The opinion of the court was delivered by: Cedarbaum, District Judge.
Seatriumph Marine Corporation ("Seatriumph") moves to dismiss
the third-party complaint for lack of personal jurisdiction.
Plaintiff United Rope Distributors is a Delaware Corporation
with its principal place of business in Minnesota. Defendant
and third-party plaintiff Kim-Sail, Ltd. ("Kim-Sail") is a
Cayman Islands corporation with its principal place of business
in New York City.*fn1 Third-party defendant Seatriumph is a
Liberian corporation with its principal place of business in
At the time of the events giving rise to this action,
Seatriumph was the owner of the M.V. Katia. (Third-Party
Complaint, ¶ 3.) Seatriumph had chartered the Katia to a Danish
company, Copenship A/S, under a head charter in January 1988.
(Lord Ex. 2.)*fn2 Copenship A/S had in turn subchartered the
vessel to Kim-Sail in October 1988. (Lord Ex. 3.)
In November of 1988, Kim-Sail, through its general agent in New
York, Kersten Shipping Agency, Inc., accepted 300,000 bales of
twine from Sisalana, S.A. of Salvador, Brazil, for shipment to
Distributors in Superior, Wisconsin. The twine was loaded onto
the Katia beginning on November 5, 1988 in Salvador, Brazil.
The cargo was never delivered because the Katia sank on or
about November 25, 1988.
United Rope Distributors brought this admiralty action against
Kim-Sail for damages arising from the loss of the cargo.
Kim-Sail impleaded Seatriumph, seeking indemnity or
contribution for any liability Kim-Sail is found to have to
United Rope Distributors. Seatriumph moves to dismiss the
third-party complaint on the ground that this court lacks
personal jurisdiction over it.
The facts that Kim-Sail submits to show that Seatriumph is
subject to personal jurisdiction under CPLR § 301 as a foreign
corporation doing business in New York are as follows.
The Katia called at New York in December of 1986 and April of
1987. (Lord Ex. 7.)
In August, 1982, Seatriumph and four other borrowers borrowed
$2.5 million from Bank of America International Trust and
Savings Association, a California bank. The loan agreement
provided for payment to be made in United States dollars at
that bank's New York branch. (Lord Ex. 6.) On September 22,
1982, Seatriumph granted a $3.1 million mortgage on the Katia
to the bank in order to secure the loan.*fn3 The mortgage
was recorded on that date in a Certificate of Ownership and
Encumbrance registered in Seatriumph's name at Liberia's Bureau
of Maritime Affairs in New York City. (Lord Ex. 5.) The loan
was completely paid off on September 30, 1988. (Id.)
Seatriumph's head charter with Copenship required all hire
thereunder to be paid in United States dollars. (Lord Ex. 2,
Line 58.) More importantly, the head charter also provided that
hire was to be paid to the owner's bankers in New York,
continental bank international, new york branch . . . 520
madison avenue, new york, n.y. 10022 . . . attention miss
eileen pierson . . . in favour of m.v. `katia'
Michael Petropoulos, the president of Seatriumph, affirmed in
affidavits that Seatriumph has never had a bank account in New
York. Rather, the bank account designated in the head charter
for receipt of hire was held by Richmond Investments Ltd.,
which had agreed with Seatriumph's managing agent, Global Ship
Management Ltd., to receive the Katia's charter hire. (Aug. 30,
1989 Petropoulos Aff., ¶ 6.) Richmond, according to
Petropoulos, was not a collection agent for Seatriumph but
"simply had an account in New York which Richmond agreed (with
Global) could be used from time to time for the receipt of
funds." (Oct. 20, 1989 Petropoulos Aff., ¶ 3.) In addition,
Petropoulos stated that not all of Seatriumph's hire and
freight was paid in New York by wire transfer into Richmond's
New York account; Seatriumph also used an account which it held
at Continental Bank in Pireaus, ...