Ex parte Petition of Shagang Shipping Co., ltd
Filing
19
OPINION. Based on the reasoning given in this Opinion, HNA's motions to vacate and quash are granted, and its motion for a protective order is denied as moot. It is so ordered. (Signed by Judge Robert W. Sweet on 4/28/2014) (rjm)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------x
IN RE EX PARTE PETITION OF SHAGANG
SHIPPING CO., LTD,
14 Misc. 53-Pl (RWS)
OPINION
----------------------------------------x
A P P E A R A N C E S:
Attorneys for Petitioner Shagang Shipping Co., Ltd.
CHALOS & CO, P.C.
55 Hamilton Avenue
Oyster Bay, New York 1171
By:
George M. Chalos, Esq.
Katherine N. Christodoulatos, Esq.
Briton P. Sparkman, Esq.
Attorneys for Movant HNA Group Co. Ltd.
BLANK ROME LLP
405 Lexington Avenue
New York, NY 10174
By:
Thomas Hunt Belknap, Jr., Esq.
Sweet, D.J.
Movant
moved this
Court,
Group
sitting
ex pa rte order
2O14
("Shagang"
Ltd.
pursuant
the
HNA
to
subpoenas
Order
(the
limiting
Subpoenas.
1782
§
Part One,
to
Pe ti ti oner
or
"Movant")
vacate
the March
Shagang
discovery
"Order") ,
Shipping
of
an
(the
has
certain
order
6,
Co. ,
banks
quashing
issued by Shagang in this matter pursuant to the
"Subpoenas")
the
("HNA"
"Petitioner")
U.S. C.
28
in
granting
or
Ltd.
Co.
scope
of
or,
alternatively,
permissible
Based on the
a
discovery
conclusions
set
protective
pursuant
forth
below,
order
to
the
Movant' s
motions to vacate and quash the Order are granted.
Prior Proceedings
The
lawsuit
Court
under
claims
commenced
(the
a
Kong)
Ltd.
Co.,
supply
the
Sha gang
Action") ,
performance
made
to
by
"London
"Charter")
underlying
guaranty
this
motion
HNA
against
in
arise
the
which
issued by
in
seeks
HNA
a
for
M/V
(the
minimum of 82 months and maximum of 86 months.
failed
to
regularly
hire
payments,
1
and
recovery
(the
Shipping
"Vessel")
(Hong
Shagang was
to
GCS
for
Eventually,
Shagang
a
High
charter
Pursuant to the Charter,
DONG-A ASTREA
of
London
Shagang
between Shagang and Grand China
("GCS").
out
obtained
a
GCS
six
-------------------------------
arbitral awards against GCS under the terms of the Charter.
GCS
was unable to pay the entirety of all awards,
and in accordance
with the terms
Shagang commenced
of the performance guarantee,
The London
the London Action against HNA on September 13, 2013.
Action
remains
pending,
with a
five-day
hearing
in the matter
for February 9, 2015.
Petitioner initiated the
instant
action by filing
application for an ex parte order pursuant to 28 U.S.C.
on March
6,
2014
(the
Application was
granted,
Order,
Shagang
was
served
the
to
Subpoenas
On March
"Application").
and the Order was
serve
on
seven
March
11,
Movant filed the instant motions.
banks,
2014.
7,
2014,
issued.
six
On
§
an
1782
the
Under the
of
which
March
25,
were
2014,
Oral arguments were held, and
the matter marked fully submitted, on April 16, 2014.
HNA's Motion To Quash Is Granted
28 U.S.C.
proceeding in a
§
to
1782 (a).
assist
before
§
1782 provides for discovery "for use in a
foreign or international tribunal."
Pursuant to
a
such
foreign
a
or
tribunal
§
1782,
u.s.c.
a district court is authorized
international
by
28
ordering
tribunal
discovery
or
a
where
litigant
(1)
the
person from whom discovery is sought resides or is found in the
2
district;
the discovery is for use in a proceeding before a
( 2)
foreign tribunal;
or
and
international
(3)
the application is made by a
or "any interested person."
tribunal
foreign
Schmitz
v. Bernstein, Liebhard & Lifshitz, LLP,
376 F.3d 79,
(quoting In re Esses, 101 F.3d 873, 875
2004)
A district
conditions
that
it
court
deems
retains
wide
appropriate
discretion
in
courts
and
876
(2d Cir.
granting
discretion
1102
investment
of
invitation
for
example,
not
with
Rules
discretion
of
litigation
to
and
otherwise,
Federal
Civil
v.
Rules
in
In re Esses,
the
grant
discovery
to
Esmerian,
Inc.,
read
section
district
fashion
courts
creative
avoid
51
1782's
as
an
means
of
promoting efficiency in
persuading
other
testimony
or
nations,
statement
or other thing produced,
Procedure
discovery
by
"To the extent that the order does
the
of
impose
discovery
R.
("We
in
judges
such
statute's double goal:
and the document
the
S.A.,
1995)
to do the same.").
prescribe
taken,
Cir.
district
implementing the
international
(2d
broad
tailor
Euromepa
attendant problems.");
1095,
to
to
("Section 1782 grants district
wide discretion to determine whether to
equally wide
F.3d
1996)
(2d Cir.
(2d Cir. 1996)).
connection with a foreign proceeding under § 1782.
101 F.3d 873,
83
Civil
2 6.
Procedure,"
28
Auto-Guadeloupe Investissement S.A.,
3
U.S.C.
§
shall
in accordance
including
1782(a);
12 MC 221
be
(RPP),
Federal
see
also
2012 U.S.
Dist.
LEXIS
147379,
considering a
at
*12
request
mindful of U.S.
for
(S.D.N.Y.
Oct.
discovery under
10,
2012)
1782 must
§
may
privileged,
obtain
that
A&R
party.
also be
federal discovery procedures under Rules 26 and
Under Rule 2 6,
4 5 of the Federal Rules of Civil Procedure.") .
"[p]arties
("A court
is
Body
Progressive Cas.
discovery
relevant
to
the
Specialty
Co.,
Ins.
regarding
claim
or
Collision
&
CIV.
any
NO.
matter,
defense
(WWE),
of
any
Inc.
Works,
3:07CV929
not
v.
2014
U.S.
Dist. LEXIS 32567, at *6 (D. Conn. Mar. 13, 2014).
Shagang sought the Order to pursue discovery of HNA's
financial
information
from
Petitioner
seeks
financial
Defense
and
this
Counterclaim
information
submitted
"Defense and Counterclaim") ,
banks
certain
in
the
in
New
based
London
in which HNA submits,
York.
on
HNA's
Action
(the
as a defense
for the appropriate calculation of damages in the London Action,
"[it]
will
should
be
say
that
assessed
the
by
discount
rate
reference
to
for
the
accelerated
Claimant's
Average Cost of Capital" and that "the Claimant is
give
credit
for
possibility of
insolvency
such as
15).
the
Shagang
insolvency
contends
should
be
due
credit
to
in
HNA's creditworthiness and financial
4
HNA' s
the
Weighted
required to
contingencies,
( Grieveson Deel. ,
ff
that
given
catastrophic
receipt
pleadings
damages
Ex.
that
5
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