On October 10, 2024, Justice Bannon of the New York County Commercial Division issued a decision in Rakaez Geotekania KSA v. Fransabank S.A.L., 2024 NY Slip Op. 33766(U), holding that use of a New York correspondent bank account is insufficient, without more, to create personal jurisdiction in New York, explaining:
In its amended complaint, Rakaez states that the court has in personam jurisdiction pursuant to CPLR 302(a)(1) and quasi in rem jurisdiction pursuant to CPLR 314(3) over Fransabank through the levy upon Fransabank’s correspondent account at BONYM in New York. . . .
When a defendant seeks to dismiss for lack of in personam jurisdiction, a New York court may not exercise personal jurisdiction over a non-domiciliary unless two requirements are satisfied: the action is permissible under the long-arm statute and the exercise of jurisdiction comports with due process. In assessing jurisdiction under the long-arm statute, the jurisdictional inquiry is twofold: under the first prong, the defendant must have conducted sufficient activities to have transacted business in the state, and under the second prong, the claims must arise from the transactions. Under the first prong, the defendant must purposefully avail itself, through volitional acts, of the privilege of conducting activities in the forum state, thus, invoking the benefits and protections of its laws. Determining purposeful availment is an objective inquiry requiring a court to closely examine the defendant’s contacts for their quality. Under the second prong, there must be an articulable nexus or substantial relationship between the business transaction and the claim asserted. It is well settled that mere maintenance of a correspondent bank account in New York does not suffice to establish personal jurisdiction there. Rakaez fails to establish in personam jurisdiction over Fransabank on both prongs.
Under the first prong, Rakaez argues that Fransabank purposefully availed itself of doing business in New York by maintaining a correspondent account at BONYM, and that under the terms of the agreement between Fransabank and AM Bank, Fransabank required AM Bank to deposit the Cash Margin to the Fransabank’s correspondent account at BONYM. However, Rakaez’s submissions, including emails between the parties and AM Bank, as well SWIFT messages between the banks, do not include any requirement that the Cash Margin be deposited at BONYM. Indeed, Fransabank’s submissions show that Fransabank specified that AM Bank send the funds to Fransabank’s account at DL Beirut, in Lebanon. Even though AM Bank deposited the Cash Margin to BONYM in July 2015, this was only one transfer that took place through Fransabank’s correspondent account in New York. Rakaez does not point to any other transactions that occurred through the BONYM account, nor to any other evidence that the agreement between Fransabank and AM Bank required Fransabank to reimburse the $1,472,178.77 owed to Rakaez in New York. Furthermore, Fransabank’s mere maintenance of a correspondent account in New York is insufficient to subject it to personal jurisdiction. Indeed, a defendant’s use of a correspondent account must be purposeful and necessary to effectuate the alleged wrong alleged in the complaint. No such facts are alleged here.
(Internal quotations and citations omitted).