They were supposed to deliver one certificate - they didn’t, and it backfired
A borrower that prevented its own lender from securing a mortgage cannot use that gap to kill a $10 million lawsuit.
New York’s Appellate Division, First Department, unanimously affirmed summary judgment for RBL Bank Limited on October 15, finding that Veria Lifestyle Inc. and its guarantors owed the bank roughly $10 million on a defaulted loan - and that none of their defenses held up.
The loan goes back to November 2017, when RBL Bank, a foreign banking corporation, lent approximately $10 million to Veria Lifestyle under a Facility Agreement. Veria and a guarantor defaulted. RBL sued.
Veria’s first defense was jurisdictional. It argued RBL could not bring the case because it had never registered to do business in New York under Business Corporation Law Section 1312. That statute bars unregistered foreign corporations “doing business” in the state from filing lawsuits.
The court found RBL’s New York activity was too thin to trigger the rule. Its dealings were “occasional and sporadic” - nowhere near enough to qualify as doing business.
Then came the sharper argument.
Veria pointed to Banking Law Section 200, which requires a debt to be secured by a mortgage. RBL’s loan was unsecured. But the court identified a straightforward reason: under the Facility Agreement, the defendants were supposed to provide a “no objection certificate” that would have let the bank take mortgage security. They never delivered it.
The court’s conclusion was direct. Because the defendants caused the failure to secure the mortgage, they could not rely on that gap to block the lawsuit. You do not get to break the lock and then complain the door is open.
On top of that, the court found the defendants had waived the Banking Law defense altogether by failing to raise it in their initial pleading, then failing to appeal when the lower court denied their motion to add it later.
Veria’s counterclaims went the same way. The company alleged breach of the Facility Agreement and breach of the covenant of good faith and fair dealing. The court dismissed both, finding they rested on “terms not in the contract” and that the defendants were already in breach.
For cross-border lenders and the mortgage professionals who work with them, the takeaway is practical: a foreign bank with only sporadic US activity can enforce a loan in New York, and a borrower’s own failure to deliver required documents will not become a shield at trial.
The decision was unanimous, with costs awarded to RBL Bank.
