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January 5, 1976


The opinion of the court was delivered by: DUFFY


 This is a motion to dismiss a third party action for lack of personal jurisdiction and for insufficiency of service of process, Rule 12(b)(2) and (5), Fed.R.Civ.P. *fn1" Hellenic Lines Limited ("Hellenic") is a defendant in an action to recover for damage to cargo brought under the admiralty and maritime jurisdiction of this Court. See Rule 9(h), Fed.R.Civ.P. Hellenic, in turn, seeks to hold Palm Line Limited ("Palm Line"), the third party defendant and owner of the vessel on which the goods were shipped, liable on an indemnity theory. Palm Line has moved to dismiss.

 Palm Line is a corporation organized and existing under the laws of the United Kingdom of Great Britain and Northern Ireland with offices in London, England. It is a shipper between ports of England and those of Europe and Africa. Palm Line does not have regular service to the United States. On occasion, it charters its ships to others who operate the vessels under a time charter agreement. Palm Line does not have any agents or offices in New York or any other jurisdiction within the United States and is not licensed to do business in New York.

 On April 6, 1972, Palm Line executed a standard Time Charter agreement in London with Transpacific Carriers Corporation ("Transpacific"), a Panamanian corporation. Transpacific chartered the AKASSA PALM for a round voyage via South Africa, Red Sea, Persian Gulf, Pakistan, India and/or Bangladesh. The Charter provided that any dispute between Palm Line and Transpacific was to be submitted to arbitration in New York and that the vessel's hire was to be paid to a named New York bank for the credit of Palm Line's London bank.

 Pursuant to an operating and managing agreement with Transpacific, the vessel was made available to Hellenic. Although Hellenic has not submitted its agreement with Transpacific to this Court, Hellenic's relationship with Palm Line has been described as one of "charterer pro hac vice," "subcharterer," and "agents for: Transpacific." Regardless of the label employed, two facts are clear: first, that Hellenic was not in any way a party to the Time Charter with Palm Line and, second, that Palm Line and Hellenic accepted each other's performance under the Time Charter.

 On April 15, 1972, Hellenic issued operating instructions from its New York office to the Master of the AKASSA PALM, an employee of Palm Line, who was then in port in New Orleans. The ship arrived in New York on May 1, 1972 for a four day call during which it was berthed at Hellenic's 57th Street Terminal. Hellenic performed certain husbanding functions for Palm Line, including securing water and dunnage for the vessel. In New York, the Master of the vessel contracted with Hellenic to paint Hellenic's name on the ship's side for the sum of $100.

 Thereafter, the AKASSA PALM departed for South Africa. During a July 28, 1972 stopover in Durban, South Africa, Timberit Woodboard Limited delivered to the vessel a shipment of hardboard, the subject matter of this action, for transportation to Baltimore, Maryland. The shipment was made under a Bill of Lading issued by Hellenic under general authorization by the ship's Master. The AKASSA PALM returned to New York for a six day call before arriving in Baltimore on August 30, 1972. The vessel was redelivered to Palm Line in New Orleans on September 16, 1972. From April to September, the ship made 21 calls in 16 ports.

 Masonite Corporation, as consignee and owner of the damaged shipments, commenced an action against Hellenic. Hellenic in turn has commenced this third party claim against Palm Line for indemnity. The summons and complaint were served by registered mail on the third party defendant in London as authorized by Rule 4(i)(1)(D), Fed.R.Civ.P. *fn2"

 Palm Lines moves to dismiss under Rule 12(b)(2) for lack of personal jurisdiction. It also moves to dismiss under Rule 12(b)(5) for insufficiency of service of process. Palm Line concedes that the motion under Rule 12(b)(5) stands or falls on whether there existed a valid basis for personal jurisdiction.

 The Federal Rules of Civil Procedure incorporate state law basis of personal jurisdiction for original federal causes of action, Rule 4(d)(7) *fn3" and (e). *fn4" See United States v. Montreal Trust Co., 358 F.2d 239 (2d Cir.), cert. denied, 384 U.S. 919, 16 L. Ed. 2d 440, 86 S. Ct. 1366 (1966). See also Notes of Advisory Committee on Civil Rules (1963).

 To begin with, it is the burden of Hellenic to establish a basis for personal jurisdiction over Palm Line, see McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 80 L. Ed. 1135, 56 S. Ct. 780 (1936). The opposing papers of Hellenic appear to meld three distinct jurisdictional standards. First, Hellenic relies on cases such as International Shoe Co. v. Washington, 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154 (1945) and McGee v. International Life Insur. Co., 355 U.S. 220, 2 L. Ed. 2d 223, 78 S. Ct. 199 (1957) as a basis for jurisdiction. These cases set the outermost reach of a state's extraterritorial jurisdiction under federal constitutional standard. They certainly do not impose a minimum. Rule 4(e) authorizes this Court to exercise jurisdiction over non-domiciliaries where New York has in fact provided a basis for jurisdiction. Apparently, New York has not chosen to extend its jurisdiction to its fullest limits. See, Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68 (1965); Lavie v. Marketscope Research Co., Inc., 71 Misc.2d 373, 336 N.Y.S.2d 97 (App. Term, 1st Dept. 1972).

 Turning to New York law, Hellenic suggests that the third party defendant is subject to jurisdiction under the so-called "doing business" test or corporate presence doctrine. CPLR 301. Under that standard a foreign corporation is considered present within the state if it does local business "not occasionally or casually, but with a fair measure of permanence and continuity." Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915 (1917). If the test is met, then the corporation is subject to jurisdiction regardless of whether the cause of action arises from the New York business.

 In the instant case, few of the classic indicia of presence have been demonstrated. Palm Line has no office and no employees within the state. It solicits no business and does not conduct any regular service to or from New York whether by business representative or subsidiary. Although Palm Line does maintain a New York bank account, the monies are immediately credited to its London bank. See Weinberg v. Colonial Williamsburg, Inc., 215 F. Supp. 633, 639-40 (E.D.N.Y. 1963). In sum, under the "simple pragmatic" test suggested by Bryant v. Finnish National Airline, 15 N.Y.2d 426, 432, 208 N.E.2d 439, 260 N.Y.S.2d 625 (1965), Palm Line does not conduct sufficient activities in New York to be considered "present".

 The final justification for jurisdiction posed by Hellenic is the New York "long arm" statute, CPLR 302. Specifically, it urges that the cause of action arises out of the transaction of ...

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