Commercial Division Blog

Posted: December 12, 2018 / Categories Commercial, Banking and Finance, Jurisdiction

Court Lacks Subject Matter Jurisdiction Over Claim Against Foreign Bank By Non-Resident

On November 28, 2018, Justice Sherwood of the New York County Commercial Division issued a decision in Garcia v Banco BCT S.A., 2018 NY Slip Op. 32989(U), holding that the court lacked subject matter jurisdiction over a non-resident's claim against a foreign bank, explaining:

Banking Law section 200-g provides that:
2. Except as otherwise provided in this chapter, an action or special proceeding against a foreign banking corporation may be maintained by another foreign corporation or foreign banking corporation or by a non-resident in the following cases only:

  • (a) where the action is brought to recover damages for the breach of a contract made or to be performed within this state, or relating to properly situated within this state at the time of the making of the contract:
  • (b) where the subject matter of the litigation is situated within this state:
  • (c) where the cause of action arose within this state, except where the object of the action or special proceeding is to affect the title of real property situated outside this state:
  • (d) where the action or special proceeding is based on a liability for acts done within this state by a foreign banking corporation:
  • (e) where the defendant is a foreign banking corporation doing business in this state

Plaintiff claims subsections (d) and (e) apply here. Because there is personal jurisdiction under CPLR 302(a)(1), which provides that a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent transacts any business within the state or contracts anywhere to supply goods or services in the state. Plaintiff acknowledges that both provisions require that the action arise from or be based on the acts or business done by the non-domiciliary within the State of New York. Accordingly, this argument fails for the same reason as the personal jurisdiction argument above.

(Internal quotations and citations omitted).

The New York Supreme Court is a court of general jurisdiction, so questions of subject matter jurisdiction rarely arise. However, as this decision shows, there are statutes that prevent some types of claims from being heard in the court. Contact Schlam Stone & Dolan partner John Lundin at if you or a client have questions regarding a court's jurisdiction to hear a claim.