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Swiss Marine Services S.A. v. Louis Dreyfus Energy Services L.P.

November 17, 2008

SWISS MARINE SERVICES S.A., PLAINTIFF,
v.
LOUIS DREYFUS ENERGY SERVICES L.P., DEFENDANT.



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

OPINION

I. Introduction

Following the Court of Appeal's decision in Winter Storm Shipping, Ltd. v. TPI, 310 F.3d 263 (2d Cir. 2002), holding that a court in this district can order the attachment of assets of a foreign company,*fn1 and as a further consequence of economic turmoil in the international maritime industry, this Court has been flooded with applications seeking attachment. These applications have in common the following: a maritime dispute between foreign corporations arising out of some transaction having no nexus to the United States; an agreement between the parties calling for disputes to be resolved by arbitration (usually in London or some other foreign forum); and an attachment, pursuant to Winter Storm, of funds in transit from one foreign city to another.

Numerous defendants have sought to have such attachments vacated. The Court of Appeals has made clear that attachments may be vacated "only in certain limited circumstances." Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 444 (2d Cir. 2006). An attachment may not be vacated on general equitable grounds if the provisions of Rule B are satisfied.*fn2 The limited grounds for vacating attachment are:

1) the defendant is subject to suit in a convenient adjacent jurisdiction; 2) the plaintiff could obtain in personam jurisdiction over the defendant in the district where the plaintiff is located; or

3) the plaintiff has already obtained sufficient security for the potential judgment, by attachment or otherwise.

Id. at 445.

A number of cases in this district have dealt with the question of whether an attachment can be vacated because a convenient adjacent jurisdiction is available to the plaintiff and the defendant can be found in that district: that is, the defendant can be found in terms of jurisdiction and can be found for service of process. See Seawind Compania, S.A. v. Crescent Line, Inc., 320 F.2d 580, 582 (2d Cir. 1963). These cases have dealt with issues relating to the geographic location of the allegedly convenient adjacent district. Here, Plaintiff Swiss Marine Services S.A. ("Swiss Marine") resists Defendant Louis Drefyus Energy Services, L.P.'s ("LDES") motion to vacate on these grounds and one other ground not raised in prior cases. Swiss Marine asserts that the purported convenient adjacent districts (Connecticut, New Jersey, and the Northern District of New York) are not in fact convenient because absent the ability to attach assets, LDES is not subject to any suit in any of these districts at this stage of the proceedings, before an arbitration award has been granted. (Tr. Oral Arg. at 15--16, Oct. 30, 2008.)

For the reasons stated below, we find that Connecticut is a convenient adjacent jurisdiction and that all of the criteria for determining convenience have been satisfied.*fn3 We conclude that the requirement that a defendant be subject to suit relates to jurisdictional presence, not to whether a cause of action could be asserted at this time in that jurisdiction.

II.The Facts

The underlying events involve a contract of charter party, in which LDES agreed to charter from Swiss Marine a vessel for the carriage of coal from South Africa to France. LDES allegedly made an anticipatory breach of the contract. The underlying dispute is subject to arbitration in London pursuant to English law. (Compl. ¶ 20.) Swiss Marine moved, pursuant to Rule B of the Supplemental Rules, for an order of attachment in this district on the assets of LDES in the Southern District of New York. The order was granted on September 15, 2008 and funds were attached in the amount of approximately $3.6 million.

LDES brings this motion to vacate the attachment of its property based on its jurisdictional presence in three adjacent districts-the District of Connecticut, the District of New Jersey, and the Northern District of New York. LDES asserts jurisdictional presence in Connecticut because its principal office in North America is located in Wilton, Connecticut. LDES is qualified to do business in Connecticut and service can be made on LDES at its Wilton office, where officers of LDES are located. (Scheinman Decl., Paré Aff. Ex. 1.) Defendant also states that it is subject to in personam jurisdiction in New Jersey based on its significant business there, which in the period of September to October 2008 was in excess of $89 million. (Gilman Decl., Paré Aff. Ex. 2.) LDES further asserts that it is subject to in personam jurisdiction in the Northern District of New York based on sales transactions during the period of September to October 2008 in excess of $128 million. (Id.) LDES is registered to do business in both New Jersey and New York and has a designated agent for service of process in West Trenton, New Jersey and in Albany, New York. (Ex. B & C to Scheinman Decl., Paré Aff. Ex. 1.)

We will evaluate the convenience arguments for these districts based on geographic considerations, before turning to Swiss Marine's argument that regardless of proximity, the inability to bring ...


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