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Ancile Investment Company Limited v. Archer Daniels Midland Co.

September 23, 2009

ANCILE INVESTMENT COMPANY LIMITED, PLAINTIFF,
v.
ARCHER DANIELS MIDLAND COMPANY, DEFENDANT.



The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge

OPINION & ORDER

This dispute arises out of a series of commercial transactions involving Plaintiff Ancile Investment Co. Ltd. ("Ancile"), a Cayman Islands entity whose parent company is located in Switzerland; Defendant Archer Daniels Midland Co. ("ADM"), a multinational corporation headquartered in the United States; and a third party, Solo Vivo Industria e Comercio Fertilizantes Ltda. ("Solo Vivo"), a Brazilian company. Ancile financed Solo Vivo's purchases of fertilizer materials from ADM. Ancile claims that ADM (1) failed to return an overpayment Ancile made during one of the transactions; and (2) failed to provide Ancile with endorsed bills of lading for some of the fertilizer materials, thereby depriving Ancile of a security interest in the goods and opening the door for Solo Vivo to dispose of the goods without repaying Ancile for the loans.

ADM moves to dismiss Ancile's Complaint on the grounds of forum non conveniens. It argues that this matter should be adjudicated in Brazil. Ancile opposes the motion to dismiss and cross-moves for summary judgment on five of its eight claims. ADM opposes the cross-motion for summary judgment, asks the Court to strike the Declaration of Fabio Ulhoa Coelho ("Coelho Declaration") submitted by Ancile in support of its cross-motion, and requests a continuance pursuant to Federal Rule of Civil Procedure 56(f) to allow it to conduct the discovery it needs to further oppose summary judgment.

For the reasons that follow, ADM's motion to dismiss for forum non conveniens is DENIED. Ancile's motion for summary judgment is DENIED without prejudice to its renewal following the close of discovery. ADM's motion to strike the Coelho Declaration is DENIED. Lastly, because the Court denies Ancile's motion for summary judgment, ADM's request for a Rule 56(f) continuance is unnecessary and is also DENIED.

BACKGROUND

I. Facts*fn1

In July 2007, Ancile entered into a Credit Facility Agreement with Solo Vivo. (Compl. ¶ 7.) Under the terms of the Credit Facility Agreement, Ancile agreed to make short-term loans to Solo Vivo to finance Solo Vivo's importation of raw materials to manufacture fertilizer. (Id. ¶¶ 8-9.) Solo Vivo agreed to provide Ancile with security interests in the fertilizer materials pending repayment of the short-term loans. (Id. ¶ 11.)

Ancile claims that the basic operation of the Credit Facility Agreement was informed by its "prior course of dealing" with Solo Vivo and ADM. (See id. ¶¶ 14-28.) In June 2007, Solo Vivo contracted with ADM to purchase monoammonium phosphate carried on the ship African Falcon under Bill of Lading No. 4. (Id. ¶ 14.) Ancile agreed to finance Solo Vivo's purchase by advancing 83.33% of the total invoice amount to ADM in exchange for a security interest in the phosphate. (Id. ¶ 15.) Solo Vivo instructed ADM to deliver Bill of Lading No. 4, duly endorsed, to Ancile as security for the loan. (Id. ¶¶ 16-17.) Ancile claims that once it paid its portion of the invoice amount to ADM, ADM endorsed Bill of Lading No. 4 to Ancile and delivered it to Ancile's representative in Brazil, per Solo Vivo's instructions. (Id. ¶¶ 19-21.)

Also in June 2007, Solo Vivo contracted with ADM to purchase potassium chloride carried on the ship Jullieta under Bill of Lading No. 1. (Id. ¶ 22.) Ancile advanced 83.33% of the total invoice amount to ADM and Solo Vivo instructed ADM to deliver Bill of Lading No. 1 to Ancile. (Id. ¶¶ 22-25.) According to Ancile, ADM then endorsed Bill of Lading No. 1 and delivered it to Ancile's representative in Brazil as security for the loan. (Id. ¶ 26.)

In August 2007, following the signing of the Credit Facility Agreement, Solo Vivo contracted with ADM for two further shipments of fertilizer materials. The first was a shipment of muriate of potash, carried from Russia aboard the Calypso under Bill of Lading No. 10. (Id. ¶ 30.) In October 2007, pursuant to the Credit Facility Agreement, Solo Vivo instructed ADM to deliver Bill of Lading No. 10, duly endorsed, to Ancile's representative in Brazil. (Id. ¶ 35.) Ancile subsequently made a payment, via wire transfer, of $1,606,545.11 to an ADM account at Citibank in New York. (Id. ¶ 37.) This payment was $650,683.35 more than the 83.33% of the invoice amount Ancile was required to pay under the Credit Facility Agreement, and was, in fact, more than the total invoice amount for the shipment. (Id. ¶¶ 38-40.) Ancile requested that ADM return the excess amount, but ADM never repaid the funds. (Id. ¶¶ 43-44.) Moreover, after receiving Ancile's payment, ADM never endorsed Bill of Lading No. 10 over to Ancile as it had done in the past. (Id. ¶ 41.) By failing to do so, it denied Ancile a security interest in the muriate of potash, which allowed Solo Vivo to dispose of the goods without repaying Ancile for the short-term loan. (Id. ¶ 42.)

A similar situation developed with respect to the second August 2007 shipment, which consisted of monoammonium phosphate from China shipped on the Abkhazia under Bill of Lading No. PGU-04. (Id. ¶ 31.) In October 2007, Solo Vivo instructed ADM to deliver Bill of Lading No. PGU-04 to Ancile. (Id. ¶ 36.) Ancile then paid 83.33% of the invoice amount into an ADM account at Citibank in New York. (Id. ¶ 45.) ADM, however, never endorsed Bill of Lading No. PGU-04 to Ancile, thereby depriving Ancile of its security interest in the phosphate. (Id. ¶¶ 46, 50.) According to Ancile, Solo Vivo sold a portion of the phosphate and placed the remainder in a Brazilian warehouse owned by ADM. (Id. ¶¶ 47-49.)

II. Ancile's Complaint

Ancile's Complaint advances eight claims. The first two claims arise under Brazilian law. "Count I" alleges violations of Articles 876 and 884 of the Brazilian Civil Code. Ancile claims that ADM was unjustly enriched by Ancile's overpayment for the muriate of potash and that Ancile is entitled to reimbursement of the excess funds. (Id. ¶¶ 51-54.) "Count II" alleges violations of Articles 186, 187, and 927 of the Brazilian Civil Code. Ancile claims that ADM's failure to endorse certain bills of lading to Ancile, and its release of goods directly to Solo Vivo, subject ADM to extra-contractual liability under Brazilian law for failing "to act in strict good faith and probity in its commercial dealings." (Id. ¶¶ 55-62.)

The remaining six claims arise under New York law. "Count III" alleges unjust enrichment with respect to the overpaid funds. (Id. ¶¶ 63-67.) "Count IV" alleges conversion with respect to the overpaid funds. (Id. ¶¶ 68-71.) "Count V" is a claim for bailment. (Id. ¶¶ 72-76.) "Count VI" alleges breach of contract. (Id. ¶¶ 77-80.) "Count VII" alleges conversion of the goods shipped under Bills of Lading No. 10 and No. PGU-04. (Id. ¶¶ 81-84.) Finally, "Count VIII" alleges that ADM and Solo Vivo engaged in a conspiracy to defraud Ancile. (Id. ¶¶ 85-95.)

DISCUSSION

III. Motion to Dismiss for Forum Non Conveniens

ADM moves to dismiss the Complaint on the grounds of forum non conveniens. It contends that the dispute should be adjudicated in Brazil because, among other reasons, all of the events underlying Ancile's claims occurred there and most of the key witnesses and documents are located there. (See Def. Mem. in Support of Motion to Dismiss ("Def. Mem. MTD") at 1.) By contrast, "[t]he only connection to [the Southern District of New York] is that the ADM invoices for the Solo Vivo shipments at issue were paid by wire transfer to ADM's Citibank account in New York." (Id.)

Ancile opposes the motion to dismiss. It argues that ADM mischaracterizes the dispute by focusing on the events that occurred in Brazil, and claims that New York is an appropriate forum because the decisions that led to Ancile's injuries--i.e. the decision to keep the overpaid funds and the decisions not to endorse the bills of lading--were made by ADM ...


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