Lloyd's Maritime and Commercial Law Quarterly
US MARITIME LAW
Robert Force*
Martin Davies**
CASES
358. Blue Whale Corp v Grand China Shipping Development 1
Admiralty jurisdiction—Rule B attachment—property within the jurisdiction—alter ego status—choice of law
The plaintiff, Blue Whale, alleged that it had not been paid freight promptly by the defendant, Grand China, for carriage of a cargo of 250,000 mt of iron ore from Brazil to China. The plaintiff alleged that, as a result of the non-payment, it had suffered consequential losses of more than $1 million, and it instituted arbitration proceedings in London to recover that sum pursuant to the charterparty between it and the defendant. In order to obtain security for its claim, the plaintiff brought proceedings in the admiralty jurisdiction of the US District Court for the Southern District of New York against another Chinese company, HNA Group Co Ltd (“HNA”) and attached assets of HNA in New York (shares in another corporation) worth about $1.3 million. The plaintiff alleged that HNA was the defendant’s alter ego, so that HNA’s assets within the jurisdiction were, in effect, the defendant’s. The district court granted HNA’s motion to vacate the attachment, holding that the question whether HNA was the defendant’s alter ego should be governed by English law, which was the governing law of the underlying claim. The plaintiff appealed to the US Court of Appeals for the Second Circuit.
Decision: Appeal allowed. District court decision vacated, case remanded for further consideration.
Held: (1) In order to obtain an order of attachment under Rule B, a plaintiff must show that: (a) it has a valid prima facie admiralty claim against the defendant; (b) the defendant cannot be found within the district; and (c) there is no statutory or maritime law bar to the attachment.2 The present case turned upon the first of these requirements, namely whether the plaintiff had a prima facie valid claim against HNA that sounded in admiralty. That required an evaluation of whether the plaintiff’s claim sounded in admiralty, and also whether the claim was prima facie valid.
* Niels F Johnsen Professor of Maritime Law and Director Emeritus, Maritime Law Center, Tulane University Law School, New Orleans.
** Admiralty Law Institute Professor of Maritime Law and Director, Maritime Law Center, Tulane University Law School, New Orleans.
1.(2013) 722 F 3d 488; 2014 AMC 145 (2d Cir).
2.Aqua Stoli Shipping Ltd v Gardner Smith Pty Ltd (2006) 460 F 3d 434 (2d Cir); digested [2007] IMCLY §155.
US MARITIME LAW
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