The opinion of the court was delivered by: Robert W. Sweet, Distridt Judge.
Interpleader-plaintiff CSC is a Delaware corporation with its principal
place os business in New York, New York.
Defendant JVW is a corporation formed under the laws of the
Commonwealth of Dominica ("Dominica"), with its principal places of
business in Dominica.
Defendant Donal Kelleher ("Kelleher") is a foreign national and a
resident of Surrey, England. At all times relevant to this action,
Kelleher was an officer of JVW. Third-party defendant SSBT is a Bahamian
corporation with its principal place of business in the Bahamas. SSBT
received a transfer of funds from Kelleher for deposit into a new account
on behalf of JVW that is the subject of this action.
The background and prior proceedings in this action have been set forth
in a prior opinion, Correspondent Services Corp. v. J.V.W. Investment,
Ltd., 2000 WL 1174980 (S.D.N.Y. Aug. 18, 2000), familiarity with which is
assumed. The remaining issue in this action is JVW's attempt to recovery
a $2.3 million shortfall in a $10 million deposit to the Bahamian bank.
SSBT alleges that the shortfall is due to a decrease in the value of
stocks it purchased with the funds at JVW's request. JVW disputes ever
authorizing the purchase of stock, and contends that because the funds
were deposited in a "one-day call" money market account, SSBT's failure
to return the funds upon request renders it liable for the eventual
shortfall. In response, SSBT contends that the swift transfers of large
sums into and then out of the account raised suspicions of money
laundering, as a result of which it notified the Bahamian banking
authorities and froze the account during the ensuing investigation. SSBT
holds funds at the New York brokerage firm of Tucker Anthony, which JVW
wishes to attach in the present action.
JVW moved by order to show cause on September 28, 2000 for leave to
file and serve an amended pleading adding SSBT as a defendant on
cross-claims, asserting cross-claims against Kelleher and SSBT, and
moving for an attachment order against SSBT's funds at Tucker Anthony. On
September 28, 2000, after hearing argument from counsel for both JVW and
SSBT, this Court issued a temporary restraining order attaching up to $3
million in assets held at Tucker Anthony by SSBT. JVW filed a $200,000
undertaking pursuant to CPLR § 6212(b). The attachment remained in
effect until JVW's motion to confirm was heard on October 5. By agreement
of the parties, the attachment order continued until November 1, when the
rescheduled hearing took place.
SSBT opposed the motion to confirm and moved to vacate the attachment
order on the grounds that (1) as a Bahamian corporation with no
significant contacts in New York, it was not subject to the personal
jurisdiction of this Court; and (2) JVW failed to meet its burden of
proving that it was likely to succeed on the merits of the underlying
claim. The Court granted JVW's motion to serve amended pleadings adding
SSBT as a third-party defendant, and extended the temporary order
attaching the funds for 10 days, until Friday, November 17, 2000, pending
As any order issued against a party over whom this Court lacks
jurisdiction would be void, the jurisdictional question is addressed
SSBT argues that, as it is a Bahamian bank with no contacts with New
York, it is not subject to personal jurisdiction in this Court, and
therefore the Third-Party Complaint should be dismissed and the ...