## Facts

- International Legal Consulting Ltd. (ILC) and Malabu Oil & Gas Ltd. (Malabu) entered into an engagement letter and fee agreement dated January 19, 2010 for ILC to provide consulting and negotiation services related to Malabu’s interests in Nigerian oil block OPL 245.
- ILC claimed it helped facilitate a resolution and transfer arrangement concerning OPL 245 and asserted entitlement to a large “success fee”; Malabu disputed any obligation to pay ILC.
- Transaction proceeds were initially placed in a New York escrow account at JPMorgan Chase Bank under an escrow agreement.
- After escrow conditions were satisfied, the funds were transferred from New York and deposited into an account at JPMorgan’s London branch in the name of the Federal Government of Nigeria.
- ILC initiated arbitration in London under the agreement’s arbitration clause and filed a New York special proceeding seeking provisional relief against the funds while the arbitration was pending.
- The New York court had issued an ex parte order of attachment directed to JPMorgan; ILC moved to confirm it and sought a temporary restraining order and preliminary injunction under CPLR 7502(c).

## Issues

1. Whether a New York court may confirm or maintain an attachment against funds held in an account at a bank’s London branch after the funds have left a New York escrow account.
2. Whether the London-branch account could be treated as attachable property of Malabu in New York, including on an asserted equitable or beneficial-interest theory.
3. Whether CPLR 7502(c) permits a preliminary injunction restraining disposition of the London-branch funds in aid of a London-seated arbitration, including whether ILC showed that an eventual award would be rendered ineffectual without such relief.

## Decision

- The court denied ILC’s motion to confirm the ex parte order of attachment and vacated the attachment.
- The court denied ILC’s request for a temporary restraining order and preliminary injunction in aid of arbitration under CPLR 7502(c).
- The court did not decide the merits of the fee dispute, which remained for determination in the London arbitration.

## Legal Principles

- For attachment purposes, a bank deposit is generally located at the branch where the account is maintained; a foreign-branch account is treated as a separate obligation with its situs in the foreign jurisdiction, not at the bank’s New York presence.
- Once the escrowed funds were transferred out of New York to a London-branch account, the prior New York situs did not establish continuing attachable property in New York.
- Attachment requires a showing of attachable property of the respondent within the court’s reach; funds held in an account titled to a third party (here, the Federal Government of Nigeria) are not attachable absent proof of a present property interest of the respondent.
- CPLR 7502(c) provisional relief in aid of arbitration is limited and requires a showing that the anticipated arbitral award may be rendered ineffectual without the relief; it does not authorize relief exceeding what would be available in an ordinary action or orders that effectively operate on foreign-sited assets beyond the court’s territorial and property-based limits.

## Conclusion

The court refused to use New York provisional remedies to freeze or secure funds that had moved from a New York escrow to a London-branch account titled to a foreign sovereign, holding that ILC failed to identify attachable New York property of Malabu and failed to satisfy CPLR 7502(c)’s requirement that, without relief, any eventual arbitral award would be rendered ineffectual.


Int'l Legal Consulting Ltd. v. Malabu Oil & Gas Ltd., 35 Misc. 3d 1203(A), 950 N.Y.S.2d 723 (Sup. Ct. N.Y. Cnty. 2012)