Defendants move to dismiss plaintiff's verified complaint and vacate the November 19, 2008 ex parte order for process of maritime attachment and garnishment of up to $12,324,520 in their property, and, if those requests are denied, to reduce the amount of property subject to attachment, and give them countersecurity.
The issues raised by the motion are disposed of as follows.
1. Motion to Dismiss and Vacate
Defendants argue that dismissal of the verified complaint and vacatur of the attachment order are required because plaintiff has failed to show that it has a valid prima facie admiralty claim against any of them.
Plaintiff time chartered the motor vessel "LISA J" to defendant Dooyang Limited, whose obligations were guaranteed by defendant Dooyang Line. Plaintiff is now pressing its claim for breach of the charter party against the Dooyang defendants in arbitration proceedings under English law in London as required by the contract.
The verified complaint alleges that:
* Dooyang Limited failed to remit the hire payment for the period from about November 8 through 17, 2008 (see Verified Compl. ¶¶ 10-12);
* plaintiff exercised its option to withdraw the vessel on November 17, after Dooyang Limited was on November 13, 2008 notified of, and failed to cure, the default (see id. ¶¶ 11-14); and
* plaintiff is owed the past-due hire payment and damages for the loss of hire payments it expected to receive from the contract's termination on about November 17, 2008 through July 1, 2009, the earliest date for re-delivery of the vessel under the contract (see id. ¶¶ 10, 15-17).
The "option" to withdraw the vessel is allegedly conferred by clauses 5 and 47 of the charter party, which provide that failing the punctual and regular payment of the hire, plaintiff may withdraw the vessel without prejudice to any claim it may otherwise have against the charterers, if they fail to cure.
Defendants contend that a default on one hire installment is not "tantamount to full repudiation and breach of the charter party" (Defs.' Mem. 4), and that the vessel's withdrawal was accepted only "in contemplation of the resolution of the dispute regarding the singular outstanding hire period" (id. 4-5, emphasis in original). Those are questions for the London arbitrators to decide. See, e.g., Glory Wealth Shipping Service Ltd. v. Five Ocean Corp. Ltd., 571 F. Supp. 2d 531, 535 (S.D.N.Y. 2008)("Because the Time Charter is subject to arbitration in London and governed by English law, whether Clause 31 prohibited the Iraq Voyage and whether Five Ocean repudiated the Time Charter are questions of contract law that are for the London arbitrators to decide, not for this Court.").
The allegations suffice to state a claim for breach of the charter party against Dooyang Limited as charterer and Dooyang Line as guarantor, and ...