On February 8, 2022, the First Department issued a decision in E D & F Man Sugar Ltd. v. Gellert, 2022 NY Slip Op. 00813, staying a first-filed action to recover on a guaranty in favor of a later-filed action related to the guarantied obligation, explaining:
In March 2021, plaintiff brought this action to recover on a personal guaranty executed by defendant as consideration for a loan by plaintiff to two Romanian companies partly owned by defendant. Two months later, defendant brought suit against the instant plaintiff in Romania, seeking a declaration that the companies’ payment obligations under the underlying loan agreements were not enforceable.
This action should be stayed pending determination of the related Romanian action, because the issues to be decided in the Romanian action are potentially dispositive of this action; there can be no liability for defendant under the personal guaranty if there is no underlying liability for the companies under the loan agreements. Moreover, while defendant’s liability under the guaranty may be decided in New York, the companies’ liability under the loan agreements must be decided in Romania and under Romanian law.
Although this action was filed first, chronology is not dispositive, particularly where both actions are at the earliest stages of litigation. The practice of determining priorities between pending actions on the basis of dates of filing is a general rule, not to be applied in a mechanical way, regardless of other considerations. Here, both actions are in the early stages and were commenced reasonably close in time and the later-filed action is more comprehensive and involves more parties.
(Internal quotations and citations omitted).