Wednesday, December 11, 2013

Banco do Brasil S.A. v. State of Antigua and Barbuda case brief

Banco do Brasil S.A. v. State of Antigua and Barbuda case brief summary
707 N.Y.S.2d 151 (2000)

Defendants appealed a decision by the Supreme Court, New York County (New York) not to dismiss plaintiffs' complaint for breach of a loan agreement and associated promissory notes and guarantees as barred under N.Y. C.P.L.R. 213(2), the applicable six-year statute of limitations.

Plaintiffs Brazilian banking corporation entered into a loan agreement with defendant State of Antigua and Barbuda (State) where defendant Ministry of Finance of the State of Antigua and Barbuda (Ministry) agreed to act as guarantor of the loan and the promissory notes on behalf of the defendant State. The defendant State failed to pay and the defendant Ministry wrote to plaintiffs, confirming its obligation to pay. Yet, despite demands, defendants failed to pay. Plaintiffs commenced an action for breach and defendants filed motions to dismiss the claim as time-barred under the applicable six-year statute of limitations. The lower court rejected the motion and defendants appealed.

The court found the defendant Ministry's letter to plaintiffs constituted an acknowledgment within the meaning of N.Y. Gen. Oblig. Law § 17-101 that revived plaintiffs' otherwise time-barred claims and was consistent with an intention to pay, which was all that needed be shown to defeat the dismissal motion.

The court affirmed the decision not to dismiss, finding the statute was tolled by defendants' sending of a letter to plaintiffs acknowledging their obligation to pay the debt.

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