New York Taps The Brakes On Foreign Judgment Collection

Four years ago, the New York Court of Appeals, in Koehler v. Bank of Bermuda,¹ greatly broadened the judgment enforcement power of New York courts, a decision of note especially for global financial institutions with customer assets in faraway places. This split decision by the state's highest court accorded judgment creditors worldwide the long arm of New York's new enforcement law, enabling them to reach far beyond New York's borders to grab debtors' assets. But what if the underlying litigation, the parties themselves, and the targeted assets bear no connection to New York? It does not matter.

Although the court recently shortened, somewhat, the long arms bestowed by Koehler, the far-reaching implications of these two decisions on international enterprises—especially financial institutions—subject to jurisdiction in New York (and their business counterparties) command attention. Ignorance of the evolving jurisprudence might prove expensive.