Committee Reports

Motorola v. Standard Chartered (New York Court of Appeals)


The Banking Law Committee submitted a brief in Motorola Credit Corporation v. Standard Chartered Bank to address the following question certified by the Second Circuit Court of Appeals to the New York Court of Appeals: “Whether the separate entity rule precludes a judgment creditor from ordering a garnishee bank operating branches in New York to restrain a debtor’s assets held in foreign bank branches of the bank.” Under the separate entity rule, each branch of a bank is viewed for certain purposes as if it were a separate entity, even though all branches may be part of the same legal entity. The Committee urged that the Court answer the question in the affirmative, on the basis that Article 52 of the Civil Practice Law and Rules, read consistently with New York principles of statutory construction and in conjunction with directly relevant provisions of New York banking and enforcement law, precludes the extraterritorial restraint or turnover of deposits held by an offshore branch office of a foreign bank simply because it maintains a New York office.