Bill Text: NY S02530 | 2011-2012 | General Assembly | Introduced

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Bill Title: Declares certain contracts to which a debt evading foreign state is a party to be void as against public policy.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2012-01-04 - REFERRED TO JUDICIARY [S02530 Detail]

Download: New_York-2011-S02530-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         2530
                              2011-2012 Regular Sessions
                                   I N  S E N A T E
                                   January 25, 2011
                                      ___________
       Introduced  by Sen. GIANARIS -- read twice and ordered printed, and when
         printed to be committed to the Committee on Judiciary
       AN ACT to amend the general obligations  law,  in  relation  to  certain
         provisions  of contracts and debt or equity securities of debt evading
         foreign states and state-owned corporations of  debt  evading  foreign
         states to be void as against public policy
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. The general obligations law is  amended  by  adding  a  new
    2  section 5-337 to read as follows:
    3    S  5-337. CERTAIN AMENDMENTS OF CONTRACTS ENTERED INTO BY DEBT EVADING
    4  FOREIGN STATES AND BY STATE OWNED CORPORATIONS OF DEBT  EVADING  FOREIGN
    5  STATES  VOID AS AGAINST PUBLIC POLICY. (A) AN AMENDMENT OF A CONTRACT TO
    6  WHICH A DEBT EVADING FOREIGN STATE, AN AGENCY OR  INSTRUMENTALITY  OF  A
    7  DEBT EVADING FOREIGN STATE, OR A STATE-OWNED CORPORATION OF A DEBT EVAD-
    8  ING  FOREIGN STATE IS A PARTY, INCLUDING A CONTRACT GOVERNING DEBT OBLI-
    9  GATIONS OF OR EQUITY SECURITIES ISSUED BY A FOREIGN STATE, ADOPTED BY  A
   10  VOTE OF THE PARTIES TO, OR THE RECORD OR BENEFICIAL HOLDERS OF THE OBLI-
   11  GATION  IN  CONNECTION  WITH  A  TRANSACTION WITH THE FOREIGN STATE AS A
   12  RESULT OF WHICH THE HOLDERS VOTING IN FAVOR OF SUCH  AMENDMENT  WILL  NO
   13  LONGER BE HOLDERS, AND WHICH PURPORTS TO REVOKE, AMEND, CHANGE OR ELIMI-
   14  NATE  A  PROVISION  WHICH  RELATES  IN ANY WAY TO A HOLDER'S ENFORCEMENT
   15  RIGHTS UNDER SUCH OBLIGATION, INCLUDING BUT NOT LIMITED TO AN  AMENDMENT
   16  THAT RELATES TO A PROVISION WHEREBY THE FOREIGN STATE:
   17    (I)  WAIVES THE IMMUNITY OF SUCH FOREIGN STATE WITH RESPECT TO ACTIONS
   18  OR PROCEEDINGS, INCLUDING ACTIONS OR PROCEEDINGS TO  ENFORCE  ANY  FINAL
   19  JUDGMENT ENTERED AGAINST SUCH FOREIGN STATE, BROUGHT BY ANY HOLDER BASED
   20  UPON OR WITH RESPECT TO SUCH OBLIGATION; OR
   21    (II)  DESIGNATES THE COURTS OR JURISDICTION TO WHICH THE FOREIGN STATE
   22  WILL SUBMIT FOR PURPOSES OF SUIT,  OR  FOR  ACTIONS  OR  PROCEEDINGS  TO
   23  ENFORCE ANY FINAL JUDGMENT; OR
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD05797-01-1
       S. 2530                             2
    1    (III)  DESIGNATES THE CHOICE OF LAW SET FORTH IN ANY SUCH CONTRACT FOR
    2  PURPOSES OF DETERMINING THE RIGHTS AND DUTIES OF THE PARTIES TO ANY SUCH
    3  CONTRACT; OR
    4    (IV)  ELIMINATES  ANY  OBLIGATION  OF THE FOREIGN STATE TO APPOINT AND
    5  MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE  JURISDICTION  TO  WHICH
    6  THE  FOREIGN  STATE HAS SUBMITTED OR IN WHICH IT IS SUBJECT TO JURISDIC-
    7  TION; OR
    8    (V) COMMITS NOT TO CREATE OR PERMIT TO SUBSIST ANY LIEN, PLEDGE, MORT-
    9  GAGE, SECURITY INTEREST, DEED OF TRUST, CHARGE OR OTHER  ENCUMBRANCE  OR
   10  PREFERENTIAL  ARRANGEMENT WHICH HAS THE PRACTICAL EFFECT OF CONSTITUTING
   11  A SECURITY INTEREST; OR
   12    (VI) COMMITS THAT ITS DUTY TO MAKE PAYMENT WILL RANK, AND PAYMENT WILL
   13  BE MADE, PARI PASSU, OR AT LEAST EQUALLY,  WITH  ANY  OTHER  PRESENT  OR
   14  FUTURE  PAYMENT  OBLIGATION,  SHALL BE VOID AS AGAINST PUBLIC POLICY AND
   15  UNENFORCEABLE AGAINST ANY HOLDER THAT HAS NOT  AFFIRMATIVELY  AGREED  TO
   16  SUCH  AMENDMENT,  REGARDLESS  OF THE PERCENTAGE OF HOLDERS OF SUCH OBLI-
   17  GATION VOTING FOR SUCH AMENDMENT.
   18    (B) ANY PROVISION OF A CONTRACT TO WHICH A FOREIGN STATE IS  A  PARTY,
   19  INCLUDING  A  CONTRACT  GOVERNING THE OBLIGATIONS OF SUCH FOREIGN STATE,
   20  WHICH RELATES IN ANY WAY TO A HOLDER'S ENFORCEMENT RIGHTS UNDER ANY SUCH
   21  OBLIGATIONS, INCLUDING BUT NOT LIMITED TO THOSE SET FORTH IN SUBDIVISION
   22  (A) OF THIS SECTION, SHALL SURVIVE THE ENTRY OF FINAL JUDGMENT ON BEHALF
   23  OF ANY HOLDER AGAINST ANY SUCH FOREIGN STATE AND  SHALL  NOT  BE  MERGED
   24  INTO ANY SUCH FINAL JUDGMENT.
   25    (C)  THE  FOLLOWING  TERMS  AS  USED  IN  THIS SECTION, SHALL HAVE THE
   26  FOLLOWING MEANING UNLESS A DIFFERENT MEANING CLEARLY  APPEARS  FROM  THE
   27  CONTEXT:
   28    (I)  "AGENCY  OR  INSTRUMENTALITY  OF  A FOREIGN STATE" SHALL MEAN ANY
   29  ENTITY:
   30    (A) WHICH IS A SEPARATE LEGAL PERSON, CORPORATE OR OTHERWISE; AND
   31    (B) WHICH IS AN ORGAN OF A FOREIGN STATE OR A PROVINCE, OR  ANY  POLI-
   32  TICAL  SUBDIVISION  THEREOF;  OR A MAJORITY OF WHOSE SHARES OR ANY OTHER
   33  OWNERSHIP INTEREST IS OWNED BY A FOREIGN STATE OR  A  PROVINCE,  OR  ANY
   34  POLITICAL SUBDIVISION THEREOF; AND
   35    (C)  WHICH  IS  NEITHER A CITIZEN OF A STATE OF THE UNITED STATES, NOR
   36  CREATED UNDER THE LAWS OF ANY THIRD COUNTRY.
   37    (II) "FINAL JUDGMENT" SHALL MEAN ANY JUDGMENT THAT IS NO LONGER ELIGI-
   38  BLE TO BE APPEALED TO ANY COURT.
   39    (III) "FOREIGN STATE" INCLUDES A PROVINCE OR POLITICAL SUBDIVISION  OF
   40  A FOREIGN STATE.
   41    (IV) "DEBT EVADING FOREIGN STATE" SHALL MEAN:
   42    (A) ANY FOREIGN STATE THAT:
   43    (I) HAS ONE OR MORE FINAL JUDGMENTS ENTERED AGAINST IT BY ANY STATE OR
   44  FEDERAL  COURT  LOCATED  IN  THIS  STATE,  INCLUDING  ANY FINAL JUDGMENT
   45  ORIGINALLY ISSUED IN A FOREIGN COURT THAT IS FILED OR REGISTERED IN THIS
   46  STATE, IN THE COMBINED AMOUNT OF WHICH  JUDGMENTS  EXCEEDS  ONE  MILLION
   47  DOLLARS;
   48    (II)  FAILS  TO SATISFY IN FULL ANY SUCH JUDGMENT FOR A PERIOD OF MORE
   49  THAN TWO YEARS AFTER THE JUDGMENT BECOMES A FINAL  JUDGMENT,  REGARDLESS
   50  OF  WHETHER SUCH JUDGMENT BECAME A FINAL JUDGMENT BEFORE THE DATE OF THE
   51  EFFECTIVE DATE OF THIS SUBDIVISION; AND
   52    (III) IS NOT A FOREIGN STATE ELIGIBLE FOR:
   53    1. FINANCING THROUGH THE INTERNATIONAL DEVELOPMENT ASSOCIATION, UNLESS
   54  SUCH STATE IS ELIGIBLE FOR FINANCING FROM  THE  INTERNATIONAL  BANK  FOR
   55  RECONSTRUCTION AND DEVELOPMENT; OR
       S. 2530                             3
    1    2.  DEBT  RELIEF  UNDER  THE  ENHANCED  HIPC INITIATIVE, AS DEFINED IN
    2  SECTION 1625(E)(3) OF THE UNITED STATES INTERNATIONAL  FINANCIAL  INSTI-
    3  TUTIONS  ACT,  OR  DEBT RELIEF UNDER THE MULTILATERAL DEBT RELIEF INITI-
    4  ATIVE OF THE INTERNATIONAL MONETARY FUND; AND
    5    (B) A PROVINCE OR POLITICAL SUBDIVISION OF A FOREIGN STATE REFERRED TO
    6  IN SUBPARAGRAPH (A) OF THIS PARAGRAPH.
    7    (V)  "STATE-OWNED  CORPORATION  OF A DEBT EVADING FOREIGN STATE" SHALL
    8  MEAN ANY CORPORATION OR ENTITY, OTHER THAN A NATURAL PERSON:
    9    (A) THAT IS AN AGENCY OR INSTRUMENTALITY OF A FOREIGN STATE THAT IS  A
   10  DEBT EVADING FOREIGN STATE; OR
   11    (B) THAT A MAJORITY OF THE SHARES OR OTHER OWNERSHIP INTEREST OF WHICH
   12  IS  HELD, EITHER DIRECTLY OR INDIRECTLY, BY A DEBT EVADING FOREIGN STATE
   13  OR BY AN AGENCY OR INSTRUMENTALITY OF A FOREIGN STATE  THAT  IS  A  DEBT
   14  EVADING FOREIGN STATE.
   15    S 2. This act shall take effect immediately.