On December 22, 2014, the U.S. District Court for the Southern District of New York issued its decision on the question of, “[w]hether a New York judgment creditor, through subpoenas issued on New York offices of international banks, can obtain discovery regarding accounts held by judgment debtors or their agents in various foreign branches of these banks.”
The case — Motorola Credit Corp. v. Uzan, 2014 U.S. Dist. Lexis 176225 (S.D.N.Y. Dec. 22, 2014) — involved subpoenas issued to banks in France, Switzerland, Jordan and the United Arab Emirates (“UAE”) by judgment creditor Motorola. The banks objected to the subpoenas on the grounds that laws governing the banks’ non-U.S. branches prohibit the production of requested discovery documents.
In reaching its decision, the court relied on a U.S. Supreme Court ruling in Societe Nationale Industrielle Aerospatiale v. United States District Court for the Southern District of Iowa, 482 U.S. 522 (1987), finding that Motorola would be unable to seek attachment of foreign assets if they were prevented from discovering the location of those funds and that Motorola was unlikely to obtain the necessary information through the Hague Convention or proceedings in foreign countries because of blocking statutes that prohibit the release of the documents.
In addition, the court centered on the concept of international comity — “the extent to which non-compliance with the [discovery] request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located” — to reach different conclusions for each country as follows:
France. The court found France’s blocking statute to be “riddled with loopholes that make it substantially unenforceable” and that France’s interests do not override U.S. interests in enforcing judgments.
Switzerland. The court found that Switzerland’s bank secrecy regime “constitutes, not just a seriously enforced national interest, but almost an element of that nation’s national identity” and deferred to Swiss bank secrecy statutes.
Jordan and UAE. In declining to defer to Jordan and UAE statues, the court noted that there is a “total paucity of published prosecutions of banks or their officers in Jordan and UAE for complying with discovery ordered by a foreign court.”
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