The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51 were read on this motion for DISMISSAL.

This is an action to recognize a foreign-country judgment under CPLR Article 53. Plaintiff, Invest Bank PSC, asks this court to recognize a judgment won against defendants in the Abu Dhabi Commercial Court of Appeal in the amount of AED 45,849,888.27, which converts to $12,379,469.83. In addition to the UAE action, plaintiff and defendant Ahmed Mohammed Al Hussaini are involved in litigation in several other forums, including the United Kingdom and Canada.

Defendant Al Hussaini moves to dismiss the complaint under CPLR 3211 (a) (8) for lack of personal jurisdiction and improper service. He also seeks an order under CPLR 3103 (c) that would (1) preclude plaintiff from using any information from nonparty document subpoenas that he alleges were not issued in accordance with CPLR 3120 and (2) direct plaintiff to destroy any data or information received from those subpoenas. Plaintiff cross-moves for default judgment under CPLR 3215 and CPLR 5303 against Al Hussaini and against defendants Al Tadamun [*2]Glass & Aluminum Company LLC (Al Tadamun) and Commodore Contracting (Offshore) SAL (Commodore).

Al Hussaini's requests for dismissal under CPLR 3211 (a) (8) and for suppression under CPLR 3103 (c) are granted. Plaintiff's cross-motion for default judgment against defendant Al Hussaini is denied; plaintiff's cross-motion for default judgment against defendants Al Tadamun and Commodore is denied without opposition.

Defendant Al Hussaini argues that plaintiff's CPLR article 53 judgment-enforcement action against him must be dismissed for improper service and lack of personal jurisdiction. This court agrees.

As relevant here, CPLR article 53 applies to a foreign country judgment that "grants or denies recovery of a sum of money" and that "is final, conclusive and enforceable" under "the law of the foreign country where rendered." (CPLR 5302 [a] [1]-[2].) CPLR 5303 provides that "a court of this state" shall recognize these judgments "as conclusive between the parties to the extent that it grants or denies recovery of a sum of money," except as otherwise provided in CPLR 5304 or contrary federal law. (CPLR 5303 [a].)

A CPLR article 53 plaintiff seeking recognition of a foreign-country judgment need not show that New York courts may, constitutionally speaking, exercise jurisdiction over the judgment debtor—unless the judgment debtor presents colorable, nonfrivolous grounds for denying recognition. (See AlbaniaBEG Ambient Sh.p.k v Enel S.p.A., 160 AD3d 93, 94 [1st Dept 2018]; Abu Dhabi Commercial Bank PJSC v Saad Trading, Contr. & Fin. Servs. Co., 117 AD3d 609, 611 [1st Dept 2014].) Either way, the plaintiff must also establish that the court's jurisdiction over the judgment debtor, whatever its substantive basis, was properly invoked through service on the judgment debtor consistent with the CPLR or contract. (See TCA Global Credit Master Fund, L.P. v Puresafe Water Sys, Inc., 151 AD3d 1098, 1100 [2d Dept 2017] [holding that a plaintiff moving without opposition under CPLR 3213 for recognition of a Florida judgment "bore the burden of establishing . . . that the defendants were properly served with the summons and motion"].)^[FN1]

Here, plaintiff contends that it properly served Al Hussaini in Lebanon by the leave-and-mail method under CPLR 308 (2) and CPLR 313. This court is unpersuaded.

CPLR 313 permits out-of-state service on a nondomiciliary defendant only if that party is "subject to the jurisdiction of the courts of the state under [CPLR] section 301 or 302."^[FN2] Plaintiff relies on CPLR 302 (a) (2): It contends that Al Hussaini "conducted tortious acts within the state" within the meaning of that provision by "us[ing] New York's correspondent banks to hinder, delay or defraud Invest Bank and organize the concealment of his assets using third-party nominees." (NYSCEF No. 41 at 4.) But tortious-act jurisdiction under CPLR 302 (a) (2) has "traditionally required the defendant's presence here at the time of the tort"—not merely the presence of "the instrument of the tort itself." (Pramer S.C.A. v Abaplus Intl. Corp., 76 AD3d 89, 97 [1st Dept 2010] [emphasis added].) Plaintiff does not suggest that Al Hussaini was physically present in this state at the time of the alleged torts on which plaintiff relies to establish jurisdiction. Nor does plaintiff attempt to argue that this case somehow falls into an exception to the traditional requirements for tortious-act longarm jurisdiction.

Plaintiff also asserts that the court has "in rem jurisdiction over any funds that transited and continue[] to transit through New York's corresponding banks' accounts." (NYSCEF No. 41 at 4.) But this is not an action in rem under CPLR 314 (2) or quasi-in rem under CPLR 314 (3)—i.e. one directed at particular, identifiable property in New York or premised on an actual (not merely potential) attachment of New York property. (See Bongiorno v Hayden, 233 AD2d 211, 212 [1st Dept 1996] [affirming motion court's holding that the court lacked in rem jurisdiction over plaintiff's declaratory-judgment action because the requested declaration did "not put into dispute the parties' title or interest in any specific property in New York"].) Conversely, if this court were to have in rem jurisdiction under CPLR 314, that jurisdiction would not extend to the relief that plaintiff seeks—a money judgment running against Al Hussaini personally. (See Kelly v Stanmar, Inc., 51 Misc 2d 378, 379 [Sup Ct, Albany County 1966] [holding that "it is obvious that a claim of [in rem] jurisdiction . . . could not result in an in personam judgment"].)

In short, plaintiff has not properly served Al Hussaini. Absent proper service, dismissal of the action as against Al Hussaini is required for lack of personal jurisdiction.^[FN3] For the same reason, the branch of plaintiff's cross-motion seeking default judgment as against Al Hussaini is [*3]denied.

Plaintiff cross-moves without opposition for default judgment against defendants Al Tadamun and Commodore, in addition to defendant Al Hussaini. This branch of plaintiff's cross-motion must be denied as well.

To obtain default judgment under CPLR 3215 and CPLR article 53, plaintiff must demonstrate proper service on these defendants, their defaults, and the facts constituting plaintiff's claims against them. Plaintiff did not properly serve either Al Tadamun or Commodore.

As an initial matter, plaintiff did not use the correct method of service for Al Tadamun. Plaintiff represents that it served Al Tadamun in the United Arab Emirates under CPLR 310-a. (See NYSCEF No. 41 at 7 [describing method of service]; NYSCEF No. 5 [affidavit of service].) But plaintiff's complaint alleged that Al Tadamun is a limited liability company. (NYSCEF No. 2 at ¶ 3.) The CPLR provision governing service on limited liability companies is CPLR 311-a. CPLR 310-a is instead the method to be used for limited liability partnerships.

To be sure, both CPLR 310-a (a) and CPLR 311-a (a) permit service by hand delivery to any agent or employee of the recipient party authorized to receive service, or to any other person designated by the partnership or company to receive process. But it is far from clear that plaintiff effectuated service on Al Tadamun by these means. The affidavit of service does not say that the attorney serving process for plaintiff hand-delivered the papers to an agent or employee of Al Tadamun. Rather, the affidavit appears to reflect delivery on an employee of a firm engaged in liquidating the affairs of Al Tadamun—apparently a receivership- or bankruptcy-type process. (See NYSCEF No. 5 at 1.) And the affidavit does not represent (or otherwise establish) that under UAE law the employee of a "liquidator" constitutes an agent or employee of the company being liquidated; nor that the particular employee who received plaintiff's papers was authorized, or otherwise designated, to accept process on behalf of Al Tadamun.^[FN4]

More fundamentally, plaintiff has not identified a basis by which it could properly serve Al Tadamun outside New York other than CPLR 313.^[FN5] CPLR 313 requires that Al Tadamun be subject under CPLR 301 or 302 to the jurisdiction of the New York courts. And neither plaintiff's complaint nor the papers submitted in support of plaintiff's opposition/cross-motion identify any facts that might permit this court under CPLR 301 or 302 to exercise personal jurisdiction over Al Tadamun—a UAE company that was sued in the UAE based on a transaction with plaintiff, another UAE entity.

Plaintiff's service on Commodore fares no better. The complaint alleges that Commodore is a Lebanese corporation. (NYSCEf No. 2 at ¶ 5.) Plaintiff represents that it served Commodore in Lebanon under CPLR 311 and 313. (NYSCEF No. 41 at 6; NYSCEF No. 6.) But plaintiff [*4]neither alleged in the complaint nor provided facts on this motion that might establish jurisdiction over Commodore under CPLR 301 or 302, as CPLR 313 requires. At most, the complaint alleges that Commodore guaranteed Al Tadamun's obligations under the loans that plaintiff made to Al Tadamun. But absent some provision in the guarantee that might implicate the jurisdiction of the New York courts—and plaintiff has not identified any—this court perceives no basis for exercising jurisdiction over a guarantee executed by a Lebanese corporation in favor of a UAE bank arising from loans by that bank to a UAE company.

Absent proper service, plaintiff is not entitled to default judgment against Al Tadamun and Commodore. To the contrary, plaintiff's claims in this action against those defendants must be dismissed for lack of personal jurisdiction due to improper service.

After plaintiff brought this action in May 2021—but before it served defendant Al Hussaini with process in September 2021—plaintiff served a series of nonparty document subpoenas seeking Al Hussaini's financial information, and obtained numerous documents in response to those subpoenas. Al Hussaini contends that in doing so, plaintiff repeatedly failed to comply with the notice requirements of CPLR 3120; and he asks this court to suppress the information that plaintiff obtained through those noncompliant subpoenas. Al Hussaini's request for suppression is granted.

A. Whether Plaintiff Complied with CPLR 3120 in Issuing the Subpoenas

The first issue relating to plaintiff's nonparty document subpoenas is whether plaintiff complied with the requirements of CPLR 3120. This court concludes that plaintiff did not.

CPLR 3120 (3) provides that when issuing a document subpoena, the issuing party must "at the same time serve a copy of the subpoena upon all other parties"; and that "within five days of compliance therewith, in whole or in part," the issuing party must also "give to each party notice that the items produced in response thereto are available for inspection and copying, specifying the time and place thereof."

Plaintiff filed its complaint in this action on May 19, 2021. (NYSCEF No. 2.) Between May 21, 2021, and July 16, 2021, plaintiff served over 25 nonparty document subpoenas; and it received responses to those subpoenas between June 22, 2021, and October 5, 2021, inclusive. (See NYSCEF No. 25 at 5-8.) Plaintiff did not serve the summons and complaint on Al Hussaini until September 6, 2021. (NYSCEF No. 7 at 3.) Even assuming that plaintiff also served copies of the subpoenas on Al Hussaini when effecting service of process, more than three months elapsed between issuance of the earliest subpoenas and service on him of those subpoenas.

Plaintiff's New York counsel attempts to minimize this failure to comply with CPLR 3120 by arguing that any delay in notification was unintentional and due to a "miscommunication" between counsel and plaintiff's local attorneys. (NYSCEF No. 41 at 8.) New York counsel asserts that it had expected service, including service of the subpoenas, to be effected by plaintiff's local counsel in the other jurisdictions where proceedings against Al Hussaini had commenced. (See id.) But New York counsel's putative intent to ensure timely service of the subpoenas does not alter the fact that timely service under CPLR 3120 (3) did not occur.

Plaintiff also argues that CPLR 3120 "should be interpreted according to [its] statutory purpose: keeping all parties informed of what another party is seeking from a nonparty." (NYSCEF No. 41 at 8, quoting Patrick M. Connors, Practice Commentaries, CPLR C3120:12A.) [*5]Plaintiff asserts that it satisfied this purpose by placing Al Hussaini on constructive notice of the document subpoenas—i.e., by serving papers on him in a parallel British action that included exhibits referencing the subpoenas, and by serving evidence on him in that action that was derived from the subpoenas. (See id. at 8-9; NYSCEF No. 34 at ¶¶ 4-10.) Plaintiff concedes that this form of notice "does not remedy stricto sensu the lack of service pursuant to CPLR [3120] at the same time the subpoenas were served." (NYSCEF No. 41 at 8-9 [italics in original].) Plaintiff is thus suggesting, in effect, that this court should treat constructive notice as sufficient anyway. Plaintiff cites no New York precedent authorizing the court to do so. This court declines to experiment with plaintiff's proposed approach.

B. Whether the Information Obtained through the Subpoenas Should Be Suppressed

Al Hussaini argues that plaintiff should be prohibited from using the information obtained by the subpoenas and that the court should order plaintiff under CPLR 3103 (c) to return or destroy the information. This court agrees.

CPLR 3103 (c) provides that "[i]f any disclosure under this article has been improperly or irregularly obtained so that a substantial right of a party is prejudiced, the court, on motion, may make an appropriate order, including an order that the information be suppressed." CPLR 3103 "governs the subject of 'protective orders' for disclosure abuses and confers broad discretion upon a court to fashion appropriate remedies both where abuses are threatened . . . and where they have already occurred." (Lipin v Bender, 84 NY2d 562, 570 [1994]). In determining whether a party has suffered prejudice because of improperly obtained discovery, a key consideration is whether the information would, "in any event . . . have to be produced in the ordinary course of discovery." (Coast to Coast Energy, Inc. v Gasarch, 77 AD3d 589, 589 [1st Dept 2010].)

Here, plaintiff has not shown that it would have been entitled to the financial information at issue in the ordinary course. That information is not relevant to the issues presented by a CPLR article 53 judgment-recognition action, which "merely asks the court to perform its ministerial function of recognizing the foreign country money judgment and converting it into a New York judgment." (Abu Dhabi Commercial Bank, 117 AD3d at 611 [internal quotation marks omitted].)

Plaintiff contends that the "subpoenas were validly issued in furtherance of jurisdictional inquiry into Mr. Al Hussaini's assets." (NYSCEF No. 41 at 12 [emphasis omitted].) But jurisdictional discovery in the CPLR 3211 sense is available in appropriate circumstances, by leave of court, to enable a plaintiff to defend fully against a CPLR 3211 (a) (8) or (a) (9) motion to dismiss for lack of personal jurisdiction. (See CPLR 3211 [d]; see also Peterson v Spartan Indus., Inc., 33 NY2d 463, 466-467 [1974] [discussing standard for granting CPLR 3211 [d] jurisdictional discovery].) This type of jurisdictional discovery is not available to a plaintiff that has not even served the defendant with process.^[FN6]

Plaintiff also asserts that it needed—and could properly obtain—discovery into Al [*6]Hussaini's financial transactions and assets in anticipation of a challenge by Al Hussaini to recognition of the Abu Dhabi judgment. (See NYSCEF No. 41 at 12-13.) This assertion is not persuasive. If plaintiff reasonably believed that personal jurisdiction existed but that the possibility of a challenge to recognition warranted additional clarity and support for the presence of jurisdiction, plaintiff could have sought jurisdictional discovery through a pre-action discovery special proceeding under CPLR article 4 and CPLR 3102 (c). (See Bumpus v New York City Transit Auth., 66 AD3d 26, 33 [2d Dept 2009] [discussing this form of discovery].) There is no indication in the record that plaintiff did so.

For that matter, plaintiff has not shown that when it brought this action it reasonably believed that personal jurisdiction existed. The complaint's only jurisdictional allegation is the conclusory statement that "upon information and belief, each [defendant] has connections to this jurisdiction, including assets and communications that have been stored and passed through this jurisdiction." (NYSCEF No. 2 at ¶ 6.) Overseas transactions do not, however, "constitute the transaction of business in New York pursuant to CPLR 302 (a) (1)" merely because they incidentally entail the transmission of dollar-denominated payments through New York banks. (Bluewaters Communication Holdings, LLC v Ecclestone, 122 AD3d 426, 427 [1st Dept 2014]; accord Pramer, 76 AD3d at 96-97 [holding that "payment into a New York account does not alone provide a basis for New York jurisdiction . . . especially when all aspects of the transaction occur out of state . . . absent more extensive New York banking relating to the transaction at issue] [emphasis added].) As discussed above in Point I, the use from overseas of New York correspondent banks does not constitute tortious conduct committed in New York within the meaning of CPLR 302 (a) (2). And in rem jurisdiction over property located in New York under CPLR 314 (2) would not give rise to personal jurisdiction over Al Hussaini himself.^[FN7]

Indeed, the record contains direct evidence that rather than obtaining financial discovery to bolster this action against jurisdictional challenge, plaintiff instead brought this action to obtain that discovery.^[FN8] In July 2021, counsel for plaintiff in the related British legal proceeding told the court there that "we're not aware of any assets in the [United] States and we don't have any [asset] freezing relief there," but instead that plaintiff "simply went to get a recognition order to get disclosure" that might "lead to more proceedings" against Al Hussaini in "other jurisdictions." (NYSCEF No. 14 at Tr. 61 [emphasis added].) Counsel also told the court that although plaintiff "believe[d] that [Al Hussaini] has no notice" that plaintiff has "made an effort to enforce the judgments outside the Middle East," and that he did not "need to be served" with process in the "recognition proceedings in New York" until "August or September" 2021, plaintiff's issuance of the subpoenas "against clearing banks" in New York raised a "remote [*7]possibility of tipping-off" Al Hussaini by chance prior to service of process. (Id. at Tr. 59, 62.)

These candid statements suggest that permitting plaintiff to retain the financial discovery it obtained in this action through the nonparty subpoenas would undermine the purpose of the notice provisions of CPLR 3120 (c) and would unfairly prejudice Al Hussaini under New York law. That information must be suppressed under CPLR 3103, as Al Hussaini requests.

Finally, Al Hussaini seeks monetary sanctions against both plaintiff and its counsel under 22 NYCRR 130-1.1. (See NYSCEF No. 28 at 2 [order to show cause]; NYSCEF No. 25 at 13-17 & n 6.) Al Hussaini's request for monetary sanctions is denied. This court is somewhat skeptical of the explanation for why plaintiff's nonparty subpoenas (and the discovery obtained through those subpoenas) were not timely provided to Al Hussaini—particularly given the weakness of plaintiff's jurisdictional arguments in this action. But that skepticism is not sufficient, without more, to meet the high bar of awarding monetary sanctions under Part 130.

Accordingly, for the foregoing reasons, it is hereby

ORDERED that the branch of plaintiff's cross-motion seeking default judgment under CPLR 3215 against defendant Al Hussaini is denied; and it is further

ORDERED that the branch of defendant Al Hussaini's motion seeking under CPLR 3211 (a) (8) to dismiss plaintiff's claim against him is granted, and the action is dismissed against Al Hussaini, with costs and disbursements to be taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that the branches of plaintiff's cross-motion seeking default judgment under CPPLR 3215 against defendants Al Tadamun and Commodore are denied, and plaintiff's claims against those defendants are dismissed for lack of personal jurisdiction, no costs; and it is further

ORDERED that the branch of defendant Al Hussaini's motion seeking under CPLR 3103 (c) a protective order with respect to the nonparty discovery obtained by plaintiff is granted in part and denied in part; and it is further

ORDERED that plaintiff, plaintiff's in-house and outside counsel (whether in this action or otherwise providing legal representation to plaintiff), and plaintiff's employees, agents, and those otherwise acting on plaintiff's behalf, are prohibited from retaining, accessing, disclosing, or using any of the data and information that was obtained by plaintiff through the use of nonparty subpoenas issued in this action between May 21, 2021, and July 16, 2021; and it is further

ORDERED that plaintiff, plaintiff's in-house and outside counsel (whether in this action or otherwise providing legal representation to plaintiff), and plaintiff's employees, agents, and those otherwise acting on plaintiff's behalf shall destroy all copies of data and information that was obtained by plaintiff through the use of nonparty subpoenas issued in this action between May 21, 2021, and July 16, 2021, and that plaintiff shall provide a sworn certification of compliance with this directive (by e-filing on NYSCEF) within 14 days of entry of this order; and it is further

ORDERED that the branch of defendant Al Hussaini's motion seeking under 22 NYCRR part 130 the award of monetary sanctions against plaintiff and its counsel is denied; and it is further

ORDERED that defendant Al Hussaini serve a copy of this order with notice of its entry on all parties and on the office of the County Clerk, which shall enter judgment accordingly.