09-4956-cv

China National Chartering Corp. v. Pactrans Air & Sea, Inc.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A

SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS

GOVERNED BY THIS COURT’S LOCAL RULE 32.1.1 AND FEDERAL RULE OF APPELLATE

PROCEDURE 32.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS

COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC

DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY

ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. 

At a stated Term of the United States Court of Appeals for the Second Circuit, held at the

Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,

on the 19 day of January, two thousand eleven. th

Present: RALPH K. WINTER,

ROSEMARY S. POOLER,

PETER W. HALL,

Circuit Judges.

_____________________________________________________

CHINA NATIONAL CHARTERING CORP.,

Plaintiff-Appellee,

-v.- 09-4956-cv 

PACTRANS AIR & SEA, INC.,

Defendant-Third-Party-Plaintiff-Counter-Defendant-Appellant,

DEVON SAFETY PRODUCTS, INC.,

Third-Party-Defendant-Counter-Claimant,

SUPPLY MARKETING CORP.,

Third-Party-Defendant.

 

For Appellant: Bill Xian Feng Zou, Law Offices of Xian Feng Zou, Flushing, NY.

For Appellee: Patrick F. Lennon and Charles E. Murphy (on the brief), Lennon Murphy

Caulfield, LLC, New York, NY.
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Appeal from the United States District Court for the Southern District of New York (Kaplan, J.).

ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the case be and hereby is REMANDED to the district court. 

Pactrans Air & Sea, Inc. (“Pactrans”) appeals from a November 16, 2009 judgment

recognizing, confirming, and enforcing a foreign arbitration award against Pactrans of $543,814.74

plus interest and fees. Pactrans argues that the district court lacked personal jurisdiction over

Pactrans. We assume the parties’ familiaritywith the underlying facts, procedural history, and issues

presented on appeal.

In its complaint, China National Chartering Corp. (“CNCC”) requested an order of maritime

attachment pursuant to Rule B of the Supplemental Rules for Admiralty or Maritime Claims of the

Federal Rules of Civil Procedure. CNCC relied on Winter Storm Shipping, Ltd. v. TPI, 310 F.3d 263

(2d Cir. 2002), which held that electronic fund transfers (“EFTs”) – momentary electronic passages

of funds from one bank account to an intermediary bank to another account – were attachable

property sufficient for personal jurisdiction in the district in which the intermediary bank was

located. Id. at 278. CNCC alleged that Pactrans “cannot be found within this District within the

meaning of Rule B of the Supplemental Rules” but has “or will have” assets within the District in

the hands of various banks. Counsel for CNCC submitted a sworn affidavit stating that “I have

attempted to locate the Defendant, Pactrans Air & Sea Inc., within this District. . . . I submit that the

Defendant cannot be found within this District within the meaning of Rule B.” The district court

granted CNCC’s request, and CNCC successfully attached $658,104.40 in EFTs. 

In July 2009, having received a foreign arbitration award of $543,814.74, CNCC petitioned

the district court for recognition, confirmation, and enforcement of the arbitration award. 

On October 16, 2009, this Court overruled Winter Storm’s holding that EFTs processed at

an intermediary bank were defendant’s attachable property under Rule B. Shipping Corp. of India

Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58, 72 (2d Cir. 2009). Three days later, Pactrans filed a

motion to vacate the maritime attachment based on the Court’s decision in Jaldhi. 

Before deciding Pactrans’s motion to vacate the attachment, the district court, on November

13, 2009, granted CNCC’s petition to recognize, confirm, and enforce the foreign arbitration award.

The district court did not specify the grounds for the court’s personal jurisdiction over Pactrans. On

November 16, 2009, the district court entered judgment against Pactrans. On November 19, 2009,

Pactrans filed a motion requesting, inter alia, that the district court (1) reconsider or allow

reargument on CNCC’s petition to recognize, confirm, and enforce the foreign arbitration award; (2)

deny such petition for lack of jurisdiction; and (3) vacate the judgment. The district court set oral

argument on the motion for December 7, 2009. On November 23, 2009, the district court vacated

the maritime attachment, in light of this Court’s decision in Jaldhi. 
 In an order dated December 10, 2009, the district court noted that Pactrans had filed, and *

later withdrawn, a motion for an order that CNCC show cause why the action should not be

dismissed for lack of personal jurisdiction. As we understand that order, the district court expressly

refused to decide both the question of personal jurisdiction and whether Pactrans had waived that

question, and also stated that it did not consider itself to have decided those questions earlier. The

district court’s refusal to act likely was appropriate, especiallyas it mayhave lacked jurisdiction over

the case at that time, given that there were no pending post-judgment motions and a timely notice

of appeal had been filed, divesting the district court of jurisdiction. See Motorola Credit Corp. v.

Uzan, 388 F.3d 39, 53 (2d Cir. 2004). If in fact the district court does not consider itself to have

decided these questions previously, we ask it to do so in the first instance, as we did in Hawknet.

See 590 F.3d at 92-93.

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On November 30, 2009, fourteen days after judgment was entered, Pactrans appealed,

arguing that the district court lacked personal jurisdiction over it and erred in recognizing,

confirming, and enforcing the arbitration award. On December 3, 2009, the parties conducted a

hearing by teleconference with this Court regarding bond pending appeal. During the hearing, this

Court referenced Pactrans’s November 19, 2009 motion pending before the district court and asked,

“Are you appealing a final judgment or are you looking for reconsideration in the District Court?”

After failing to reach agreement with CNCC to consent to Pactrans’s withdrawal of that motion,

Pactrans withdrew the motion on December 7, 2009, and continued its appeal in this Court. 

In light of this Court’s holdings in Jaldhi and Hawknet, Ltd. v. Overseas Shipping Agencies,

590 F.3d 87, 91 (2d Cir. 2009) (applying Jaldhi retroactively to cases open on direct review), the

district court’s maritime attachment could not have provided personal jurisdiction over Pactrans.

CNCC agrees and asks that we affirm on alternative grounds – that Pactrans waived any objection

to personal jurisdiction by its actions in this case. We decline to do so. In Hawknet, this Court stated

that although the defendant did not object to personal jurisdiction before the district court, the

“defendant did not waive its right to object to the District Court’s lack of personal jurisdiction.” 590

F.3d at 92. The defendant in Hawknet defended itself heartily before the district court, filing

multiple motions to vacate the district court’s attachment of its EFTs, answering the plaintiff’s

complaint, and filing numerous memoranda of law and declarations. Not only did the Hawknet

Court not find that the defendant had waived its personal jurisdiction objection, it stated that “we

find it unlikely that [the plaintiff] can establish that the District Court has personal jurisdiction over

TOM,” id., given the earlier Rule B attachment, which required a finding that the “defendant is not

found within the district,” Fed. R. Civ. P. Supp. R. B(1)(a).

Likewise, in this case, CNCC’s counsel submitted a sworn affidavit stating that Pactrans

“cannot be found within this District within the meaning of Rule B” and the district court ordered

Rule B attachment. However, as in Hawknet, we believe that CNCC should have an opportunity,

in the changed legal landscape, to assert that the district court has a basis for personal jurisdiction

over Pactrans.

Therefore, we REMAND pursuant to the procedure outlined in United States v. Jacobson,

15 F.3d 19, 22 (2d Cir. 1994), for the district court to determine whether it decided the personal

jurisdiction issue before it entered judgment, and if not, to enter an order to show cause why it should

not dismiss the complaint for lack of personal jurisdiction. The parties are to inform the Clerk of *
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the Court by letter within fourteen days of the district court’s decision on remand if either side

wishes to continue this appeal. Following such notification, jurisdiction over this appeal will be

automatically restored to this Court without the need for either party to file a new notice of appeal.

After jurisdiction is restored, this panel will resume consideration of the case.

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk