United States District Court, D. Connecticut
RULING AND ORDER ON MOTION TO VACATE MARITIME
A. BOLDEN UNITED STATES DISTRICT JUDGE
Energy, LTD (“Plaintiff”) filed a Verified
Complaint on October 30, 2017, seeking attachment of SPACE
Shipping and Geden Holdings's (“Defendants”
or “SPACE”) property located within the District
of Connecticut. See Compl., ECF No. 1. Specifically,
Plaintiff sought attachment of a debt owed by a third-party,
ST Shipping and Trading Pte. Ltd. (“ST
Shipping”), to SPACE arising from an arbitration
proceeding in London.
pending before the Court is ST Shipping's motion to
release the maritime attachment under Rule E(f)(4) of the
Supplement Rules. Because the Court holds that it lacks
personal jurisdiction over ST Shipping and, therefore, the
debt is not within the District of Connecticut, ST
Shipping's motion is GRANTED. The
attachment will be VACATED.
Factual and Procedural History
is a corporation organized under the laws of the Republic of
the Marshall Islands. Compl. ¶ 3. SPACE Shipping, one of
the defendants in this matter, is a foreign company organized
under the laws of Malta. Id. at ¶ 4.1
February 23, 2010, the parties entered into an agreement for
the Defendants to charter Plaintiff's crude oil tanker,
the CV STEALTH. Id. Plaintiff alleges that
Defendants sub-chartered the vessel to a third party, who
sailed it to Venezuela with the intention of loading the
tanker with crude oil. Id. at ¶¶ 9, 10.
Upon arrival in the Venezuelan port of Puerto La Cruz,
Plaintiff alleges that the “Vessel was detained . . .
purportedly for being unauthorized to lift a cargo of crude
oil from Venezuela and being employed to lift a cargo
stolen” from the Venezuelan state oil company.
Id. at ¶ 14-16.
authorities released the vessel on October 3, 2017. Plaintiff
alleges, however, “due to her forced idleness”
for several years without maintenance, “the vessel has
suffered extensive damages and deterioration . . . .”
Id. at ¶ 24. Plaintiff alleges that the vessel
is “out of class, uninsurable” and will require
numerous repairs that “will exceed the sum of $15, 000,
000.” Id. at ¶ 25.
alleges that delivery of the vessel “in such a
deteriorated state of extensive disrepair” is a
material breach of the bareboat charter that the parties
signed. Id. at ¶ 27. In addition to the cost of
repairs, Plaintiff alleges that Defendants failed to make
payments owed for the hire of the vessel, owe attorney's
fees for an arbitration brought in London as well as
interest, and owe damages for the time it will take to repair
the vessel. Id. at ¶¶ 26-31. The total
claim equals $19, 604, 297.00. Id. at ¶ 39.
parties entered into arbitration in London for the unpaid
hire amount of $5, 272, 100.90. Id. at ¶ 17.
Following the arbitration award, the parties pursued a
settlement agreement addressing enforcement of that award.
Id. at ¶¶ 18-22. Plaintiff alleges that
the Defendants failed to make payments under the settlement
agreement and therefore the Plaintiff is “about to
submit a claim in the London arbitration, which has continual
jurisdiction over the claims for the January through June
2017 unpaid hires, interest, legal costs, and costs of the
London arbitration, and any other claims arising under the
bareboat charter.” Id. at ¶ 22.
then filed a Verified Complaint in this Court on October 30,
2017 and sought the attachment of an arbitration award
between the Defendants and a third party: ST Shipping.
Plaintiff alleged that the debt owed by ST Shipping to SPACE
in relation to the award was intangible property within the
meaning of Rule B and - based on a lawsuit filed by SPACE in
this District to enforce the award against ST Shipping - that
property existed within the District of Connecticut's
November 1, 2017, this Court held that “Plaintiff has
met its initial burden in seeking attachment under Rule B,
and the Court will authorize process of attachment and
garnishment.” Ruling On Attachment, ECF No. 15. The
Court subsequently issued a writ of garnishment.
Shipping filed a motion seeking to vacate the garnishment
under Rule(E)(4)(f) of the Supplement Rules and sought a
hearing. See Motion to Release Maritime Attachment,
ECF No. 18. The Court then scheduled and held a hearing on
November 17, 2017, at which SPACE Shipping appeared for the
first time. SPACE maintained that Plaintiff failed to inform
the Court about developments in the London arbitration and
therefore argued the Verified Complaint should be dismissed
or, alternatively, reduced to account for those developments.
ST Shipping argued that this Court lacked jurisdiction over
the debt because this Court lacked personal jurisdiction over
ST Shipping. Alternatively, it sought Court approval to
transfer the funds it owed to an escrow account in London.
the November 17th hearing, the Court issued an order
permitting the parties to submit any supplemental briefing on
any issue. See Order, ECF No. 33. ST Shipping filed
a supplement brief in which it argued that a debt is only
found within this District only if a creditor - here, SPACE -
could enforce that debt here. Garnishee's Supplemental
Br., ECF No. 37 at 1-4. Additionally, ST Shipping argued
that, in order for SPACE to enforce a debt in the District,
there must be personal jurisdiction over ST Shipping and, as
a foreign corporation, ST Shipping argues SPACE would be
unable to do so. Id. at 4-5.
adopted ST Shipping's jurisdictional arguments in their
filing. See Defs. Objection 3, ECF No. 36.
Additionally, they argued that the award should be vacated or
reduced based on developments in the London arbitration
between PSARA and SPACE. Id. at 1-2. Specifically,
SPACE argued that the arbitrators found many of the losses
related to the condition of the vessel not yet ripe, and that
PSARA should have notified the Court of this decision when
filing the Verified Complaint. Id. at 2-3. They
argue that, by not informing the Court, “Plaintiff has
thus breached the heightened duty of disclosure imposed in
rule B attachment actions.” Id. at ...