Two recent developments in U.S. law may be of special interest to non-U.S. clients, especially foreign banks. First, the highest appellate state court in New York issued a decision on November 20, 2012 holding that a Lebanese bank may be subject to personal jurisdiction in New York courts because the bank makes use of a correspondent bank account at a New York bank on behalf of a client where the legal claim is connected to the use of the correspondent account. Second, in a separate case, the Supreme Court of the United States recently heard arguments concerning whether non-U.S. corporations may be liable under the U.S. Alien Tort Statute for conduct outside the U.S. and whether such claims can be asserted against corporations.

The New York “Long Arm” Jurisdiction Case; Licci v. Lebanese Canadian Bank, SAL -

The recent decision of the New York State Court of Appeals in the case Licci v. Lebanese Canadian Bank, has clarified when a New York Court can exercise personal jurisdiction over a foreign banking entity whose only connection with New York is the maintenance of a correspondent account at a New York bank. This decision reduces the strength of a foreign bank’s opposition to jurisdiction where it can be shown that the plaintiff’s claims arise at least in part out of repeated banking activity in New York, even where the foreign bank has no other connection to New York.