A case involving developer David Dodwell, his former business partner Lee Koehler and the Bank of Bermuda Ltd. could be set to return to the same court where it started almost 17 years ago.

Mr. Koehler first filed a lawsuit against Mr. Dodwell in the US District Court for the District of Maryland in October 1992 concerning budget over-runs incurred from renovations on a resort in Nevis and put in a claim for negligent misrepresentation against Mr. Dodwell over financing the work.

Mr. Koehler was awarded almost $2.1 million in a default judgement which ruled against Mr. Dodwell in the same court in June 1993 and duly registered the judgement in the US District Court for the Southern District of New York.

Mr. Dodwell indicated his group had agreed to pay $475,000 to settle "all claims between the parties" six weeks before the US District Judge for the District of Maryland William Quarles dismissed Mr. Koehler's complaint against Mr. Dodwell in July 2004.

But since mid 1993, Mr. Koehler has been trying to get hold of the $2.1 million in the form of stock held by Mr. Dodwell as a collateral for a loan at the Bank of Bermuda, going all the way to New York State Court of Appeals for judges to give their opinions on whether a New York court can order the bank, over which it has jurisdiction, to hand over the stock certificates to Mr. Koehler when they are held outside of the state.

Judge Pigott, Chief Judge Lippman and Judges Ciparick and Graffeo all agreed that the answer was affirmative to the question posed by the US Court of Appeals for the Second Circuit, despite Judge Smith dissenting and voting to answer the question to the contrary, concurring with Judges Read and Jones.

In October 1993, Mr. Koehler filed a petition against the Bank of Bermuda in the US District Court for the Southern District of New York seeking "payment or delivery of property of judgement debtor", serving the petition on an officer of the bank's subsidiary the Bank of Bermuda (New York) Ltd.

The same month, the District Court ordered the Bank of Bermuda to hand over the stock certificates to Mr. Koehler, but the bank argued before the District Court that it was not under the court's jurisdiction.

After almost 10 years of litigation over the issue, the Bank of Bermuda finally consented, via a letter in October 2003, to the court's jurisdiction from the time when Mr. Koehler had started his proceedings.

However, a year later, the bank revealed that the stock certificates were no longer in its possession after the obligations for which it had held them as collateral had been satisfied and, despite the District Court's order to turn them over, were transferred to a company owned by Mr. Dodwell in July 1994.

But in a further twist, in March 2005, the District Court dismissed Mr. Koehler's petition on several grounds, including the fact that the federal court had no jurisdiction over Mr. Dodwell's shares.

The Bank of Bermuda appealed to the Second Circuit, which observed that New York law does not make it clear whether a New York court has the authority to order a defendant to deliver assets in the state when it has jurisdiction over them but the assets are not held in New York.

Judge Pigott concluded that a court sitting in New York that had jurisdiction over a bank can order it to produce stock certificates located outside the state.

The case could now go back to the US District Court for the District of Maryland, where it was originally heard, to be decided on, according to Mr. Koehler's lawyer Paul Newhouse.

The Bank of Bermuda and Mr. Dodwell were contacted but did not comment.