Dispute over foreign bank assets sent to New York's highest court
By Dena Aubin
NEW YORK (Reuters) - In a case with wide implications for the global banking industry, New York's highest state court has been asked to decide if banks operating in the state can be forced to turn over to litigants assets held in their foreign branches.
At issue are two high-profile cases being heard by the U.S. 2nd Circuit Court of Appeals. The cases involve U.S. companies that are trying to reach assets held overseas by UK-based Standard Chartered Plc and Bank of China.
In a ruling on Tuesday, a three-judge panel for the 2nd Circuit in Manhattan delayed a decision on the lawsuits, saying they raise policy concerns that should be resolved by the New York Court of Appeals.
"The questions presented by these appeals involve important issues of New York state law and policy that are likely to recur and may have important effects on a highly regulated industry," the 2nd Circuit court wrote.
At stake is whether companies can evade the enforcement of judgments by keeping assets in overseas banks. The outcome could be important to foreign banks with New York branches, which are subject to New York courts' jurisdiction.
UZAN DISPUTE AT STAKE
In one of the two cases, Motorola Credit Corp, part of Motorola Solutions, has been trying for over a decade to recover billions of dollars from Turkey's Uzan family, which ran the Turkish mobile phone company Telsim.
The Uzans borrowed more than $2 billion from Motorola Credit between 1998 and 2000 for Telsim, but diverted much of the money for other uses, according to court documents. Continued...