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WESTON COMPAGNIE DE FIN. ET D'INVESTISSEMENT

June 11, 1993

WESTON COMPAGNIE DE FINANCE ET D'INVESTISSEMENT, S.A., Plaintiff,
v.
LA REPUBLICA DEL ECUADOR, et al., Defendants.


McKENNA


The opinion of the court was delivered by: LAWRENCE M. MCKENNA

McKENNA, D.J.

 1.

 Plaintiff, a "financial institution" organized under the laws of Switzerland, "[a] substantial part of [the business of which] has involved the acquisition and trading of Latin American debt" (Gerstel Decl. P 2), commenced this action on April 26, 1993 to recover $ 20,756,959.74 in principal and $ 9,587,360.34 in interest (computed as of February 16, 1993) from the Republic of Ecuador (the "Republic"), its central bank, Banco Central del Ecuador (the "Central Bank"), and various entities which, for purposes of the present motions at least, the Court takes to be agencies or instrumentalities of the Republic within the meaning of 28 U.S.C. § 1603(b). Plaintiff brings the action as the purchaser, presumably at a substantial discount, and the assignee of interests in "a number of loan agreements entered into or guaranteed by [the Republic and the Central Bank] and two of Ecuador's agencies and instrumentalities, including its state electric company." (Id. P 3.) *fn1"

 On April 27, 1993, the Judge to whom this case was previously assigned granted, on the ex parte application of plaintiff, an order of attachment pursuant to New York Civil Practice Law and Rules Article 62. *fn2" The order permitted the attachment of up to $ 10,000,000, and required the furnishing of an undertaking in the sum of $ 250,000; it exempted from levy "(i) property belonging to any consulate or embassy of Ecuador; (ii) any gold reserves maintained in the Federal Reserve Bank of New York; or (iii) any property that is, or is intended to be, used in connection with a military activity and is of a military character or is under the control of a military authority or defense agency."

 According to the most recent information supplied to the Court (otters from Pl.'s Counsel to Court of May 25, 1993 and June 8, 1993) and other information contained in the parties' submissions, levies have been made on the following amounts in accounts in the name of the Central Bank: (i) Swiss Bank Corporation, $ 204,490.22; (ii) The Chase Manhattan Bank, N.A., $ 246,086.00; (iii) Bankers Trust Company, $ 3,159.82; and (iv) Chemical Bank, $ 10,885.02. *fn3" Swiss Bank Corporation, however, has set off against amounts due to it the entire amount described in P (i); plaintiff does not contest the setoff, and says that its motion to confirm is moot as to the Swiss Bank Corporation account.

 Plaintiff moves (i) to confirm the order of attachment and (ii) for an order requiring "defendants to return to the jurisdiction of this Court any such assets as may at any time have been transferred out of or through New York on or after 1:30 p.m., April 27, 1993, where they shall then become subject to the Order of Attachment in an aggregate up to the amount of $ 30 million." (Notice of Mot. at 2.) The Central Bank cross-moves for (i) an order vacating the order of attachment "because the funds of the Central Bank attached pursuant to the Order are absolutely immune from prejudgment attachment under the Foreign Sovereign Immunities Act ["FSIA"], 28 U.S.C. § 1601, et seq., and, [ii] in the event any part of the Order [of attachment] is confirmed," an order increasing the amount of the undertaking required of plaintiff to $ 25 million. (Notice of Cross-Mot. at 1-2.)

 2.

 The FSIA specifically addresses attachment in three sections.

 28 U.S.C. § 1609 lays down the general rule that "subject to existing international agreements to which the United States is a party at the time of enactment of this Act [1976] the property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611 of this chapter." 28 U.S.C. § 1609 (1988). Neither plaintiff nor the Central Bank relies on an international agreement, and, for purposes of 28 U.S.C. §§ 1609, 1610 and 1611, the Central Bank (as well as the Republic and, presumably, the other defendants) comes within the definition of "foreign state" of 28 U.S.C. § 1603(a).

 28 U.S.C. § 1610 sets out exceptions to § 1609. As far as prejudgment attachment, at issue here, is concerned, § 1610(d) provides that:

 
The property of a foreign state, as defined in section 1603(a) of this chapter, used for a commercial activity in the United States, shall not be immune from attachment prior to the entry of judgment in any action brought in a court of the United States or of a State, or prior to the elapse of the period of time provided in subsection (c) of this section, if--
 
(1) the foreign state has explicitly waived its immunity from attachment prior to judgment, notwithstanding any withdrawal of the waiver the foreign state may purport to effect except in accordance with the terms of the waiver, and
 
(2) the purpose of the attachment is to secure satisfaction of a judgment that has been or may ultimately be entered against the foreign state, and not to obtain jurisdiction.

 28 U.S.C. § 1610(d) (1988). The Central Bank does not appear to contest, for purposes of the present motions, its general waiver of immunity from attachment prior to judgment, nor that the purpose of the attachment is to secure satisfaction of an ultimate judgment, and not to obtain jurisdiction. It relies, rather, on 28 U.S.C. § 1611.

 28 U.S.C. § 1611 sets out certain exceptions to § 1610. The Central Bank relies specifically on § 1611(b)(1), which provides that:

 
Notwithstanding the provisions of section 1610 of this chapter, the property of a foreign state shall be immune from attachment and from execution, if--
 
(1) the property is that of a foreign central bank or monetary authority held for its own account, unless such bank or authority, or its parent foreign government, has explicitly waived its immunity from attachment in aid of execution, or from execution, notwithstanding any withdrawal of the waiver which the bank, authority or government may purport to effect except in accordance with the terms of the waiver.

 28 U.S.C. § 1611(b)(1) (1988). *fn4"

 These provisions present two issues. The first is whether the Central Bank's waiver of immunity from attachment-given in broad terms and explicitly waiving immunity from prejudgment attachment *fn5" --renders the immunity provided by § 1611(b)(1) unavailable; the second, whether the funds on which levies have been made are "property . . . of a foreign central bank . . . held for its own account" within the meaning of the statute.

 3.

 While 28 U.S.C. § 1610 provides for the waiver both of "immunity from attachment in aid of execution," 28 U.S.C. § 1610(a)(1), and of "immunity from attachment prior to judgment," 28 U.S.C. § 1610(d)(1), 28 U.S.C. § 1611 refers only to waiver of "immunity from attachment in aid of execution." 28 U.S.C. § 161l(b)(1) (1988). Plaintiff argues that, "notwithstanding the absence of an express reference in Section 1611(b)(1) to prejudgment attachments, there is good authority for permitting prejudgment as well as postjudgment attachment of central bank assets on showing of a valid waiver." (Pl. Mem. at 17 (citing Charles N. Brower et al., The Foreign Sovereign Immunities Act of 1976 in Practice, 73 Am. J. Int'l L. 200, 209 (1979) (hereinafter "FSIA in Practice")).) That citation, however, is not very good authority at all for the proposition that 28 U.S.C. § 1611(b)(1) provides for waiver of prejudgment attachment. Indeed, it notes that comparison of the waiver provisions of § 1611(b)(1) with those of § 1610(d)(1) "appears on the surface to eliminate attachment prior to the entry of judgment in actions against a foreign central bank or monetary authority, even in cases involving a ...


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