Golden Horn Shipping Co. Ltd. v. Volnas Shipping Company Limited et al

Filing 54

MEMORANDUM AND ORDER: For the foregoing reasons, the amount of funds subject to the Writ of Attachment and Garnishment originally issued on March 28, 2014, is reduced to $1,205,743.20. (As further set forth in this Order.) (Signed by Magistrate Judge James C. Francis on 4/15/2016) Copies Faxed By Chambers. (cf)

UNITED STATES DISTRICT COURT
SOUTf!ERN DISTRICT OF NEW YORK
COLDEN HORN SHIPPING CO. LTD.,

14 Civ.

2168

(JPO)

(JCF)

MEMORANDUM
AND ORDER

Plaintiff,

- agalnst -

VOLANS SHIPPING COMPANY LIMITED
and NORVIK BANKA,
Defendants.
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
Defendant

JCF

Norvik

Banka

(sued

as

"Norvik

Banka"

and

referred to hereinafter as "Norvikn) seeks to reduce the amount of
funds subJect to an attachment issued pursuant to Rule B of the
Supplemental

Rules

for

Admiralty

or

Maritime

Claims.

The

application raises the issue of whether a claim for costs awarded
to the plaintiff,

Golden Horn Shipping Co.

Ltd.

("Golden Hornn),

in a London arbitration based on the same dispute at issue in this
action

is

sufficiently

maritime' in

nature

to

be

secured

by

a

Although Lechnically the terms ''admiralty law'' and ''maritime law"
are distinct, _c;ee Rod Sullivan, Punitive Damages and a Century of
Maritime Law, 15 Fla. Coastal L. Rev. 1, 25-26 (2013) ("While some
use t:hose terms interchangeably, the terms are not the same.
Marit:ime law refers to the broad categories of statutory and
general maritime laws that apply to cases that arise either out of
a rri.ari-cirne tort or a maritime contract.
Admiralty law is a
subcategory of maritime law and applies to suits claimants bring
aqai!lst a vessel or piece of property in rem to enforce a maritime
:_ien.
Therefore, while all admiralty cases are maritime cases,
1

Supplemental Rule B attachment.

Norvik’s application is granted

in part. 2
Background
As noted in earlier opinions, the complaint alleges that
Golden

Horn

and

Norvik

negotiated

agreements

constituting

a

bareboat charter between Golden Horn and Norvik’s subsidiary,
defendant

Volans

Shipping

Company

(“Volans”).

Golden

Horn

Shipping Co. v. Volans Shipping Co., No. 14 Civ. 2168, 2015 WL
1344374, at *1 (S.D.N.Y. March 23, 2015) (“Golden Horn II”).

The

agreements allowed Golden Horn to use Volans’ vessel, M.V. Apus
(the “Vessel”), to “transport frozen fish in the Sea of Okhotsk
and the Bering Sea.”

Golden Horn II, 2015 WL 1344374, at *1

(quoting Golden Horn Shipping Co. v. Volans Shipping Co., No. 14
Civ. 2168, 2014 WL 5778535, at *1 (S.D.N.Y. Nov. 6, 2014) (“Golden
Horn I”)).

But the Vessel was laid up in port for mechanical

repairs, causing the defendants to miss not only the initial cargo

not all maritime cases are admiralty cases.” (footnotes omitted)),
I
will follow
conventional
practice
and
use
the
terms
interchangeably, see, e.g., Weaver v. Hollywood Casino-Aurora,
Inc., 255 F.3d 379, 381 n.2 (7th Cir. 2001) (“The terms ‘admiralty’
and ‘maritime’ are used interchangeably for purposes of this
opinion as the precedents discussed below use both terms.”)
2

As noted in an earlier order, the parties agree that this
dispute is properly before me pursuant to the referral for general
pre-trial supervision by the Honorable J. Paul Oetken, U.S.D.J.
2

delivery date, but also subsequent revised deadlines.
II, 2015 WL 1344374, at *1.

Golden Horn

Approximately five months after the

original cargo delivery date, Norvik informed Golden Horn that it
had conveyed the Vessel to another shipping company.

Id.

Golden Horn then filed the complaint in this action against
both Norvik and Volans asserting that Volans breached the parties’
agreements by failing to deliver the Vessel (Complaint, ¶¶ 55-56),
and that Norvik is liable for the breach because it is an alter
ego of Volans, Golden Horn I, 2014 WL 5778535, at *4-5; (Complaint,
¶¶ 57-81).
damages.

The complaint sought approximately $4 million in

(Complaint, ¶¶ 95-97).

Golden Horn indicated that it

would exercise its right under the agreements to resolve the
dispute in the London Court of International Arbitration (the
“LCIA”), but “maintain[ed] that the instant action is appropriate
and necessary to obtain quasi in rem jurisdiction over the property
of [Norvik] by way of Maritime Attachment and Garnishment pursuant
to [Supplemental] Rule B so as to obtain security for its damages.”
(Complaint, ¶¶ 99-100).
On March 28, 2014, pursuant to an order signed by Judge
Oetken,

the

Clerk

of

Court

issued

a

Writ

of

Attachment

and

Garnishment in the amount of $3,960,693.20, which was served on
garnishee Deutsche Bank Trust Company Americas, where Norvik holds

3

a United States Dollar correspondent account. 3

Golden Horn II,

2015 WL 1344374, at *6; Golden Horn I, 2014 WL 5778535, at *1;
(Declaration of Service dated March 31, 2014).

Norvik moved to

vacate the attachment arguing, in part, that Golden Horn had not
made a prima facie case that Volans is Norvik’s alter ego.
Horn I, 2014 WL 5778535, at *1.

Golden

Judge Oetken denied the motion,

finding that “Golden Horn ha[d] amply made a prima facie case that
Volans was Norvik’s alter ego,” by pleading facts (1) showing “a
disregard of corporate formalities, complete overlap in ownership,
common office space, addresses, and email addresses of the two
corporations,”

(2)

showing

that

“Volans

lacked

independent

employees and, therefore, [] lacked any business discretion [so
that] the dealings between it and Norvik could not have been at
arm’s length,” and (3) showing that “the corporations are not
treated

as

independent

statements.”

centers

on

Norvik’s

and

Golden

financial

Id. at *6.

Meanwhile,
respondent

profit

and

Volans

(as

claimant)

counterclaimant)

proceeded

to

Horn

arbitrate

dispute over the bareboat charter before the LCIA.

(as
their

(Final Award

dated Dec. 23, 2015, attached as Exh. B to Letter of Michael J.

3

A small portion of the attached funds belongs to Volans.
See Golden Horn I, 2014 WL 5778535, at *1 n.1.
4

Frevola dated Feb. 26, 2016 (“Frevola 2/26/16 Letter”), at 1).
During the arbitration, there was some disagreement over whether
the arbitrator should issue a single award, encompassing both
damages and costs, or instead issue one award for damages and a
separate award for costs.

(Post-Hearing Order dated Oct. 11,

2015, attached as Exh. A to Letter of Owen F. Duffy, III dated
Feb. 19, 2016 (“Duffy 2/19/16 Letter”), at 1).

Volans worried

that, if Golden Horn prevailed and its damages and costs were
included in one award, Golden Horn might attempt to “claim costs
in the US proceeding” -- that is, this proceeding -- although
Volans “underst[ood] [] that since a claim for costs is not a
maritime claim it cannot be recovered in the current proceedings
in the US where Norvik [] funds are arrested.”
Order at 2).

(Post-Hearing

For its part, Golden Horn urged a single award

“because separate awards will simply, and unnecessarily, increase
the overall costs because there will be legal costs to prepare
additional argument and there will be additional costs to produce
a second award.”

(Post-Hearing Order at 3).

rejected

concern

Volans’

that

a

single

Golden Horn also

award

would

cause

“confusion” in this proceeding, stating, “[W]e anticipate that a
single award will make clear what sums are being awarded as
damages/restitution, . . . and what sums are being awarded as

5

costs” such that “there is no chance of confusion . . . and . . .
no possibility of prejudice to Volans.”
2-3).

(Post-Hearing Order at

Counsel for Golden Horn also “reject[ed] the suggestion

that [his] clients would seek to exploit any such confusion in the
New York proceedings.”

(Post-Hearing Order at 2-3).

The arbitrator ultimately found that Volans was liable to
Golden

Horn

for

$803,424.58

in

damages,

£32,684.11 in costs, plus interest.

and

$280,340.86

(Final Award at 66).

+
He

issued only one award, in accordance with his earlier decision on
that formal dispute.

(Final Award at 66; Post-Hearing Order at

4-5).
Norvik

requests

a

reduction

in

the

amount

subject

to

attachment in this proceeding to $850,000, an amount representing
Volans’ liability in damages to Golden Horn plus an approximation
of the interest due on that amount.

(Letter of Michael J. Frevola

dated Feb. 16, 2016 (“Frevola 2/16/16 Letter”), at 1 & 2 n.2).
Golden Horn argues that funds in the amount of $1,325,743.20 -$803,424.58 in damages from the London arbitration, $327,318.68 in
costs from the London arbitration, $75,000 in estimated prejudgment interest on those awards, and $120,000 in estimated
attorneys’

fees

from

this

action

(Duffy 2/19/16 Letter at 14).

--

should

remain

attached.

Norvik replies that (1) there is

6

no basis for any claim for attorneys’ fees in this action; (2) the
amount awarded in costs by the LCIA cannot be the subject of a
Supplemental Rule B attachment because a claim for those costs is
not maritime in nature; and (3) Golden Horn should be judicially
estopped from asserting that the amount awarded in costs should
continue to be secured by the attachment in light of its position
in the LCIA that a single, composite award should issue.

(Frevola

2/26/16 Letter at 2-5).
After briefing was completed, I reduced the amount of the
attachment to $1,325,743.20 without objection by Golden Horn,
while I considered the further reduction requested by Norvik.
(Order dated March 30, 2016, at 2).
Discussion
A.

Judicial Estoppel

Volans argued in the LCIA that, if Golden Horn prevailed
there, the arbitrator should issue two awards -- one encompassing
damages and the other costs -- in order that there would be no
“confusion” in this proceeding.

(Post-Hearing Order at 2).

In

its view, any award of costs would not be a maritime claim and
would therefore not be recoverable “in the current proceedings in
the US.”

(Post-Hearing Order at 2).

Golden Horn, on the other

hand, sought a single award in order to save time and money, and

7

pledged not to exploit any “confusion” engendered by an award
including both damages and costs.

(Post-Hearing Order at 2-3).

The arbitrator issued a single award, finding “good reasons, on
the basis of efficiency.”

(Post-Hearing Order at 4).

He was

further satisfied that the judge in this proceeding “would be fully
capable

of

distinguishing

maritime

from

non-maritime

claims/recoveries (assuming arguendo that Volans is correct that
costs of the arbitration are ‘non-maritime’).”
Order at 5).

(Post-Hearing

Here, Norvik asserts that Golden Horn should be

estopped from arguing that the LCIA costs are maritime claims,
because that position is inconsistent with the one it took in the
LCIA proceeding.

(Frevola 2/16/16 Letter at 3; Frevola 2/26/16

Letter at 2-4).
Application
discretion.

of

judicial

estoppel

is

within

the

court’s

New Hampshire v. Maine, 532 U.S. 742, 750 (2001).

[S]everal factors typically inform the decision whether
to apply the doctrine in a particular case: First, a
party’s later position must be ‘clearly inconsistent’
with its earlier position.
Second, courts regularly
inquire whether the party has succeeded in persuading a
court to accept that party’s earlier position, so that
judicial acceptance of an inconsistent position in a
later proceeding would create ‘the perception that
either the first or the second court was misled.’ . . .
A third consideration is whether the party seeking to
assert an inconsistent position would derive an unfair
advantage or impose an unfair detriment on the opposing
party if not estopped.”

8

Id. at 750-51 (internal citations omitted) (quoting United States
v. Hook, 195 F.3d 229, 306 (7th Cir. 1999), and Edwards v. Aetna
Life Insurance Co., 690 F.2d 595, 599 (6th Cir. 1982)).

The Second

Circuit interprets the doctrine narrowly, “limit[ing] [it] to
situations where the risk of inconsistent results with its impact
on judicial integrity is certain.”

Uzdavines v. Weeks Marine,

Inc., 418 F.3d 138, 148 (2d Cir. 2005) (quoting Simon v. Safelite
Glass Corp., 128 F.3d 68, 72 (2d Cir. 1997)).
Before the LCIA, Golden Horn stated that it would not exploit
any confusion that might arise from including both costs and
damages in a single award.

Here, Golden Horn argues that the

costs from the arbitration are maritime claims and can therefore
be secured by a Supplemental Rule B attachment.

This position is

not clearly inconsistent with its statements to the arbitrator.
Golden Horn is not exploiting confusion engendered by the issuance
of a single award, as I can easily determine what amount of his
award

is

attributable

to

costs

and

what

amount

to

damages.

Moreover, there is no indication that Golden Horn would not make
the same argument even if the arbitrator had issued separate
awards.

Importantly, Golden Horn did not assert that it agreed

with Volans’ stance that a claim for costs is non-maritime or that
it would forego any such argument here.

9

Additionally, Norvik has not explained how Golden Horn’s
position here, if accepted, would “certain[ly]” risk inconsistent
results -- nor could it, as the LCIA arbitrator did not rule that
costs were non-maritime claims or that they could not be secured
by the Supplemental Rule B attachment.

Rather, he avoided any

such decision, merely assuming for the purposes of the parties’
arguments that Volans’ view was correct. 4
5).

(Post-Hearing Order at

Barring the plaintiff from arguing that the LCIA costs award

is a maritime claim is therefore inappropriate.
B.

Supplemental Rule B Attachment

The purpose of a Supplemental Rule B maritime attachment is
“two-fold: first, to gain jurisdiction over an absent defendant;
and second, to assure satisfaction of a judgment.”

Aqua Stoli

Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 437 (2d
Cir. 2006), overruled on other grounds by Shipping Corp. of India
v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009).

To be

granted such an attachment, a plaintiff must first show that “it
has a valid prima facie admiralty claim against the defendant.”
Id.

at

445.

This

determination

4

comprises

two

subsidiary

In light of these findings, it is unnecessary to evaluate
whether Golden Horn persuaded the LCIA to accept its position or
whether Norvik would be unfairly prejudiced by allowing Golden
Horn to make its argument.
10

questions: first, whether the claim “sounds in admiralty” and,
second, “whether the claim is prima facie valid.”

Blue Whale

Corp. v. Grand China Shipping Development Co., 722 F.3d 488, 493
(2d Cir. 2013).

“[W]hether a claim is properly considered a

maritime claim for purposes of the applicability of [Supplemental]
Rule B is a purely procedural issue, and thus governed by federal
law irrespective of the law to be applied to any underlying
claims.”

Euro Trust Trading S.A. v. Allgrains U.K. Co., No. 09

Civ. 4483, 2009 WL 2223581, at *3 (S.D.N.Y. July 27, 2009); see
also Blue Whale, 722 F.3d at 494 (“[W]hat is clear is that federal
law controls the procedural inquiry, namely, whether a plaintiff’s
claim sounds in admiralty.
by

virtue

of

its

This question is inherently procedural

relationship

to

the

courts’

subject

matter

jurisdiction and, thus, is controlled by federal maritime law.”
(internal citations omitted)).
Supplemental Rule E(6) allows a court to reduce the amount of
security upon a motion, “for good cause shown.”
Supp. R. E(6).

Fed. R. Civ. P.

The court must “determine whether the amount

attached is ‘excessive’ or ‘reasonably necessary to secure the
plaintiff’s claim.’”

Ronda Ship Management Inc. v. Doha Asian

Games Organising Committee, 511 F. Supp. 2d 399, 405-06 (S.D.N.Y.
2007) (quoting A.R.A. Anomina Ravannate Di Armamento, SPA v.

11

Heidmar Inc., No. 97 Civ. 1383, 1997 WL 615495, at *1 (S.D.N.Y.
Oct. 6, 1997)).

In doing so, the court may preliminarily review

the complaint in order to satisfy itself that the claims may
support an award of damages in approximately the amount attached.
See Transportes Navieros y Terrestres S.A. de C.V. v. Fairmount
Heavy Transport, N.V., 572 F.3d 96, 111 (2d Cir. 2009).
1.

Attorneys’ Fees

Golden Horn asserts that its claim for $120,000 in estimated
attorneys’ fees should be secured by the Supplemental Rule B
attachment.
the

(Duffy 2/19/16 Letter at 14).

plaintiff

“gives

no

basis

for

why

Norvik points out that
it

attorneys’ fees award in this [] proceeding.”
Letter at 2).

Norvik is correct.

would

receive

an

(Frevola 2/26/16

To be sure, there is a “maritime

exception to the American rule” that each party bears its own
attorneys’

fees

where

the

prevailing

party

presents

“clear

evidence” that the other party has “commenced or conducted an
action in bad faith, vexatiously, wantonly, or for oppressive
reasons.”

Dolco Investment, Ltd. v. Moonriver Development, Ltd.,

526 F. Supp. 2d 451, 453 (S.D.N.Y. 2007) (quoting Dow Chemical
Pacific, Ltd. v. Rascator Maritime S.A., 782 F.2d 329, 344 (2d
Cir. 1986)).

But Golden Horn has neither presented such evidence

nor indicated that it intends to do so.

12

Moreover, there is no

fee-shifting provision in the underlying bareboat charter.

Golden

Horn’s unsupported claim for estimated attorneys’ fees should not
be secured by the attached funds.
2.

Costs

Norvik does not contend that claims for costs are never
maritime claims.

It is clear that an estimated amount of costs

can be secured by a Supplemental Rule B attachment: Supplemental
Rule E, which provides procedures for claims of maritime attachment
and garnishment under Supplemental Rule B, allows the court to
“require the plaintiff, defendant, claimant, or other party to
give security, or additional security, . . . to pay all costs and
expenses that shall be awarded against the party.”
P. Supp. R. E(2)(b).

Fed. R. Civ.

Thus, Norvik concedes that “[c]osts awards

issued in one proceeding against one party and then sought to be
enforced through U.S. security against the same party can be
treated as maritime.”
“costs

awards

from

entities, cannot.”
a.
It

has

been

(Frevola 2/26/16 Letter at 3).

separate

proceedings,

or

against

However,
separate

(Frevola 2/26/16 Letter at 3).
Separate Proceedings
the

practice

in

this

district

to

allow

Supplemental Rule B attachments of funds in amounts that include
costs awarded or expected to be awarded in separate proceedings.

13

For example, in Golden Ocean Group Ltd. v. G.T. Group Holding, No.
09 Civ. 7391, 5 2009 WL 8624484 (S.D.N.Y. Sept. 2, 2009), the court
attached

funds

in

the

amount

of

$668,981.50

“inclusive

interests, costs, and attorneys’ and arbitrators’ fees.”
*1.

of

Id. at

As the complaint in that case makes clear, the attachment was

taken

in

aid

of

arbitration

which

was

to

occur

in

London.

(Complaint, ¶¶ 18-19, 21, Golden Ocean Group Ltd. v. G.T. Group
Holding, No. 09 Civ. 7391 (S.D.N.Y. Aug. 21, 2009)).

In DSND

Subsea AS v. Oceanografia, S.A. de CV, 569 F. Supp. 2d 339
(S.D.N.Y. 2008), the parties arbitrated their maritime dispute in
London, which eventually resulted in an award of costs against the
defendant

in

connection

with

its

arguments and subsequent appeal.

unsuccessful
Id. at 341.

jurisdictional
Thereafter, the

plaintiff secured its claim for the awarded costs and for the
damages it sought in the London proceedings with a Supplemental
Rule B attachment.

Id. at 342.

The defendant moved to vacate the

attachment, and the plaintiff cross-moved “for an order directing
that

a

portion

of

defendant’s

attached

funds

be

awarded

to

plaintiff in satisfaction of the orders from the [English] High
Court

and

plaintiff.

5

[arbitration]

[t]ribunal”

Id. at 342, 351.

granting

costs

to

the

The court granted the motion, noting

Westlaw lists an incorrect case number on this opinion.
14

that at oral argument the defendant had “agree[d] that there was
no impediment to the entry of such an order.”

Id. at 351.

That

is, the DNSD Subsea court allowed an award of costs in a separate
proceeding

to

be

collected

from

primarily

on

the

funds

attached

under

Supplemental Rule B.
Norvik

relies

Cosmotrade

Exports,

S.A.

v.

Conchart Overseas (Offshore) SAL, No. 09 Civ. 4211, 2009 WL 2914337
(S.D.N.Y. Sept. 8, 2009), which in turn relies on two other cases
from this district, Pires v. Heller, No. 04 Civ. 9069, 2004 WL
2711075 (S.D.N.Y. Nov. 24, 2004), and Naias Marine S.A. v. Trans
Pacific Carriers Co., No. 07 Civ. 10640, 2008 WL 111003 (S.D.N.Y.
Jan. 10, 2008).

In Pires, defendant Kenneth Heller was the former

attorney of plaintiff S.M. Pires and former co-counsel of plaintiff
Saul Rudes.

2004 WL 2711075, at *1.

Along with Mr. Rudes, Mr.

Heller had represented Mr. Pires in a maritime action.

Id. at *2.

The plaintiffs sued him in state court for breach of contract and
certain torts, such as breach of fiduciary duty, conversion, and
fraud.

Id. at *1.

Mr. Heller, in turn, sued his former associate

Susan Harmon for breach of an employment contract, and removed the
case to federal court, claiming it fell within the federal courts’
admiralty jurisdiction.
noted

that

the

Id. at *1-2.

plaintiffs’

contract

15

The court disagreed.
claims

arose

from

It

their

agreements with Mr. Heller regarding legal fees in the underlying
maritime action, and that the third-party claim was “a standard
breach of employment claim.”

Id. at *2.

Notwithstanding that the

representation at the heart of the dispute occurred in an admiralty
case, the specific agreements sued on did not “incorporate a
‘uniquely maritime concern,’” which is required for a contract
claim

to

fall

within

admiralty

jurisdiction.

Id.

(quoting

American Home Assurance Co. v. Merck & Co., 329 F. Supp. 2d 436,
442 (S.D.N.Y. 2004)).

Similarly, the tort claims, which alleged

that Mr. Heller had stolen money from Mr. Pires and Mr. Rudes,
were “entirely separate from the underlying maritime action in
which [Mr.] Pires suffered leg amputations from his shipowner’s
denial of maintenance and cure.”

Id.

The court asserted that

“the fact that the previous lawsuit involved maritime claims [is
not]

sufficient

to

establish

admiralty

jurisdiction

future lawsuits arising between the parties.”
Building

on

this

observation,

Naias

over

any

Id. at *3.
Marine

addressed

a

situation in which the plaintiff sought a Supplemental Rule B
attachment to secure “a claim for estimated costs for defending
against [defendant] Trans Pacific’s maritime claims in [a] London
arbitration.”

2008 WL 111003, at *2.

The court found that the

claim for costs could not be characterized as a maritime claim

16

merely because the underlying claim in the London arbitration was
maritime.

Id.

at

*4.

The

court

distinguished

an

earlier

Supplemental Rule B attachment action brought by Trans Pacific,
which sought security both for the claim to be submitted to
arbitration in London and for the costs of that arbitration.
at *1.

Id.

“In the Trans Pacific action, Trans Pacific set forth a

valid prima facie admiralty claim for breach of the charter party
agreement, and obtained an attachment for that claim, with an
ancillary claim for costs.”

Id. at *3.

The court noted that “if

Naias [had] asserted a maritime claim [in the instant case], it
likely would be entitled to security for costs as well.

Naias,

however, has asserted only a claim for legal costs, without more.”
Id. at *5.

That is, where a plaintiff “has failed to set forth a

maritime claim,” security for costs is unavailable.

Id.

In the words of the court in Cosmotrade, Naias Marine teaches
“that a bare claim for legal fees -- even legal fees incurred in
a maritime proceeding -- is not essentially maritime in nature,
even if the legal fees are being incurred in a separate maritime
action.”

2009 WL 2914337, at *5.

Cosmotrade, a time charterer,

had obtained a Supplemental Rule B attachment in the amount of
$539,365.44.

Id. at *1 & n.1.

This attachment secured certain

claims that were to be heard in a future London proceeding against

17

two defendants -- Contchart Overseas (Offshore) SAL (“Contchart”)
and Overcom S.A. (“Overcom”) -- who had arranged to ship a cargo
of pig iron on the chartered vessel including $73,750.00 in damages
attributable

to

the

detention

of

the

vessel;

$151,545.90

in

estimated interest on that claim; and $250,000.00 in estimated
costs and attorneys’ fees on the claim.

Id.; (Amended Verified

Complaint, ¶¶ 7-12, 21-22, 25-26, Cosmotrade Exports S.A. v.
Contchart Overseas (Offshore) SAL, No. 09 Civ. 4211 (S.D.N.Y. May
13, 2009) (“Cosmotrade Compl.”).

It also secured $64,069.64,

representing an estimated award of costs from a separate proceeding
in the English High Court (brought by Contchart and Overcom) that
had sought an injunction requiring the plaintiff to release the
bills of lading connected with the subject voyage.

Cosmotrade,

2009 WL 29314337, at *1; (Cosmotrade Compl., ¶¶ 16-17, 25).

The

defendants filed a motion that, among other things, asked the court
to

“vacate

that

part

of

the

attachment

seeking

security

for

reimbursement of the English High Court costs on the basis that
such costs do not constitute an admiralty claim.”
2009 WL 2914337, at *1.

Cosmotrade,

Relying on Naias Marine, the court granted

the request, noting that “plaintiff’s claim for security for the
payment of costs awarded in a wholly separate

. . . action in

the English High Court [] is not a maritime claim in this court

18

and does not confer maritime jurisdiction in the present action.”
Id. at *5.

That is, the costs award from the prior maritime action

was not “ancillary” to the maritime claim that was the subject of
the anticipated London proceeding, in aid of which the plaintiff
had sought Supplemental Rule B attachment.
Naias Marine, 2008 WL 111003, at *3.

See id.; see also

However, the estimated costs

and attorneys’ fees (in the amount of $250,000) for that upcoming
proceeding were left undisturbed as ancillary to the maritime
claim.
Properly

understood,

Norvik’s position here.

then,

Cosmotrade

does

not

support

Rather, the case deals with a “bare claim”

for costs derived from an action that is procedurally unrelated to
the

action

which

forms

the

foundation

of

the

request

for

Supplemental Rule B attachment and holds, following Naias Marine,
that such a claim is non-maritime.

Here, on the other hand, Golden

Horn sought attachment of Norvik’s funds in aid of the London
arbitration, and it was awarded costs in that arbitration.
claim

against

the

attached

funds

derives

from

the

Its

damages

calculated in that proceeding, and the claim for costs is quite
clearly ancillary to that award.

The claim here is more akin to

the Trans Pacific action (discussed in Naias Marine), where the
plaintiff “set forth a valid prima facie admiralty claim for breach

19

of the charter party agreement, and obtained an attachment for
that claim, with an ancillary claim for costs.”
2008 WL 111003, at *3.

Naias Marine,

These precedents indicate that the claim

for costs awarded in the London arbitration is a maritime claim.
b.

Separate Parties

Norvik also contends that a costs award against one entity
cannot be secured by a Supplemental Rule B attachment against a
separate entity.

(Frevola 2/26/16 Letter at 3).

While as a

general matter that might be true, the defendant leaves out an
important detail: Judge Oetken has already found that Golden Horn
“has amply made a prima facie case that Volans was Norvik’s alter
ego.”

Golden Horn I, 2014 WL 5778535, at *6.

“When a court

determines that two companies are alter egos, they may be treated
as one unit for all legal purposes.”

In re South African Apartheid

Litigation, 617 F. Supp. 2d 228, 303 (S.D.N.Y. 2009); see also
Board of Trustees, Sheet Metal Workers’ National Pension Fund v.
Elite Erectors, Inc., 212 F.3d 1031, 1038 (7th Cir. 2000) (“[A]
contention that A is B’s ‘alter ego’ asserts that A and B are the
same entity . . . .”).

Norvik has not explained why this principle

should not apply in the maritime context.
In any event, case law, including Cosmotrade, indicates that
the principle does indeed apply here.

20

Along with Contchart and

Overcom, Cosmotrade sued two other entities -- Navitrade and
Continental Ship Management (“CSM”) -- alleging they were alter
egos

of

Contchart.

Cosmotrade,

(Cosmotrade Compl., ¶¶ 27-34).

2009

WL

2914337,

at

*1,

5;

Navitrade and CSM sought to vacate

the attachment as to them, contending that the complaint did not
sufficiently

allege

that

they

were

Cosmotrade, 2009 WL 2914337, at *1, 5.

alter

egos

of

Contchart.

The court ultimately found

that the complaint “ma[de] out a prima facie case that Navitrade
and CSM are . . . alter egos of Conchart” and that there was
therefore “no basis to vacate the attachment as to either of those
entities,” id. at *5, even though neither Navitrade nor CSM were
to be parties in the future London proceeding (Cosmotrade Compl.,
¶¶ 25-26 (noting amounts Cosmotrade “expects to recover . . . in
English

High

Court

or

London

arbitration

proceedings”

from

Conchart and Overcom, alone)).
In Emeraldian Ltd. Partnership v. Wellmix Shipping Ltd., No.
08 Civ. 2991, 2009 WL 3076094 (S.D.N.Y. Sept. 28, 2009), the
plaintiff Emeraldian Limited Partnership (“Emeraldian”) sought an
order for process of maritime attachment and garnishment against
three defendants in the amount of $7,593,015.13, which included
amounts for interest and costs.

Id. at *1.

The complaint

establishes that the underlying dispute was to be resolved in a

21

proceeding in London that included only Wellmix Shipping Ltd.
(“Wellmix”).
Ltd.

(Amended Verified Complaint, ¶¶ 6, 9, 11, Emeraldian

Partnership

v.

Wellmix

Shipping

Ltd.,

No.

98

Civ.

2991

(S.D.N.Y. Nov. 12, 2008)); 6 Emeraldian, 2009 WL 3076094, at *1.
The plaintiff alleged that defendant Kam Kwan was an alter ego of
defendant Guangzhou Iron & Steel Corporation (“Guangzhou”), which
had guaranteed the performance of the maritime contract between
Emeraldian and Wellmix. 7
as to it.

Id. at *2.

Kam Kwan sought to vacate the attachment
The court granted Kam Kwan’s motion, but

not on the grounds that Emeraldian inappropriately secured a
projected costs award from a separate proceeding against a separate
party; rather, the court vacated the attachment against Kam Kwan
because Emeraldian had not sufficiently alleged that Kam Kwan was
an alter ego of Guangzhou and therefore had not shown that it had
an admiralty claim against Kam Kwan.
implication

is

that,

if

Emeraldian

Id. at *3-5.
had

alleged

The obvious
an

alter

ego

6

The final complaint in that case -- the Third Amended
Verified Complaint -- was filed under seal and is not, therefore,
publicly available.
However, the paragraphs cited from the
Amended Verified Complaint appear verbatim in that sealed
complaint, although at paragraphs 7, 10, and 12, rather than
paragraphs 6, 9, and 11.
7

“[A] claim based on a guarantee of performance of a maritime
contract is maritime in nature.” Emeraldian, 2009 WL 3076094, at
*1-2.
22

relationship, the claim against Kam Kwan would have sounded in
admiralty

and

Supplemental

would
Rule

have
B

been

appropriately

attachment,

secured

notwithstanding

by

that

the
the

underlying claim would be resolved in a separate proceeding to
which Kam Kwan was not a party.
The relevant cases, including Naias Marine and Cosmotrade -the cases on which Norvik primarily relies -- indicate that the
costs award in Golden Horn’s favor in the LCIA action against
Volans can be secured by the Supplemental Rule B attachment of
funds predominantly belonging to Volans’ alleged alter ego Norvik.
C.

Calculation

As it currently stands, the attachment in this case secures
$1,325,743.20, comprising $803,424.58 for the claim for wrongful
repudiation

of

arbitration,

the

charter

$327,318.68

party

in

the

London

costs

in

resolved
awarded

in

the

London

arbitration, $75,000 in estimated pre-judgment interest as ordered
in the London arbitration (Final Award at 66), and $120,000 in
estimated attorneys’ fees from this action. 8
the

claim

for

attorneys’

fees

should

not

I have found that
be

secured

by

the

attachment, so the restrained amount must be reduced by $120,000.

8

There is a slight discrepancy -- of six cents -- between
the amount of the attachment and the sum of these specific listed
amounts
23

\Jorv ik
amot1n~

--c:.he

has

not

challer:qed

of the costs award,

attachment

$1,325,743.2C -

should

the

amount

of

the

or the estimated
be

$120,COO.OO

reduced
~

to

damages

award,

interest.~

the

Therefore,

$1, 205, 743. 20

$1,205,743.20).

Conclusion
For the foregoing reasons,

the amount of funds subJect to the

Writ of Attachment and Garnishment originally issued on March 28,
2011,

~s

reduced to $1,205,713.20.

SO ORDERED.

~·

AMES C. FRANCIS IV
NITED STATES MAGISTRATE JUDGE
Dated:

New York,
April l'.J,

New York
2016

Copies transmitted this date:
Owen f. Duffy, III, Esq.
Law OffJCOS cf Owen F. Duffy
S Fenn 2laza, 19th Floor
Now York, NY 10001

'Korvik's original reduction request estimated interest at
approximately $46,500, buL thal calculation relied on a principal
amount
tha~
excluded
the
London
arbitration's
costs
award.
(Frevola 2/16/16 Letter at 1-2 & n. 2).
Golden Horn's response
ostunated the inLerest on both the damages and costs award at
$75, 000 (Quffy 2/19/16 Letter at 14), and Norvik' s subsequent
submisslor1 docs not quibble witt1 that amount.

24

Michael J. Frevola, Esq.
Holland & Knight LLP
31 W. 52nd St.
New York, NY 10019

25