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Posted: October 17, 2017

Foreign Defendants Found Not to Be Subject to Personal Jurisdiction in New York

On October 10, 2017, the First Department issued a decision in IMAX Corp. v. Essel Group, 2017 NY Slip Op. 07091, affirming a holding that foreign defendants were not subject to personal jurisdiction in New York, explaining:

Initially, petitioner failed to establish that New York courts have personal jurisdiction over the Essel Group and the individual respondents on the basis of a tortious act committed without the state causing injury to person or property within the state. As the original event that caused the economic injury was the demerger of E-City in India, the situs of the injury is India. Petitioner’s executive offices in New York do not alone constitute a sufficient predicate for jurisdiction. Nor does it avail petitioner that respondent Subhash Chandra, chairman of the Essel Group, traveled to New York to negotiate the agreement with petitioner, since the injury petitioner alleges arose not from the breach of the agreement but from the demerger. These facts do not constitute a sufficient start in showing that jurisdiction could exist to justify pretrial jurisdictional disclosure.

Additionally, petitioner failed to establish that New York courts have general jurisdiction over respondent Chandra individually pursuant to CPLR 301. New York courts may not exercise general jurisdiction against a defendant under the United States Constitution or under CPLR 301 unless the defendant is domiciled in the state or in an exceptional case where an individual’s contacts with a forum are so extensive as to support general jurisdiction notwithstanding domicile elsewhere. In the present case, movant has failed to show either that Chandra was domiciled in New York or that Chandra’s contacts with New York were so extensive as to support general jurisdiction. Initially, the purchase of the apartment, even if attributable to him personally, is insufficient to establish that Chandra was domiciled in New York. Further, the evidence submitted by petitioner demonstrates that Chandra’s business activities in New York were undertaken on behalf of a corporate entity. No pretrial jurisdictional disclosure is warranted.

To the extent respondents concede that New York courts may exercise general jurisdiction over respondent Asia TV USA, Ltd. (“Asia TV”), petitioner argues that it can recover against Asia TV as well as the other respondents on the ground that respondents should be treated as a single personality for purposes of enforcing the judgment against E-City. However, the evidence does not show that the individual Essel Group promoters used their domination and control over E-City to transfer assets of E-City to Asia TV so as to make E-City incapable of honoring its obligation to petitioner. Rather, the argument that Asia TV should be treated as a single personality with the other companies is without basis as it is undisputed that Asia TV was not in existence at the time E-City was demerged and thus, there is no evidence that any assets were ever transferred from E-City to Asia TV so as to make E-City incapable of honoring its obligations to petitioner. For the same reason, there is no basis for issuing a turnover order against Asia TV as there is no evidence that any assets of E-City were ever transferred to Asia TV. No pretrial jurisdictional disclosure is warranted.

(Internal quotations and citations omitted) (emphasis added).

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