A New Weapon Against Debtors! Attachment In Aid Of International Arbitration Is Permitted Even Where The Court Lacks Personal Jurisdiction Over The Debtor

In the matter of In re Sojitz Corporation v. Prithvi Information Solutions, Ltd, Index No. 602511/2009 (1st Dept. 2011) (“Sojitz Corp.”), the First Department, in a case of first impression, affirmed the decision of former Justice James A. Yates, and held that a creditor can attach assets in New York, for security purposes, in anticipation of an award that will be rendered in an international arbitration proceeding, even though the debtor has no connection to New York by way of personal jurisdiction.

In Sojitz Corp., petitioner ("Petitioner"), a Japanese company with its principal place of business in Tokyo, intended to commence an arbitration proceeding against respondent Prithvi Information Solutions, Ltd. ("Respondent"), an Indian company with its principal place of business in Hyderabad, India, to recover over $48 million in unpaid invoices. Pursuant to the parties' agreement, Petitioner was to provide telecommunications equipment that was produced in China to Respondent in India and, in exchange, Respondent would deposit its payments in an account at Punjab National Bank in India. The agreement also contained an arbitration clause which provided that the agreement was governed by the laws of England and that any disputes arising out of the agreement would be settled by arbitration in Singapore.

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Published In: Alternative Dispute Resolution (ADR) Updates, Civil Procedure Updates, Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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