed to provide clear and convincing proof of a discovery violation. View "Next Investments, LLC v. Bank of China" on Justia Law

The Second Circuit affirmed the district court's dismissal of the operative amended complaints in two actions seeking to hold defendant bank liable under the Antiterrorism Act of 1990 (ATA), for providing banking services to a charitable organization with alleged ties to Hamas, a designated Foreign Terrorist Organization (FTO) alleged to have committed a series of terrorist attacks in Israel in 2001-2004. The actions also seek to deny leave to amend the complaints to allege aiding-and-abetting claims under the Justice Against Sponsors of Terrorism Act (JASTA).The court concluded that 18 U.S.C. 2333(a) principles announced in Linde v. Arab Bank, PLC, 882 F.3d 314 (2d Cir. 2018), were properly applied here. The court explained that, in order to establish NatWest's liability under the ATA as a principal, plaintiffs were required to present evidence sufficient to support all of section 2331(1)'s definitional requirements for an act of international terrorism. The court saw no error in the district court's conclusion that plaintiffs failed to proffer such evidence and thus NatWest was entitled to summary judgment dismissing those claims. The court also concluded that the district court appropriately assessed plaintiffs' request to add JASTA claims, given the undisputed evidence adduced, in connection with the summary judgment motions, as to the state of NatWest's knowledge. Therefore, based on the record, the district court did not err in denying leave to amend the complaints as futile on the ground that plaintiffs could not show that NatWest was knowingly providing substantial assistance to Hamas, or that NatWest was generally aware that it was playing a role in Hamas's acts of terrorism. The court dismissed the cross-appeal as moot. View "Weiss v. National Westminster Bank PLC" on Justia Law

After R&R filed suit seeking to redeem bonds issued by Banco do Brasil, the district court dismissed for lack of subject-matter jurisdiction and decided, in the alternative, that the bonds were no longer redeemable under Brazilian law.The Eleventh Circuit concluded that the district court had subject-matter jurisdiction under the commercial-activity exception to the Foreign Sovereign Immunities Act (FSIA), because the issuance of the colonization bonds was a commercial activity and the Bank's refusal to honor those bonds caused a direct effect in the United States. However, the court concluded that the complaint is barred by the statute of limitations under Brazilian law. In this case, the statute of limitations ran in 1997, 20 years after maturity, and thus when R&R tried to redeem the colonization bonds in 2018, they were no longer enforceable. Accordingly, the court vacated in part and affirmed in part. View "R&R International Consulting LLC v. Banco Do Brasil, S.A." on Justia Law

The United States government thought that three banks, headquartered in China, held records that might clarify how North Korea finances its nuclear weapons program. After the government subpoenaed those records, the Banks resisted and claimed that the district court lacked personal jurisdiction, that the Patriot Act subpoena exceeded the government's statutory authority, and that compelling production would run afoul of comity principles. The district court overruled the Banks' objections and subsequently held the Banks in civil contempt for failing to produce the requested records.The DC Circuit affirmed the contempt orders, holding that the Banks' jurisdictional challenges were meritless where Banks One and Two consented to jurisdiction when they opened branches in the United States and, although Bank Three has no U.S. branch and executed no such agreement, its choice to maintain correspondent accounts in the United States established an adequate connection to the forum and the enforcement action to sustain jurisdiction.The court also held that records "related to" a U.S. correspondent account, under 31 U.SC. 5318(k)(3)(A)(i), include records of transactions that do not themselves pass through a correspondent account when those transactions are in service of an enterprise entirely dedicated to obtaining access to U.S. currency and markets using a U.S. correspondent account. In this case, Bank Three's subpoena under the Patriot Act did not exceed the Attorney General's statutory authority, because all records pertaining to the Company's Bank Three account and its correspondent banking transactions, no matter where they occurred, are "related to" the Bank's U.S. correspondent accounts.In regard to the Banks' comity concerns, the court held that the district court did not abuse its discretion by enforcing the subpoenas despite the fact that the United States chose not to pursue the process designated in the Mutual Legal Assistance Agreement (MLAA) between the United States and China. Finally, the court held that the district court did not abuse its discretion by issuing the civil contempt orders in light of the circumstances. View "In re: Sealed Case" on Justia Law

Judgment creditors of the Islamic Republic of Iran and Iran's Ministry of Intelligence and Security sought to enforce underlying judgments obtaining the turnover of $1.68 billion in bond proceeds allegedly owned by Bank Markazi. The Second Circuit held that the settlement agreements released plaintiffs' non-turnover claims with respect to some but not all of the banks; the assets at issue were in fact located abroad, but that those assets may nonetheless be subject to turnover under state law pursuant to an exercise of the court's in personam jurisdiction, inasmuch as the district court has the authority under New York State law to direct a non‐sovereign in possession of a foreign sovereignʹs extraterritorial assets to bring those assets to New York State; and those assets will not ultimately be subject to turnover, however, unless the district court concludes on remand that such in personam jurisdiction exists and the assets, were they to be recalled, would not be protected from turnover by execution immunity. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Peterson v. Islamic Republic of Iran" on Justia Law

Plaintiffs, owner of Fiscal Agency Agreement (FAA) bonds that were not restructured, filed suit against BCRA seeking to recover their unpaid principal and interest. The district court held that the FAA's express waiver of sovereign immunity, pursuant to 28 U.S.C. 1605(a)(1), also waived BCRA's immunity because BCRA is Argentina’s “alter ego.” The district court further held that BCRA’s use of its account with the Federal Reserve Bank of New York (FRBNY) constituted “commercial activity” in the United States, which waived BCRA’s sovereign immunity under 28 U.S.C. 1605(a)(2). The court concluded that it has jurisdiction over the appeal under the collateral-order doctrine; Argentina’s sovereign‐immunity waiver in the FAA may not be imputed to also waive BCRA’s independent sovereign immunity; and BCRA’s use of its FRBNY account is too incidental to the gravamen of plaintiffs’ claim to serve as the basis for waiving BCRA’s sovereign immunity under the commercial‐activity exception to the FSIA. Accordingly, the court reversed and remanded with instructions to dismiss the complaint. View "EM Ltd. v. Banco Central de la Republica Argentina" on Justia Law

Plaintiffs, family members or trustees of the estates of victims of state-sponsored terrorism, seek to enforce their 2009 Florida state court judgment obtained against Cuba by attaching the blocked assets of that state under section 201 of the Terrorism Risk Insurance Act of 2002 (TRIA), 28 U.S.C. 1610 note. Plaintiffs seek to satisfy the underlying judgment from electronic fund transfers (EFTs) blocked under the Cuban Assets Control Regulations, 31 C.F.R. Part 515. The court concluded that the EFTs are not attachable under section 201 because no terrorist party or agency or instrumentality thereof has a property interest in the EFTs. In this case, it is undisputed that no Cuban entity transmitted any of the blocked EFTs directly to the blocking bank. Accordingly, the court reversed the district court's grant of summary judgment for plaintiffs and remanded for further proceedings. View "Hausler et al., v. JPMorgan Chase Bank, N.A., et al." on Justia Law