Al Rushaid v. Pictet & Cie: New York’s High Court Holds That a Bank’s Repeated Use of New York Correspondent Accounts Is Sufficient in Some Circumstances To Justify Jurisdiction Over It by New York Courts

Sullivan & Cromwell LLP - November 28, 2016
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In Al Rushaid v. Pictet & Cie, the New York Court of Appeals held, in a 4-3 decision, that the defendant bank’s repeated and knowing use of New York correspondent accounts to help customers move ill-gotten money from abroad into Swiss bank accounts justified subjecting the bank to New York jurisdiction over claims related to that money.  Although Al Rushaid could be read to allow New York courts to exercise jurisdiction over non-New York based banks that repeatedly use New York correspondent accounts, the decision appears to have turned on allegations that the bank knowingly facilitated wrongdoing through New York correspondent accounts, and the Court of Appeals reaffirmed that the use of correspondent accounts must be connected to the alleged wrongdoing to subject a bank to jurisdiction.  The opinion remains subject to the bank’s possible petition for a writ of certiorari to the U.S. Supreme Court for review of whether jurisdiction over the bank is consistent with the U.S. Constitution’s due process clause.