Commercial Division Blog

Posted: November 30, 2015 / Categories Commercial, Arbitation, Mediation and Other ADR, Judgment and Collection, Injunctions Attachments and Other Preliminary Remedies

Court Grants Attachment in Support of Collection of Foreign Judgment

On November 17, 2015, Justice DeStefano of the Nassau County Commercial division issued a decision in Passport Special Opportunities Master Fund, L.P. v. ARY Communications, Ltd., 2015 NY Slip Op. 51696(U), granting an attachment in support of the collection of a foreign judgment.

In Passport Special Opportunities Master Fund, the plaintiff brought an "action to recognize a money judgment of the High Court of the Republic of Singapore" and moved for an order "attaching the New York assets of the . . . judgment debtors."

The court granted the attachment. First, it noted that:

an order of attachment may be granted in any action, except a matrimonial action, where the plaintiff has demanded and would be entitled, in whole or in part, or in the alternative, to a money judgment against one or more defendants, when:

1. the defendant is a nondomiciliary residing without the state, or is a foreign corporation not qualified to do business in the state; or

* * *

5. the cause of action is based on a judgment, decree or order of a court of the United States or of any other court which is entitled to full faith and credit in this state, or on a judgment which qualifies for recognition under the provisions of article 53.

Attachment against a non-domiciliary has two purposes: to secure assets for a money judgment or to provide a basis for quasi in rem jurisdiction. Attachment is strictly a creature of statute and, therefore, because of its harsh nature and, it being in derogation of the common law, the courts have strictly construed the statute creating it in favor of those against whom it may be employed. The decision whether to grant a motion for an order of attachment or to confirm or vacate such an order ultimately rests within the sound discretion of the court.

(Internal quotations and citations omitted) (emphasis added). As an initial matter, the court held that the plaintiff had not showed "that an order of attachment is necessary for jurisdictional purposes." As to obtaining attachment in support of judgment collection, the court granted the motion, explaining that:

where attachment is sought to secure payment of a foreign judgment that is likely to be recognized, some showing of necessity—less than what is required for pre-judgment attachments, is required.

. . .

On a motion to confirm an order of attachment, the plaintiff has the burden of establishing that there is a cause of action, that it is probable that the plaintiff will succeed on the merits, that one or more grounds for attachment provided in section 6201 exist, and that the amount demanded from the defendant exceeds all counterclaims known to the plaintiff. In addition to the statutory requirements for an attachment, there must be some identifiable necessity for the attachment, such as the risk that the defendant will not be able to satisfy the judgment.

At bar, contrary to the contentions of the defendants, their conduct has gone beyond merely refusing to pay an arbitral award. Instead, defendants have attempted to unseat the appointed arbitrator, threatened him with prosecution for contempt, thwarted issuance of the Singapore arbitration award by obtaining injunctive relief in Pakistan—the jurisdiction where the defendants are located, exhorted the Pakistan court to declare New York arbitral enforcement proceedings illegal and order that they cease, and contested jurisdiction in New York while failing to cite both New York's liberal jurisdictional policies in terms of enforcement proceedings under CPLR Article 53, and Pakistan's authorization of service by mail under the Hague convention. That the arbitral award remains unpaid, therefore, is but one indication of the need for security.

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