X AG v. A Bank

The X Company (plaintiff) was organized in Switzerland and had offices in 30 different countries. The Y Company (plaintiff), which also was organized in Switzerland and had a major office in New York, was a subsidiary of X. The Z Company (plaintiff), which was incorporated in Panama and had its headquarters in Switzerland, was associated with X. X and Z conducted no business in the United States, had no presence in the United States, and their books and records were maintained in Switzerland. Y handled business that emanated from and was destined for New York; Y’s other business operated from Y’s Switzerland headquarters. The A Bank (bank) (defendant) had its head office in New York and a branch in London. Y conducted banking business via a London-based account with the bank’s London branch. X, Y, and Z sued the bank to enjoin its London branch from complying with New York-issued subpoenas seeking documents relating to X’s, Y’s, and Z’s accounts with the London branch. The court issued the requested injunctions. The court subsequently considered whether to maintain the injunctions. X’s functional corporate secretary submitted an affidavit stating that X never contemplated that the law of the United States would apply to X’s relationship with the bank because the relationship was centered in London. X’s secretary further attested that all of X’s instructions to the bank came from Switzerland or an English subsidiary and that X would not have done business with the bank’s London branch if X believed that the highly sensitive business information X shared with the bank would not be protected by English law’s stringent disclosure standards. The general manager of the bank’s London branch submitted an affidavit stating that (1) X’s, Y’s, and Z’s relationships with the bank were managed from New York; (2) from the bank’s perspective, its relationship with X, Y, and Z was centered in New York; (3) at least X and Y must have known that their relationships with the bank “would be subjected to the necessary incidents of an overall international relationship having close connections to New York;” and (4) the bank must comply with the legal obligations in the country in which it was incorporated, where its head office was located, and where the bank’s relationships with X, Y, and Z were centered. However, a vice president in the bank’s London office also submitted an affidavit, in which he affirmed that he was responsible for the bank’s relationships with X, Y, and Z.