Parbulk II AS v. Heritage Maritime
35 Misc. 3d 235
N.Y. Sup. Ct.2011Background
- Parbulk II, AS chartered the vessel Mahakam to Heritage Maritime, SA under a sale/leaseback; HIT guaranteed the lease.
- Neither Parbulk nor Heritage are NY registered; HIT's NY-registered subsidiary Humpuss Sea Transport PTE Ltd. transacts business in New York.
- After Lehman Bros. collapse, freight rates fell and Heritage stopped paying hire; Parbulk arrested Mahakam, terminated the charter, and took possession.
- London Arbitration awarded over $27,000,000 to Parbulk; UK High Court in January 2011 entered judgment against HIT; no NY judgment against HSTPL.
- April 2011 UK High Court issued a worldwide freezing injunction against Heritage, HIT, and HSTPL based on asset-dissipation claims; HSTPL alleged as alter ego of HIT, with no specific concealment actions alleged.
- Petitioner sought to confirm the foreign award and judgment and attach NY-held property; banks and shipping company named as garnishee-respondents; some garnishees appeared and opposed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether post-judgment attachment can reach garnishee assets outside NY when garnishees are within NY. | Koehler allows attachment of out-of-state property via in-person jurisdiction over garnishee. | Attachment limited to property located within NY; separate entity rule may bar external property. | Attachment allowed to the extent garnishee banks lack property in NY branches; otherwise denied and proceeding severed as to those banks. |
| Whether the separate entity rule applies to garnishee-defendants in post-judgment attachment. | Koehler-based approach should apply; no need to apply separate entity rule post-judgment. | Separate entity rule applies to branches and accounts; situs fixed at branch; cannot reach other branches. | Court adheres to separate entity rule; denial of attachment as to banks without NY-branch property; proceeding continues for others. |
| Whether Bank Negara Indonesia (persero) is immune from NY jurisdiction as a foreign state under the Foreign Sovereign Immunities Act. | Immunity not automatic; NY attachment should proceed if property located in NY. | As a foreign state, immune from NY jurisdiction. | Court did not decide immunity since no property of respondents found at NY branches. |
Key Cases Cited
- Koehler v Bank of Bermuda Ltd., 12 NY3d 533 (2009) (post-judgment attachment reaches out-of-state property with in-person jurisdiction)
- Hotel 71 Mezz Lender LLC v Falor, 14 NY3d 303 (2010) (prejudgment attachment can reach property outside NY where garnishee is within jurisdiction)
- Clinton Trust Co. v Compania Azucarera Cent. Ramona S.A., 258 App Div 780 (1939) (situs and reach of property under attachment rules; early precedent on attachable property)