Stephen v Zivnostenska Banka

• Date: 25 March 1955
• Court: New York Supreme Court

United States, Supreme Court, Special Term, New York County, Part I.

Stephen

and

Zivnostenska Banka National Corporation.2

International Organization — Specialized Agencies — International Monetary Fund — Articles of Agreement of — Regulation of Currency and International Exchange — Recognition of Such Regulation by Other States — International Recognition of Exchange Control Regulations — Effect of Withdrawal from Membership in International Monetary Fund.

This was a proceeding by creditors to throw the assets of the defendant into receivership on the ground that it was a foreign nationalized institution. The case had been assigned to a referee,

and the Court affirmed his report on all but two points, on one of which the Court said

“Regarding the second exception, that relating to the plaintiffs' standing as creditors, as influenced by the International Monetary Fund Agreement, the referee noted the membership of Czechoslovakia in the International Monetary Fund, and considered particularly that portion of Article VIII, section 2 (b), of the Fund Agreement [which ran as follows]:

‘Exchange contracts which involve the currency of any member and which are contrary to the exchange control regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the territories of any member.’

He therefore concluded that the plaintiffs could not obtain relief in this Court: Perutz v. Bohemian Discount Bank in LiquidationUNKUNK, 304 N.Y. 533, 110 N.E.2d 6.[1]

“However, he did state, and with mindful foresight, that this phase could be reopened if Czechoslovakia ever withdrew, voluntarily or otherwise, from the fund organization. Such circumstance actually occurred on January 5, 1955, when the International Monetary Fund issued a...