King & Spalding has signed on to represent Halkbank for the "limited and special purpose" of challenging an Oct. 15 indictment, which accused the Turkish state-run bank of helping Iran evade U.S. economic sanctions.

In a filing late Monday, King & Spalding partner Andrew Hruska said the case raised the "first impression" issue of whether a federal court in Manhattan could exercise personal jurisdiction over Halkbank, a foreign entity with no physical operations in the United States.

Hruska also said his client would ask U.S. District Judge Richard M. Berman of the Southern District of New York to recuse himself from the case, based on unspecified "statements both in and out of the courtroom that call into question the court's impartiality regarding key factual and legal issues relevant to the indictment."

The bank, he said, had refused to accept service, and "has not stipulated to service by any means."

Since resolution of the recusal motion would ultimately decide the judge assigned to the case, Hruska asked that Berman take up that issue first.

"Because this case has been widely publicized and brought in a highly-charged atmosphere between the U.S. and Turkey, it is essential to address reasonable questions regarding the court's impartiality (and appearance of impartiality) and to demonstrate that U.S. courts are fair and neutral arbiters of fact and law," Hruska wrote in a four-page letter.

Monday's filing came as somewhat of an about-face for the King & Spalding, which told Berman last month that it was not authorized to accept service on behalf of Halkbank, despite previously representing the bank in an investigation by the Department of Justice.

But it also staved off, for now, the possibility of sanctions if Halkbank failed to appear for a second court date Tuesday morning, after first blowing off an arraignment last month.

In an order dated Oct. 23, Berman said Halkbank had "willfully and knowingly disobeyed" an initial summons to appear, but nonetheless gave the bank one more chance to comply. Had Halkbank failed to appear again Tuesday, Berman said he would have considered "any appropriate sanctions for knowing and willful noncompliance."

Halkbank is charged in a six-count indictment with fraud, money laundering and sanctions offenses for its "systemic participation" in a massive sanctions-busting scheme to deceive U.S. regulators and foreign banks.

According to the indictment, Halkbank, which is majority-owned by the Turkish government, used a series of money service businesses and front companies in Iran, Turkey and the United Arab Emirates to transfer billions of dollars worth of Iranian oil revenue in violation of prohibitions barring Iran from accessing the U.S. financial system.

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