The opinion of the court was delivered by: Shira A. Scheindlin, United States District Judge
Defendants Thai Petrochemical Industry and the other defendants
(collectively, "TPI") now move to vacate the attachment of funds held by
The Bank of New York ("BONY") in a suspense account. For the reasons set
forth below, TPI's motion to vacate the attachment and to dismiss the
complaint is granted.
In February 2001, TPI, a Thai corporation, entered into a maritime
contract to charter the M/V Nimenia ("the ship") from Winter Storm, a
foreign corporation with a place of business in Malta. See Verified
Complaint ("Compl.") §§ 2-4. According to Winter Storm, TPI breached
the contract on March 7, 2001, at a port in Saudi Arabia by loading
"non-contractual cargo crude oil" onto the ship. See id. § 5. Winter
Storm further alleges that TPI failed to pay freight costs of $205,757.90
as required by the contract. See id. § 7. It is this sum, to which
interests, costs and fees have been added for a total of $361,621.58,
that Winter Storm seeks to recover in an arbitration instituted in
London. Both parties have now appointed arbitrators, and the arbitration
is proceeding. See Plaintiff's Opposition to Defendants' Motion to Vacate
the Attachment and Dismiss the Complaint ("Pl. Opp.") at 1.
On June 21, 2001, Winter Storm brought an action in this Court to
secure its claims in the London proceeding under the FAA and Rule B(1).
Satisfied that plaintiff made a prima facie showing under Rule B by
filing a verified complaint and an affidavit stating that defendants
could not be found in this district, see infra Part II, this Court issued
an order of attachment enabling Winter Storm to attach TPI's assets in
this district. See Order of Attachment. The Order provided that
process of maritime attachment and garnishment shall
issue against all goods, chattels, letters of
credit, bills of lading, effects, debts and monies,
tangible or intangible, belonging to, claimed by or
being held for the Defendant by any garnishees
within this district, including Chase Manhattan
Bank, in an amount up to and including $361,621.58.
Id. at 2. Pursuant to the order, Winter Storm served various garnishees,
including BONY. See Defendants' Memorandum of Law to Support its Motion
to Vacate and Dismiss ("Def. Mem.") at 1. Winter Storm served BONY with a
writ of maritime attachment on June 28, 2001, at 10:30 a.m., 12:15 a.m.,
and 4:44 p.m.; three more times on June 29, 2001; and, following a
weekend during which banks were closed, on July 2, 2001 at 10:58 a.m.
See Pl. Opp. at 2.
Winter Storm succeeded in arresting a wire transfer ("electronic fund
transfer" or "EFT") initiated by TPI. At some point prior to July 2 at
6:48 a.m. (Eastern Standard Time), TPI had instructed its bank in
Thailand, the Bank of Ayudhya, to transfer funds from TPI's account to an
account at the Royal Bank of Scotland in London. See Defendants' Reply in
Support of its Motion to Vacate ("Def. Reply") at 3. At 6:48 a.m. on July
2, in its capacity as an intermediary between the Thai and British
banks, BONY received a payment order from the Bank of Ayudhya via the
SWIFT electronic funds transfer system. See Pl. Opp. at 2. BONY debited
the Bank of Ayudhya's account and, aware of earlier writs of attachment
served by plaintiff, placed the sum of $361,621.58 in a suspense
account. See id.
Courts order maritime attachment pursuant to the FAA, 9 U.S.C. § 8,
B(1).*fn1 Rule B is properly invoked when a plaintiff files (1)
a verified complaint in personam sufficient to make a prima facie showing
that the plaintiff has a maritime claim against the defendant in the
amount sued for, and (2) an affidavit swearing that the defendant is not
present in the district. Supp. R. B(1); see also 2 Thomas J. Schoenbaum,
Admiralty and Maritime Law § 21-2 at 471 (2d ed. 1999).
Because TPI has moved to dismiss for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1), this Court must accept as true
all material factual allegations in the complaint. See Atlantic Mut.
Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir.
1992). The party asserting jurisdiction, however, bears the burden of
demonstrating that such jurisdiction exists. See Shipping Fin. Serv.
Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998). Winter Storm thus
bears the burden of demonstrating why the attachment, which is the basis
for this Court's jurisdiction over TPI, should not be vacated. See Fed.
R. Civ. P. E(4)(f); Maritima Petroleo E Engenharia, Ltda v. Ocean Rig I
AS, 78 F. Supp.2d 162 (S.D.N.Y. 1999).
III. GENERAL PRINCIPLES OF MARITIME ATTACHMENT
Maritime attachment is an ancient remedy that has become a
"characteristic feature" of the general maritime law. Aurora Maritime
Co. v. Abdullah Mohamed Fahem & Co., 85 F.3d 44, 47 (2d Cir. 1996)
(citing American Dredging Co. v. Miller, 510 U.S. 443, 447-48 (1994)).
Maritime law itself is a separate body of substantive and procedural
law, distinct from common law. See U.S. Const. art. III, § 2; see
also Schiffhartsgesellschaft Leonhardt v. Bottachi SA, 773 F.2d 1528,
1533 (11th Cir. 1985). The present Rule B, promulgated under the