The Southern District of New York recently quashed a subpoena seeking documents from the Commonwealth of Australia and New Zealand Banking Group Limited (ANZ Bank) for use in a foreign arbitration proceeding. This case was preceded by multi-national litigation between APR Energy Holding Ltd. and Forge Power Pty Ltd., related to a bankruptcy proceeding and four gas turbine generator sets worth millions of dollars. Having lost in the prior litigation, APR initiated arbitration against the Commonwealth of Australia and issued a subpoena seeking relevant information about Forge's finances, given that ANZ Bank is Forge's biggest creditor.
The parties initially disputed whether APR satisfied the criteria for enforcement of a Section 1782 subpoena, namely whether ANZ Bank "resides or is found in New York." ANZ Bank has only one branch office in New York, and this branch accounts only for 2% of the bank's assets, operating income and profit, and 0.3% of its employees. The court ultimately found this case to fit squarely within the precedent set by Gucci Am., Inc. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014). Gucci applied Daimler AG v. Bauman, 134 S. Ct. 746 (2014), to hold that there was no basis consistent with due process for the district court to have exercised general jurisdiction over a nonparty bank incorporated and headquartered elsewhere merely because it has branch offices in the forum.
Further, the court rejected APR's argument that ANZ Bank consented to jurisdiction because its New York branch is regulated by the International Banking Act of 1978. The court also rejected APR's request for limited jurisdictional discovery to develop facts in support of subject matter jurisdiction because of APR's failure to rely on more than "conclusory allegations" or "mere speculations or hopes that jurisdiction exists."
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