The New York State Court of Appeals has come a bit closer to the answer to the classic question of obtaining jurisdiction over a non-resident bank that maintains a correspondent account in Manhattan. Is mere maintenance of US correspondent account sufficient to confer personal jurisdiction, upon a foreign bank, or is something else required ?
A private Swiss bank was sued, in state court in New York, by Saudi companies & a Saudi national, for alleged participation in a bribery and kickback scheme. Certain bank staff members participated, and were rewarded with bribes, sent through the bank's New York correspondent account, in route to Geneva. A suit against by the bank resulted in decisions against the plaintiff in both the NY Supreme Court, and the Appellate Division*; This appeal, to the court of last resort in New York, followed.
The Court of Appeals held that, where there was deliberate, intentional, and repeated, use of correspondent bank accounts, located within the State of New York, for money laundering operations, the Bank was subject to the personal jurisdiction of NY courts, pursuant to the state's long-arm statute. The Court found that the Bank employees' action satisfied the requirements of the statute.
The Court's decision was divided; any reader who wishes to review the complete text of the decision can access it here. The name of the case is Rasheed Al-Rushaid vs. Pictet & Cie., et al .
* The highest court in the State of NewYork is not the Supreme Court; it is the Court of Appeals.