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ALOSIO v. IRANIAN SHIPPING LINES

October 19, 1976

Rudolph V. ALOSIO, Plaintiff,
v.
IRANIAN SHIPPING LINES, S.A., et al., Defendants. ATLANTIC STEAMERS SUPPLY CO., INC. OF PENNSYLVANIA, et al., First Intervening Plaintiffs, v. IRANIAN SHIPPING LINES, S.A., et al., Second Defendants. IRANIAN SHIPPING LINES, S.A., a corporation, Cross-Claimant, v. Peter MORAITES et al., Impleaded Defendants


Werker, District Judge.


The opinion of the court was delivered by: WERKER

WERKER, District Judge.

This is a motion by defendant Arya Shipping Lines, S.A. pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment on the amended cross-claim brought against it by Iranian Shipping Lines, S.A. (hereinafter "ISL"). The Manta defendants, *fn1" Robert R. Kreis and the firm of Levin, Kreis, Ruskin & Gyory have also moved for summary judgment on that cross-claim upon the papers submitted by Arya. Movants contend that ISL lacks the capacity to prosecute this suit.

 The facts surrounding this motion are not complicated. On March 1, 1972, ISL filed a cross-claim against Arya and twenty-two other defendants. The cross-claim was brought by Nick C. Spanos who had been appointed as a Managing Director of ISL on May 31, 1965. ISL itself was incorporated on April 10, 1961 as a "joint stock company" under the Commercial Code of Iran of 1932 (hereinafter "1932 Code").

 Amendments to the 1932 Code effective in 1969 provided that joint stock companies had to reorganize, either as "public" or "private" joint stock companies or as non-joint stock companies. Pursuant to a subsequent amendment, joint stock companies organized under the 1932 Code, such as ISL, were given until April 27, 1973 to convert to an approved form of organization. Those that did not were to be dissolved as of that date by operation of law. A certificate issued by the Registrar of Companies and Industrial Properties of the Iranian Ministry of Justice *fn2" states that ISL failed to make the required change in its corporate structure and that it "is considered as having been dissolved . . . subject to the liquidation proceedings stipulated in the [1932 Code]." The foregoing facts are not disputed.

 Arya and the other movants contend that ISL lacks the capacity to continue prosecution of this suit because of the involuntary dissolution. They note that:

 
"Iranian law contains no savings statute whereby the automatic incidents of corporate death are suspended for a specified period of time." Arya Memorandum at 6.

 ISL maintains, however, that Spanos was authorized by an ISL Board of Directors resolution dated March 28, 1964 to "institute legal action against any person and/or party for the collection of all funds due and owed to the company." ISL urges that this resolution and the 1932 Code empower Spanos to proceed with this suit as a corporate liquidator.

 DISCUSSION

 Under Rule 17(b), Fed.R.Civ.P., the capacity of a corporation to sue is determined by the law under which it was organized. In deciding questions of foreign law, the court may look to the testimony of expert witnesses as well as the underlying statutes. 9 Wright & Miller, Federal Practice and Procedure § 2444 (1971). Moreover, disagreements over the meaning of a foreign statute raise questions of law, not fact, and they do not preclude the granting of a motion for summary judgment. Bassis v. Universal Line, S.A., 436 F.2d 64, 68 (2d Cir. 1970); Fleischmann Distilling Corp. v. Distillers Co., Ltd., 395 F. Supp. 221 (S.D.N.Y.1975).

 Article 284 of the 1969 amendments to the 1932 Code provides that the dissolution of a joint stock company which has not been transformed into an approved type of organization by the deadline date "shall be subject to the dissolution proceedings laid down in the [1932 Code]." Article 203 of the 1932 Code in turn, provides that:

 
"In [the] case of . . . joint stock companies, the director or directors shall carry out the liquidation proceedings . . ."

 Finally, article 209 of the 1932 Code declares that:

 
"Liquidators have the right to bring or defend actions in the company's name, either in person or by attorney."

 The 1932 Code fails to state, however, whether the authority of directors to carry out liquidation proceedings under article 203 makes them ...


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