10-4735-cv
Mediterranean Shipping v. Ningbo Toptrade

                                     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 FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND LOCAL RULE 32.1.1 . 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 23rd day of January, two thousand twelve,

Present:    ROSEMARY S. POOLER,
            DEBRA ANN LIVINGSTON,
            RAYMOND J. LOHIER, JR.
                        Circuit Judges.
_____________________________________________________

MEDITERRANEAN SHIPPING COMPANY S.A.,

                                                  Plaintiff-Appellee,

                                 -v-                                                 10-4735

NEWDEH LEE,

                                                  Defendant,

NINGBO TOPTRADE IMP. EXP. CO. LTD.,

                                                  Defendant-Appellant.


Appearing for Appellant:                    Keith Dalen, Hill Rivkins LLP, New York, N.Y.

Appearing for Appellee:                     Peter Skoufalos, Brown Gavalas & Fromm LLP (Patrick O’Mea,
                                            on the brief), New York, N.Y.


       Appeal from the United States District Court for the Southern District of New York
(Cedarbaum, J.).
     ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of said District Court be and it hereby is VACATED and
REMANDED.

       Ningbo Toptrade Imp. Ex. Co. Ltd. appeals from the September 29, 2010 judgment of the
United States District Court for the Southern District of New York (Cedarbaum, J.) entering
judgment without issuing a decision regarding the fate of funds attached pursuant to Rule B of
the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the
Federal Rules of Civil Procedure (“Rule B”). We assume the parties’ familiarity with the
underlying facts, procedural history, and specification of issues for review.

         Mediterranean Shipping Company S.A. (“MSC”) alleges that on September 30, 2005, a
“to order” bill of lading was issued by MSC at Durban, South Africa, evidencing a shipment of
18 containers of copper cathodes (the “Cargo”) to Shanghai, China. It further alleges the Cargo
was transported to Shanghai, arriving on October 23, 2005. Before the Cargo was unloaded
from the ship, the defendants presented a document to the ship’s Master purporting to be the bill
of lading issued in Durban. MSC alleges the document was a fake. Based on the alleged fake
bill of lading, MSC released the Cargo to defendants, who obtained customs clearance for the
goods. When the rightful holder of the bill of lading sought to claim the goods, Shanghai
Customs refused to release the Cargo.

         In anticipation of securing a judgment from the English high court, MSC filed a
complaint in the Southern District of New York against the defendants on May 3, 2006. The
district court issued a Rule B order of attachment on May 23, 2007, authorizing attachment of
Ningbo’s property in an amount of up to $3,665,275.55. On July 11, 2007, the Bank of New
York Mellon attached a wire transfer of $500,000 originated by Ningbo.

         Ningbo moved to dismiss the complaint for lack of admiralty jurisdiction, a motion the
district court denied without prejudice. On October 16, 2009, this Court issued its decision in
Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009), holding
that electronic fund transfers being processed by an intermediary bank in New York were not
subject to Rule B attachment. On November 4, 2009, the district court entered an Order to Show
Cause directing the parties to demonstrate why the attachment order should not be vacated.

        MSC alleges the district court held a hearing on the order to show cause and ruled that it
would not release the attached funds. To support its claim, MSC relies on a docket entry stating
“Minute Entry for proceedings held before Judge Miriam Goldman Cedarbaum: Status
Conference held on 5/14/2010.” No transcripts of the proceedings on May 14, 2010 are in the
record before us, and there is no docket entry settling the order to show cause. Ningbo’s counsel
alleges the district court never ruled on the order to show cause.

        MSC eventually moved pursuant to N.Y. C.P.L.R. Article 53 for an order to recognize
and enforce a judgment it obtained from the English High Court of Justice. The district court
granted the motion and entered judgment recognizing the English court judgment on September
29, 2010. Ningbo moved for reconsideration, arguing the court had never ruled on the
November 4, 2009 order to show cause. The district court denied the motion on the ground that
it did not raise any new arguments. MSC obtained a turnover order from the New York State

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Supreme Court to execute on the judgment, but the bank interpleaded the funds into the district
court registry before the order was served.

        On appeal, Ningbo argues it was error for the district court not to release the attached
funds following this Court’s decision in Jaldhi. MSC argues that vacatur is required under
Jaldhi only where “the plaintiff obtained a final judgment but has not executed it against the
attached funds that are being retained by banks in suspense accounts pursuant to Rule B
attachments,” Eitzen Bulk A/S v. Ashapura Minechem, Ltd., 632 F.3d 53 (2d Cir. 2011). Here,
MSC served a writ of execution on Bank of New York Mellon, and thus, MSC argues, the
attachment is no longer subject to vacatur under Jaldhi. Ningbo disputes this, and in the
alternative argues for vacatur on the ground that the district court lacked admiralty jurisdiction.


        We remand to the district court for consideration of two issues. First, does admiralty
jurisdiction exist? Second, the district court is to determine the fate of the attached funds in light
of our post-Jaldhi jurisprudence, including Scanscot Shipping Servs. GmbH v. Metales Tracomex
Ltda., 617 F.3d 679, 682-83 (2d Cir. 2010); Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading
Corp., 619 F.3d 207, 214 (2d Cir. 2010);Hawknet, Ltd. v. Overseas Shipping Agencies, 590 F.3d
87 (2d Cir. 2009) and India S.S. Co. Ltd. v. Kobil Petroleum Ltd., 620 F.3d 160 (2d Cir. 2010).
We further direct the district court to consider the effect, if any, of MSC’s attempt to execute
against the judgment.

    Accordingly, the judgment of the district court hereby is VACATED, and this case
REMANDED for further proceedings in accordance with this summary order.


                                                      FOR THE COURT:
                                                      Catherine O’Hagan Wolfe, Clerk




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