Second Circuit Clarifies Standard For Attachment In Aid Of Arbitration

The Second Circuit on August 5 clarified the standard for attachment in aid of arbitration – in this case an international arbitration and assets of a Lebanese bank held in New York. In Iraq Telecom Limited v. IBL Bank S.A.L,¹ the Second Circuit addressed the issues left open in two of its prior decisions and that have not yet addressed by the New York Court of Appeals. The Second Circuit held that courts addressing such attachments under New York law may consider both statutory and non-statutory factors in deciding whether to attach a party's assets, or vacate or modify an existing attachment – but the non-statutory factors can only be considered if they are "extraordinary".

In the case before the Second Circuit, the plaintiff seeking attachment had initiated arbitration proceedings in Lebanon against the defendant, a Lebanese bank. The plaintiff had previously obtained a declaratory judgment that the Lebanese bank and several other defendants had defrauded the