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October 31, 1997


The opinion of the court was delivered by: WARD

 WARD, District Judge.

 Plaintiff Banco de la Provincia de Buenos Aires ("BPBA"), which filed this action seeking a declaratory judgment, now moves for summary judgment pursuant to Rule 56, Fed. R. Civ. P. For the reasons that follow, plaintiff's motion is granted.


 BPBA is a bank incorporated under the laws of the Province of Buenos Aires, Republic of Argentina. Defendant BayBank Boston, N.A. ("BayBank") is a federally chartered national banking association with its principal place of business in Boston, Massachusetts.

 On January 11, 1995, BPBA extended a loan of $ 250,000 ("the loan") to Banco Feigin S.A. ("Banco Feigin"), an Argentine bank that is not a party to this action. BPBA disbursed the proceeds of the loan to a credit account maintained by Banco Feigin at the New York City branch office of BPBA. The term of the loan, which was to mature on July 10, 1995, was 180 days. *fn1"

 Between November 30, 1994 and March 14, 1995, Banco Feigin suffered a liquidity crisis, losing 49% of its deposits. In March 1995, the Central Bank of Argentina ("the Central Bank") commenced what is known under Argentine law as an Intervention ("the Intervention"), essentially an inquiry into the solvency of a bank. In the months that followed, the Central Bank issued a series of resolutions which suspended the operations of Banco Feigin and ultimately revoked Banco Feigin's authorization to operate as a bank under Argentine law. *fn2" The assets of Banco Feigin were liquidated and sold for the benefit of Banco Feigin's depositors at an auction sponsored by the Central Bank in July 1995.

 In light of the Central Bank's suspension of Banco Feigin's operations on March 17, 1995, BPBA placed an administrative freeze on Banco Feigin's credit balance account on March 22, 1995. Aff. of William R. Molloy Supp. Summ. J. ("Molloy Aff.") P 8. On that date, Banco Feigin's BPBA account contained $ 245,529.55, and consisted solely of proceeds from BPBA's January 1995 loan to Banco Feigin.

 According to BPBA, pursuant to the provisions of N.Y. Creditor and Debtor Law § 151, the Intervention by the Central Bank that began on March 17, 1995 gave BPBA the right, at any time after the Intervention, to a set-off against the money owed to BPBA by Banco Feigin. On April 19, 1995, BPBA exercised this statutory right of set-off by applying against the indebtedness of Banco Feigin to BPBA the funds contained in Banco Feigin's account. The amount of the set-off was $ 245,529.55, the remainder of Banco Feigin's BPBA account. BPBA notified Banco Feigin of the set-off by telex dated April 19, 1995. Banco Feigin's remaining indebtedness to BPBA as a result of the January 1995 loan was $ 12,637.12.

 After the Central Bank began its Intervention, but before the April 19, 1995 set-off, Banco Feigin's Buenos Aires branch sent BPBA a request to transfer $ 245,000 from Banco Feigin's account with BPBA in New York to a Banco Feigin account at BayBank in Boston (the "wire transfer request"). According to BayBank, Banco Feigin intended to use the transferred funds to repay amounts it owed to BayBank. BPBA received the wire transfer request on March 24, 1995, but did not accept the payment order or transfer the funds because of the administrative freeze on Banco Feigin's account and BPBA's then existing but as yet unexercised right of set-off.

 In a letter to BPBA dated August 4, 1995, BayBank demanded that BPBA pay it $ 245,000, plus interest, representing the monies not sent on March 24, 1995 to Banco Feigin's BayBank account. In its letter, BayBank stated its intent to initiate legal proceedings if the demand was not met in full by August 31, 1995.

 BPBA commenced this action against BayBank in the Supreme Court of the State of New York, County of New York, on September 1, 1995. The case was subsequently removed to this Court based upon the parties' diversity of citizenship under 28 U.S.C. §§ 1332(a)(2) and 1348, and under 12 U.S.C. § 632, since the defendant is a banking corporation organized under the laws of the United States and the lawsuit involves international banking transactions.

 In its complaint, plaintiff seeks a declaratory judgment that on April 19, 1995, BPBA had the right to set-off against the funds in Banco Feigin's account at BPBA, and that this right to set-off was superior to any right BayBank may have had as the bank maintaining an account of Banco Feigin to which Banco Feigin had requested its funds be sent. BayBank counterclaims in the amount of $ 245,000 plus interest, alleging BPBA wrongfully converted its money when it refused to execute the wire transfer request. Claiming that the $ 245,000 became its property upon BPBA's receipt of Banco Feigin's wire transfer request, BayBank seeks a declaratory judgment that the set-off exercised by BPBA was unlawful and that BayBank's right to the funds which were the subject of the wire transfer request of Banco Feigin was superior to BPBA's right to such funds.


 I. The Standard for Summary Judgment

 Summary judgment is appropriate where the moving party has established that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), Fed. R. Civ. P. On a motion for summary judgment, the Court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). In making this determination, the Court "must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor." Consarc Corp. v. Marine Midland Bank, N.A., 996 F.2d 568, 572 (2d Cir. 1993).

 Initially, the moving party must show that there is "an absence of evidence to support the non-moving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Once the moving party has carried its burden under Rule 56, the non-moving party must set forth "specific facts showing that there is a genuine issue for trial." Rule 56(e), Fed. R. Civ. P. The non-moving party is required to introduce evidence beyond the mere pleadings to show that there is an issue of material fact concerning ...

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