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Ve Tigaret v. Tripcovich

September 28, 2007

DEVAL DENIZCILIK VE TIGARET A.S., PLAINTIFF,
v.
AGENZIA TRIPCOVICH S.R.L. AND BANCA POPOLARE DI MILANO, DEFENDANTS.



The opinion of the court was delivered by: Cedarbaum, J.

OPINION

Deval Denizcilik Ve Tigaret A.S. ("Deval") sues defendant Agenzia Tripcovich S.R.L. ("Tripcovich") for confirmation of a London arbitration award and defendant Banca Popolare di Milano ("BPDM") for breach of a guarantee. Shortly after filing the complaint, Deval obtained an ex parte order for attachment of wire transfers routed through New York banks. BPDM now moves to vacate the attachment and dismiss the complaint as against it on the ground that there is no subject matter jurisdiction because the breach of guarantee claim is not within the admiralty jurisdiction of the court, and there is no other basis for federal jurisdiction.

BACKGROUND

The following facts are undisputed.

Plaintiff Deval, a Turkish corporation with its principal place of business in Istanbul, Turkey, is in the business of leasing cargo ships. On February 20, 1997, Deval entered into a charter party with defendant Tripcovich, an Italian corporation with its principal place of business in Trieste, Italy, pursuant to which the Leyla Deval, a ship owned by Deval, was chartered by Tripcovich to carry general cargo from Porto Nogaro, Italy to Alexandria, Egypt. Defendant BPDM, an Italian bank with its principal place of business in Milan, Italy, was not a party to that agreement.

While at the load port of Porto Nogaro, the Leyla Deval ran aground. As a result, certain disputes arose between Deval and Tripcovich. To prevent Deval from exercising a maritime lien against the cargo on board the vessel, Tripcovich supplied Deval with a document entitled "GUARANTEE NO. FCE 35613 M.V. 'LEYLA DEVAL' C/P DD PIRAEUS 20.02.1997 GROUNDING AT P. NOGARO" ("the guarantee") (Compl., Ex. 2). The guarantee, issued by the Mestre, Italy branch of BPDM on March 24, 1997, provides, in relevant part:

In consideration of and upon condition that you refrain from exercising a lien on the cargo, we BANCA POPOLARE DI MILANO S.C.A. R.L. Mestre Branch, hereby undertake to pay you on your written demand any sum which may be adjudged to be due to you by the Charterers of the vessel "Leyla Deval," Messrs. Agenzia Tripcovich Srl, as a consequence of the above claim either by friendly written agreement between the parties and/or enforceable judgment by the competent judicial authority and/or arbitration award, provided such sum will not exceed US$100,000 (one hundred thousand only). (Id.) Deval accepted the guarantee and refrained from exercising a lien on the cargo.

Although the charter party provides for arbitration in London, Deval and Tripcovich tried their dispute before an Italian court in Trieste. After the Trieste court absolved Tripcovich of liability, however, Deval demanded that the parties submit the same dispute to arbitration in London. Tripcovich refused. Nevertheless, on April 23, 2004, a justice of the English High Court appointed an arbitrator to hear Deval's claim. Tripcovich chose not to participate in the proceedings and did not submit any defense. On November 28, 2005, the arbitrator issued a "Final Award" against Tripcovich -- an award which Tripcovich has not paid. The complaint alleges that the amount Tripcovich owes is $344,377.65.

On October 4, 2006, counsel for Deval presented BPDM with the London arbitration award and demanded payment under the guarantee. BPDM refused, arguing that the award is unenforceable because the doctrine of res judicata barred Deval from arbitrating a claim previously litigated in Italy.

Deval responded by filing this action, in which it sues Tripcovich for confirmation of the arbitration award and asserts a claim against BPDM for breach of the guarantee. After meeting the minimal burden imposed upon it by Rule B of the Supplemental Rules for Admiralty or Maritime Claims, Deval obtained an ex parte order, directed to a number of banks in the Southern District of New York, directing the attachment of up to $344,377.65 of Tripcovich's funds, and a similar ex parte order directing the attachment of up to $100,000 of BPDM's funds. Shortly thereafter, Deval attached $100,000 belonging to BPDM as those funds were traveling through a New York bank.

BPDM now moves to vacate the order of attachment and dismiss the complaint as against it on the ground that this court has no subject matter jurisdiction over Deval's claim for breach of the guarantee.

DISCUSSION

"A party seeking to invoke the subject matter jurisdiction of a court has the burden of demonstrating that there is subject matter jurisdiction in the case." Shenandoah v. Halbritter, 366 F.3d 89, 91 (2d Cir. 2004). Deval argues that its claim against BPDM falls within this court's admiralty jurisdiction because the guarantee upon which it sues is a "maritime contract."

Federal district courts have original jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction . . . ." 28 U.S.C. § 1333(1). It is well settled that "this grant includes jurisdiction 'over all contracts . . . which relate to the navigation, business, or commerce of the sea.'" Atlantic Mutual Insurance Co. v. Balfour Maclaine International Ltd., 968 F.2d 196, 199 (2d ...


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