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Erne Shipping Inc. v. HBC Hamburg Bulk Carriers GMBH & Co.

January 11, 2006

ERNE SHIPPING INC., PLAINTIFF,
v.
HBC HAMBURG BULK CARRIERS GMBH & CO. KG, DEFENDANT.



The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge

OPINION AND ORDER

On October 20, 2005, plaintiff Erne Shipping Inc. ("Erne") was granted an ex parte order attaching assets of defendant HBC Hamburg Bulk Carriers GMBH & Co. KG ("HBC"). See Ex Parte Order for Process of Maritime Attachment, dated October 20, 2005 (Docket #4). HBC now moves to vacate the attachment. The parties have consented to jurisdiction over this matter by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons stated below, HBC's motion to vacate is denied.

I. BACKGROUND

A. Procedural History

Erne and HBC are currently participating in an arbitration in London involving Erne's claim that HBC breached two maritime contracts in 2003 and 2004. Erne is a shipping company based in Monrovia, Liberia. HBC is a shipping company based in Hamburg, Germany. Erne claims damages in the arbitration of $188,647.79, inclusive of fees, costs, and interest.

Relying on Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims ("Rule B"), Erne sought and obtained an order of attachment for this amount pending the outcome of the arbitration. See Verified Complaint, dated October 19, 2005 (Docket #1) ("Compl."), ¶¶ 8, 11, 12, 14; Affidavit in Support of Prayer for Maritime Attachment, dated October 20, 2005 (Docket #3) ("Aff. in Support"). Following expedited briefing by the parties, a hearing was held on November 4, 2005, pursuant to Rule E(4)(f), at which Erne was required to show cause why the order of attachment should not be vacated. See Defendant's Memorandum of Law in Support of Motion to Vacate the Attachment, dated October 31, 2005 (Docket #14) ("Def. Mem."); Plaintiff's Memorandum of Law in Opposition to Motion to Vacate the Attachment, dated Nov. 3, 2005 (Docket #6); Defendant's Reply Memorandum of Law in Further Support of Its Motion to Vacate the Attachment, dated Nov. 4, 2005 (Docket #9). At the request of the Court, the parties submitted additional briefing after the hearing. See Defendant's Post-Hearing Memorandum of Law in Further Support of Its Motion to Vacate the Attachment, dated Nov. 16, 2005 (Docket #15); Plaintiff's Reply Memorandum of Law in Opposition to Motion to Vacate Attachment, dated Nov. 16, 2005 (Docket #17) ("Pl. Post-Hearing Mem."). HBC argues that it is entitled to vacatur because it can be "found" in this district within the meaning of Rule B.

B. Factual Background

1. Nature and History of HBC

HBC's primary business is "the chartering (leasing) of ships from vessel owners for a set period of time and subsequent sub-chartering of those ships to other companies to carry cargo either on a single voyage basis for which HBC collects freight or on a time basis for which HBC collects hire." See Third Declaration of Thomas Boggild, dated November 15, 2005 (Docket #16) ("Third Boggild Decl."), ¶ 3.

HBC was incorporated in Germany in 1999, and was converted to a German limited partnership in 2001. See Declaration of Thomas Boggild, dated October 28, 2005 (Docket #13) ("Boggild Decl."), ¶ 3. It has fifteen employees including directors. All of these employees are based in Hamburg. See Deposition of Thomas Boggild, dated November 10, 2005 (reproduced as Ex. 1 to Pl. Post-Hearing Mem.), at 8. HBC's website indicates that the company is located solely in Hamburg. See id. at 16-17.

HBC is a "substantial" company with a "strong and solid" industry reputation. See Boggild Decl. ¶ 4. In its capacity as a provider of ships for bulk cargoes and as a commercial ship management company for third parties, it has chartered more than 400 vessels between 2000 and 2005, and conducted more than 695 voyages, of which 134 were related to the United States. Id. ¶¶ 5, 6. It has also operated "numerous" vessels as "commercial managers" for other shipowners. Id. ¶ 6. HBC earned revenues of "approximately $406 million in gross in the years 2000-2004." Id. ¶ 7. Of this figure, approximately $69.5 million was earned as the result of doing business with "shippers, receivers, and charterers" in the United States. Id. As of June 2005, HBC had earned gross revenues of approximately $482 million, $73 million of which was earned as a result of doing business with United States-based shippers, receivers, and charterers. Id.

2. Business "Registration" in New York

In August 2005, HBC "register[ed]" with the New York State Department of State's Division of Corporations "so as to create a formal presence within the United States in New York City," which it determined would "also help to serve HBC's growing connections with cargo shippers located elsewhere throughout the United States." Boggild Decl. ¶¶ 21-22. HBC "is comfortable with the fact that its registration in New York makes it liable to answer any suit brought by any party in any New York Court for any amount of damages." Id. ¶ 23. HBC has also appointed Michael Unger, its attorney in New York, as its agent to accept service of process here. See id. ¶ 24.

3. Contracts with New York-based Companies

HBC has pointed to two main types of contracts that it has with New York-based companies. First, it states that it has "fixed" -- that is, contracted to charter, see T. 29 -- 16 vessels with shipbrokers in New York State in the last five years. See Boggild Decl. ¶ 9.*fn1 These shipbrokers earn a commission based on a percentage of the daily hire rate or freight charges paid to HBC by the shippers or charterers. See Third Boggild Decl. ¶ 4.

Second, between 2000 and the present, HBC has entered into 14 contracts with three different New York-based shippers (or charterers) to carry cargoes. See Boggild Decl. ¶ 10; T. 36. It has provided copies of the 14 "charter parties" (i.e., contracts) with these shippers. See Ex. A to Boggild Decl.

Between 2000 and 2004, HBC earned gross revenues of approximately $8.79 million from shipments undertaken on behalf of New York-based ...


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