974 F. Supp. 2d 264
S.D.N.Y.2013Background
- Judgment totaling $205,880,749.18 against Corfino, an agency/instrumentality of Honduras, entered in Mississippi in 2003 and registered in SDNY in 2011.
- Plaintiffs sought FSIA §1610(c) notice relief to execute on the judgment without attaching Honduran assets.
- Court issued January Order finding Honduras was Corfino’s successor and that notice requirements were satisfied, enabling execution; Honduras did not appear.
- Honduras appealed the January Order; a Rule 60(b) motion was filed by Honduras for relief from the January Order and for vacatur of a restraining notice, arguing lack of jurisdiction and notice problems.
- Court subsequently concluded it would reconsider and vacate the January Order if jurisdiction were restored, and denied reconsideration as moot; the Rule 60(b) analysis addressed whether Corfino, Cohdefor, and Honduras could be treated as a single enterprise under Bancec and related case law.
- Court ultimately held that Plaintiffs failed to overcome presumptions of separateness between Corfino, Cohdefor, and the Republic, and denied relief from the January Order on those grounds; it also found that proper FSIA notice to the Republic was not satisfied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSIA provides jurisdiction for the January Order | Byrd had jurisdiction under commercial activities exception | jurisdiction improperly extended to Honduras itself | Court had subject matter jurisdiction in aid of judgment, but execution immunity still applies to assets |
| Whether Honduras is successor in interest to Corfino for attachment | Corfino’s successor status should be established | No sufficient control or unity to pierce separateness | Failed to overcome Bancec separateness presumption; no successor liability |
| Whether 1610(c) notice requirements were satisfied | Notice was adequate under §1610(c) | Notice to Republic required under §1608(e) not satisfied | Not satisfied; notice must be provided to Republic, not just Corfino |
| Rule 60(b) relief grounds | Relief appropriate due to error and potential reopening if jurisdiction restored | Relief not warranted | Relief denied or procedural path limited; court would vacate if jurisdiction restored |
| Whether the restraining notice against Deutsche Bank was properly vacated | Restraint should remain as part of execution process | Restraint vacated due to lack of Honduran property in bank | Matter moot in light of withdrawal of jurisdiction and vacatur |
Key Cases Cited
- Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480 (U.S. 1983) (FSIA immunities and jurisdiction framework)
- First City, Tex. Houston, N.A v. Rafidain Bank, 281 F.3d 48 (2d Cir. 2002) (execution in aid of judgment; alter-ego concepts)
- Byrd v. Corporacion Forestal y Industrial De Oloncho, S.A., 182 F.3d 380 (5th Cir. 1999) (affirmed non-immunity under FSIA commercial activities exception)
- Walters v. Industrial & Commercial Bank of China, Ltd., 651 F.3d 280 (2d Cir. 2011) (distinguishes subject-matter vs. execution immunity; piercing standard)
- Bancec v. Netherlands Bank, 462 U.S. 611 (U.S. 1983) (presumption of separateness for instrumentality)
- Transamerica Leasing, Inc. v. La Republica de Venezuela, 200 F.3d 843 (D.C. Cir. 2000) (extensive control test for alter-ego)
- De Letelier v. Republic of Chile, 748 F.2d 790 (2d Cir. 1984) (recognizes presumption of separateness; need to show abuse of form)
- Commercial Bank of Kuwait v. Rafidain Bank, 15 F.3d 238 (2d Cir. 1994) (evidentiary standards under §1608(e))
- Agudas Chasidei Chabad v. Russian Fed’n, 798 F.Supp.2d 260 (D.D.C. 2011) (notice requirements under §1610(c) and §1608(e))
- Gen. Star Nat. Ins. Co. v. Administratia Asigurarilor de Stat, 289 F.3d 434 (6th Cir. 2002) (FSIA successor liability context)