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Ancile Investment Company Limited v. Archer Daniels Midland

December 10, 2012


The opinion of the court was delivered by: Wood, U.S.D.J.:

Opinion & Order

Plaintiff Ancile Investment Company ("Ancile"), pursuant to an Amended Complaint ("Complaint") (Dkt. No. 68), brings this action against Archer Daniels Midland Company ("ADM"). Ancile's claims are based on ADM's failure to endorse and deliver to Ancile two bills of lading in connection with Ancile's financing of the sale of fertilizer materials by ADM.

The Complaint alleges one claim under Brazilian law and three claims under New York state law. On March 8, 2011, this Court granted ADM's motion to dismiss the New York state law claims. (Dkt. No. 79). On August 3, 2011, this Court denied ADM's motion for an order determining that Ancile's remaining Brazilian law claim is governed by Illinois law, held that Brazilian law applied to the claim, and denied ADM's motion to dismiss. (Dkt. No. 93). As a result, all that remains of the Complaint is Ancile's Brazilian law claim. ADM now moves, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss this remaining claim. (Dkt. No. 102). For the reasons that follow, ADM's motion to dismiss is GRANTED.


The procedural history and factual background of this case are more fully reviewed in the Court's previous opinions in this matter. See Ancile Inv. Co. v. Archer Daniels Midland Co., 2011 WL 3516128 (S.D.N.Y. Aug. 3, 2011) (Wood, J.) (Dkt. No. 93); Ancile Inv. Co. v. Archer Daniels Midland Co., 784 F. Supp. 2d 296 (S.D.N.Y. 2011) (Wood, J.) (Dkt. No. 79); Ancile Inv. Co. v. Archer Daniels Midland Co., 2009 WL 3049604 (S.D.N.Y. Sept. 23, 2009) (Crotty, J.) (Dkt. No. 47). The following summary is drawn from Ancile's Complaint, and is accepted as true for purposes of ADM's motion to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

A.Basic Allegations

Ancile, a foreign corporation with its principal place of business in the Cayman Islands, entered into a Credit Facility Agreement ("CFA") with Solo Vivo Industria E Commercio De Fertilizantes LTDA ("Solo Vivo"), under which Ancile agreed to finance Solo Vivo's import and export business by issuing short term loans to Solo Vivo. SeeCompl. ¶¶ 7-8. ADM, a domestic corporation with a place of business in the Southern District of New York, entered into contracts with Solo Vivo under which ADM agreed to sell Solo Vivo various raw materials used to produce fertilizer. Id. ¶¶ 14, 23, 33.

Ancile's loaned Solo Vivo the funds to finance its purchases from ADM. Id. ¶¶ 15, 24, 38. Ancile agreed to advance approximately 83.33% of the invoice amounts, with Solo Vivo responsible for the remainder. Id. ¶ 10. In exchange for Ancile's financing, Solo Vivo agreed to provide Ancile with security interests in the imported materials pending repayment, including "all Bills of Lading and other documents of title for the goods being financed." Id. ¶ 11. A bill of lading is "an acknowledgment by a carrier that it has received the goods for shipment," which, if negotiated (as in this case), "controls possession of the goods." Royal & Sun Alliance Ins. v. Ocean World Lines, Inc., 612 F.3d 138, 141 n.3 (2d Cir. 2010); Ancile, 784 F. Supp. 2d at 299.

As this Court noted in its earlier opinion, Ancile's Complaint boils down to the following basic allegation:

In exchange for [Ancile]'s financing of Solo Vivo's purchases of fertilizer materials from [ADM], Solo Vivo "instructed" [ADM] to deliver to [Ancile] the bills of lading for each shipment of goods as security for the financing. Those bills of lading served as the documents of title to the goods shipped. When [ADM] failed to do this, and Solo Vivo defaulted on its payment obligations, [Ancile] was left unpaid, with no way to enforce its security interest in the goods. Ancile, 784 F. Supp. 2d at 299 (footnoted omitted) (citing Compl. ¶ 55).

B.History of Relevant Transactions

To understand the shipments that gave rise to the allegations in the Complaint, Ancile argues that the Court must also consider certain prior transactions. In particular, Ancile focuses on shipments made by ADM aboard the African Falcon and the Jullieta. Solo Vivo instructed ADM that when ADM received payment from Ancile, ADM should endorse the bill of lading from the African Falcon shipment to the order of Ancile and deliver it to Ancile. See Compl. ¶¶ 14, 16-17. ADM, however, had previously endorsed the bill of lading "in blank" (meaning whoever had possession of the bill of lading had title to the goods) and, upon receiving payment from Ancile, delivered the bill of lading to Solo Vivo. Id. ¶¶ 18, 21. When Ancile's representative learned of the transfer, it immediately obtained the bill of lading from Solo Vivo and had Solo Vivo endorse the bill "to the order of Ancile." Id. ¶ 22. The bill of lading for the Jullieta shipment was endorsed following the same pattern. See id. ¶¶ 23-31.

Ancile's claims arise out of ADM's actions regarding shipments carried aboard the Calypso and the Abkhazia. According to the Complaint, Solo Vivo, pursuant to a "Letter of Undertaking" with Ancile, "agreed and undertook to notify and instruct" ADM to endorse and deliver two bills of Lading to Ancile-Bill of Lading No. 10 and Bill of Lading No. PGU-04- relating to materials transported aboard the Calypso and the Abkhazia, respectively. See id. ¶¶ 34, 35, 38. After Ancile paid ADM, ADM did not deliver the bills of lading to Ancile, but rather to Solo Vivo-just as it had with the African Falcon and Julieta shipments. See id. ¶¶ 40, 44, 51-54. In the Calypso and the Abkhazia transactions, however, Ancile was unable to obtain the bills of lading from Solo Vivo. Thus, once Solo Vivo disposed of the goods, Ancile could not enforce its security interest ...

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