The opinion of the court was delivered by: Richard J. Holwell, District Judge
MEMORANDUM OPINION AND ORDER
In admiralty, a "mixed" contract is one that creates both maritime and non-maritime obligations. The underlying question in this case is whether the mixed contract alleged in the complaint creates severable obligations, such that it falls within the federal admiralty jurisdiction. Plaintiff Tradhol Internacional, S.A. has moved the Court to reconsider a prior order which answered that question in the negative. The Court, however, cannot decide the motion, because Tradhol subsequently filed a notice of appeal from the Court's order. Accordingly, Tradhol's motion for reconsideration will be denied as moot.
Tradhol filed its complaint on January 7, 2009. The complaint stated two claims against defedant Colony Sugar Mills Limited.
In the first claim, Tradhol alleged that it had entered into a contract with Colony to purchase 3,000 metric tons of neutral anhydrous fermentation ethyl alcohol "free on board" a vessel nominated by Tradhol. (¶ 4.) In mercantile contracts, "free on board" means the seller must clear the goods for export, and the buyer must arrange for transportation. Black's Law Dictionary 737 (9th ed. 2009) ("Black's"). Thus, Colony was responsible for delivering the ethyl alcohol to Tradhol, and Tradhol was responsible for shipping it.
Delivery was to occur at the port of Karachi, Pakistan during the first half of October 2008. (¶ 4.) According to the complaint, "COLONY was to be responsible directly to TRADHOL for the payment of dead freight and demurrage for any delays or shortages arising from its fault in loading the product on the vessel . . . ." (¶ 5.)*fn1 Aside from this allegation, the complaint did not contain any allegations concerning the relationship between the contract's primary objective (the sale of ethyl alcohol) and its demurrage and dead freight provisions. Nor was a copy of the underlying contract attached to the complaint. See Fed. R. Civ. P. 10(c).
The complaint continued to allege that Colony breached this contract twice, first by demanding prepayment for 1,500 metric tons of ethyl alcohol, and second, by only delivering 1,200 metric tons of ethyl alcohol to the vessel Tradhol nominated. (¶ 6.) Tradhol demanded damages of $242,117.00 for dead freight; $515,885.42 for demurrage; $54,000 for lost profits; $78,750 "for various damages arising from the delay in loading the product;" $95,000 for financing the prepayment; $360,000 for "the difference between [Tradhol's] sales price and the replacement costs for the 1,800.874 metric tons of undelivered product;" and $218,133.65 for the difference between its prepayment and the value of ethyl alcohol actually delivered to the vessel. (¶ 7.)
In its second claim, Tradhol alleged that it had contracted with Colony to purchase 600 metric tons of B grade fermentation ethyl alcohol free on board a vessel nominated by Tradhol. The product was to be delivered by the end of August 2008 at the port of Karachi, Pakistan. (¶ 10.) The complaint alleged, again without providing specifics, that "COLONY was to be responsible directly to TRADHOL for the payment of dead freight and demurrage for any delays or shortages arising from its fault in loading the product on the vessel . . . ." (¶ 11.)
According to the complaint, Colony breached this contract on two occasions. On September 27, 2008, Colony demanded that Tradhol prepay for the entire 600 metric tons of product, plus an additional sum of $22,715 for other unspecified claims. (¶ 12.) Then, on November 28, 2008, Colony "defaulted by refusing to provide product for loading . . . ." (¶ 13.) (The complaint did not explain the discrepancy between the date of Colony's latter default and the August 2008 delivery date.) Tradhol demanded damages of $335,215 for non-delivery of ethyl alcohol at the load port, and $23,963,17 for lost profits. (¶ 14.) Including attorneys' fees, interest, and costs, the complaint demanded total damages of $3,023,065.23. After making the customary allegations about Colony's lack of presence in the district, see Seawind Compania, S. A. v. Crescent Line, Inc., 320 F.2d 580 (2d Cir. 1963), the complaint requested that the Court issue process of maritime attachment and garnishment against Colony pursuant to Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure (the "Supplemental Rules").
By order dated January 15, 2009, the Court denied the requested attachment. Relying on Judge Buchwald's timely opinion in Glencore AG v. Bharat Aluminum Co. Ltd., No. 08 Civ. 9765(NRB), 2008 WL 5274569 (S.D.N.Y. Dec. 15, 2008), the Court noted that for a contract claim to support federal admiralty jurisdiction, there must be a direct and substantial link between the underlying contract and the operation of a ship, its navigation, or its management afloat. For a mixed contract to meet this standard, the contract must support a claim that is severable from its non-maritime obligations, or the non-maritime elements must be "merely incidental" to the maritime elements. The Court reasoned that, as in Glencore, the Complaint failed to make this showing.
The next day, Tradhol moved the Court by letter to reconsider its ruling. (Letter from Armand P. Mele to Hon. Richard J. Holwell (Jan. 16, 2009) ("Mele Letter").) Tradhol pointed out that its complaint asserted dead freight and demurrage claims totaling $758,003.41. (Id. at 2-3.) Thus, it reasoned that it had "clearly sought maritime damages which are severable from the non-maritime obligations of the contract.'" (Id. at 2.) Tradhol did not explain why it sought an attachment of more than $3 million when its maritime claims totaled less than $1 million.
Before the Court acted on the motion, Tradhol on February 13, 2009, appealed from the January 15, 2009, order. All proceedings, here and in the Second Circuit, have been ex parte.