On March 28, 2024, Justice Chan of the New York County Commercial Division issued a decision in Safra v. SNBNY Holdings Ltd., 2024 NY Slip Op. 31061(U), dismissing an action because the court lacked personal jurisdiction over a necessary party, explaining:
With SNBNY, the Family Defendants, and the Non· Resident Directors dismissed from the case for lack of personal jurisdiction, the only remaining defendant in this action is defendant Morato. Defendants argue that Alberto’s complaint must now be dismissed because, in the absence of, inter alia, SNBNY, complete relief cannot be afforded. Under CPLR 3211(a)(10), a party may move to dismiss on the basis that the court should not proceed in the absence of’ a necessary party. CPLR l00l(a), in turn, defines necessary parties as either persons [or entities who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or [persons or entities] who might be inequitably affected by a judgment in the action. In assessing the issue of complete relief, courts will consider whether the relief sought against a defendant relies on, in part or in whole, an adjudication of the liability of and/or harm caused by the nonparty sought to be joined.
Here, Alberto’s claims all relate to (1) the validity of share issued and maintained by SNBNY, (2) amendments to SNBNY’s Articles, and (3) issues impacting SNBNY’s corporate governance and internal affairs (to the extent not mooted). And the relief sought by Alberto necessarily requires an adjudication of SNBNY’s liability and/or the harm caused by its actions. Accordingly, as Alberto seemingly concedes, the court cannot afford complete relief without SNBNY, meaning that full dismissal is warranted in the absence of this necessary party.
Consideration of the CPLR 1001(b) factors does not alter this conclusion. Under CPLR 1001(b), if the court lacks jurisdiction over a necessary party, it shall consider the following factors: (1) whether plaintiff has another remedy if the action is dismissed for nonjoinder; (2) the prejudice which may accrue from nonjoinder to the defendant or to the nonjoined party; (3) whether and by whom prejudice might have been avoided or may in the future be avoided; (4) the feasibility of a protective provision; and (5) whether an effective judgment may be rendered in the absence of the nonjoined person. Here, these factors largely weigh in favor of dismissal of the entire action in the absence of SNBNY. For example, Alberto has another remedy if this action is dismissed because he would be free to initiate this action in another forum (including in Gibraltar). By contrast, any judgment entered in this action would seemingly be ineffective because the sole remaining defendant, Morato, would not be able to bind SNBNY on any judgment or declaration entered in this action. Furthermore, allowing SNBNY’s rights and obligations to be adjudicated in its absence would also be unfairly prejudicial, especially since the heart of this matter pertains to SNBNY’s internal affairs, corporate governance, shareholder structure, and share capitalization. And a protective provision would not be able to cure this infirmity.
In sum, SNBNY is a necessary party under CPLR 1001(a). But because the court lacks personal jurisdiction over SNBNY dismissal of the entirety action under CPLR 3211(a)(10) is warranted.
(Internal quotations and citations omitted).