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S2 | MONDAY, MARCH 28, 2016 | Alternative Dispute Resolution
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Discovery Attachment
Preliminary and

BY TIMOTHY J. McCARTHY
AND BRIAN K. STEINWASCHER
I
Of Assets in International Arbitration
n Civil Procedure 101, law students learn a
usual course of procedure that begins with
the iling of a suit, proceeds through discov-
ery, and concludes in a trial and possibly an
appeal. Enforcement of a judgment through
that effort is considered, if at all, to arise at

the end of the process. In the years since the
2008 inancial and economic crisis, however,
ensuring at the outset of a case that a judg-
ment ultimately will be enforceable has taken
on new salience. This is particularly true in
cross-border disputes, in which the assets
against which enforcement will be sought are
often located overseas in the hands of par-

ties whose U.S.-facing business might not be
enough to ensure their compliance.
Ensuring enforceability requires counsel and
clients to move the question from the end of
the process to the beginning, and to determine
whether a judgment or award can and will in
fact be paid before the costs of the process
are undertaken. To do so effectively sometimes
requires preliminary discovery of assets and

preliminary encumbrance of those assets. Dif-
ferent jurisdictions, of course, have different
rules and different tools on offer. As this article
describes, New York also authorizes such steps
in certain circumstances, although the jurispru-
dence on these points remains somewhat thin.
Preliminary Discovery of Assets in Aid
of International Arbitration.
New York law permits pre-action discovery

under CPLR §3102(c), which provides: “Before
an action is commenced, disclosure to aid in
bringing an action, to preserve information
or to aid in arbitration, may be obtained, but
only by court order. The court may appoint
a referee to take testimony.”
No New York Court has addressed whether
the statute extends to actions outside the

United States; however, language from the
Supreme Court’s decision in Matter of Mur-
ray v. Society for Worldwide Interbank Finan-
cial Communication1 suggests that it does.
In Murray, the petitioner sought pre-action
discovery against the respondent for use in
framing a complaint to be iled » Page S12

K
OC
TIMOTHY J. McCARTHY is a partner and BRIAN K. GST
STEINWASCHER is an associate at Thompson Hine BI
in New York, where they practice in the business
litigation group.

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