American Express Bank Ltd. v. Banco Español de Crédito, S.A.
United States District Court for the Southern District of New York
597 F. Supp. 2d 394 (2009)
Facts
Isolux Wat S.A. (Isolux) was a Spanish construction company. Isolux entered into a contract with the Pakistan Water and Power Development Authority (WAPDA) to construct electrical substations in Pakistan. The contract required local performance guarantees in favor of WAPDA. Isolux arranged for the guarantees through the Pakistani branch of American Express Bank (AEB) (plaintiff). Isolux arranged to have the Spanish bank Banesto (defendant) issue counter-guarantees in favor of AEB in case WAPDA made a demand on the basic guarantees in Pakistan. Later, a dispute arose between Isolux and WAPDA. Isolux prevailed in arbitration in Switzerland. Subsequently, WAPDA demanded payment from AEB under the guarantees in Pakistan. AEB did not honor WAPDA’s demand but brought suit in New York seeking payment from Banesto for the counter-guarantees. Banesto filed a motion to dismiss.
Rule of Law
Issue
Holding and Reasoning (Holwell, J.)
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