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August 31, 2005.


The opinion of the court was delivered by: PETER LEISURE, District Judge


Plaintiffs, Masefield AG and Masefield Ltd., filed the instant action because they seek to avoid arbitration before the International Chamber of Commerce ("ICC") with defendant, Colonial Oil Industries, Inc. ("Colonial"). They request injunctive relief enjoining Colonial from attempting to arbitrate with them, as well as a declaratory judgment providing that they have no agreement to arbitrate with Colonial and are not bound to arbitrate with Colonial. On April 18, 2005, the Court granted plaintiffs' request for a preliminary injunction, finding that, on the record before the Court, plaintiffs, as non-signatories, cannot be bound to the arbitration agreement between Colonial and non-party Masefield America ("MA"), pursuant to the theories of estoppel, agency, or alter ego. Accordingly, the Court enjoined Colonial from asserting to the ICC Tribunal in the arbitration proceeding against MA that the Tribunal has the power to determine whether plaintiffs must arbitrate Colonial's demands. One week later, on April 25, 2005, the Court denied Colonial's motion to dismiss for failure to state a claim because it was based on the same arguments that the Court considered and rejected in granting plaintiffs' application for a preliminary injunction.

  On May 9, 2005, Colonial filed an Answer and Counterclaim, wherein it asks the Court to dismiss the Complaint with prejudice and direct plaintiffs to submit to arbitration, including submission of plaintiffs' claims brought in this action. In response, plaintiffs filed the instant motion seeking to dismiss the counterclaim for failure to state a claim, and to enjoin Colonial permanently from seeking to arbitrate its claims against them. In its opposition, Colonial cross-moved for leave to amend its counterclaim in order to assert claims of tortious interference with contract and tortious interference with prospective business relations against both plaintiffs. The Court will address the parties' competing motions below in seriatim. BACKGROUND

  The facts giving rise to this action are set forth in the Court's prior Orders, with which familiarity is assumed. See Masefield AG v. Colonial Oil Indus., Inc., No. 05 Civ. 2231, 2005 U.S. Dist. LEXIS 7158 (S.D.N.Y. Apr. 25, 2005); Masefield AG v. Colonial Oil Indus., Inc., No. 05 Civ. 2231, 2005 U.S. Dist. LEXIS 6737 (S.D.N.Y. Apr. 18, 2005) ("Masefield I"). In September 2003, MA, a non-party affiliate of plaintiffs,*fn1 agreed to sell approximately 50,000 tons of fuel oil to defendant Colonial, a large oil distributor, each month for the one year period beginning November 1, 2003. The purchase agreement (the "Contract") contained an arbitration provision, which provided for all disputes between the parties to be resolved under the rules of the ICC by a three-member arbitration panel appointed by the parties. In October 2004, Colonial filed a demand for arbitration with the ICC, alleging that MA and plaintiffs defaulted on the Contract by failing to deliver fuel oil during the final two months of the Contract period. In several submissions to the ICC, plaintiffs maintained that they were not subject to ICC jurisdiction because they were not parties to the Contract or any other arbitration agreement with Colonial. Nonetheless, the ICC decided to refer the threshold issue of arbitrability to the Tribunal. As a result, plaintiffs filed the instant action on February 17, 2005, seeking injunctive and declaratory relief. DISCUSSION

  I. Rule 12(b)(6) Standard*fn2

  When determining whether to dismiss a claim on motion for failure to state a claim for which relief may be granted, the Court "must accept as true all of the factual allegations set out in plaintiff's complaint, draw inferences from those allegations in the light most favorable to plaintiff, and construe the complaint liberally." Gregory v. Daly, 243 F.3d 687, 691 (2d Cir. 2001) (quoting Tarshis v. Riese Org., 211 F.3d 30, 35 (2d Cir. 2000)); see also Hosp. Bldg. Co. v. Trs. of Rex Hosp., 425 U.S. 738, 740 (1976); Walker v. City of New York, 974 F.2d 293, 298 (2d Cir. 1992), cert. denied, 507 U.S. 961, and, 507 U.S. 972 (1993). Similarly, when considering a motion to dismiss a counterclaim for failure to state a claim, the Court must accept the material facts alleged in defendant's answer and counterclaim as true and construe all reasonable inferences in favor of defendant. See Twinlab Corp. v. Signature Media Servs., No. 99 Civ. 169, 1999 U.S. Dist. LEXIS 18973, at *10 (S.D.N.Y. Dec. 6, 1999) (citing, inter alia, Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995)). Thus, "[t]he issue is not whether [the claimant] will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); see also Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton College, 128 F.3d 59, 62-63 (2d Cir. 1997). A party's claim should not be dismissed in this instance "unless it appears beyond doubt that the [movant] can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also Lipsky v. Commonwealth United Corp., 551 F.2d 887, 894-95 (2d Cir. 1976). However, the claim "must contain allegations concerning each of the material elements necessary to sustain recovery under a viable legal theory." Huntington Dental & Med. Co. v. Minnesota Mining & Mfg. Co., No. 95 Civ. 10959, 1998 WL 60954, at *3 (S.D.N.Y. Feb. 13, 1998).

  II. Colonial's Counterclaim

  In its counterclaim, Colonial seeks an order pursuant to 9 U.S.C. § 4 compelling plaintiffs to submit to arbitration pursuant to the Contract, including submission of the claims filed in this action. (See Answer and Counterclaim ("C-C1.") ¶ 1.)*fn3 Title 9 U.S.C. § 4 permits a party to an arbitration agreement claiming breach to bring an action in federal court for an order directing that the arbitration proceed in the manner provided for in the agreement. See 9 U.S.C. § 4. Colonial argues that plaintiffs may be compelled to arbitrate because they are bound to the Contract's arbitration provision. (See C-C1. ¶ 1.) Although plaintiffs are not parties to the Contract, Colonial alleges that "[p]laintiffs exercised complete domination over Masefield America as regards its entering into, and performance of, the Contract" and "[t]his domination was used to defraud and damage Colonial."*fn4 (Id. ¶ 28.)

  As a preliminary matter, plaintiffs argue that the counterclaim is jurisdictionally deficient because it grounds personal jurisdiction over plaintiffs in the Contract signed only by MA. (See Memorandum In Support Of Motion To Dismiss Counterclaim ("Pls. Mem.") at 3.) Plaintiffs ask the Court to view them as counterclaimants who have not freely submitted to the Court's jurisdiction because they commenced this action defensively in response to Colonial's improper arbitration demand. (Id. at 3 n. 1.) The Court rejects this reasoning, as plaintiffs cannot employ the Court's jurisdictional power as both a sword and shield. Plaintiffs seek affirmative relief from this Court in this matter, and therefore have consented to its jurisdiction. See Andros Compania Maritima, S.A. v. Intertanker Ltd., 718 F. Supp. 1215, 1217 (S.D.N.Y. 1989) (Leisure, J.) ("It is a fundamental tenet of jurisdictional law that a party may waive a challenge to the Court's in personam jurisdiction, . . . and appearing and seeking affirmative relief from the Court is the paradigm of such a waiver.")*fn5

  With respect to the merits of the counterclaim, plaintiffs insist that they cannot be compelled to arbitrate because Colonial's allegations mimic the assertions that the Court previously rejected in granting plaintiffs' application for a preliminary injunction. (See Pls. Mem. at 4.) As noted above, in Treppel I, the Court rejected each of the three arguments advanced by Colonial for binding the non-signatory plaintiffs to the Contract: estoppel, agency and alter ego.*fn6 Colonial resurrects these theories in its opposition to the instant motion, relying now upon the allegations contained within its counterclaim and the affidavits of two employees involved in the negotiation and the performance of the Contract. Building upon its analysis in Treppel I, the Court now turns to defendant's apparently enhanced arguments.

  A. Estoppel

  In Masefield I, the Court explained that a non-signatory may be bound to an arbitration agreement only where the non-signatory knowingly exploited and accepted benefits of the agreement. See Masefield I, at *9 (citing MAG Portfolio Consult., GMBH v. Merlin Biomed Group LLC, 268 F.3d 58, 61 (2d Cir. 2001)). However, the benefits must flow directly from the agreement and cannot result from events involving the parties that occur independent of the agreement. Id. (citing MAG Portfolio, 268 F.3d at 61 (citing Thomson-CSF, S.A. v. Am. Arbitration Ass'n, 64 F.3d 773, 779 (2d Cir. 1995) (holding that the non-signatory was not subject to arbitration because the competitive advantage gained by the non-signatory flowed from its acquisition of one of the signatories, not directly from the agreement))). Colonial argued that Masefield AG is estopped from avoiding arbitration because it received all of the proceeds from the fuel oil purchased under the Contract as part of MA's repayment of a debt previously owed to Masefield AG.*fn7 Id. at * 11. After noting that the Contract does not mention Masefield AG or its receipt of the proceeds, the Court rejected Colonial's estoppel argument, finding that the benefit to Masefield AG does not flow directly from the Contract but from Masefield AG's position as MA's lender. Id. at * 12-14.

  Relying principally upon the affidavit of its Vice President, Steven McNear, Colonial now contends that there are additional material facts demonstrating plaintiffs' intent to benefit directly from the Contract. According to McNear, plaintiffs participated in negotiating and drafting the Contract (see Affidavit of Steven McNear ("McNear Aff.") ¶ 6), and their involvement was so significant that the first draft of the Contract was on Masefield AG letterhead (id. ¶ 8, Ex. A). In addition, "Masefield LTD and/or Masefield AG had specific duties under the contact [sic] — including hedging and supplying the cargos (shipments of oil via tanker) to Colonial Oil on behalf of [MA]." (Id. ¶ 11.) As a result, Colonial considered plaintiffs beneficiaries of the Contract (id. ¶¶ 10, 13), which became more apparent when Masefield Ltd. began to pressure MA to cancel the Contract because it was losing money (id. ¶¶ 20, 22). Colonial argues that these new allegations establish that plaintiffs received direct benefits from the Contract, and therefore, they are estopped from avoiding arbitration.

  Even construing Colonial's counterclaim liberally and drawing all reasonable inferences in its favor, the Court is not persuaded that Colonial can prove that plaintiffs benefited directly from the Contract. Participating in the Contract negotiations and assisting in the satisfaction of some of its terms, assertions that plaintiffs do not dispute, does not necessarily render plaintiffs direct beneficiaries. Moreover, the Court does not credit Colonial's allegation that plaintiffs had "specific duties" under the Contract, including hedging and supplying oil shipments to Colonial, because it finds no support for such a claim in the terms of the Contract. The Contract assigns no duties to either Masefield AG or Masefield Ltd., does not address the practice of hedging, and identifies only MA as the supplier of oil. Therefore, there is no basis for Colonial to conclude that plaintiffs intended to profit from the sale of the cargos sold pursuant to the Contract. (See Def. Mem. at 13-14.) Further, as noted above, Masefield AG is never mentioned in the Contract and Masefield Ltd. is listed only once as the contact party on behalf of MA. Finally, McNear's claim that Colonial understood that plaintiffs intended on benefiting from the Contract is entirely speculative, and does nothing to advance Colonial's position. Thus, Colonial's additional allegations do not persuade the Court to depart from its earlier conclusion ...

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