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OCEAN WAREHOUSING B.v. v. BARON METALS AND ALLOYS

May 29, 2001

OCEAN WAREHOUSING B.V., PRESENTLY KNOWN AS HENRY BATH B.V., PLAINTIFF,
v.
BARON METALS AND ALLOYS, INC., MARCO INTERNATIONAL (HK), LTD., AND MARCO INTERNATIONAL CORP. D/B/A BARON METALS AND ALLOYS, INC. AND D/B/A MARCO INTERNATIONAL (HK), LTD., DEFENDANTS.



The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.:

OPINION AND ORDER

Ocean Warehousing B.V. has filed this action against Baron Metals and Alloys, Inc. ("Baron"), Marco International (HK), Ltd. ("Marco"), and Marco International Corp. ("Marco Corp.") d/b/a Baron Metals and Alloys, Inc. and d/b/a Marco International (HK), Ltd., seeking entry of a Dutch arbitral award as a judgment of the United States pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("Convention"), 9 U.S.C. § 201 et seq. On February 13, 2001, this Court signed an ex parte order of attachment against Baron and Marco in the amount of $110,000.00, pursuant to Federal Rule of Civil Procedure 64 and Articles 62 and 53 of the New York Civil Practice Law and Rules ("C.P.L.R."). Pending before this Court are plaintiff's motion to confirm the order of attachment pursuant to N.Y. C.P.L.R. § 6211(b) (McKinney 1980), and defendants' cross-motion to vacate the order of attachment pursuant to N.Y. C.P.L.R. § 6223 (McKinney 1980).*fn1 For the reasons stated below, plaintiff's motion is granted and defendants' cross-motion is denied.

I. BACKGROUND

Ocean Warehousing, presently known as Henry Bath B.V., is a Netherlands corporation involved in customs clearance and forwarding of goods shipped in international commerce. See 4/25/01 Declaration of James Ross ("Ross Decl."), attorney for plaintiff, ¶ 2. Baron is a New York corporation, and Marco is a Hong Kong corporation with a place of business in New York. See Amended Verified Complaint ("Am. Compl.") ¶¶ 5, 6. Both Baron and Marco are involved in the international import and export of metal products. See id. ¶ 3. Marco Corp. is a New York corporation and is alleged to be the alter ego of Baron and Marco. See id. ¶ 18.

Since 1995, plaintiff has acted as defendants' forwarding agent in the Netherlands and has performed various services including customs clearance of goods transported by sea to the Netherlands. See id. ¶ 8. The parties never signed a contract dictating the terms of their agreement. See 5/2/01 Affidavit of Michael Barenholtz, an officer of Baron, ¶ 5; 5/2/01 Affidavit of Alan Kestenbaum, an officer of Marco, ¶ 5. However, the parties often exchanged written communications. Each written communication from plaintiff to defendants — including price quotes, invoices, and plaintiff's request for a limited power of attorney — contained at the bottom of the page boilerplate language advising that plaintiff's services as a forwarding agent "shall always be governed by the latest version of the . . . Dutch Forwarding Conditions . . . including the arbitration clauses included therein."*fn2 Exs. 1-6 to Ross Decl. This boilerplate was printed in both Dutch and English.

A dispute arose concerning defendants' refusal to pay plaintiff for funds Ocean Warehousing expended after the Dutch government altered its import tax laws with respect to magnesium shipments. See Ross Decl. ¶¶ 15-16. In May 1999, Ocean Warehousing commenced an arbitration proceeding in the Netherlands pursuant to the Dutch Forwarding Conditions. See id. ¶ 17. Although they received adequate notice of the arbitration proceeding, defendants never appeared in that forum.*fn3 See id. ¶ 18. A default judgment was entered against defendants in the amount of $136,324.89. See Am. Compl. ¶¶ 14, 15. On November 7, 2000, plaintiff filed a petition to the President of the District Court of Rotterdam, seeking to confirm the arbitration award as an enforceable judgment. See id. ¶ 16. On November 9, 2000, the arbitral award was confirmed as a Dutch judgment, which under Dutch law is final, conclusive and enforceable in the Netherlands. See id. ¶ 17. Although this judgment is subject to appeal, no appeal has been filed. See id.

II. DISCUSSION

A. Applicable Law

Section 6211(b) of the C.P.L.R. requires that ex parte orders of attachment be confirmed within certain time limits. Such proceedings are governed by section 6223(b) of the C.P.L.R. which provides that: "Upon a motion to vacate or modify an order of attachment the plaintiff shall have the burden of establishing the grounds for the attachment, the need for continuing the levy and the probability that [it] will succeed on the merits." N.Y. C.P.L.R. § 6223(b). Defendants only challenge plaintiff's ability to demonstrate a likelihood of success on the merits.

To determine the probability that plaintiff will succeed on the merits, a court must analyze whether the attachment is permitted under the relevant state statute. Article 62 of the C.P.L.R. authorizes attachment, inter alia, when "the cause of action is based . . . on a judgment which qualifies for recognition under the provisions of article 53." N.Y. C.P.L.R. § 6201(4). Article 53, in turn, provides for the recognition and enforcement by a New York court of foreign money judgments.*fn4 See N.Y. C.P.L.R. § 5301 et seq. "Under New York law, . . . a foreign-country judgment that is final, conclusive and enforceable where rendered must be recognized and will be enforced as `conclusive between the parties to the extent that it grants or denies recovery of a sum of money.'" In re Union Carbide Corp. Gas Plant Disaster at Bhopal, India, 809 F.2d 195, 204 (2d Cir. 1987) (emphasis added) (quoting N.Y. C.P.L.R. § 5303). "Indeed, New York has a `long-standing' tradition of `permitting the enforcement of foreign country money judgments.'" Bridgeway Corp. v. Citibank, 45 F. Supp.2d 276, 285 (S.D.N Y 1999) (quoting Fairchild, Arabatzis & Smith, Inc. v. Prometco (Produce & Metals) Co., 470 F. Supp. 610, 615 (S.D.N.Y. 1979)).

New York law, however, recognizes mandatory grounds for the non-recognition of a foreign judgment: (1) "the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law"; or (2) "the foreign court did not have personal jurisdiction over the defendant." N.Y. C.P.L.R. § 5304(a). Similarly, a foreign country judgment "need not be recognized" if:

1. the foreign court did not have jurisdiction over the subject matter;
2. the defendant in the proceedings in the foreign court did not receive notice of the proceedings in sufficient ...

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