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Marine v. Congentra A.G.

July 25, 2008


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge


Defendant Congentra A.G. ("Congentra") moves to vacate this Court's February 20, 2008 Amended Ex Parte Order for Process of Maritime Attachment ("Ex Parte Attachment Order") or, alternatively, to reduce the amount of the attachment. For the reasons given below, the Court denies Congentra's motion to vacate the Ex Parte Attachment Order and reduces the attachment as set forth herein.


On February 19, 2008, Plaintiff Sixteen Thirteen Marine ("STM") submitted an Amended Verified Complaint ("Amended Complaint")*fn1 against Congentra, seeking an amended ex parte order for process of maritime attachment and garnishment pursuant to Rule B of theSupplemental Rules for Certain Admiralty and Maritime Claims("Supplemental Rules") of the Federal Rules of Civil Procedure.

STM claims that Congentra breached their charter party and tortiously interfered with STM's business relations; the merits of these claims will be decided in a London arbitration applying English law.*fn2 Generally, STM contends that Congentra unduly delayed the movement of a ship owned by STM while tied up in St. Petersburg, Russia, thereby preventing STM from performing its obligations under a later contract and causing STM to lose the money it would have made on that contract and possibly an even later one.

A. Allegations in STM's Amended Complaint

According to the Amended Complaint, on October 10, 2007, STM, as vessel owner, and Congentra, as charterer, entered into a charter party for the charter of the M/V NICHOLAS M (the "Vessel") for a charter trip to carry soybean meal from Argentina to St. Petersburg, Russia. Am. Compl. ¶ 4. The Vessel loaded the soybean meal in Argentina, set sail, reached St. Petersburg on or before December 2, 2007, and, according to the Amended Complaint, by that date had begun unloading and discharging the cargo. Id. ¶ 5. While the cargo was being discharged, STM scheduled the Vessel for her next employment, with non-party Britannia Bulkers. Id. ¶ 16. The agreement between STM and Britannia Bulkers required STM to deliver the Vessel to Britannia Bulkers by December 31, 2008, or else Britannia Bulkers would have the right to cancel the agreement. Id. ¶ 13.

1. Alleged Delay of the Vessel Caused by Congentra

On December 2, 2007, the Russian inspectors found a small quantity (150.12 metric tons) of damaged or wetted cargo in the Vessel's cargo hold number 4, and on December 15, 2007, they found a smaller quantity (64.12 metric tons) of damaged or wetted cargo in cargo hold number 2. Id. ¶¶ 5-6. STM alleges that after this discovery, Congentra, in concert with the cargo receivers and their agents, which are not parties to this action, demanded security from STM in the amount of $2,790,000 and threatened to arrest the vessel. Id. ¶ 7. On December 24, 2007, the Vessel's insurance company posted security in the amount of $322,271, plus interest and costs. Id. ¶ 8. STM asserts that tests performed on the cargo determined that none of the damage was caused by seawater, meaning that the damage was all due to pre-shipment conditions for which STM was neither liable nor responsible. Id. ¶ 9. STM claims that, nevertheless, Congentra, in concert with the cargo receivers and their agents, refused in bad faith to discharge the cargo and to separate the undamaged from the damaged cargo on shore, and so "extensively" delayed the Vessel from completing her discharge. Id. ¶ 10.

On December 29, 2007, STM claims that Congentra, along with the non-party cargo receivers and their agents, tried to further delay the Vessel by demanding ultrasound tests inside the cargo holds. Id. ¶ 11. STM contends that Congentra had a contractual right pursuant to the charter party to have ultrasound tests performed at the "loadport," i.e., where the cargo was loaded into the ship in Argentina, it opted not to do so there, and so was not entitled to do so at St. Petersburg. Id. When STM refused to permit Congentra to perform ultrasound tests, STM alleges that Congentra threatened to obtain an order of the English High Court; no order, however, was ever presented to the Vessel. Id.

STM alleges in its Amended Complaint that Bureau Veritas, a non-governmental organization that surveys vessels to ensure that safety and technical requirements are met, temporarily withdrew the Vessel's "certificate of class," pending repairs to a hydraulic lifting mechanism for the hatch covers of cargo hold number 6. Id. However, in its opposition to Congentra's motion and during oral argument, STM asserted that it had been mistaken: Bureau Veritas, in fact, never withdrew the Vessel's certificate of class, and although the society did physically remove the certificate from the Vessel on December 28, 2008, the Vessel was never "out of class." Pl.'s Br. at 16; Tr. 39: 11-14. STM's Amended Complaint alleges that the hydraulic mechanism for cargo hold number 6 was repaired prior to December 31, 2007. Am. Compl. ¶ 15. However, Congentra argues that the repairs were not made until January 8, 2008. Tr. 10: 14-16.

On December 29, 2007, STM alleges that Congentra "persuaded" the Russian Port State Control officials to go on board and detain the Vessel until about January 2, 2008, causing STM to miss its December 31 deadline to notify Britannia Bulkers that the Vessel was ready to set sail. Am. Compl. ¶ 12. STM pleads that "[t]he Russian Port State Control eventually released the vessel without any serious deficiencies having been found that would warrant detention. No explanation has been provided as to why Defendant [Congentra] waited over three weeks after the first discovery of damaged cargo on board to involve the Russian Port State Control." Id. STM claims that, but for the Vessel's delay and detention at port in St. Petersburg, it would have been able to fulfill its obligations to Britannia Bulkers, which canceled its contract with STM because STM missed the December 31 deadline for delivery of the Vessel. Id. ¶ 13.

2. Alleged Damages

STM's contract with Britannia Bulkers was for a time charter trip to South America, for approximately forty-five days with payment set at $40,000 per day. Id. ¶ 16. STM alleges that if the Vessel had performed the Britannia Bulkers charter, she would have earned $1,800,000 for STM (45 days multiplied by $40,000 per day). Id. ¶ 17. STM further asserts that it had expected, once it completed the Britannia Bulkers charter to South America, to secure a contract to take cargo from South America to the Far East so as to be in the Far East for the Vessel's scheduled dry-docking and "Class survey" in April 2008. Id. ¶ 16. STM asserts that if it had obtained such a subsequent contract to the Far East, the Vessel would have earned an estimated $2,205,000 (52.5 days multiplied by $42,000 per day).*fn3 Id. ¶ 18.

Once the Britannia Bulkers contract was lost, STM's Vessel stayed in St. Petersburg waters seeking alternative employment but was eventually forced out into the Gulf of Finland. Id. ¶ 20. STM asserts that applicable legal regulations*fn4 disallowed the Vessel from entering another port in the area to take cargo, and as a result STM was forced to direct the Vessel to depart the Gulf of Finland with no employment. Id. ¶¶ 21-22. To mitigate its damages, STM fixed the Vessel on a substitute charter for approximately thirty-five days at a hire rate of $35,703 per day, totaling $1,074,605. Id. ¶ 23. Therefore, STM claims, as a result of Congentra's alleged breach of charter and alleged tortious interference in STM's business relations, and the alleged conspiracy between Congentra and the non-party cargo receivers and their agents, STM suffered total damages of $3,430,395, which is the sum of the amount it would have received under the Britannia Bulkers contract, plus the estimated amount of the anticipated subsequent contract to the Far East, less the amount of the substitute charter that STM obtained to mitigate its damages. Id. ¶ 24.

STM further estimates that the legal expenses and costs of prosecuting its claims in the London arbitration will be $200,000 and anticipates interest in the amount of $510,723.32 (calculated at the rate of 7% per annum compounded quarterly for a period of two years, the estimated time for completion of the proceedings in London). Id. ¶ 31. The total amount of damages stated in the Amended Complaint, therefore, is $4,141,118.32. Id. ¶ 32.

Finally, the Amended Complaint alleges that Congentra cannot be found within this district within the meaning of Supplemental Rule B but has ...

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