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ProShipLine, Inc. v. Aspen Infrastructures

October 22, 2009

PROSHIPLINE, INC., PLAINTIFF-APPELLANT,
v.
ASPEN INFRASTRUCTURES, LTD., DEFENDANT-APPELLEE.



SYLLABUS BY THE COURT

Appeal from a judgment of the United States District Court for the Southern District of New York. The district court (Robert W. Sweet, Judge) vacated a maritime attachment, concluding that (1) maritime jurisdiction was absent, (2) both the party that attached the funds and the party that owned the funds were present in another jurisdiction -- the Southern District of Texas, and (3) the party that had sought and secured the attachment abused the ex parte nature of the attachment process. We disagree with the district court as to the first ground for vacatur, but agree with it as to the second, and therefore affirm without reaching the third.

Affirmed.

The opinion of the court was delivered by: Sack, Circuit Judge

Argued: March 12, 2009

Before: McLAUGHLIN and SACK, Circuit Judges, and KAPLAN, District Judge.*fn1

ProShipLine, Inc., the plaintiff-appellant, and EP-Team, Inc., not a party to this proceeding, are engaged in a breach-of-contract dispute with Aspen Infrastructures, Ltd., the defendant-appellee. What appears to have been a relatively simple matter, however, has metastasized, spreading across several proceedings spanning a variety of districts, states, and continents. Two separate proceedings related to this dispute are pending in the Southern District of New York. In one, Aspen secured an ex parte order of maritime attachment against EPTeam's assets. In the second, ProShipLine sought and secured an ex parte order of attachment against Aspen's assets worth close to two million dollars. On Aspen's motion, the district court vacated ProShipLine's attachment of Aspen's assets, concluding, inter alia, that both Aspen and ProShipLine are present in the Southern District of Texas. On appeal in this second case only, ProShipLine challenges the vacatur. We affirm.

BACKGROUND

The Parties

The facts underlying this appeal, including those set forth in the district court's Opinion and Order of February 1, 2008, see ProShipLine, Inc. v. Aspen Infrastructures, Ltd., 533 F. Supp. 2d 422, 424-26 (S.D.N.Y. 2008) ("ProShipLine"), upon which we rely, are uncontested. Aspen is an Indian corporation associated with Suzlon Energy Ltd. ("Suzlon"). We refer to Aspen and Suzlon collectively as "Aspen." Aspen manufactures and markets wind turbines -- windmills that convert wind energy into electricity. It manufactures turbine components in India and then ships them to purchasers in market countries, including the United States, for installation. Aspen ships these components on ocean-going vessels that it time-charters. In an attempt to ensure that the vessels are used efficiently when not carrying Aspen products, i.e., to avoid "deadhead" return of empty vessels from market countries to India, Aspen entered into the contract carriage business, soliciting cargos from the market countries with destinations in Asia.

On April 9, 2006, as part of this effort, Aspen and EP-Team entered into a "Sales and Logistics Service Agreement," by which EP-Team was appointed as Aspen's general sales and port service agent in the United States. In connection with this arrangement, EP-Team established ProShipLine -- the appellant here -- to act as Aspen's agent.

Under the agreement, either party had the right to terminate the "arrangement" on 30 days' notice "without stating any cause" and at "any time during the currency of [the] agreement." The contract contained a choice-of-law clause providing that it would be construed and enforced in accordance with English law, and a forum selection clause providing that all disputes arising from the agreement would be resolved by arbitration in Singapore.

Aspen eventually became dissatisfied with the arrangement. By email dated July 5, 2007, Aspen informed EP-Team that as of August 1, 2007, Aspen "will have alternate arrangements in place" for its shipping services and that as of that date "Proshipline will [cease] to be our agent[]." Email from Sanjivv G. Bangad to David Pulk and Neil Johnson (July 5, 2007). By letter to Aspen dated July 6, 2007, EP-Team asserted that the email constituted a "purported termination" of the agreement "in violation of the Services Agreement" and was "actionable by EP-Team." Letter from Richard A. Lowe to Sanjeev Bangad (July 6, 2007). By letter dated July 13, 2007, Aspen informed EP-Team that there was "no contract" between Aspen and EP-Team, that the agreement did not purport to appoint EP-Team as the exclusive agent for Aspen in America, and that ProShipLine was "failing to perform in accordance with the agreement or its spirit in any event." Letter from Christopher Chauncy to Shannon, Gracey, Ratliff and Miller, LLP (July 13, 2007). By letter dated July 30, 2007, EP-Team told Aspen that "as of Midnight July 31, 2007, [EP-Team/ProShipLine will] not be in a position to act in any capacity on behalf of [Aspen]." Letter from Richard A. Lowe to Christopher Chauncy (July 30, 2007).

Procedural History

In October 2007, Aspen named EP-Team as a defendant in a proceeding in the Southern District of New York over which Judge Robert W. Sweet was reassigned to preside. See Aspen Infrastructures Ltd. v. E.P. Team, Inc., No. 07 Civ. 8813 (S.D.N.Y. Oct. 12, 2007). Some two months later, by verified complaint dated December 3, 2007, ProShipLine, without EP-Team, initiated the instant litigation against Aspen, seeking a Writ of Maritime Attachment and Garnishment in the amount of $6,390,000. See Verified Complaint, ProShipLine, Inc. v. Aspen Infrastructures, Ltd., No. 07 Civ. 10969 (S.D.N.Y. Dec. 3, 2007) (Doc. No. 1). We refer to the former as the "First New York Action" and the latter -- the case now before us on appeal -- as the "Second New York Action."

On December 4, 2007, Judge John F. Keenan, sitting as Part I judge, issued the order in the Second New York Action in the full amount. See Order Directing Clerk to Issue Process of Maritime Attachment and Garnishment, ProShipLine, Inc. v. Aspen Infrastructures, Ltd., No. 07 Civ. 10969 (S.D.N.Y. Dec. 4, 2007) (Doc. No. 5). On Saturday, January 5, 2008, ProShipLine's counsel "gave notice that an electronic fund transfer belonging to [Aspen] in the amount of US$1,999,964.00 had been restrained." Declaration of John A. Orzel ¶ 6 (Jan. 9, 2008). Thereafter, the case, having been deemed to be related to the First New York Action, was assigned to Judge Robert W. Sweet. See Notice of Reassignment, ProShipLine, Inc. v. Aspen Infrastructures, Ltd., No. 07 Civ. 10969 (S.D.N.Y. Dec. 18, 2007) (Doc. No. 8). On*fn2 January 10, 2008, Aspen moved in the Second New York Action to vacate ProShipLine's attachment of its funds. See ProShipLine, Inc. v. Aspen Infrastructures, Ltd., No. 07 Civ. 10969 (S.D.N.Y. Jan. 10, 2008) (Doc. No. 10). By Opinion and Order dated February 1, 2008, the district court vacated that attachment. See ProShipLine, 533 F. Supp. 2d at 427.

The district court based its vacatur on three grounds: (1) the court lacked maritime jurisdiction because the agreement at issue was an executory requirements contract, id.; (2) Aspen is present in the Southern District of Texas, where ProShipLine has its headquarters and principal place of business, id.; and (3) ProShipLine abused the ex parte nature of the maritime attachment rules, id. at 427-29.

ProShipLine appeals, asserting that the district court erred in all three respects. We affirm solely on the ground that the district court did not err in concluding that the parties were ...


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