Commercial Division Blog

Posted: May 5, 2015 / Categories Commercial, Discovery/Disclosure, Banking and Finance

Litigant Ordered to Use Hague Convention to Obtain Foreign Bank Documents

On April 28, 2015, the First Department issued a decision in Peters v. Peters, 2015 NY Slip Op. 03488, affirming an order requiring documents subject to foreign bank secrecy laws to be sought under the Hague Convention.

In Peters, the trial court denied the plaintiff's "motion to compel nonparty witness UBS AG to comply with a subpoena and instructed plaintiff to use the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (Hague Convention) in order to seek the documents at issue." The First Department modified the order in affirming, explaining:

The IAS Court providently exercised its discretion in directing plaintiff to use the Hague Convention to obtain any documents subject to Swiss banking secrecy laws. Although the documents sought are critical to the litigation, and the document requests are sufficiently specific, it is undisputed that the documents originated and reside in Switzerland. In addition, the interests of international comity, coupled with UBS's status as a nonparty in this litigation, weigh in favor of the application of the Hague Conventio. UBS presented a legal opinion that the disclosure of any confidential information about its customers in violation of Swiss law would subject its employees to potential criminal prosecution, fines, and even imprisonment. Further, UBS's conduct in this litigation does not rise to the level of bad faith.

(Internal citations omitted). On the other hand, the First Department went on to hold that "the same concerns of international comity do not apply to any documents that are not subject to Swiss banking secrecy laws. Accordingly, UBS is directed to produce those documents, to the extent they exist, and if none exist, provide an affidavit in conformity with the CPLR." (Emphasis added).