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February 8, 1977

FEDERAL REPUBLIC OF NIGERIA and Central Bank of Nigeria, Defendants

The opinion of the court was delivered by: GOETTEL

GOETTEL, District Judge.

 National American Corp. ("NAC"), the plaintiff in this action, sued the defendants, Federal Republic of Nigeria (Nigeria) and Central Bank of Nigeria ("CBN"), to recover damages for the alleged breach of NAC's contract to supply cement. They also sue upon a letter of credit issued by CBN having the plaintiff as its beneficiary. Two other corporations, Nikkei International, Inc. (Nikkei) and Chenax Majesty (Chenax) which also claim to have contracted to supply cement to Nigeria and to have been beneficiaries of a CBN letter of credit, have moved for permissive intervention under Fed.R.Civ.Proc. 24(b). For the reasons stated in this opinion, leave to intervene is hereby denied.

 Several years ago, Nigeria mounted a massive program for the purchase of cement, involving approximately sixty-seven primary suppliers. The court has been told that 500 ships converged on Lagos (Nigeria's principal port) which had facilities for unloading only a couple of ships a week. As unpaid claims for demurrage began to exceed the value of many shipments, litigation resulted. There is currently pending in this court at least one other case arising from these contracts, while still another was settled and discontinued. See this court's decision in the related case of National Bank & Trust Co. v. J.L.M. Int'l Inc., 421 F. Supp. 1269 (S.D.N.Y.1976).

 A brief description of the history of this litigation is necessary to understand the grounds for the denial of the proposed intervenors' motion. In 1975, NAC entered into a written agreement with Nigeria in which it contracted to supply cement. Payment of the purchase price, which exceeded $14,000,000, was guaranteed by an irrevocable letter of credit issued in favor of plaintiff by CBN under which payments were to be made by Morgan Guaranty Trust Company of New York (Morgan Guaranty) upon presentation of sight drafts and other documents. Payments were to be made through the Bank of America in New York City. Thereafter, Morgan Guaranty advised plaintiff that, upon defendant's instructions, it would refuse payment unless the documents required by the letter of credit also were accompanied by a CBN certificate that plaintiff had given advance notice of sailing and the defendants had given clearance for the departure of each ship. Plaintiff regards this unilateral amendment to the documentation requirements as an anticipatory breach of the letter of credit agreement. Settlement discussions were held resulting in a "discharge agreement." Thereafter, plaintiff claimed the defendants breached the settlement agreement and defendants claimed it was obtained by plaintiff's fraudulent misrepresentation.

 Plaintiff commenced this action based upon the breach of the contract of sale and the letter of credit agreement seeking to recover the unpaid balance of the purchase price and demurrage charges. At the commencement of the action, plaintiff applied for and was granted an attachment of defendants' funds held by Morgan Guaranty. A subsequent motion to prove the grounds of the attachment was granted upon a finding by Judge Weinfeld that plaintiff had established a prima facie case. National American Corp. v. Federal Rep. of Nigeria, 420 F. Supp. 954 (S.D.N.Y.1976) (Weinfeld, J.).

 Chenax and Nikkei claim a relationship to the defendants sufficiently similar to that of NAC to justify their intervention in this action. Chenax alleges in its proposed complaint that it contracted with Nigeria to supply 240,000 metric tons of cement with payment guaranteed by an irrevocable letter of credit to be paid by Morgan Guaranty upon presentation of the requisite documentation. Payment was to be made through a German bank, Schroeder, Munchmeyer, Hengst & Co. Chenax also alleges that it contracted to purchase cement from third parties in order to fulfill its commitments to Nigeria. Nikkei alleges a similar plight in that it contracted to supply 240,000 metric tons of cement with payment guaranteed by an irrevocable letter of credit, payable by Morgan Guaranty through First National City Bank in New York City. Both of the proposed intervenors, like NAC, claim the defendants placed further conditions upon payment of the letters of credit and that this change constituted an anticipatory breach of the letter of credit. Both seek to recover their lost profits and consequential damages.

 The applicants seek permissive intervention under Rule 24(b). *fn1" Both plaintiff and defendant oppose their intervention on the grounds that (1) the applicants have failed to establish independent grounds of jurisdiction, (2) the claims have no common questions of law or fact, and (3) granting the motion will prejudice the existing parties through the delay caused by injecting new issues which would add to confusion at trial.

 Independent Jurisdictional Grounds

 The parties to the action oppose permissive intervention on the ground that the applicants have failed to establish a separate basis of personal jurisdiction over the defendants. Both the instant plaintiff and the applicants for intervention rest their claim of federal subject matter jurisdiction upon diversity of citizenship under 28 U.S.C. ยง 1332(b). The plaintiff, however, has sidestepped the need for personal jurisdiction by successfully attaching the defendants' funds in a New York bank. The applicants, in contrast, have not attempted to establish a similar quasi-in-rem basis and, therefore, run headlong into the issue in personam jurisdiction. *fn2"

 As a general rule, an applicant for permissive intervention must establish an independent ground of jurisdiction. Reedsburg Bank v. Apollo, 508 F.2d 995 (7th Cir. 1975); 3B J. Moore, Fed. Practice para. 24.18 (2d ed. 1976). Where, as here, the court has acquired jurisdiction over only a res and the proposed intervenors assert personal claims without having an interest in that res, the court must be concerned with the presence of personal jurisdiction. As the Seventh Circuit framed the issue:

"In an in personam action . . . when the only basis for intervention is a common question of law or fact, there is no compelling reason to permit the litigation of a claim or a defense that could not have been asserted had the intervenor been an original plaintiff or defendant."

 Reedsburg Bank v. Apollo, supra at 1000. The issue in a diversity action then becomes whether there exists a state predicate of in personam jurisdiction. As the Second Circuit stated in Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir. 1963):

"There . . . exists an overwhelming consensus that the amenability of a foreign corporation to suit in a federal court in a diversity action is determined in accordance with the law of the state where the court sits, with 'federal law' entering the picture only for the purpose of deciding whether a state's assertion of jurisdiction contravenes a constitutional guarantee."

 In applying state law, the federal court is guided by the state courts' interpretation of their jurisdictional statutes. American Eutectic Welding Alloys Sales Co. v. Dytron Alloys Corp., 439 F.2d 428, 431-32 (2d Cir. 1971). Consonant with this approach, the Federal Rules of Civil Procedure permit service upon a non-domiciliary where the forum state would permit it. *fn3" ...

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