KARACHI, Nov 10: Justice Zia Pervez of the Sindh High Court on Monday decreed against US corporation ABCO Apparel a sum of $51,222.95 in a suit filed by the United Bank’s New York branch for the recovery of $2,155,975.

The UBL instituted a suit against the defendants on the basis of foreign judgment under section 29 of the Financial Institution (recovery of finance) Ordinance 2001.

It was stated that the defendant corporation, organized under law of the state of New York, had ceased its operation.

As per the plaint, credit facility was secured by corporate guarantees from the defendants in favour of the plaintiff. On strength of such guarantees, advance made to the defendant corporation stood at $2,371,596, payable at the accrued rate of interest of 4.5 per cent plus the plaintiff prime rate per annum.

The plaintiff, earlier, moved before the supreme court of New York, on failure of the defendant to make payment of the outstanding amount, and its claim was allowed on Oct 18, 2000.

When the matter was taken up before the court earlier, the defendant’s counsel through an application challenged the jurisdiction of the court and questioned the maintainability of the suit.

He submitted that the loan was advanced in the United States and documents executed in New York. He argued that no transactions took place in Pakistan. He said the parties, under credit modification agreement, agreed that the agreement would be governed in accordance with the law of New York.

The plaintiff’s counsel opposed the ground taken by the defendant’s counsel and relied on a verdict of the superior court for support of his suit.

The court, after hearing the arguments of both sides, observed that the “objections raised by the defendant cannot be maintained ... The suit falls within the jurisdiction of this court and is maintainable under the Ordinance. Accordingly, the suit is decreed in sum of US$51,222.95 with interest at 2.5 per cent above plaintiff prime rate per annum from June 16, 2000 till the realization of costs.” — PPI