New York Court Rules Parties to International Arbitration May Attach New York Assets as Security Even Without Personal Jurisdiction

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In a case of first impression, the New York Appellate Division ruled in March 2011 that parties to an international arbitration may attach assets located in New York as security for a future award in the arbitral proceeding. This is the case even if the New York courts lack personal jurisdiction over the parties and even if the underlying dispute has no connection whatsoever to New York.

In a case of first impression, the Appellate Division, First Department, of the State of New York ruled in March 2011 that parties to a foreign arbitral proceeding may attach assets located in New York as security for a future award in the proceeding—even when there is no connection to New York by way of personal or subject matter jurisdiction. The Appellate Division’s decision, which was a ruling of first impression, provides the only judicial affirmation to date of changes that the New York Legislature made to New York’s Civil Practice Law and Rules (CPLR) in 2005. In light of the ruling, the New York courts will likely see a proliferation of motions for orders of attachment by foreign parties to international arbitrations.

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