For about the past seven years, the Second Circuit’s decision in Winter Storm1—permitting maritime attachments of electronic fund transfers (EFTs) at intermediary banks in New York—has been a scourge to the conduct of international business and to banks in New York. On Oct. 16, 2009, the U.S. Court of Appeals for the Second Circuit reversed Winter Storm in its decision in Shipping Corp. of India v. Jaldhi Overseas PTE Ltd., holding that “EFTs being processed by intermediary banks are not subject to attachment under Rule B.”2 With this one decision, the Second Circuit has probably reduced by about 30 percent the number of civil cases that will be filed in the Southern District of New York and removed a burden on international commerce and New York banks.
Our 2001 Case
In 2001, we3 represented an Egyptian company, ANSDK, which, as reflected in court-filed documents, had a case with the following facts. On June 6, 2001, ANSDK, issued a payment order to National Societe Generale Bank (NSGB) in Alexandria, Egypt. The payment order instructed NSGB to transfer payment of $709,230 to the account of Intermar Holding Company Trust Inc. at HSBC Bank in Greece. NSGB sought to effectuate the payment through the correspondent account that it maintained at the Bank of New York (BONY) in New York. At 1:15 P.M. on June 7, 2001, BONY received NSGB’s order to debit NSGB’s account in the amount of $709,230 and to transfer the funds from its account to the account of Intermar at HSBC in Greece.
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