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Indagro S.A. v. Bauche S.A.

August 31, 2009

INDAGRO S.A., PLAINTIFF,
v.
BAUCHE S.A., DEFENDANT.



The opinion of the court was delivered by: Paul G. Gardephe, U.S.D.J.

MEMORANDUM OPINION AND ORDER

In this maritime attachment action, Plaintiff Indagro S.A. ("Indagro") alleges that it entered into a contract with Defendant Bauche S.A. ("Bauche") to sell, transport by chartered vessel, and deliver a cargo of fertilizer to Bauche. Indagro claims that it fulfilled its obligations under the contract, but that Bauche failed to pay it demurrage due under the contract.*fn1 (Cmplt. ¶¶ 4, 6, 9, 11, 16, 18-19, 22-24 & Ex. A)

Indagro commenced this action on December 1, 2008 by filing a verified complaint and supporting attorney affidavit. Indagro sought an ex parte Rule B Order authorizing attachment of "all tangible or intangible property of [Bauche] up to and including $804,219.90 . . . ."*fn2 (Cmplt. Prayer for Relief ¶ b) The requested Rule B Order for Process of Maritime Attachment and Garnishment (the "Rule B Order") was issued on December 3, 2008,*fn3 and pursuant to that order, $804,219.90 of Bauche's funds have been restrained by banks in this District. (See Docket No. 10)

On April 21, 2009, Bauche moved by order to show cause to vacate the Rule B Order pursuant to Rule E(4)(f) of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure, and Local Admiralty Rule E.1. (Docket No. 10) On May 13, 2009, this Court held a hearing on Bauche's motion. For the reasons stated below, Bauche's motion is GRANTED and the Rule B Order is VACATED.

DISCUSSION

To obtain a Rule B order, a plaintiff must allege facts that make it plausible to believe that: "(1) it has a valid prima facie admiralty claim against the defendant; (2) the defendant cannot be found within the district; (3) the defendant's property may be found within the district; and (4) there is no statutory or maritime law bar to the attachment." Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2d Cir. 2006); Peninsula Petroleum Ltd. v. New Econ Line PTE Ltd., No. 09-Civ.-1375(PGG), 2009 WL 702840, at *1 (S.D.N.Y. Mar. 17, 2009) (plaintiff in maritime case must at least meet pleading standard of Federal Rules of Civil Procedure, "which require[s] a plaintiff to . . . allege 'enough facts to state a claim to relief that is plausible on its face'" (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007))).

Once the defendant's property is attached pursuant to a Rule B order, Rule E(4)(f) provides that the defendant "shall be entitled to a prompt hearing at which the plaintiff shall be required to show why the arrest or attachment should not be vacated or other relief granted consistent with these rules." Fed. R. Civ. P. Supp. AMC R. E(4)(f). "Rule E(4)(f) clearly places the burden on the plaintiff to show that an attachment was properly ordered and complied with the requirements of Rules B and E." Aqua Stoli, 460 F.3d at 445 n.5. A "motion to vacate . . . is decided based on whether a prima facie claim is shown and technical requirements for attachment have been met," Chiquita Int'l Ltd. v. MV Bosse, 518 F. Supp. 2d 589, 597 (S.D.N.Y. 2007) (citing Aqua Stoli, 460 F.3d at 445), and while "[m]aritime plaintiffs . . . are not required to prove their case at this stage," SPL Shipping Ltd. v. Gujarat Cheminex Ltd., No. 06 Civ. 15375 (KMK), 2007 WL 831810, at *2 (S.D.N.Y. Mar. 15, 2007), the Court may "vacate the judgment [granting an attachment] if it determines, after hearing from both parties, that the requirements of Rule B have not actually been met." Williamson v. Recovery Limited Partnership, 542 F.3d 43, 52 (2d Cir. 2008). "Superficial compliance with Rule B, while necessary, is not sufficient in determining whether maritime attachment is appropriate." Id.

Here, Bauche argues that vacatur is warranted because Indagro has not shown that it has a valid prima facie admiralty claim against Bauche. (Def. Br. at 2-3) Indagro argues that the Court is barred from considering this question under the doctrine of issue preclusion, and that its alleged claim under the sale of goods contract at issue is a valid prima facie admiralty claim. (Pltf. Br. at 6-20) For the reasons stated below, vacatur is warranted here.

I. BACKGROUND

A. The Contract At Issue

Indagro's Verified Complaint contains, inter alia, the following allegations: By contract dated November 22, 2007 (the "Contract"), Indagro agreed to sell Bauche 21,000 metric tons of fertilizer (specifically, "NPK 8-24-24-9") on a "Cost and Freight" basis.*fn4 (Cmplt. ¶¶ 4, 6 & Ex. A) The Contract contains provisions for calculating laytime, and also contains a clause entitled "Demurrage/Despatch" that states in its entirety: "As per Charter Party of the performing vessel to be advised upon nomination."*fn5 (Cmplt. ¶¶ 6, 9, 11 & Ex. A) The Contract provides that it is governed by English law and that disputes between the parties are to be resolved by arbitration in London. (Cmplt. ¶¶ 27-28 & Ex. A)

Indagro fulfilled its obligations under the Contract by loading the fertilizer on the vessel M/V Swift Splash (the "Vessel"), which it had nominated and Bauche had accepted. (Cmplt. ¶¶ 16, 18-19) The Vessel was on demurrage for 15 days, 20 hours and 17 minutes at the discharge port, as calculated under the terms of the contract. (Id. ¶ 22-23) Indagro alleges that Bauche owes it $581,875.00 under the demurrage clause of the Contract, which Bauche has failed to pay despite due demand. (Id. ¶¶ 23-24)

B. Related Proceedings

The instant action is not the only action between Indagro and Bauche in this District. In a case initiated on November 21, 2008 and assigned to Judge Batts, Indagro asserted a similar claim against Bauche under a nearly identical contract. (Def. Br. at 2; De Klerk Aff. ¶ 4; De Klerk Exs. A & B) As in this case, Indagro obtained a Rule B attachment order, which Bauche moved to vacate. (Def. Br. at 2) On January 6, 2009, Judge Batts found that the contract was maritime and denied Bauche's motion to vacate in an oral decision. (Reilly Aff. Ex. 10 (hereafter "1/6/09 Tr.") at 19:2-24)

II. WHETHER BAUCHE IS PRECLUDED FROM SEEKING VACATUR

As a preliminary matter, Indagro contends that Judge Batts' decision precludes Bauche from litigating the issue of whether the Contract here is a maritime contract. (Pltf. Br. at 6-8) Under the doctrine of issue preclusion, a party may not re-litigate an issue where: "(1) the identical issue was raised in a previous proceeding; (2) the issue was actually litigated and decided in the previous proceeding; (3) the party had a full and fair opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a valid and final judgment on the merits." Marvel Characters, Inc. v. Simon, 310 F.3d 280, 288-89 (2d Cir. 2002) (internal quotation omitted). Because Indagro ...


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