Stone Column Trading House Ltd. v Beogradska Banka A.D. in Bankruptcy

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Stone Column Trading House Ltd. v Beogradska Banka A.D. in Bankruptcy 2017 NY Slip Op 32077(U) October 2, 2017 Supreme Court, New York County Docket Number: 650228/13 Judge: Charles E. Ramos Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 1] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 SUPREME COURT OF 'l'HE STATE OF NEW YORK COUN'I'Y OF NEW YORK: COl'dMERCIAL DIVISION ... -- -- - - - - - - - - - - - - - - - - - - - - - - ... -- ... --- ... - - - - - - - - - - - - - x ·~ S'l'ONE COLUJYD\f TRADING HOU.SE LIMITED, Index No. 650228/13 Claimant, BEOGRADSKA BANKA A.D. IN BANKRUPTCY Claimant, STONE COLUMN TRADING HOUSE LIMITED -against- Claimant. --------------------------------------------x In rnot:ion seqt.ience 07, claim.ant Stone (:'olum:n Trading House Limited (Stone Column) moves for judicial notice of Cyprus and Yugoslav law as relates to the validity of certain powers of attorney (CPLR 4511). In motion sequence 08, Stone Column moves for a determination of the applicable choice of 1aw {CPLR 4511}. Claimaint Beogradska Banka A.D. in Bankruptcy (the Beogradska trustee) cross-moves for an order finding that the powers of attorney at issue are valid and effective under New York law. Stone Colu.mn Complaint The relevant events at issue in this action arose in the midst of the protracted civil 1Nar that erupted in the former Socialist Federal Republic of Yugoslavia {Yugoslavia) . 2 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 2] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 Stone Column is a Cyprus corporation that was engaged in the import and export of energy products and raw materials between private companies in the former Yugoslavia and outside trading partners. Stone Column was incorporated by three Yugoslav nationals, Dragojle Radonjic, 1.Jovica_ Aleksic, and Orce Korunovski. According to Stone Column, the existing banking system in war--time Yugoslavia was unable to effectively support international transactions, because the Yugoslav currency was experiencing severe hy:.Jerinflation. Consequent:ly, Stone Column sought to deposit its funds in a foreign banking institution. On 1v1arch 31, 1992, Stone Column deposited ~>2 0 million in a ne'"'Jly---created account (Stone Colunm account.) in Beog-radska Banka New York Agency (Beoqradska NY}, the New York branch of a foreign-licensed Yugoslavian bank. 'I'he very next month, the United Nations imposed econorn.-lc sanctions on Yugoslavia, followed by a U.S. imposed trade and economic embargo, and the fall of the Yugoslav governrnent. In May 1993, a unit of t.he U.S. Treasury Department clm:;ed Beogradska NY, and froze its assets fo.-c over a deca.de" Once the U.S. embargo on Yugoslavia (now kno11m as the Republic of Serbia) , 1,vas lifted, the Superintendent of Financial Ser.·..,/ ices fo:t:"' t.he St.ate of l'Je~l\7 Yor.~k: ( St1pe:r."inte11dent) ·1 took 1 The Superintendent is the statutory receiver tasked with liquidating failed foreign banks' New York assets and managing the claims process to pay off the bank's creditors (see gene:ra.IJ_y 2 3 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 3] INDEX NO. 650228/2013 NYSCEF DOC. NO. 321 RECEIVED NYSCEF: 10/03/2017 possession of Beoqr·adska l~TI' s New York off ice, in Janua.r:y 2 002. 'I'hereafter, the assets of Beogradska NY were l~he subject of protracted litigation in federal court between the Superintendent and a competing Ser.·bia.n bank receiver. The litigation -;,·ms ultimately settled. On January 13, 201.2, Stone C'olurnn presented its claim to the Superintendent for the ba."J.ance of its account, $20 :million plus interest. On July 13, 201.2, the Superintendent rejected Stone Column's claim. Shortly Lhereafter, St.one Colunm commenced thi~:; action challenging the Superintendent's rejection, under New York Banking Law § 62.5 (3}. Beogradska Banka A.Do in Bankruptcy Complaint According to the Beogradska trustee's complaint, the $20 million deposited in the Stone Column account constitutes a portion of a $40 million Jo.::m issued by Beobanka dd Belgra.de (Beobanka}, a bank 1,,.._;hich operated w:i.th:Ln the Beogradska bcmking system, to the City of Belgrade for the purpose of building a sports stadium in Belgrade in the early to mid-1990s, and that it is the true Oi1mer of the funds in the Stone Colunm account. The Beogradska trustee alleges that two of Stone Column's directors executed a power of attorney (POA) in favor of Zeljko Popovic, an executive at Beobank.a, and Branislav Jerotic, a ln re Liquida.U.on of ...Tugobanka, A.Do, 46 :Misc3d 615, Ct, J:.JY County 2 014, Ramos, ~L] ) . 3 4 of 20 616···17 [Sup [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 4] INDEX NO. 650228/2013 NYSCEF DOC. NO. 321 RECEIVED NYSCEF: 10/03/2017 director of Iii.mes d.ooo., a limited lial:)ility company incorporated in the former Yugoslavia. Subsequently, Popovic .::md ,Jerotic, purporting to act as agents on behalf of Stone Column pursuant to the POA, sent letters Lo Beog·radska NY requesting that Beogradskc:t NY enter into an agreement with the National Bank of Yugoslavia (now the National Bank of Serbia [NBS J } for the pu.r.-pose of fa.cili tating NBS' s "buy back" of the frozen fun&3 in the Stone Col urrn account, in exchange for the release of Yugoslav currency to Limes, exchange, Beogradska NY purportedly ag-reed to pay NBS back In 1/J.i th the frozen funds in the Stone Co.1.urnn account (BeogradskamNBS agreements) . Beogradska NY submitted its claim to t:he Superintendent, in its purported capacity as trustee to the legal successor of NBS and pursuant. to the Beogradska--·NBS aqreements 0 The Superintendent. rej ect.ed Beogradska' s c1a.i:m., and the Beog-radska tn.wu:.~e commenced th:\.s action a.gainst the Superintendent 0 Because Stone Column's and the Beogradska trustee's lawsuits arise out of the same accou:nt. with Beogradska_ rTi, ehe parties entered into a stipulation of consolidation and discharge {stipulation} (lffSCEF Doc No. 14) . In that stipulation, the parties agreed to consolidate Stone Column's and Beogradska trustee's lawsuits into a single action before this Court, who will det·;ermine v1hich party has the s1..iperior riqht to the Stone 4 5 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 5] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 Column account." Discussion I. Judicial Notice of Foreign Law Stone Column maintains that Cyprus law applies to the validity of the POA because l} Stone Column is a Cyprus based company, governed by Cyprus law; 2) the POA is broadly phrased, purporting to grant the agents power over Stone Column's "operations" vdthout reference to any parUcuJ.ar asset or its location; 3} at the time POA was purportedl::/ executed, Stone Column d.i.d not have ct bank account, office, asset or any other contact in New York; 4) all of Stone Column's directors were Yugoslav nationals who did not speak English and have never traveled to the United States; 5) the named agents in the POA were based in and doing business in Yugoslavia; and 7) the POA, if enforced, was to be used solely bet.ween parties based in Yugoslavia. In its opposition, the Beogradska trustee argues that Stone Column has failed to conduct ct proper conflicts analysis in its rnotion, and thus, Nev.1 York law applies and the POA should be found valid. Following oral argument on the motion and cross-motion, this Court permitted the parties to submit supplemental briefing on the issue of choice of law, specifically, with regard to the application of New York la';,v (.3/?.7/J.7 Tr 54--47). 6 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 6] INDEX NO. 650228/2013 NYSCEF DOC. NO. 321 RECEIVED NYSCEF: 10/03/2017 In its supplemental su}Jrnissj_or1, the Beogradska trustee "concedesg that Yugoslav law applies to the validity of the POA in light 0£ the Court" s ''·dete:r..-rr:.ination that the weight of the activities took place in YugosJ.avia" (Mad.on Supp" l>ff., SI 20) 'I'o be clear, this Court did not rnake a.ny factual determinations. This Court plainly reserved decision on determination of choice of lffw, v:hile giving the parties the opportunity to submit supplemental briefing on the potentia.l applicability of New York lmN (3/27/17 Tr 4<1-,17). The first: issue to resolve in di::termining wh(~ther t~o undertake a choice of law ana.lysis is whether then: is an actual conflict of laws (Matter of" iillstate Ins. Co. Jersey lvJfrs . Lns. Co.], 8.1 N-Y2d 219, 223 [Stolarz- New [1993]). Only when it can be concluded that no confJ.ict of lffws exists can a choice of law ana'J.ysis be dispensed vvit:h, whereupon New York lav1J ( .J. Aron 1996])" & Co, v Chown, Correspondingly, where tr1e l~he Court v,riJl apply 2 31 AD2d 42 6 [ l st Dept Court identifies an actual conflict of la-.-,,,m ,. a. choice of lall'.r ana.lysis is required (Id.) . An addi t:i.onal complicating· factor in this case is that the laws C)f two potent:i.aJ.ly applicable jurisdictions are foreign. A party who intends to raise an issue concerning- the law of ct foreign country sb=.:.11 give not ice by, inter alia, a motion ( C.PLR 4511 [bJ) , "The court: may choose to take judicial notice of the lav\rs ·:)f a fc:reign j-:..1risdi(~ti()r1( l)u.t it i.s or1ly req11ireCi to do so 6 7 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 7] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 when the party requesting the notice provides 'suff.i ci.ent .information to enable it to comply iNith the request,'" pursua_nt to CPLR 4511 (b) (Sea Trade Mar. 483, 484-85 [Pt Dept 2013]; v Coutsodontis, 111 AD3d i11ilden.stein & Co,, 297 AD2d Corp. i11ar.i.n v [1'3:: Dept 2002]}. 214, 2111 Copies of statutes are prima_ facie evidence of the law when contained in pu.blications g-enerally admitted a_s evidence of the existing L1w of the jurisdiction where it is in force (Sea. Trade I•ra.r. Corp,, 111 AD3d at 484-85). Expert affidavits interpreting the relevant legal provisions can also be a basis for constructing foreign law when accompanied by sufficient documentary evidence (Id.), The court can t.a.ke judicial notice of foreign law even ;,vhen the parties submit conflicting expert affidavits and need not hold a.n. evidentiary hearing ,~,/here ei Lher pa:cty subrni ts sufficient persuasive inform.at.ion to determine the scope and effect:. of a. particula.r la_w (cf .Korea Life Ins. Co., Ltd. \/.Morgan Guar. Trust Co. of New York, 269 FSupp2d 424, 439-440 [SD NY 2003], reconsideration denied 200'1 WL 1858314 [SD l\TY 2004J). In this regard, the motion court has broa.d discretion to take notice of the la-ws of a foreign country, based on the evidence presented (CPLR 4511 A. [b]) . Cyprus law Stone Column ha_s presented competent proof Sl1fficient for '7 I 8 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 8] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 this Court to take judicial notice of Cyprus law" Stone Column submitted the sworn expert affidavit of Cy_priot attorney, Yiannos Georgiades, Esq, , accompanied by his curriculurn vitae detailing his leqal expertise, and auth,2nticated by an apostille certi.fi.cate< 2 St.one Colu.mn has also submitted certified translations of a.11 of the Cy--prus lmvs reference6. in Georgiades' test.irnony, including the relevant. port.ion of the Cyprus Companies Law, Cert·:i fying Officers Law, a.nd caselaw interpreting these statutes (Exhibits 4-5, annexed to the Georgiades Aff.), Georgiades concludes that the POA is inv.:.=1li.d under Cypr·us .1.a·w because it. vJas not properly executed before a certifying officer pursuant to cha.pter 39 of the C:'[prus Certifying· Officers Law, and was not iss~H:~d following a va.1.id decision or resob;.tion of Stone Col um.:n' s board of directors, pursuant to Stone Col urnn' s Articles of Association (Georgiades Aff., ~~ 8-11). Georgiades explains that the Minister of Interior appoints CYJ;:irus, Serbia. and the US are signatories to the Ha.gue Convention. An apostille is an aut.he.nti.cation of a. pub1ic document issued pursuant to the 1961 Hague Conventicm. The Hague Convention provides for the simplified certification of public (including notarized) documents to be u.sed in countries that have joined the convention. Under the Hague Convention, signatory countries have agreed to recognize public documents issued by other signatory countries if those documents are authenticated by the attachment of an i.nternat.ional recognized form of authentication, knolfm as the apostille. The apostille ensures that document:s issued in one siqnatory country will be recognized as valid in another signatory country (Nevv York State Departinent of State, Division of Licensing Services, A.uthentica.tion of Public Documents: https: I /<,.ll!:rw.dos .ny .gov/licensing/apostille.html [accessed Sep. 15, 2017]), 8 9 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 9] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 ~rpon certifying officers, and appo.Lntrnent, an officer receives a personalized seal; v;hen certifying a document, the certifying officer affixes his seal 9). (Id., i In addition, the person executing the docu.ment must be personally knmvn to the certifying office.::-, oY the person's identity must be attested by two persons personally knovvn to the certifying officer who :rn1::;;t also sign the document, in addition to affixi.nq a stamp {Id., f 10). Georgiades states that, even if a power of attorney has the proper seal and cerLification, it is unenforcea.ble where it does IWt ha.Ve the signature of all Of the di.rectors Of the company, with certain excepl·:icms (Id., 'fl'j[ 13-18). Georgiad;:?s explains that interpreting Stone Column's l-i.rticles of Association under C:;rprus Law, any matter may be decided by a majority vote of all directors of the company. The Beogradska trustee submitted a competing foreign law a.ffidavit by a Cypriot attorney, Angelos Pa_phitis, who disagree~::; that a po'He:c of attorney need be cert.if ied in order to be deemed valid. He testifies that certification, obtaining an apostille and/or a notary on a power of attorney is merely a moderr1 commercial lrend, but is not a legally binding obligat.ion. this basis, he co~ncl udes tha.t the POA is perfectly valid Cy1Jrus law {PaphiU.s Aff 0, ~mder Exhibit B, c:mnexed to the Marion Aff.} . Paphitis also stat.es that: "all three directors of the 9 10 of 20 On [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 10] INDEX NO. 650228/2013 NYSCEF DOC. NO. 321 RECEIVED NYSCEF: 10/03/2017 Company [Stone Column] were presented at the meeting" ·when t;he POA 'it.:as purportedly executed (Exhibit B, annexed to the Maricrn Aff, g[lj[ 9-10) o ?.aphitis' affidavit is unsworn, does not contain an apostille certificate, and does not include certified transJat.ions of the staLutory .:.=.rn.d common L=n'll that he references. Moreover, on.1.y two directors' signat.u.res appear on the POA a_nd the sig-.r1ature 1 ine for J'ovica rema.ins bJ.ank. Jovica has repeatedly denied in sworn testimony that he wa.s notified of the board meeting where the POll.. approval, or ever approved was purportedly prese:1t.ed for for that matter. Paphitis's conclusion that the POA is valid because •all three directors of the Cornpa.ny [Stone Column] vvere presented a.t the meeting," is simply puzzling, i.n liqht of the evidentiary record. The conseql.1ence of these critical omissions and Lhe failure to adequa t.ely present Cyprus Ja<.rl is that the Beo·;r::cadska trustee's expert witness statement is not to be given any weight, because it does noL provide sufficient information for this Court to a_ccord thi~ cons tructior.t of C:y-prus law that its expert u:cqes 0 Thus, the Beogradska trustee fails to rebut the presentation of Cyprus la-w by Stone Colurnn's expert {see Sea. T.ra.de Haro Corp., 111 AD3d at 483) . E~ Yugoslav Law According to Stone Column's Yugoslav law expert, the 10 11 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 11] INDEX NO. 650228/2013 NYSCEF DOC. NO. 321 RECEIVED NYSCEF: 10/03/2017 Yugoslav laws applicable in 1992 dictate that the POA is to be purportedly issued by Stone Column's directors at a board meecing in force in March 1992 when the POA was ~~rportedly executed The Beogradska trustee suhnits a one-page, unsworn statement observation that Stone Column's Yugoslav iaw expert is not the Constitutional Court of Serbia is «exclusively which establishes this {Id.). 11 12 of 20 con~etentR in [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 12] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 Nonetheless, Andj elkovic opines that the POA is valid_ and ' ,.;,] en f orceaD l e unu.;:?r Yugoslav law because t:he agents designated by the POA (Orce and Dragojie) never directly revoked it, and the holders of the POA (Popovic ancI Jerotic) have also not demanded its revocation (Exhibit C, annexed to the Marion Aff.). Further, he opines that: the POA cannot be ccmcelli:?d "due to the expiry of deadlines," although he does not: specify the applicabl;:? limitations periods he is referring t:o {Id.). Andjelkovic's statement is unsworn and does not incJ.ude an apostille certificate. Moreover, his statement does not: include translated copies of any lmvs or caselaw he references, or cmy biogrr.:tphicaJ. information corroboraxing his legal expertise. 'rhe Court concludes that the Beogra.dska trustee's expert has not prO\.rided sufficient ev:Ldent:Lary support for his op:Lni on (see e.g. Grynl1er <I Giffen,. 119 AD3d 526 [2d Dept 2014], lF appeal denied 2 5 l\JY3d 9 05 [ 2 015] ) . As a :r:esuJ t, Andj eTkovic' s statement: is wholly unpersuasive (see Itar-Tass Russian News Agency v Russian Ku:r.i.er, [" [IJ t Tnc., 153 F3d 8~'.:, ~n [2d Cir 1998] is not the credibility of the (foreig-n law} experts that is at issue, it is the persuasive force of the opinions they expressed"]). In its supplemental submission, the Beogradska trustee completely ig·nores the Court• s 1.mei..ruivocal direction that tbe paxties present their argurnents as to the applicability, if any, 12 13 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 13] INDEX NO. 650228/2013 NYSCEF DOC. NO. 321 RECEIVED NYSCEF: 10/03/2017 of New York law, to the validity of the POA (3/27/17 Tr 44:17-25, 45:19, 46:9-14, 22-26, 47:2-4). submits experts" thret=~ Instead, the Beogradska trustee addition.:.'.i.l }_eg·aI opinions from Yugosl.:tv la:w All Lhree legal opinions conclude that the POi\ is effective and legally valid according to the laws a_ppl icable in the former Yugoslavia in 1992. The Cou·ct notes that tbe supplemental legal opinions offered by the Beogradska t:-custee cornpletely contradict the position offered by the Beogradska l".ru.stee's ori_ginal expert, Sava_ Andjelkovic.'' The Lhree legal opinions offered by the Beogradska trustee in its supplem(~ntal submission appear to be preciseJ.y tbe type of incompetent and unauthorized evidence which its first expert, Andje.1.kcnric, ha.d rejected outright. The Court completely rejects Beogradska's supplemental submission on Y1.1gosJav J.aw, presented in total disregard of this Court's instruction that the supplementaJ. subm·l.ssion be J.irni ted to J:-,Jew York law o Moreover, the Beogr..=;:_dska trustee's supple.ment~:il submission is simply irreconcilable with the position its initial Yu.goslav law expert presented, and thus, wholly unpersuasive. :i P.r1djelk·o\l.ic t1a(l rejected Stone Colurnn:s y·ugoslaviar1 law . expert's presentation as incompetent evidence based on his assertion that; onJ.y a Serbian court in the court of a regula_r liti.gaU.on can opine on the validity of lhe POA, which authority is exclusive. Andjelkovic also concluded that in the case of a conflict of .laws, the Constitutional Court of lhe Republic of Serbia is exclusively competent .i.n this field {Andjelkovic Affo) 14 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 14] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 'rhe Court has considered a.lJ_ of the \Iie1Hs presented by the expert witnesses and the sources provided, .:;_nd concludes tha_t Stone Column's experts sufficiently set forth the lav"'S of Cy--prus and Yugoslavia as they existed in 1992 and insofar as they pertain to the validity of the POA '.-lh:Lch permit this Court to ,, ' \DJ ,. take judicial notice of foreign la.ws, pursuant to CPLR 4511 C. New York law New York General Obligations La·w (GOL), which .governs the va.lidity of powers of attorney, 2009. 1;1c:rn substantially amended in In 1992, v.;hen the POA was purportedly executed, GOL § :;- 1501 set forth a sample statutory power of attorney form, and contained a notarization requirement (GOL § § 5---1501 [1992]}. GOL 5-1501 also provided that different forms of powers of attorney Vv7ere 1)er1nissif)le: btit. is silent as to v..rhet11er STICh other forrns had Lo be notarized (Id"} . .Nonetheless, I\lew York courts have consistentJ.y held that powers of attorney are invc:,lid when not acknowledged before a notaxy or if defectively notarized (F.reecJxnan v Oppenheim, A 80 AD2d 487 [2d Dept 1903]), defect in acknowledgment or lack of a not;ary is not necessarily fatal to the validity of a pow•2r of attorney under New York law, where the principal ratifies and confirms it {e"g. C:i. Uba.nk, No ii. v S'iLverman, 84 AD3d 42 5, 42 6 [pt Dept 2 0111 ) . "Ratifica_tion is the act of knowingly giving sanction or af f irmance to an act vvhich would otherwise be unauthorized and 14 15 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 15] NYSCEF DOC. NO. 321 8 ,.,' / } RECEIVED NYSCEF: 10/03/2017 bindin~J" not INDEX NO. 650228/2013 {57 NY Jur2d Estoppel, Ratification, and Waiver § . II. Conflict of Laws York law reveals a clear conflict between them. New York permits Because there is a clear conflict between New York law on pertains to the validity of the POA under laws that existed in unaer New York's choice of law rules. II!. Choice of Laws New York recognizes the "center of gravity" or "grouping of contacts" ;_rn.a lytic approach to choice of law issues in order to determine whicb state has the most significant n:lationship to the transaction and the r::·arties (Zurich Lns, C'o. v Shearson Ler.xnan Hutton, 84 T\ff2d 309, 317 [1994]}, Under this approach, C(Y-.1rts consider the spectrum of sig-ni f icant contacts, with "heavy weight" given to the traditional choice of law factors identified by l-~he Restaternent: the place of: contracting, negotiation, and 15 16 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 16] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 perform.:mce; the location of the subject rna.tter of the contract; and the domicile of the contracting parties (Id. at 317-18). \,~Jhen the significant contacts are cons·1dered, in light of the fact that this is a contract case, it is pJ.ain that this dispute centers on Cypnrn. S t:one Col 1Jmn vvas incorporated in Cyprus. Acco.r:ding to t·;he uncontroverted record, at the time that the POA was purportedly sig-ned, the Beogradska NY account in .New York City was not yet in existence; Stone Column's were located in Cyprus. o~nly existing bank a.ccounts and assets Stone Column submits the testimony of two direct.ors who consistently testify that every single one of Slone Column's .board and shareholder meetings were held at its hea.dquarters in Cyprus, which is the only office it ever maintained (Marios Prois Aff., i 3). The POA is da.ted Mc:_rch 31, 1992, is written in Engiish, and is comprised of two documents attached to what appears to be the undated minutes of a rneet.inq of Stone Col UIIll1' s board of directors (minutes). The minutes state that all three Stone Column directors >Nere present for the meeting. At that time, Stone Column .had three directors (Radonjic, Korunovski, and Aleksic) The minutes state that the board "unamimTtOllS [ly] approved to appoint Mr. Popovic and Mr. Jerotic {the Beobanka. and Limes executives) with full powers to issue a power of at;torney t.o U:is ef feet." The m.inutes are followed by the two powers of attorney 16 17 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 17] INDEX NO. 650228/2013 NYSCEF DOC. NO. 321 RECEIVED NYSCEF: 10/03/2017 [the POAJ forms, one for Popovic and another for ,Tero tic. the testimony of Stone Colunm' s directors, Given the board raeel·.ing where the POA was purportedly executed rr·,L1st have occ~l.t'red in Cyprus. Only two of Stone Colunm' s direcl:ors, Radon:) ic and Korunovski, appear to have signed the POA; the signature line for Stone Column's third director, Aleksic, is blank. 4 purports to ~.rrant The POA Popovic and Jerotic complete and unfettered a.uthor:Lty over Stone Column's "operations." The POA contains no language of limitation pertaining to time, subject matter, scope of assets or geographic location. Specifically, there is no lanquage in the POA referencing assets located in New York, acts to be undertaken in New York (or c:my location, for that matter), or an acco1..i.nt J.ocated in Beogradska NY. The POA does nol·: cont;_:tin ~=.:. choice of la.•Ai provision, and is 4 Radonjic died in 1999; Korunovski died in 2002. could be deposed in this action. Neither l\leksic testified that he was completely unaware that Stone Coln.nm had ever appointed any third party agents throuqh a power of attorney, and that he v11as never informed that Korunovski or Radonjic had signed a power of attorney in favor of Jerotic or Popovic, and, speaking through a translator, that neither himself, Radonj ic or Korunovski speak or read EngJ.ish (Aleksic Aff., '1':11. 5, 1.0) . AJ.eksic also testified that he never received notification of a board meeting held on March 31, 1992 (Id). Aleksic testified that he was the sole signatory on all of Stone Column's bank accounts, including the Beogradska 1'."Y account, and that he attended every single board rn.:~eting of Stone Column, c:,ll of which were held in Cyprus, and the POA vvas :never i nLcoduced or voted upon at any of these meetings (Id,). He maintains that the POA is a forqery. 17 18 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 18] NYSCEF DOC. NO. 321 INDEX NO. 650228/2013 RECEIVED NYSCEF: 10/03/2017 not notarized. No details concerning the place of negotiation or execution of the POA have been unearthed during extensive discovery. In 1992, Stone Colunm' s three directors and the princi:pals purportedly appointed by the POA were Yugoslav citizens. Nonetheless, other significant factors identified by the Restatement are simply unknov-m, i.e. the place of negotia_tion and contracting of the POA, and the pla_ce of performc:mce, given the POA's silence on these matters. In toto, insofar as Stone Colurnn was incorporated in Cyp:r-us, all of its board meetings were held in Cyprus, the presumed locaU.on of tbe POA' s execution, and Stone Column's only bank accounts and assets were located in C)/prus at that time, the Court determines that Cyprus la_w applies. III. Beogradska Trustee's Cross-motion The Beogradska trustee seeks a declaration, in a crossmotion, that t.he POA is valid and effective under New York law, 'l'hat portion of the cross---motion which seeks a deterrn-J.nation that New York law applies to the validity of the POA is denied, the rea.sons set forth above. for As to the validity of the PCA under C-yprus law, the Court will afford the parties an opportunity to brief the issue and present the full evidentiary record. on a :notion for summary judgment, if so advised.:.! ' ' ' • , ... Accor0ingiy, ic is f urcner 18 19 of 20 [*FILED: NEW YORK COUNTY CLERK 10/03/2017 02:53 PM 19] INDEX NO. 650228/2013 NYSCEF DOC. NO. 321 RECEIVED NYSCEF: 10/03/2017 ORDERED that claimant Stone Column 'l'rading House Lirnited' s motion (007) is granted; and it is further OEDER.ED that cL=.dmant Stone Column Trading House Limited' s motion (008) is granted; and it is further ORDEEED tha.t Claimant Beogradska Ba_nka A, D, in Bankruptcy's cross---rnot.ion is denied< DATED: October 2, 2017 ENTER.: cLS,C. 19 20 of 20

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