CHALOS, O’CONNOR & DUFFY, LLP 

Attorneys for Defendant Forbes 

366 Main Street 

Port Washington, New York 11050 

Tel: (516) 767-3600 / Fax: (516) 767-3605 

Eugene J. O’Connor (EO-9925) 

Timothy Semenoro (TS-6847)

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

------------------------------------------------------------X 

NOVSTAR SHIPPING AND MARINE 

SERVICES CO., LLC, 

 

 Plaintiff, 

 07 CV 3536 (GEL) 

 - against - 

 

FORBES GOKAK LTD. a/k/a M/S FORBES 

GOKAK LTD., 

 Defendant. 

------------------------------------------------------------X 

DEFENDANT’S REPLY MEMORANDUM OF LAW IN SUPPORT 

OF MOTION TO VACATE THE ATTACHMENT 

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 1 of 15
PRELIMINARY STATEMENT

 Defendant FORBES GOKAK LTD. (hereinafter “Forbes”) present this Reply 

Memorandum and the corresponding Declaration of Zubin Morris in further support of its 

motion to vacate the Order and Process of Attachments in this action and to have released any 

Forbes property now attached by any garnishee banks with offices in New York. As previously 

set forth, this motion to vacate and release should be granted because Plaintiff NOVSTAR 

SHIPPING AND MARINE SERVICES CO., LLC (hereinafter “Novstar”) is already fully 

secured. Among other factors, international comity and the equities involved are also in favor of 

vacating the Order and Process of Attachment as to Defendant Forbes and having all of the 

wrongfully attached property of Defendant Forbes released immediately. 

BACKGROUND FACTS

We respectfully refer this Honorable Court to the accompanying Declaration of Zubin 

Morris (“Morris Decl.”), and the previously provided Declaration of Timothy Semenoro 

(“Semenoro Decl.”) with Exhibits attached thereto, which set forth the factual circumstances 

relevant to this matter. 

 

2

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 2 of 15
LEGAL ARGUMENT

POINT I 

NOVSTAR REMAINS FULLY SECURED

As we set forth in our main papers, the Second Circuit in Aqua Stoli held that “a district 

court may vacate an attachment if defendant shows at a Rule E hearing that...plaintiff has 

already obtained sufficient security for the potential judgment, by attachment or 

otherwise.” Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2d Cir. 

2006) (emphasis added); Dolco Investments, Ltd. v. Moonriver Development, Ltd., 06 Civ. 12876 

(RWS), 2007 U.S. Dist. LEXIS 31101, *15 (S.D.N.Y. April 26, 2007) (district court has 

equitable discretion to vacate maritime attachments when plaintiff has already obtained 

sufficient security by attachment or otherwise). 

 It is undisputed that Forbes has already filed a valid bank guarantee with the High Court 

of Kerala in the amount ordered by said High Court to secure Novstar’s wrongful arrest claim. 

See, Semenoro Decl. at ¶ 7; Morris Decl. at ¶¶ 6 and 7. The High Court will adjudicate all of the 

underlying claims, including the claim by Forbes for the cost of fuel oil (i.e. bunkers) it had 

delivered to the M/V BLUE STAR and Novstar’s alleged counter-claim for wrongful arrest. 

See, Semenoro Decl. at ¶¶ 5-11 and 16; Morris Decl. ¶¶ 3, 9, 11, and 13. The High Court, at its 

discretion, has already determined the proper amount of security for Novstar’s claim for the 

wrongful arrest of the vessel and Forbes has already provided this security in a form satisfactory 

to the High Court. See, Semenoro Decl. at ¶¶ 7, 8, 10, and 11; Morris Decl. ¶¶ 3, 9, 11, and 13. 

The issue of security for Novstar’s counter-claim, the same issue before this Court, is pending 

before the High Court. See, Semenoro Decl. at ¶¶ 10 and 11; Morris Decl. ¶10. Until the High 

Court decides and orders otherwise, the proper amount of security has already been set and 

3

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 3 of 15
provided by Forbes to said High Court. See, Morris Decl. at ¶¶ 4, 10, 11, and 13. Therefore, this 

Honorable Court is well within its discretion to confirm that Novstar’s claim is already fully 

secured and the current attachments should be vacated, as per the Second Circuit decision in 

Aqua Stoli. 

POINT II 

THE PARTIES ARE BOTH PRESENT 

AND ACTIVELY LITIGATING IN INDIA

The Second Circuit in Aqua Stoli also held that “a district court may vacate an attachment 

if defendant shows at a Rule E hearing that...plaintiff could obtain in personam jurisdiction 

over defendant in the district where the plaintiff is located.” Aqua Stoli Shipping Ltd. v. 

Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2d Cir. 2006) (emphasis added); OGI Oceangate 

Transportation Co. Ltd v. RP Logistics Pvt. Ltd., 06 Civ. 9441 (RWS), slip op. at pg. 15 

(S.D.N.Y. June 21, 2007) (J. Sweet) (participation by both parties in an arrest proceeding, and 

subsequent posting of security, confirms plaintiff’s ability to obtain in personam jurisdiction 

over defendant where the plaintiff is also located). 

Forbes has voluntarily appeared and submitted itself to the jurisdiction of the High Court. 

In response to the arrest, Novstar posted security to facilitate the release of the M/V BLUE 

STAR. See, Semenoro Decl. at ¶ 9; Morris Decl. ¶¶ 8 and 9. Novstar then filed a Counter 

Affidavit on behalf of itself and the M/V BLUE STAR, as Respondents, with the High Court, 

denying the Forbes’ claims and, among other things, demanding an increase in the current 

security already posted by Forbes to address Novstar’s claim for wrongful arrest and resulting 

damages. See, Semenoro Decl. at ¶ 10. Thus, Novstar, as an active participant, is also subject to 

the jurisdiction of the High Court. 

4

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 4 of 15
As both parties are actively participating before the High Court of Kerala, Novstar could 

obtain full satisfaction for its claim from Forbes through that Court. Under these circumstances, 

this Honorable Court may at its discretion vacate the current attachment, as per the Second 

Circuit decision in Aqua Stoli. 

POINT III 

INTERNATIONAL COMITY FAVORS DISMISSAL OF THIS ACTION

 Not wanting to repeat this argument as set forth more fully in our main papers, we simply 

point out the obvious – The High Court of Kerala is already considering the underlying claims 

and counter-claims, including the proper levels of security already provided by both parties. See,

Semenoro Decl. at ¶¶ 7, 8, 10, and 11; Morris Decl. at ¶¶ 3, 4, 9, and 10. If this Honorable Court 

decides the issue of how much security is proper for Novstar’s counter-claim for wrongful arrest 

in the Indian action, this decision may be contrary to the current Order of the High Court of 

Kerala and effectively infringe on the High Court of Kerala’s power to decide issues for parties 

that are already before it. As a matter of international comity, this Court should abstain from 

exercising jurisdiction over the issue of security because it will be decided in parallel 

proceedings in a foreign court. See Royal and Sun Alliance Ins. Co. of Canada v. Century Int’l 

Arms, Inc., 466 F.3d 88, 93 (2d Cir. 2006). For this reason, this Court should abstain from 

exercising jurisdiction, dismiss this action, and vacate the attachment in the interest of 

international comity. 

5

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 5 of 15
POINT IV 

NOVSTAR’S CONJECTURE FALLS SHORT

A. Plaintiff Novstar’s initial burden is not at issue - 

 At no time has Forbes challenged whether or not Novstar has met the minimum 

prerequisites under Aqua Stoli in order to obtain a writ of maritime attachment. As such, 

Novstar’s Point I of its Memorandum in Opposition is moot. We do note with interest that, 

while Novstar focuses on the basic requirements for a maritime attachment, it chooses to ignore 

the conditions set forth by the Second Circuit, e.g. plaintiff is already fully secured, etc., which 

allows a District Court discretion to vacate an attachment and dismiss the corresponding action. 

B. Plaintiff is already present and litigating in the same court as the Defendant – 

 Initially, the vessel BLUE STAR was present in the jurisdiction of the High Court of 

Kerala when it was arrested. By posting security and raising a counterclaim, Novstar has 

effectively submitted itself to the High Court of Kerala. Of course, it does not matter where 

Novstar, as a company, is located. Jurisdiction over, and the presence of, Novstar before the 

High Court was created when the vessel was arrested, and solidified when Novstar invoked the 

power of the High Court for its counter-claim. 

 While the underlying merits of the claims between the parties are not at issue before this 

Court, Novstar nevertheless alleges how valid its claim for wrongful arrest is. However, it is a 

fact that the M/V BLUE STAR, owned by Novstar, was supplied with fuel oil by Forbes, the 

invoice for said fuel oil was not paid, and the failure to pay is the basis for the underlying arrest 

of the MV BLUE STAR. Equally, Novstar ignores the possibility that it could still lose on its 

claim for wrongful arrest of the vessel, even though Forbes’s underlying claim may not be 

6

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 6 of 15
successful, because the standard for proving wrongful arrest is as high under Indian law as it is 

under US law. 

 The arrest of the MV BLUE STAR lasted only as long as it took for alternate security to 

be posted by Novstar. It is well established that the historical purposes of a Rule B attachment 

are to obtain security and/or obtain jurisdiction over a party. See Aqua Stoli, 460 F.3d at 437. 

The action in India for the arrest of the M/V BLUE STAR was no different. The supposed 

“inequity” here is a function of Novstar deciding not to litigate and secure all of the underlying 

claims where jurisdiction already existed over both Forbes and Novstar, but instead initiating an 

additional action in New York in an effort to circumvent the process of obtaining additional 

security for its counter-claim in India. See, Morris Decl. at ¶ 14. 

 In support of this argument, attached hereto is the opinion of Judge Sweet . See, OGI 

Oceangate Transportation Co. Ltd v. RP Logistics Pvt. Ltd., 06 Civ. 9441 (RWS), 2007 U.S. 

Dist. LEXIS 46841 at *15-*18 (S.D.N.Y. June 21, 2007) (J. Sweet) (participation by both parties 

in an arrest proceeding, and subsequent posting of security, confirms plaintiff’s ability to obtain 

in personam jurisdiction over defendant where the plaintiff is also located). Accordingly, we 

submit that this Honorable Court may at its equitable discretion vacate the current attachment, as 

per the Second Circuit decision in Aqua Stoli. 

C. Forbes has already provided security for Novstar’s counter-claim – 

 The Order of the High Court, in the context of the limited amount of actual costs that 

could be awarded and the large sum required in security (i.e. 5 lakhs or 5,00,000 Rupees), makes 

it clear that the security required of Forbes is to address any damages, costs and interest that may 

be awarded to Novstar. See, Morris Decl. at ¶ 5. As it turns out, the initial judgment of the 

High Court of Kerala was reasonably accurate, as it ordered Forbes to post about US $12,500 in 

7

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 7 of 15
security and Novstar alleges US $25,670.13 in damages. Regardless, the purpose of the Forbes 

security is to address Novstar’s wrongful arrest claim in India and that security has been 

deposited in the amount ordered by the High Court. See, Morris Decl. at ¶ 5. Novstar’s 

accusation that said security was renewed in the self-interest of Forbes is baseless. See, Morris 

Decl. at ¶¶ 6 and 7. 

D. Comity is relevant – 

 The High Court of Kerala will decide whether to increase the amount of security required 

of Forbes and Novstar, as well as the underlying merits of the claims of the parties. See, 

Semenoro Decl. at ¶¶ 7, 10, 11, and 16; Morris Decl. at ¶¶ 3, 4, 9, and 10. The action before this 

Court is also concerned with the amount of security posted by Forbes. The attachment 

proceeding in New York may be “ancillary” to the determination of the merits of the claims by 

the High Court in India, but the issue of security is now an integral part of the litigations both 

here and in India. The initial Order of the High Court of Kerala on the issue the security required 

of Forbes should have a res judicata / collateral estoppel effect here. In the interest of 

international comity, the decision on the quantum of appropriate security should remain with the 

High Court of Kerala. 

E. Equity favors vacating the attachment – 

 Contrary to the contention of Novstar, Forbes has already provided security for Novstar’s 

counter-claim for wrongful arrest. See, Semenoro Decl. at ¶¶ 7, 8, 10, and 11; Morris Decl. at ¶¶ 

6 and 7. For this reason and the others already presented, this Honorable Court is well within its 

discretion to confirm that Novstar’s claim is already fully secured and the current attachments 

should be vacated, as per the Second Circuit decision in Aqua Stoli. 

8

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 8 of 15
F. Only nominal attorney’s fees can be awarded in India - 

 After further consultation with Indian counsel, it has been confirmed that the possible 

award of attorney’s fees for a successful party is even more limited than originally understood. 

Under the High Court of Kerala Rules, only a maximum of Rs. 2,000 can be awarded to a 

successful party for eligible attorney’s fees, or roughly US $50. See, Morris Decl. at ¶ 12 and 

Addendum to Morris Decl. 

CONCLUSION

 The Order and Process of Attachment as to Defendant Forbes remains improper and 

should be vacated, and all of the attached property of Defendant Forbes should be released. 

Defendant Forbes also respectfully requests such other and further relief that this Honorable 

Court may deem just and proper in the circumstances of this case. 

Dated: Port Washington, New York 

 July 18, 2007 

CHALOS, O’CONNOR & DUFFY, LLP 

Attorneys for Defendant Forbes 

 By: /S/ Timothy Semenoro 

Eugene J. O’Connor (EO-9925) 

Timothy Semenoro (TS-6847) 

366 Main Street 

Port Washington, New York 11050 

Tel: (516) 767-3600 

Fax: (516) 767-3605 

9

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 9 of 15
1 of 1 DOCUMENT

OGI OCEANGATE TRANSPORTATION CO. LTD., Plaintiff, -against- RP

LOGISTICS PVT. LTD. and R. PIYARELALL INTERNATIONAL PVT. LTD.,

Defendants.

06 Civ. 9441 (RWS)

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF

NEW YORK

2007 U.S. Dist. LEXIS 46841

June 21, 2007, Decided

June 26, 2007, Filed

COUNSEL: [*1] For Plaintiff: LENNON, MURPHY &

LENNON, LLC, New York, NY, By: Nancy Rebecca

Peterson, Esq.

For Defendants: CHALOS, O'CONNOR & DUFFY,

LLP, Port Washington, NY, By: Owen Francis Duffy, III,

Esq.

JUDGES: ROBERT W. SWEET, U.S.D.J.

OPINION BY: ROBERT W. SWEET

OPINION

Sweet, D.J.

Defendants RP Logistics Pvt. Ltd. ("RPL") and R.

Piyarelall International Pvt. Ltd. ("RPI") (collectively

"the Defendants") have moved under Supplemental Rule

E(4)(f), Fed. R. Civ. P., to vacate the process of maritime

attachment and garnishment issued in this matter on

October 17, 2006, upon motion by the plaintiff OGI

Oceangate Transportation Co. Ltd. ("OGI" or the

"Plaintiff") and, in the alternative, for an order pursuant

to Supplemental Rule E(7)(a), Fed. R. Civ. P., for

security. This dispute between foreign corporations OGI,

the ship owner doing business in Bejing, the Peoples

Republic of China, and RPL (the charterer) and RPI, both

doing business in Kolkata (Calcutta), India, has so far

engaged courts in China and India relating to a charter

party which has a provision for mandatory Hong Kong

arbitration. For the reasons set forth below, the motion to

vacate the attachment is granted.

Prior Proceedings and the Verified Complaint

This action [*2] was commenced on October 17,

2006, by the filing of a verified complaint by OGI which

alleged that OGI is a foreign company, that RPL and RPI

are Indian companies, and that RPL chartered the M/V

IKAL, owned by OGI, by charter party dated June 21,

2006. (Compl. PP 2-6.) The parties disputed certain

freight and demurrage charges. The dispute was resolved

by an agreement which included the consignee China

Metals and required the payment of $ 45,000, which was

paid by RPI. (Id. PP 7-9.) A subsequent dispute. allegedly

arose concerning demurrage accrued at the discharge

port. (Id. P 10.)

In September 2006, according to OGI, RPL

wrongfully arrested the M/V UTHAI in India. (Id. PP

11-14.)

Pursuant to the charter party, all disputes are to be

submitted to arbitration in Hong Kong and OGI is

preparing to initiate such an arbitration. (Id. PP 15-16.)

According to OGI, it expects to recover $ 1,441,464.21 in

the arbitration, including over $ 930,000 in damages from

the alleged wrongful arrest of the M/V UTHAI in India.

(Id. P 17.)

According to OGI, RPL is a shell corporation

through which RPI conducts its business without separate

identity and is the alter ego of RPI, which pays RFL

obligations. [*3] (Id. PP 18-24.) OGI further asserts that

Page 1

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 10 of 15
RPL is one of several companies operated as an entity

known as the R. Piyarelall Group (id. PP 25-26), which is

controlled by the Agarwal Family (id. P 27). The

organization hierarchy, representatives, offices, and

control of the R. Piyarelall Group, as described, result in

the allegation that RPI is a party to the charter party

between OGI and RPL (id. PP 28-35) or, alternatively, a

partner, joint venturer, or affiliate (id. PP 36-37). The

Complaint requests an order of attachment and

garnishment on funds held in eleven enumerated banks.

(Id. P 38.)

On October 17, 2006, an ex parte order of attachment

was filed. An Electronic Fund Transfer ("EFT") in the

amount of $ 430,898.44, a freight payment made by RPI

as a shipper of cargo, was restrained. (Duffy Aff., Nov.

21, 2006 (the "Duffy Aff."), PP 86-87.)

The instant motion to vacate the attachment was

heard on December 7, 2006.

The Facts

Counsel for the parties have submitted affidavits and

exhibits setting forth the following facts.

RPI, incorporated in India on November 10, 1988, is

an exporter of agro-products, industrial and mineral

products, and one of its directors is also a director of

RPL. [*4] (Id. PP 17, 19, 21.) RPL was incorporated on

September 9, 2003, and provides logistical and

transportation support to shippers (id. PP 10, 12), files its

tax returns on an independent basis, and maintains its

own bank accounts (id. PP 14-15). According to OGI,

RPL and RPI have the same address, phone number,

overlapping directors, and are dominated by the R.

Piyarelall Group. (Peterson Aff., Dec. 4, 2006 (the

"Peterson Aff."), PP 58-69.)

In June 2006, RPI entered into an agreement with

China National Mineral Co. Ltd. ("China National") to

sell 11,000 metric tons of iron ore fines to China National

to be shipped from India and delivered to China with the

express understanding that, upon completion of the initial

shipment, China National would purchase two further

cargos of 20,000 metric tons each. (Duffy Aff. PP 25-26.)

RPI retained RPL on June 21, 2006, to arrange as a

disponent owner, on behalf of RPI, as sub

charterer/shippers, for the carriage of the iron ore cargo

from India to China on board the M/V IKAL. (Id. P 27.)

Pursuant to a "Fixture Note" and a "Charter Party"

agreement dated June 21, 2006, RPL chartered the vessel,

M/V IKAL, from OGI pursuant to which the M/V IKAL

was to [*5] carry the cargo of iron ore from India to

China in exchange for the payment of freight. (Id. P 28.)

According to OGI, RPL presented or forged

authorization on an unauthorized bill of lading. (Peterson

Aff. PP 16-21.)

The M/V IKAL loaded a portion of the cargo on

June 24 and 25, 2006, but was delayed by a "stability

problem" and was unable to load all 11,000 tons. (Duffy

Aff. PP 35-39.) The M/V IKAL sailed on July 4, 2006,

for China. (Id. P 42.) On arrival at the discharge port of

Fang Chang, OGI disputed demurrage calculations and

refused to berth the vessel. (Id. PP 46-48.) On July 22,

2006, RPI, OGI, and China National agreed that the

payment of $ 45,000 would resolve OGI's claims. (Id. P

50.) Although the payment was made, the cargo was not

delivered. (Id. PP 53-55.) China National commenced an

action in China resulting in a court order to release the

cargo (id. P 57), and China National cancelled the

contracts for future deliveries (id. P 60).

On October 13, 2006, RPL and RPI commenced

proceedings in the High Court of Kolkata to arrest the

M/V UTHAI NAVEE as security for their claim against

OGI and the vessel was arrested. (Id. PP 63-66.) The

M/V UTHAI NAVEE had been chartered by [*6] OGI,

and its owner succeeded in lifting the arrest early in

November 2006. (Peterson Aff. PP 42, 47.)

Discussion

1. The Burden of Proof for Vacating a Maritime

Attachment

To begin the process by which a party may attach

another party's assets, a plaintiff must file a verified

complaint seeking attachment and an affidavit stating

that, to the best of the plaintiff's knowledge, the

defendant cannot be found within the judicial district.

Fed. R. Civ. P. Supp. Rule B(1). Thereafter, Rule E(4)(f),

Fed. R. Civ. P. Supp. Rule E, provides that any person

claiming an interest in the attached property is "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." Id. Supp. Rule E(4)(f).

Page 2

2007 U.S. Dist. LEXIS 46841, *3

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 11 of 15
Under Aqua Stoli Shipping, Ltd. v. Gardner Smith

Pty, Ltd., 460 F.3d 434 (2d Cir.2006), in a Rule E(4)(f)

inquiry challenging a Rule B attachment, a plaintiff has

the burden to show not only that it has met the filing and

service requirements of Rules B and E, but also that: (1) it

has a prima facie admiralty claim; (2) the named

defendants cannot be found within the district; (3) the

attached [*7] defendant's property was within the

district; and (4) there is no statutory or maritime law bar

to the attachment. Aqua Stoli, 460 F.3d at 445. At the

Rule E(4)(f) hearing, the defendant can attack "the

complaint, the arrest, the security demanded, or any other

alleged deficiency in the proceedings." Fed. R. Civ. P.

Supp. Rule E(4)(f), advisory committee's note.

If the plaintiff meets its burden, the defendant may

show that vacatur of the attachment would still be

appropriate under certain limited circumstances,

including when: "(1) the defendant is subject to suit in a

convenient adjacent jurisdiction; (2) the plaintiff could

obtain in personam jurisdiction over the defendant in the

district where the plaintiff is located; or (3) the plaintiff

has already obtained sufficient security for the potential

judgment, by attachment or otherwise." Aqua Stoli, 460

F.3d at 445.

2. The Motion to Vacate the Attachment Is Granted

The Defendants have not contested that they cannot

be found within the district or that the attached property

of the defendant RPI was within the district. Nor have the

Defendants asserted that there is a statutory or maritime

law bar to the attachment. Rather, the issues [*8]

presented here are whether OGI has shown that it has a

valid prima facie admiralty claim against RPI and, if so,

whether the Defendants have shown that the attachment

warrants vacatur on other grounds.

A. Prima Facie Admiralty Claims

i. The Standard

To sustain the attachment, OGI must demonstrate

that it has "an in personam claim against the defendant

which is cognizable in admiralty. . . . In other words, the

plaintiff's claim must be one which will support a finding

of admiralty jurisdiction under 28 U.S.C. § 1333." Winter

Storm Shipping, Ltd. v. TPI, 310 F.3d 263, 268 (2d Cir.

2002) (quoting Robert M. Jarvis, An Introduction to

Maritime Attachment Practice Under Rule B, 20 Journal

of Maritime Law and Commerce, No 4 (October 1989) at

526 & n. 20).

Of the courts in this district that have considered the

issue, the majority have interpreted Aqua Stoli to require

the application of the prima facie standard when

considering the adequacy of the claim asserted in the

context of a maritime attachment. Compare SPL

Shipping, Ltd. v. Gujarat Cheminex. Ltd., No.

06-CV-15375 (KMK), 2007 U.S. Dist. LEXIS 18562,

2007 WL 31810, at *3 (S.D.N.Y. Mar. 15, 2007); Fesco

Ocean Mgmt. v. High Seas Shipping, Ltd., No. 06 Civ.

1055 NRB, 2007 U.S. Dist. LEXIS 19970, 2007 WL

76615, at *2 (S.D.N.Y. Mar. 12, 2007); [*9] Secil

Martima U.E.E. v. Malev Shipping, et al., No. 06 Civ.

6345 (S.D.N.Y. Oct. 10, 2006) (transcript of Rule E(4) (f)

hearing denying vacatur motion); Route Holding Inc. v.

Int'l Oil Overseas, Inc., No. 06 Civ. 3428 (S.D.N.Y. Sept.

29, 2006) (order denying vacatur of maritime

attachment); Tide Line, Inc. v. Eastrade Commodities,

Inc., No. 06 Civ. 1979, 2006 U.S. Dist. LEXIS 95870

(S.D.N.Y. Aug. 15, 2006) (order vacating attachment),

with Wajilam Exps. (Singapore) Pte. Ltd. v. ATL

Shipping Ltd., 475 F. Supp. 2d 275, 2006 U.S. Dist.

LEXIS 77033 (S.D.N.Y. Oct. 23, 2006) (holding that the

applicable standard for establishing the Agua Stoli factors

is "reasonable grounds" for an attachment). The relevant

inquiry is therefore whether OGI has pled a prima facie

admiralty claim against RPI. See Fesco Ocean Mgmt.

Ltd., 2007 U.S. Dist. LEXIS 19970, 2007 WL 766115, at

*2 ("courts should simply consider whether a plaintiff

seeking to maintain a maritime attachment has pled a

prima facie case justifying that attachment under Rule

B").

Suits in admiralty are subject to Supplemental Rule

E(2)(a), which provides that:

In actions to which this rule is applicable

the complaint shall state the circumstances

from which the claim [*10] arises with

such particularity that the defendant or

claimant will be able, without moving for

a more definite statement, to commence an

investigation of the facts and to frame a

responsive pleading.

Fed. R. Civ. P. Supp. Rule E(2)(a). "This heightened

pleading standard is not some pettifogging dechnicality

meant to trap the unwary, but, rather, a legal rule

designed to counterbalance the unique and drastic

Page 3

2007 U.S. Dist. LEXIS 46841, *6

Case 1:07-cv-03536-GEL Document 14 Filed 07/18/2007 Page 12 of 15
remedies that are available in in rem admiralty

proceedings." P.R. Ports Auth. v. Barge KATY-B, 427

F.3d 93, 105 (1st Cir. 2005) (noting that "[o]rdinary

notice pleading does not satisfy the stringencies of [the

supplemental] rules").

Here, the Complaint has alleged damages arising out

of the RPL breach of the charter party and the unlawful

arrest of the M/V UTHAI NAVEE in Kolkata. (Compl. P

14.) Although the Complaint has alleged the liability of

RPI as the alter ego, partner, joint venturer, or affiliate of

RPL (id. PP 35-37), OGI has asserted that it has also

alleged "a proper direct maritime claim for wrongful

arrest damages against both RPL and RPI." (Pl.'s Mem. in

Opp'n 2.) Because none of these allegations establish a

valid prima facie admiralty claim against RPI, OGI

cannot [*11] meet its burden to sustain the attachment.

Even if it could, however, there are other grounds

sufficient to support vacating the attachment.

ii. Breach of the Charter Party

In the Complaint, OGI has asserted that a dispute

arose during the course of the charter regarding RPL's

failure to pay dead freight and demurrage, but that the

dispute was resolved by a tripartite agreement under

which OGI was paid $ 45,000 by RPI to resolve the

dispute. (Compl. PP 7-9.) The Complaint further alleges

that another dispute arose regarding RPL's failure to pay

demurrage accrued at the discharge port. (Id. P 10.) The

details of this second alleged dispute are not made clear

in any of the Plaintiff's submissions, which instead

indicate that it is the Defendants' protests regarding the

validity of the tripartite agreement that form the basis of

OGI's claim for RPL's breach of the charter party. (Pl.'s

Mem. in Opp'n 7.) OGI, however, continues to assert that

the tripartite agreement is valid. (Id.)

Any claim for breach of the charter party regarding

dead freight, demurrage and detention at load and

discharge ports appears to have been satisfied by the

payment made to OGI under the tripartite agreement.

OGI [*12] has accepted that payment, and does not

dispute the validity of the agreement. Therefore, OGI

does not have a valid prima facie claim for breach of the

charter party.

Even if OGI were to have a valid prima facie claim

against RPL for breach of the charter party sufficient to

sustain the attachment, the receipt of the $ 45,000 in

satisfaction of the tripartite agreement militates in favor

of vacatur, as will be discussed further below.

iii. Wrongful Arrest

Although the Defendants contend that OGI has failed

to assert a direct claim against RPI for wrongfuli arrest

(Defs.' Mem. in Supp. 10), they concede that both RPL

and RPI caused the arrest in question (Defs.' Reply 1).

Furthermore, it appears from the High Court of Kolkata

documents that RPI was a plaintiff together with RPL in

the allegedly unlawful arrest of the M/V UTHAI

NAVEE. (Duffy Aff. Ex. 16.) Even assuming that OGI

may rely on submissions other than the Complaint to

justify maintenance of the attachment based on a direct

claim of wrongful arrest against RPI, see Tide Line, 06

Civ. 1979, at 13-16, 32-39 (allowing plaintiff to amend

complaint where additional allegations and evidence have

been submitted to support a claim); Maersk, Inc. v.

Neewra, Inc., 443 F. Supp. 2d 519, 527 (S.D.N.Y. 2006)

[*13] ("A court also may consider any allegations or

evidence offered in the parties' papers or at the

post-attachment hearing."), it is not clear that OGI has

sufficiently pled a prima facie claim of wrongful arrest

against either of the Defendants.

In the Complaint, OGI asserts that the M/V UTHAI

NAVEE was arrested by RPL in September 2006, that the

arrest was wrongful, and that OGI was damaged in the

amount of $ 930,962.01 as a result. (Compl. PP 11, 12,

14, 17.) With regard to the instant motion, OGI has

further asserted that during the arrest proceedings, RPL

and RPI inaccurately alleged that OGI had an interest in

the M/V UTHAI NAVEE when OGI had only chartered

the vessel from the vessel's head owner. (Peterson Aff.

PP 41-42.)

Neither party has made a choice of law argument

with respect to OGI's wrongful arrest claim. Without

citing relevant case law, Defendants have asserted that to

suscain a claim for wrongful arrest "in the U.S. or

anywhere else, the claimant must establish that the arrest

arose from malice, bad faith or reckless disregard of the

other party's legal rights" (Defs.' Reply 2), and that OGI

has not asserted any such allegations against either of the

Defendants.

Without [*14] deciding the choice of law question,

it appears fairly certain that United States law would not

apply to the wrongful arrest claim here. See Rationis

Enters. Inc. of Panama v. Hyundai Mipo Dockyard Co.,

Ltd., 426 F.3d 580, 586 (2d Cir. 2005) (citing Hellenic

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Lines Ltd. v. Rhoditis, 398 U.S. 306, 309, 90 S. Ct. 1731,

26 L. Ed. 2d 252 (1970); Lauritzen v. Larsen, 345 U.S.

571, 583-92, 73 S. Ct. 921, 97 L. Ed. 1254 (1953);

Carbotrade S.P.A. v. Bureau Veritas, 99 F.3d 86, 90 (2d

Cir.1996)) (enumerating factors for choice-of-law

analysis involving maritime tort as follows: (1) the place

of the wrongful act; (2) the law of the ship's flag; (3) the

domicile of the injured party; (4) the domicile of the

shipowner; (5) the place of the contract; (6) the

inaccessibility of the foreign forum; (7) the law of the

forum; and (8) the shipowner's base of operations);

Hawkspere Shipping Co., Ltd. v. Intamex, S.A., 330 F.3d

225, 234-35 (4th Cir. 2003) (citing Lauritzen v. Larsen,

345 U.S. 571, 73 S. Ct. 921, 97 L. Ed. 1254 (1953))

(same); Arochem Corp. v. Wilomi, Inc., 962 F.2d 496,

498-99 (5th Cir. 1992) (citing Lauritzen, 345 U.S. at 582;

Gulf Trading & Transp. Co. v. Vessel Hoegh Shield, 658

F.2d 363 (5th Cir. Unit A 1981), cert. denied, 457 U.S.

1119, 102 S. Ct. 2932, 73 L. Ed. 2d 1332 (1982)) (same).

Without an understanding [*15] of the applicable

law, the Court is unable to determine whether OGI has a

valid prima facie claim of wrongful arrest. Since OGI has

the burden of affirmatively showing that it has such a

claim, taking the strictest approach to this analysis and

without more information, Plaintiff has failed to meet its

burden with respect to this claim of wrongful arrest.

iv. Alter Ego

OGI has also contended that RPL's acts in

connection with the charter party and the unlawful arrest

of the M/V UTHAI NAVEE were as the alter ego of RPI.

Because it has been determined that there is no claim for

breach of the charter party and it appears that any claim

for wrongful arrest can be asserted directly against RPI, it

is not necessary for the Court to determine whether OGI

has sufficiently alleged its alter ego claim.

B. Vacatur

Based on the foregoing analysis, OGI has failed to

show that it has a prima facie admiralty claim in

satisfaction of its burden to withstand a vacatur motion

under Aqua Stoli. Even if OGI could meet this burden,

however, Defendants have sufficiently shown that

vacatur would still be appropriate under the limited

circumstances articulated in Aqua Stoli.

First, the Second Circuit held in Aqua [*16] Stoli

that even if the plaintiff meets its burden, vacatur would

be appropriate if "the plaintiff has already obtained

sufficient security for the potential judgment, by

attachment or otherwise." Aqua Stoli, 460 F.3d at 445.

Here, with respect to OGI's claim for breach of the

charter party, OGI has already received $ 45,000 from

RPI in satisfaction of the tripartite agreement resolving

that dispute. This is roughly the amount that OGI is

claiming for demurrage, dead freight and other charges in

connection with its claim of breach of the charter party.

Second, the Second Circuit articulated that an

attachment would be properly vacated "if the plaintiff and

defendant are both present in the same district and would

be subject to jurisdiction there, but the plaintiff goes to

another district to attach the defendant's assets." Id. at

444-45. As pointed out by the Defendants, with respect to

OGI's claim for wrongful arrest, both OGI and the

Defendants were present in the same jurisdiction during

the arrest proceedings, namely Kolkata. OGI did make an

appearance during that proceeding and even

contemplated posting security to secure the release of the

vessel. (Defs.' Mem. in Supp. 9; Peterson [*17] Aff.

46-47.)

Lastly, the Second Circuit also held in Aqua Stoli

that "vacatur may be warranted when the defendant can

show that it would be subject to in personam jurisdiction

in another jurisdiction convenient to the plaintiff." Id. at

444. Although the Aqua Stoli court indicated that the

concept of convenience was to be narrowly

circumscribed, the court was addressing the issue in the

context of the proximity of the Eastern and Southern

Districts. See id. Here, it is questionable whether the

Southern District of New York is more convenient to

OGI than the other jurisdictions implicated in this matter,

including Kolkata and Hong Kong. Furthermore, there is

the consideration that United States law most likely does

not apply to the wrongful arrest claim and that the arrest

itself was authorized by the court in India, thereby

implicating issues of international comity. See Royal &

Sun Alliance Ins. Co. of Canada v. Century Int'l Arms,

Inc., 466 F.3d 88, 94 (2d Cir. 2006) (citing Finova

Capital Corp. v. Ryan Helicopters U.S.A., Inc., 180 F.3d

896, 898-99 (7th Cir. 1999); Bigio v. Coca-Cola Co., 239

F.3d 440, 454 (2d Cir. 2000)) (indicating proper

consideration of international comity principles [*18]

requires evaluation of various factors, "such as the

similarity of the parties, the similarity of the issues, the

order in which the actions were filed, the adequacy of the

alternate forum, the potential prejudice to either party, the

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2007 U.S. Dist. LEXIS 46841, *14

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convenience of the parties, the connection between the

litigation and the United States, and the connection

between the litigation and the foreign jurisdiction").

Thus, when combined with these comity

considerations, the convenience issue speaks even more

strongly against the exercise of jurisdiction and therefore

in favor of vacating the attachment.

Conclusion

Accordingly, for the forgoing reasons, the motion to

vacate the order of maritime attachment is granted and

the Complaint is dismissed without prejudice.

It is so ordered.

New York, NY

June 21, 2007

ROBERT W. SWEET

U.S.D.J.

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