Iraq Telecom Limited v. IBL Bank S.A.L.

Background

Iraq Telecom Limited filed a verified petition seeking confirmation of a foreign arbitration award and an ex parte order of attachment against IBL Bank S.A.L. An ex parte order is issued without advance notice to the opposing party. Iraq Telecom sought to attach IBL’s money, accounts, property, or property interests up to $100 million while the arbitration-award proceedings were pending.

The court denied Iraq Telecom’s first request on December 22, 2021, without prejudice. The court stated that the first request did not identify deposits owned by IBL in New York and currently held by a New York bank, and did not address relevant Second Circuit precedent. Iraq Telecom later filed a renewed motion and a supplemental declaration. The court then required Iraq Telecom to identify the specific funds it sought to attach by listing the account numbers and banks.

Court’s Findings

The court found that Iraq Telecom had shown an immediate risk that IBL, described in the order as a foreign corporation and non-domiciliary, would remove or dissipate assets if it received notice of the attachment request. The court also found that the requirements for attachment under New York Civil Practice Law and Rules § 6201(1) and § 7502 were satisfied. The order states that IBL was a foreign corporation not qualified to do business in New York, that attachment was needed to secure payment of an arbitration award, and that without attachment the award could become ineffective. The court further found that Iraq Telecom had identified IBL accounts in New York and that applicable case law did not bar attachment of the property held by the listed banks.

Order

The court granted Iraq Telecom’s renewed motion for an ex parte order of attachment. The attachment became effective immediately and was to remain effective unless the court later amended or vacated it. The amount secured was $100 million.

Under Federal Rule of Civil Procedure 64 and New York Civil Practice Law and Rules Articles 62 and 75, the order authorized the U.S. Marshal, or an appointed substitute, to levy on IBL’s property within the Southern District of New York without taking possession of it. The listed garnishee banks and accounts were:

- Citibank, account number 36329262 - JPMorgan Chase, account number 291853882 - Bank of New York Mellon, account number 803 3215 046 - Bank of New York Mellon, account number 803 3036 168

The order appointed Court Support, Inc. and its employees to serve the attachment order and carry out the levy in place of the U.S. Marshal. It extended the period during which the levy would remain valid until 30 days after the court, or the parties by agreement, resolved any motion to confirm or vacate the attachment order or any levy served under it. The garnishee banks were required to provide a statement required by New York law within ten days after service. Iraq Telecom was required to post a $100,000 bond within 14 days, and service of the summons and petition on IBL was ordered by international courier.