The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge
Tonnevold Reefer 7 KS ("Tonnevold"), the defendant in this maritime action, moves this Court for security for its counterclaim pursuant to Rule E(7)(a) of the Supplemental Admiralty Rules of the Federal Rules of Civil Procedure ("Supplemental Rules"). For the following reasons, Tonnevold's motion is denied.
Since September of 2000, Tonnevold,*fn1 the owner of the M/V THORGULL ("Thorgull"), has entered into various contracts for the charter of the Thorgull by nonparty ECo Shipping Ltd. ("ECo")*fn2 or by the plaintiff, Eastwind Maritime, S.A. ("Eastwind").*fn3 Eastwind alleges that ECo was Eastwind's predecessor in interest to the contracts at issue here. Tonnevold, on the other hand, asserts that Eastwind and ECo are alter egos. (See Tr. of Oral Argument 5:1, Aug. 19, 2008.)
This admiralty action arises from a dispute regarding Eastwind's charter of the Thorgull under the third addendum to a charter party dated December 6, 2006 ("2006 Charter"). (Compl. ¶ 7.) The 2006 Charter was executed by Tonnevold as shipowner and ECo as charterer, but all three addenda name Eastwind as the charterer, with no mention of ECo. (See Walle Ex. 2 at 1; Duffy Aff. Ex. 8 at 1-3.) Eastwind asserts that the three addenda "effectually novat[ed]" the 2006 Charter by replacing ECo with Eastwind as the party in interest. (Compl. ¶ 8.) Each one- page addendum incorporates by reference the terms of the 2006 Charter and sets forth the terms for a separate voyage. (Duffy Aff. Ex. 8 at 1-3.)
Under the third addendum, dated July 19, 2007 ("2007 Addendum"), Eastwind chartered the Thorgull to carry cocoa from Malaysia to Colombia, a 45-day voyage beginning July 18, 2007. (Compl. ¶ 9; Duffy Aff. Ex. 8 at 3.) Eastwind claims that during this charter Tonnevold wrongfully charged it for days when the Thorgull was "off-hire," for fuel used while "off-hire," and for fuel that Eastwind had already supplied to Thorgull. (Compl. ¶ 12.) Eastwind further claims that Tonnevold failed to deduct Eastwind's expenses from the charges and that Tonnevold must reimburse Eastwind for expenditures on fuel that the Thorgull used in excess of the fuel consumption contemplated by the contract. (Id.)
Eastwind's claims will be, or are in the process of being, arbitrated in London, pursuant to the arbitration clause in the 2006 Charter, which is incorporated by reference in the 2007 Addendum. (Compl. ¶¶ 14-15; Walle Ex. 2 at 5.) As of August 19, 2008, Eastwind had not yet commenced arbitration. (Tr. 15:8-9.)
On Eastwind's ex parte application pursuant to Rule B of the Supplemental Rules, this Court entered an order authorizing process of attachment and garnishment of up to $452,616.48 of Tonnevold's property. As of August 19, 2008, $267,871 of this amount had been attached. (Tr. 2:18.)
II. TONNEVOLD'S COUNTERCLAIMS
Tonnevold has made a counterclaim for $836,601.22 and now seeks an order compelling "ECo and/or Eastwind" to post security for the full value. Tonnevold claims that ECo breached an earlier charter party dated December 20, 2005 ("2005 Charter"), which was executed by Tonnevold as shipowner and ECo as charterer, and that even though Eastwind was not a party to the 2005 Charter, Eastwind is liable for the breach as ECo's alter ego. (See Answer ¶ 36.)
Under the 2005 Charter, ECo chartered the Thorgull for a voyage from the Canary Islands to Spain from August 7 to September 18, 2006. (Answer ¶ 39.) For some or all of that voyage, ECo subchartered the ship to a third company, Sama Navigation, which engaged in illegal trade by permitting the Thorgull to take transshipments of redfish from at least seven fishing vessels at sea. (Id.; Tr. 11:12-14.) Tonnevold alleges that, notwithstanding the subcharter, the Thorgull was under the control of both ECo and Eastwind, which are responsible for the illegal trade. (Answer ¶ 39.)
The fishing vessels from which the Thorgull received such redfish were blacklisted by the North East Atlantic Fisheries Commission ("NEAFC") and the Northwest Atlantic Fisheries Organization ("NAFO"), which conserve and manage fishery resources in the Atlantic Ocean. (Id. ¶¶ 40, 42.) Tonnevold asserts that, in permitting the Thorgull to receive redfish from such blacklisted vessels, ECo and Eastwind violated the NEAFC Scheme of Control and Enforcement, which prohibits the on-carriage of certain protected fish species such as redfish, and breached clause 15 of the 2005 Charter, which required ECo to employ the Thorgull in "lawful trades." (Id. ¶ 43.)
To punish the Thorgull for its receipt of redfish, NEAFC and NAFO blacklisted the vessel for approximately one year, until late 2007. (Id. ¶¶ 44-45.) As a consequence, Tonnevold could not charter the Thorgull at a market rate. (Id. ¶ 46.) Tonnevold alleges that ECo (and Eastwind, as its alter ego) attempted to mitigate Tonnevold's losses by entering into the 2006 Charter and chartering the Thorgull while it was blacklisted. (Id. ¶¶ 46-47.)
Tonnevold's counterclaim for $836,601.22 represents the costs it incurred to persuade NEAFC and NAFO to remove the Thorgull from their blacklists, the revenue it lost because it was compelled to charter the Thorgull to ECo and Eastwind at a below-market rate and because the ship remained unemployed for periods of time, and additional expenditures that ...