Indosuez Int'l Finance v. Nat'l Reserve Bank

• Decision Date: 25 January 2001
• Citation: 279 A.D.2d 408,720 N.Y.S.2d 102
• Parties: (A.D. 1 Dept. 2001) Indosuez International Finance B.V., Plaintiff-Respondent, v. National Reserve Bank, Defendant-Appellant. 3065-3065A
• Court: New York Supreme Court — Appellate Division

Page 102

720 N.Y.S.2d 102 (A.D. 1 Dept. 2001)

Indosuez International Finance B.V., Plaintiff-Respondent, v. National Reserve Bank, Defendant-Appellant.

3065-3065A

SUPREME COURT, APPELLATE DIVISION, FIRST JUDICIAL DEPARTMENT

January 25, 2001

A. Grant McCrea, for plaintiff-respondent,

Jeffrey Barist, for defendant-appellant.

Nardelli, J.P., Williams, Andrias, Wallach, Lerner, JJ.

Order and judgment (one paper), Supreme Court, New York County (Barry Cozier, J.), entered May 31, 2000, confirming a Special Referee's report, and, in accordance with its recommendations, awarding damages in favor of plaintiff and against defendant in the amount of $119,691,956.02, inclusive of interest, costs and disbursements, unanimously affirmed, with costs. Appeal from order, same court and Justice, entered October 22, 1999, which, inter alia, granted plaintiff's motion for partial summary judgment on liability, referred the issue of damages to a Special Referee, and denied defendant's cross motion to dismiss the complaint, unanimously dismissed, without costs, as subsumed within the appeal from the judgment.

Plaintiff, a Netherlands bank doing business in Switzerland, sued defendant, a Russian bank, for moneys due in connection with currency exchange transactions evidenced by 14 confirmations. Defendant contends that the transactions are invalid because the individual who signed the 14 confirmations on its behalf, its Deputy Chairman, lacked authority under the Russian law to do so. Consequently, defendant further argues, the English or New York choice of law and forum provisions in the confirmations are also invalid. While we accept that the parties would not be bound by choice of law and forum provisions contained in a contract that is otherwise invalid (cf., Arkwright-Boston Mfrs. Mut. Ins. Co. v Energy Ins. Agency, 659 F.Supp. 97, 98 [SD Tex]), nevertheless, applying traditional choice of law principles, we conclude that New York law applies since payment of the obligations was to be made in United States dollars at a New York bank, and New York has a paramount interest, "as an international clearinghouse and market place for a plethora of international transactions" denominated in U.S. dollars, in ensuring orderly dollar currency transactions (see, Zeevi & Sons v Grindlays Bank, 37 N.Y.2d 220, 227, cert denied 423 U.S. 866). While Russia has a significant interest in that defendant is a Russian company being called upon to perform contracts it executed in...