Saray Dokum ve Madeni Aksam Sanayi Turizm A.S. v. MTS Logistics, Inc.

Filing 198

FINDINGS OF FACT AND CONCLUSIONS OF LAW For the foregoing reasons, MTS is not liable to Saray under COGSA, the Pomerene Act, or general maritime law. The Court awards MTS attorneys' fees in an amount to be determined. The parties shall meet and confer to attempt to reach an agreement on MTSs attorneys' fees consistent within the findings in supra IV.D. If an agreement is reached, by August 21, 2023, the parties shall submit a joint stipulation as to the amount of MTS's atto rney's fees. If negotiations are unsuccessful, by August 21, 2023, the parties shall each file a letter setting forth their positions on the appropriate sum of MTS's attorneys' fees. SO ORDERED. (Signed by Judge John P. Cronan on 8/11/2023) (jca)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------------------------------- X
:
SARAY DOKUM VE MADENI AKSAM SANAYI :
TURIZM A.S.,
:
:
Plaintiff,
:
:
-v:
:
MTS LOGISTICS, INC.,
:
:
Defendant.
:
:
---------------------------------------------------------------------- X

17 Civ. 7495 (JPC) (GWG)
FINDINGS OF FACT AND
CONCLUSIONS OF LAW

JOHN P. CRONAN, United States District Judge:
Plaintiff Saray Dokum ve Madeni Aksam Sanayi Turizm A.S. (“Saray”), a Turkish
architectural manufacturing company, brings this action against Defendant MTS Logistics, Inc.
(“MTS”), a New York-based non-vessel operating common carrier (“NVOCC”), 1 under the United
States Carriage of Goods by Sea Act (“COGSA”). 2 Saray alleges that MTS failed to deliver
1,534,000 kilograms of S-PVC Resin Formosa Formolon 622 (the “Resin”), which Saray

1

An NVOCC “is one who holds [itself] out to provide transportation for hire by water in
interstate commerce, or in commerce from the United States who assumes or has liability for safe
transport,” but “does not [itself] undertake the actual transportation of cargo,” and rather “delivers
the shipment to an ocean carrier for transportation.” Royal & Sun All. Ins., PLC v. Ocean World
Lines, Inc., 612 F.3d 138, 140 n.2 (2d Cir. 2010) (quoting 1-1 Saul Sorkin, Goods in Transit
§ 1.5(8)); see also Ins. Co. of N. Am. v. S/S Am. Argosy, 732 F.2d 299, 301 (2d Cir. 1984)
(“NVOCCs operate as middlemen,” as “they arrange for relatively small shipments to be picked
up from shippers, consolidate the smaller parcels, and ship them via a carrier or several carriers,”
but “do not . . . own or charter the ships that actually carry the cargo.”).
2

COGSA was previously codified at 46 U.S.C. App. §§ 1300-1315. “Congress has since
‘reorganiz[ed] and restat[ed] the laws . . . in the appendix to title 46, and COGSA’s provisions
have been recodified at 46 U.S.C. § 30701 note.” Rexroth Hydraudyne B.V. v. Ocean World Lines,
Inc., 547 F.3d 351, 354 n.2 (2d Cir. 2008) (alteration in original) (quoting Act of Oct. 6, 2006,
Pub. L. No. 109–304, 120 Stat. 1485), abrogated on other grounds, Kawasaki Kisen Kaisha Ltd.
v. Regal-Beloit Corp., 561 U.S. 89 (2010).

purchased from non-party Oxyde Chemicals, Inc. (“Oxyde”), to Istanbul, as provided for in two
bills of lading 3 issued by MTS. Saray seeks money damages, and both parties seek attorneys’ fees.
Following resolution of the parties’ unsuccessful motions for summary judgment, see
Saray Dokum ve Madeni Aksam Sanayi Turizm A.S. v. MTS Logistics, Inc., No 17 Civ. 7495 (JPC),
2021 WL 1199470 (S.D.N.Y. Mar. 30, 2021), the Court conducted a two-day bench trial from
October 24, 2022 to October 25, 2022. Having considered the evidence admitted at trial, assessed
the credibility of the witnesses, and applied the relevant law, the Court makes the following
findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52. As set
forth below, the Court concludes that while Saray has standing to sue under the relevant bills of
lading, it has failed to prove MTS’s liability. In addition, the Court finds Saray liable to MTS for
certain attorneys’ fees as outlined below.
I. Procedural Background
As explained in more detail in the Court’s Findings of Fact, Saray commenced this action
on July 11, 2017 in the Southern District of Texas, where it was assigned to the Honorable Nancy
F. Atlas. Dkts. 1 (“Compl.”), 4. In the original Complaint, Saray brought claims against MTS for
a declaratory judgment, breach of contract, negligence, conversion, and legal fees. Compl. ¶¶ 1521, 28-44. On September 29, 2017, the case was transferred to this District pursuant to a forumselection clause in MTS’s bill of lading “providing that any dispute ‘shall be governed by the
United States District Court for the Southern District of New York.’” Dkt. 24 (memorandum and

3

“A bill of lading is a document issued by a carrier . . . to a shipper . . . record[ing] that a
carrier has received goods from the party that wishes to ship them, stat[ing] the terms of carriage,
and serv[ing] as evidence of the contract for carriage.” Maersk Line A/S v. Carew, 588 F. Supp.
3d 493, 499 (S.D.N.Y. 2022) (internal quotation marks omitted); see also MTS Logistics Inc. v.
Innovative Commodities Grp., 442 F. Supp. 3d 738, 743 (S.D.N.Y. 2020) (noting that bills of
lading are “[i]n short, . . . ‘essentially, contracts’” (quoting Norfolk S. Ry. Co. v. Kirby, 543 U.S.
14, 18-19 (2004))).
2

order of Judge Atlas quoting the bill of lading); see also Dkt. 25 (transfer order). Upon arrival in
this District, the case was initially assigned to the Honorable Paul G. Gardephe. See Oct. 2, 2017
Case Opening Initial Assignment Notice. On January 9, 2020, pursuant to a court-ordered
stipulation of the parties, Saray filed an Amended Complaint raising a single claim against MTS
under COGSA, and the Court dismissed any remaining claims with prejudice. Dkts. 71, 73 (“Am.
Compl.”). MTS answered with counterclaims for unjust enrichment and legal fees. Dkt. 74. 4
Following the case’s transfer to the undersigned on September 29, 2020, see Sept. 29, 2020
Notice of Case Reassignment, the Court denied the parties’ cross-motions for summary judgment
on March 30, 2021, see Saray, 2021 WL 1199470. The Court held in relevant part that (1) the
Amended Complaint relates back to the original Complaint and thus was not barred by COGSA’s
one-year statute of limitations, id. at *5-6; (2) while a merchant can sue on a bill of lading under
COGSA, id. at *12-13, a dispute of fact existed as to whether Saray was the holder of the relevant
bills of lading at the time of the pertinent events in this case such that it can be considered a
merchant, id. at *13-15; (3) Saray’s lawsuit was not barred by the fact that MTS’s ultimate sale of
the Resin was “judicially sanctioned” by Judge Atlas because Judge Atlas’s order permitting the
sale “explicitly reserved Saray’s right to sue,” id. at *15; and (4) the record was not sufficiently
developed to determine whether MTS’s failure to deliver the Resin was an “unreasonable
deviation” that would render COGSA’s $500 per package liability limitation inapplicable, id. at
*17-18. Accordingly, the Court ordered this case to proceed to trial on the issues of “[w]hether
Saray was a ‘merchant’ under the [relevant bills of lading], whether there was an unreasonable
deviation, and whether MTS has any defenses to liability.” Id. at *18.

4

at 6.

MTS confirmed that it has since “withdrawn its claim for Unjust Enrichment.” Dkt. 190
3

Following unsuccessful settlement negotiations, see Dkts. 145, 146, and a brief reopening
of discovery in light of Saray’s late production of the originals of the relevant bills of lading, see
Feb. 1, 2022 Minute Entry; Dkt. 176 at 42:22-43:18, trial commenced as scheduled on October 24,
2022. The Court heard testimony from two witnesses: Murat Sarayli (“Sarayli”), Tr. 5 at 19:19105:25, a member of Saray’s board of directors in charge of new investment, id. at 20:21-23, and
Mehmet Can Fidan (“Fidan”), id. at 106:5-226:14, MTS’s vice president in charge of export, id.
at 109:6-9. Following the conclusion of trial, both parties submitted post-trial briefing on
November 11, 2022. Dkts. 190 (“Saray Br.”), 191 (“MTS Br.”).
II. Bench Trial Standard
“In an action tried on the facts without a jury,” the Court “find[s] the facts specially and
state[s] its conclusions of law separately.” Fed. R. Civ. P. 52(a)(1). Accordingly, the Court below
sets forth its findings of facts, followed by its conclusions of law. Additional facts not specifically
found in the findings of fact section, see infra III, may nonetheless be included in the Court’s
conclusions of law, see infra IV. See also Flatiron Acquisition Vehicle, LLC v. CSE Mortg. LLC,
502 F. Supp. 3d 760, 769 (S.D.N.Y. 2020) (“For the avoidance of doubt, the Court has also found
additional facts that are relevant to the analysis, which are not included in this section of the
opinion, but are instead embedded in the discussion section.”).
III. Findings of Fact 6
Saray is a Turkish, family-run manufacturing company that has been “producing aluminum
and PVDC resin profiles for architectural windows and doors” since 1980. Tr. at 20:25-22:6. Its
5

“Tr.” refers to citations to the trial transcript. Dkts. 194, 196.

6

The following facts are taken from witness testimony at trial and the exhibits admitted
into evidence at trial (“Exh.”), including Sarayli’s declaration, Exh. 76 (“Sarayli Decl.”), and
Fidan’s affidavit, Exh. 74 (“Fidan Aff.”), but only to the extent that those statements are not
inconsistent with testimony at trial.
4

board of directors consists of three members: Sarayli, who is “responsible for
new . . . investments,” id. at 20:21-23, Talin Dikici—Sarayli’s sister—who is mainly in charge of
purchasing, id. at 21:12-22:4; accord id. at 25:24, and Sarayli’s other sister, id. at 57:2-6. Parseh
Sarayli, Murat’s father, is the founder of Saray and was the company’s president in 2017, although
as of the date of the bench trial he was in the process of retiring. Id. at 21:7-8; 57:7-20. Murat
Sarayli and Dikici work together in managing Saray. Id. at 21:17-22:6.
Saray uses S-PVC Resin Formosa Fomolon 622 to manufacture its window profiles. Id. at
27:24-28:4; see also Sarayli Decl. ¶ 3. It regularly imports large quantities of this product from
manufacturers in the United States. See Tr. at 40:15-24, 59:9-17; Exh. 78. In fact, between 2016
and 2021, Saray purchased roughly 36,981,608 kilograms of such resin in eighty-six separate
shipments totaling over $36 million. Exh. 78; Tr. at 41:24-42:15. Oxyde was one of the
manufacturers from which Saray frequently bought this resin . Exh. 78; Tr. at 40:15-20; Sarayli
Decl. ¶ 28. Oxyde is located in Houston, Texas, and supplies chemicals, including resin, to
manufacturing companies around the world. Fidan Aff. ¶ 8.
The relevant transaction between Saray and Oxyde occurred on November 15, 2016. Tr.
at 28:5-24; Exh. 3 (“Saray-Oxyde Contract”).

Pursuant to a contract between those two

companies, Saray agreed to buy approximately 1,500 metric tons of S-PVC Resin Formosa
Formolon 622, i.e., the Resin, at a price of $885 per metric ton. Saray-Oxyde Contract at 1. The
Saray-Oxyde Contract also provided that the goods were to be shipped “CIF Istanbul,” id., which
Saray understood to mean that Saray was required to pay the cost, insurance, and freight of
shipping the goods to Istanbul, Tr. at 45:10-46:5, 65:16-66:10. 7 The Saray-Oxyde Contract further

7

Pursuant to the Incoterms 2010, “a set of pre-defined uniform commercial terms
published by the International Chamber of Commerce that governs the shipment here,” Saray,
5

required Saray to “make a 20% advance payment by November 21st, 2016” and then pay the
“balance 80% cash . . . at sight” after which Oxyde would release the shipping documents to Saray.
Saray-Oxyde Contract at 1. Oxyde agreed to “effect shipment” roughly “20 days . . . after receipt
of [the] 20% cash deposit.” Id. In accordance with its payment obligations, Saray wired Oxyde
an initial deposit of $259,500 on November 16, 2016. Tr. at 44:21-45:3; Exh. 36.
In January 2017, Oxyde engaged MTS, an NVOCC with its main office in Manhattan, to
ship the Resin to Istanbul in sixty-five containers, each forty feet long and eight feet wide and
high. Fidan Aff. ¶¶ 2, 4, 9; Exhs. 49-50; Tr. at 107:24-108:3. MTS has thirty-eight employees,
one of whom, Fidan, is the company’s vice president in charge of overseeing the export of cargo
by ocean carriage. Tr. at 109:5-9; Fidan Aff. ¶ 3. As an NVOCC, MTS does not own its own
vessels. Tr. at 108:4-5. Instead, MTS “arrange[s] shipments for [its] customers” through its
“service contracts . . . with steamship lines [and] ocean carriers,” such as Mediterranean Shipping
Company S.A. of Geneva (“MSC”), which, in 2017, was the largest steamship line for U.S.
exports. Id. at 108:6-109:1; Fidan Aff. ¶ 4. In connection with such shipments, MTS is responsible
for issuing bills of lading. Tr. at 147:9-10, 148:5-15; Fidan Aff. ¶ 4. Prior to the events of this

2021 WL 1199470, at *14; accord Saray-Oxyde Contract at 3, ¶ 5, “CIF” stands for “Cost
Insurance and Freight.” Incoterms 2010, International Chamber of Commerce, https://iccwbo.org/
resources-for-business/incoterms-rules/incoterms-rules-2010/ (last visited Aug. 11, 2023).
Typically, “CIF” “means that the seller [i.e., Oxyde] is responsible for paying the cost, freight and
insurance coverage necessary to bring the goods to the named port of destination.” Italverde
Trading, Inc. v. Four Bills of Lading, 485 F. Supp. 2d 187, 199 (E.D.N.Y. 2007) (internal quotation
marks and brackets omitted) (emphasis added). However, Sarayli testified that he understood this
term to require Saray, not Oxyde, to pay the shipping costs. See Tr. at 45:10-46:5, 65:16-66:10;
see also Sarayli Decl. ¶ 22. Because, as the Court previously concluded, “a CIF term does not
govern change in title,” Saray, 2021 WL 1199470, at *14 (internal quotation marks omitted), and
because Saray was required to pay shipping costs under the relevant bills of lading as a merchant,
see infra, whether Saray was required to pay these costs pursuant to the Saray-Oxyde Contract is
irrelevant to the Court’s resolution of the trial.
6

lawsuit, Oxyde had been a frequent customer of MTS since 2009, with Oxyde contracting with
MTS to ship approximately 3,000 containers per year. Tr. at 110:6-16.
After being hired by Oxyde, MTS engaged MSC to provide sixty-five empty containers
and to transport the Resin across the Atlantic Ocean to Istanbul. Fidan Aff. ¶¶ 9, 11. Oxyde then
arranged for MSC’s sixty-five empty containers to be transported via a trucking company to
Oxyde’s warehouse, to have the containers loaded with the Resin, to apply seal numbers to each
container, and to subsequently transport the loaded, sealed containers back to the Port of Houston.
Id. ¶ 11; see also Tr. at 111:9-112:3. Oxyde also was responsible for preparing all the export
documentation and paperwork for the shipments required by U.S. Customs and Border Protection
(“U.S. Customs”). Tr. at 114:8-24; Fidan Aff. ¶¶ 19-20.
MTS simultaneously worked with Oxyde to begin preparing the bills of lading for the
shipments of the Resin. Fidan Aff. ¶ 10; Tr. at 112:23-113:8. Oxyde sent the details of the
shipments to MTS via email to be inserted into the bills of lading, and MTS drafted and made
changes to the bills of lading based on Oxyde’s instructions. Fidan Aff. ¶ 10; Tr. at 113:9-18,
114:1-7, 116:13-117:25; see Exhs. 51, 52. Per Oxyde’s instructions, MTS split the shipments of
the Resin into two bills of lading: one for twenty-two containers and another for forty-three
containers. Fidan Aff. ¶ 10; Exhs. 51 at 5, 53, 54. MTS then created two “proof” bills of lading
per Oxyde’s instructions and sent them to Oxyde via email to review. Fidan Aff. ¶ 12. Both proof
bills of lading list Oxyde as the “Shipper/Exporter,” “To Order” 8 as the “Consignee,” and Saray

8

A “to order” clause denotes that the bill of lading is a negotiable instrument. Saray, 2021
WL 1199470, at *11 (citing Porky Prods., Inc. v. Nippon Exp. USA (Ill.), Inc., 1 F. Supp. 2d 227,
232 (S.D.N.Y. 1997), aff’d, 152 F.3d 920 (2d Cir. 1998)); see also Fidan Aff. ¶ 10. “Because the
bills of lading were negotiable, the holder of the bill of lading would have the exclusive right to
take possession of the underlying goods.” Ancile Inv. Co. Ltd. v. Archer Daniels Midland Co.,
784 F. Supp. 2d 296, 309 n.7 (S.D.N.Y. 2011).
7

as the “Notify” party. 9 Exh. 53, Boxes 2-4; Exh. 54, Boxes 2-4; Fidan Aff. ¶ 10; Tr. at 126:1127:7. The proof bill of lading numbered 51702SH35542 lists “Description of Goods” as 440 bags
of the Resin loaded into twenty-two containers with a net weight of 519,200 kilograms, Exh. 53,
Box 20, and the proof bill of lading numbered 51702SH35592 lists 860 bags of the Resin loaded
into forty-three containers with a net weight of 1,014,800 kilograms, Exh. 54, Box 20. Both proof
bills of lading list the “Vessel” as “Sealand New York 705E,” the “Port of Loading” as “Houston,
TX USA,” the “Port of Discharge” as “Istanbul, Turkey,” and the estimated ship date as February
10, 2017, and they each attach a list of the containers by weight and seal number. Exhs. 53, 54;
Fidan Aff. ¶¶ 12, 16.
MTS then sent the two proof bills of lading to Oxyde for approval prior to issuing the
official “original” bills of lading. Fidan Aff. ¶ 12; Tr. at 113:9-25. On February 10, 2017, after
the sixty-five containers were loaded onto the Sealand New York, MTS prepared and issued the
original bills of lading. Fidan Aff. ¶¶ 15-17; Exhs. 79, 80 (collectively, the “Original Bills of
Lading”); see also Tr. at 115:2-12. The Original Bills of Lading were identical to the proof bills
of lading except that they each were stamped “original” at the top, were signed by MTS at the
bottom of the first page, and were affixed with a seal on the final page. See Original Bills of
Lading. This rendered the Original Bills of Lading “negotiable” and transferrable to a third party.
Fidan Aff. ¶ 10; Tr. at 126:11-18.
The last page of the Original Bills of Lading contains several terms and conditions relevant
to this lawsuit. See Original Bills of Lading at 4 (“Terms and Conditions”). First, Clause 1 of the
Terms and Conditions provides several definitions, including defining “Merchant” as “the shipper,

9

“A notify party is the party to be notified when the goods arrive at their destination.”
Saray, 2021 WL 1199470, at *1 n.1 (internal quotation marks omitted).
8

consignee, receiver, holder of this Bill of Lading, owner of the cargo or person entitled to the
possession of the cargo.” Terms and Conditions § 1(f). Next, the Original Bills of Lading contain
a “Clause Paramount” 10 (Clause 4) providing that “[t]he provisions of COGSA . . . shall govern
before loading on and after discharge from the vessel and throughout the entire time the [Resin is]
in the care, custody and/or control of [MTS]” and that MTS “shall not be liable in any capacity
whatsoever for any delay, non-delivery, mis-delivery or other loss or damage to or in connection
with the [Resin].” Id. § 4(a), (b). Clause 14 of the Terms and Conditions states that MTS’s
“liability . . . with respect to the [Resin] shall cease on the delivery or other disposition of the
[Resin] in accordance with the orders or recommendations given by any government or authority
or any person acting or purporting to act as or on behalf of such government authority” and that
“the Merchant shall pay any additional costs resulting from the above mentioned circumstances.”
Id. at § 14(b), (c). Next, Clause 17 of the Original Bills of Lading provides for a broad “Carrier’s
Lien” under which
[t]he Carrier shall have a lien on the [Resin], inclusive of any Container owned or
leased by the Merchant, as well as on any Charges due any other person, and any
documents relating thereto, which lien shall survive delivery, for all sums due under
this contract or any other contract or undertaking to which the Merchant was party
or otherwise involved, including, but not limited to, General Average contributions,
salvage and the cost of recovering such sums, inclusive of attorney fees. Such lien
may be enforced by the Carrier by public or private sale at the expense of and
without notice to the Merchant.
Id. at § 17; accord id. § 1(b) (defining “Carrier” as “the Company named on the face side hereof
and on whose behalf this Bill of Lading was issued and whether acting as carrier or bailee”—i.e.,
MTS). Finally, the Original Bills of Lading contain a forum-selection clause stating that “[a]ny

10

“A maritime bill of lading in international trade will generally contain a provision often
referred to as a Clause Paramount, which states that the bill of lading is subject to the provisions
of [COGSA].” Run & Sun All. Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138, 142 n.6 (2d
Cir. 2010) (internal quotation marks omitted).
9

claim or dispute (if any) arising under this Bill of Lading . . . shall be governed by the United States
District Court for the Southern District of New York, to whose jurisdiction the Carrier will
submit.” Id. § 24.
At some point between February 17 and February 21, 2017, while MTS was working to
finalize the Original Bills of Lading, the Sealand New York set sail. Tr. at 60:18-20, 115:25-116:4.
118:1-7. Once completed, MTS sent the Original Bills of Lading to Oxyde at its Houston offices
and did not retain any copies of the originals. Id. at 116:5-11; Fidan Aff. ¶ 15. Also around this
time, on February 10, 2017, Oxyde invoiced Saray for the remaining 80% payment on the two
shipments of the Resin, see Exhs. 81, 82; Tr. at 29:8-14, and Saray wired Oxyde that final payment
in the amount of $1,038,000, Tr. at 39:1-16, 42:18-20, 44:21-45:6; Exh. 36 at 5. Oxyde then sent
the Original Bills of Lading via courier to Saray. Tr. at 22:16-23:9, 99:5-15, 105:14-22; Sarayli
Decl. ¶¶ 8-9. Saray has been in possession of those Original Bills of Lading since receiving them
in late February 2017. Tr. at 22:21-25; Sarayli Decl. ¶ 10.
Because there is no direct shipping route between Houston and Istanbul, the Resin was
scheduled to travel on the Sealand New York from Houston to Sines, Portugal, and then from Sines
to Istanbul. Tr. at 130:7-11; Fidan Aff. ¶ 22. The entire journey was expected to last about thirty
days. Tr. at 60:21-22. However, on February 28, 2017, at some point during the first leg of the
journey, U.S. Customs issued a redelivery notice to the Sealand New York directing that the two
shipments of the Resin be returned to the Port of Houston for further examination. Exh. 59 (the
“Redelivery Notice”); Tr. at 168:6-11; Fidan Aff. ¶ 22. Consistent with the Redelivery Notice, the
Sealand New York offloaded the Resin at Sines, and then MSC arranged for the Resin to be shipped
back to Houston. Tr. at 130:12-14, 168:12-14.

10

MSC first notified MTS of the Redelivery Notice on March 20, 2017, while the Resin was
en route back to Houston. Fidan Aff. ¶ 21; Exh. 58; see also Exh. 63 at 36. Once notified, MTS
immediately informed Oxyde of the situation. Fidan Aff. ¶ 23; Exh. 63 at 44. Oxyde advised that
the “full set of Original [Bills of Lading] are in Turkey” and that they would “attempt to locate the
Original [Bills of Lading] and return them back to MTS.” Exh. 63 at 44. MTS employees also
attempted to reached out to MSC to learn the cause of the Redelivery Notice, but MSC repeatedly
responded that it was not permitted to divulge any information. Exh. 60; Fidan Aff. ¶ 21. MTS
subsequently attempted to contact the U.S. Customs Officer overseeing the redelivery—Officer
Henry Cruz of the Outbound Enforcement Team—but Officer Cruz refused to reveal why the
shipment had been recalled. Fidan Aff. ¶ 29; Tr. at 123:5-9; Exh. 84 at Oxyde000028. In fact, the
sole direct evidence adduced at trial relating to the decision of U.S. Customs to demand redelivery
of the Resin was an email from Officer Cruz to Oxyde stating only, “Shipment is under document
review and further inspection.” Exh. 84 at Oxyde000028.
The Resin arrived back at the Port of Houston on April 6, 2017. Fidan Aff. ¶ 24. MSC
charged MTS additional freight for the Resin’s return journey. Id. ¶ 25. On April 18, 2017, MTS
attempted to invoice Oxyde for the additional freight charges, but the following day, Oxyde
declined to pay, reasoning “[w]e are not able to process your inv[oice] since we did not have any
agreement with you . . . to bring container back to Houston. . . . We contracted with you . . . to
deliver these container[s] to Istanbul . . . and you . . . have failed to perform per agreed terms.”
Exh. 63 at 41-42; Fidan Aff. ¶ 25. On May 2, 2017, with MTS and Oxyde still unable to reach an
agreement over the additional freight charges, MTS’s former legal counsel, Gareth W. Stewart,
Esq., advised Oxyde via letter that MTS intended to foreclose on a lien against the Resin in the
event of Oxyde’s continued refusal to pay the additional freight charges. Exh. 68 at 1-2; Fidan

11

Aff. ¶ 26. In addition, while sitting on the dock at the Port of Houston pending the U.S. Customs
investigation, the Resin accrued daily detention and demurrage charges of roughly $400 per
container. 11 Fidan Aff. ¶ 28; Tr. at 124:6-15.
On June 5, 2017, U.S. Customs informed MSC that the Resin was no longer under
investigation and could be released and reexported. Fidan Aff. ¶ 27. That same day, MSC sent an
email to MTS, billing MTS $1,268,150 for the additional fees that the Resin had incurred while it
sat on the dock at the Port of Houston during the investigation. Exh. 62 at 42; see Fidan Aff. ¶ 28.
MTS also contacted Oxyde that day to inform them of the total charges. Fidan Aff. ¶ 28; Exh. 63
at 15. Oxyde responded the following day, demanding that MTS negotiate with MSC to reduce
those charges. Fidan Aff. ¶ 31; Exh. 63 at 13. Oxyde once again disclaimed ownership of the
Resin, and, for the first time, notified MTS of its belief that Saray was the Resin’s lawful owner
and requested that the Resin be reexported to Saray in Istanbul. Fidan Aff. ¶ 31; Exh. 63 at 13;
Tr. at 125:12-18, 131:4-7; see also Exh. 62 at 41. 12 MTS relayed Oxyde’s request to MSC, and
began negotiating with MSC to reduce the detention and demurrage charges. Exh. 62 at 41; Tr. at

11

As Fidan explained at trial, “demurrage charges” are “fees . . . for containers sitting in
the terminal [and] keeping terminal space” whereas detention charges are for “keeping the carrier’s
equipment more than th[ree] days”—a period which is called “free time.” Tr. at 177:10-19.
Detention charges were imposed by the Port of Houston on MSC and passed down to MTS,
whereas demurrage charges originated from MSC. Id. at 123:20-23; see also Saray, 2021 WL
1199470, at *2 n.3.
12

While Sarayli claimed at trial that Saray had hired a lawyer and conducted an
investigation following the Redelivery Notice and that Saray was aware of the daily-accruing
charges, Tr. at 87:17-88:17, the emails between Oxyde, MTS, and MSC demonstrate that Saray
was conspicuously absent throughout the entire investigative and negotiation process. For
example, on June 6, 2017, while negotiating for reduced fees with MSC, MTS requested on
Oxyde’s behalf that the Resin be reexported to Istanbul. Exh. 62 at 41. However, on June 8, 2017,
MTS asked MSC to stand down on the reexport request, informing that Oxyde had reported it was
“not able to get hold of Saray, the owners of this cargo,” and that “they are the people who have
to make the decision as to what to do with the shipment.” Id. at 37. Moreover, Fidan testified that
Saray never attempted to contact MTS during this time. Tr. at 128:20-25.
12

124:21-125:6. Over the next week, MTS sent Oxyde repeated reminders that detention and
demurrage charges were still accruing, but Oxyde failed to respond. Exh. 63 at 4-13. Nor was
Oxyde willing to negotiate with MSC on its own behalf. Tr. at 125:3-6. On June 12, 2017, after
MSC warned MTS that the Resin had to be picked up from the Port of Houston by June 16, 2017,
or else it would go into the General Order, 13 Fidan Aff. ¶ 32; Exh. 62 at 31, MTS instructed Stewart
to write to Oxyde notifying of MTS’s intent to foreclose on a lien against the Resin if the
outstanding charges were not paid, Fidan Aff. ¶ 33; Exh. 69. Stewart’s letter explicitly directed
Oxyde to “forward this letter-notice to the person or entity claiming ownership of the shipment.”
Exh. 69 at 3 (emphasis removed).
The next day, on June 13, 2017, MTS reached an agreement with MSC to reduce the
demurrage and detention charges by 60%. Fidan Aff. ¶ 34; Exh. 62 at 28, 31. MTS informed
Oxyde of the reduced charges and requested that Oxyde pay those charges to avoid the Resin going
to the General Order. Fidan Aff. ¶ 35; Exh. 63 at 5-6. 14 On June 14 and 15, 2017, MTS also sent
messages to Saray, forwarding its communications with Oxyde regarding payment on the
outstanding charges, but Saray never responded. Fidan Aff. ¶ 36; Exhs. 65-67; Tr. at 129:1-10,
130:15-17, 131:12-21. MTS finally received a response from Oxyde on June 15, 2017—one day
before the Resin was set to go to the General Order. Fidan Aff. ¶ 37; Exh. 63 at 2-4. Oxyde
claimed that it had “just heard from Talin with Saray that her uncle [w]ho was very sick, passed

13

“General Order is a warehouse in each port that is operated by the government which
holds abandoned and condemned or contraband cargos. The goods are ultimately sold or destroyed
by the government.” Fidan Aff. ¶ 32. Goods held in a General Order warehouse eventually go to
auction where they are “usually . . . sold for extremely low prices.” Tr. at 132:17-20. While stored
in the General Order warehouse pending auction, the goods continue to accrue warehouse fees
which are “much higher” than typical storage fees. Id. at 133:9-12.
14

MSC agreed to reduce the charges on the condition that the Resin not go to the General
Order. Tr. at 132:21-133:21.
13

away” and that “[s]he herself had surgery recently,” and thus requested “some more time to
respond.” Exh. 63 at 4. MTS advised Oxyde that the General Order deadline could not be
extended and that MSC would void the reduced demurrage and detention charges and the Resin
would be sold at public auction for cheap. Fidan Aff. ¶ 37; Exh. 63 at 2-3. With Saray nowhere
to be found, MTS decided that its only option was to pay MSC for the charges out of its own
pocket. Fidan Aff. ¶ 38. MTS informed Oxyde of its decision, but as a final courtesy, “allow[ed]
Oxyde 20 days to reimburse MTS all costs incurred and if that’s done the cargo will immediately
be released to Oxyde.” Exh. 63 at 3.
Following the release of the Resin from U.S. Customs on June 19, 2017, Exh. 62 at 18,
MTS negotiated with MSC to further reduce the total charges to $724,036.80, id. at 14. See also
Fidan Aff. ¶ 38. MTS then took out a line of credit with its bank and paid MSC the charges on
June 23, 2017. Fidan Aff. ¶ 38; Exh. 70; Tr. at 132:5-11. MTS also coordinated (and paid) to
have the containers removed from the Port of Houston and trucked to and stored at a cheaper
storage yard. Fidan Aff. ¶ 39; Exh. 62 at 4-15; Tr. at 134:9-135:6; see also Tr. at 173:8-15, 174:35. With Oxyde having not responded to MTS since its June 15, 2017 email and with Saray still
nowhere to be found, Fidan Aff. ¶¶ 39-40; Exh. 63 at 1-2, MTS concluded that the Resin had been
abandoned, and began arranging to sell it to recover their expenses, Fidan Aff. ¶¶ 39-40; Tr. at
195:13-16. Between June 26 and June 27, 2017, MTS communicated with Oxyde that it had one
final chance to pick up the cargo and reimburse MTS for its expenses, otherwise MTS would sell
the cargo. Fidan Aff. ¶ 40; Exh. 63 at 1-2. MTS also forwarded these communications to Saray.
Fidan Aff. ¶ 40; Exh. 67.
Saray finally appeared on July 11, 2017, when it initiated the present action in the Southern
District of Texas, seeking among other things a declaration that MTS did not possess a lien over

14

the Resin and an injunction preventing MTS from selling the Resin. Fidan Aff. ¶ 40; Compl.
¶¶ 15-27; Dkt. 6. 15 After hearing oral argument, Judge Atlas provisionally granted Saray’s request
to enjoin the sale on the condition that Saray post a bond for $820,000. Dkt. 21; see also Exh. 42.
After Saray failed to post that bond, Judge Atlas denied Saray’s application and ordered that MTS
“shall sell the Cargo in issue to recover its costs.” Dkt. 23 at 1. In doing so, however, Judge Atlas
expressly noted “that all rights are reserved for Saray to pursue any and all claims related to the
return of the $820,000.00 against MTS or any other party.” Id.
MTS subsequently sold the Resin to another chemical company called Polymerline at a
price of $820 per metric ton—5% less than the price for which Oxyde sold the Resin to Saray—
for a net amount of $1,238,528. Fidan Aff. ¶ 41; Tr. at 139:5-20; Exh. 27. Following the sale,
MTS reimbursed itself $846,590.54 for all of the expenses it had paid on the Resin following the
Redelivery Notice, and was left with $344,310 in surplus. 16 Fidan Aff. ¶¶ 42-43; Tr. at 140:7-21.
MTS attempted to transfer this surplus to Oxyde, but Oxyde informed MTS that the funds should
be paid to Saray in Turkey, which MTS subsequently did. Fidan Aff. ¶ 43; Tr. at 141:2-6.

15

Oxyde also filed suit in the Southern District of Texas around this same time, seeking a
declaration that it was not responsible for any detention or demurrage charges pursuant to the terms
of the Original Bills of Lading, which stated that those costs were for the “receiver,” and that it
was not responsible for any other costs, as title had passed to Saray. See Complaint, Oxyde Chem.,
Inc. v. MTS Logistics, Inc., No 17 Civ. 2004 (GHM) (S.D. Tex.), Dkt. 1. After Oxyde’s case was
transferred to this District, it was voluntarily dismissed in November 2017 by stipulation and order.
Stipulation and Order of Dismissal, Oxyde Cem., Inc. v. MTS Logistics, Inc., No. 17 Civ. 7283
(JMF) (S.D.N.Y.), Dkt. 21.
16

While the difference between $1,238.528 and $846,590.54 is $391,937.46—not
$344,310—there was no evidence presented at trial to account for this $47,627.46 discrepancy.
Accordingly, the Court will credit Fidan’s Affidavit in which he swears that the remaining amount
was $344,310, not $391,937.46.
15

IV. Conclusions of Law
A.

Jurisdiction, Choice of Law, and Venue
“The parties stipulate that this is an admiralty and maritime claim within the meaning of

Rule 9(h) of the Federal Rules of Civil Procedure.” Dkt. 184 at 3. The Court agrees. “The
admiralty jurisdiction of the federal courts is grounded in Article III of the Constitution.” A.P.
Moller-Maersk A/S v. Ocean Express Miami, 550 F. Supp. 2d 454, 461 (S.D.N.Y. 2008); see U.S.
Const. art. III § 2 (extending federal judicial power to “all Cases of admiralty and maritime
Jurisdiction”); 28 U.S.C. § 1333(1) (providing “exclusive” federal jurisdiction over “[a]ny civil
case of admiralty or maritime jurisdiction”). “Because the grant of admiralty jurisdiction and the
power to make admiralty law are mutually dependent, the two are often intertwined . . . .” Kirby,
543 U.S. at 23. “When a contract is a maritime one, and the dispute is not inherently local, federal
law controls the contract interpretation.” Id. at 22-23. Here, the Original Bills of Lading are
clearly maritime contracts because they “require[] substantial carriage of goods by sea.” Id. at 27;
see also A-P Moller-Maersk, 550 F. Supp. 2d at 461. As such, federal law governs, and the Court
may exercise admiralty jurisdiction “unless the contract’s interpretation ‘so implicate[s] local
interests as to beckon interpretation by state law.’” MSC Mediterranean Shipping Co. v. Airlift
Marine Servs. PVT Ltd., 579 F. Supp. 3d 484, 493 (S.D.N.Y. 2022) (brackets in original) (quoting
Kirby, 543 U.S. at 27); accord Kirby, 543 U.S. at 23. As neither party points to any such local
interest, the Court applies federal maritime law to the interpretation of the Original Bills of Lading.
Id.
Venue is appropriate in this District pursuant to a valid forum-selection clause in the
Original Bills of Lading, and no public interest factor weighs to the contrary. See Terms and
Conditions § 24; see also Dkt. 24 at 3-4.

16

B.

Applicable Law
COGSA is “the culmination of a multilateral effort to establish uniform ocean bills of

lading to govern the rights and liabilities of carriers and shippers inter se in international trade.”
Vimar Seguros y Reaseguros, S.A. v. M./V. Sky Reefer, 515 U.S. 528, 537 (1995) (internal
quotation marks omitted). The statute “establishes rules that overlay bills of lading between
carriers and their identifiable contracting partners—usually suppliers and consignors.” In re M/V
Rickmers Genoa Litig., 622 F. Supp. 2d 56, 70 (S.D.N.Y. 2009), opinion adhered to on
reconsideration, 643 F. Supp. 2d 553 (S.D.N.Y. 2009), and aff’d sub nom., Chem One, Ltd. v. M/V
RICKMERS GENOA, 502 F. App’x 66 (2d Cir. 2012).
COGSA claims are “unique” in that “[a]n ‘action under COGSA is a maritime action in
the nature of a mixed tort, contract and bailment cause of action.’” Saray, 2021 WL 1199470, at
*10 (quoting Texport Oil Co. v. M/V Amolyntos, 11 F.3d 361, 367 (2d Cir. 1993), overruled on
other grounds, Wilton v. Seven Falls Co., 515 U.S. 277 (1995)); see also Polo Ralph Lauren, L.P.
v. Tropical Shipping & Constr. Co., 215 F.3d 1217, 1220-21 (11th Cir. 2000) (concluding that
COGSA provides a “hybrid[]” claim “born of elements from contract and tort”). Under COGSA,
a carrier must “properly and carefully load, handle, stow, carry, keep, care for, and discharge the
goods carried.” 46 U.S.C. § 30701 note, § 3(2). To establish a prima facie case under COGSA,
Saray “bears the initial burden of proving both delivery of the goods to the carrier . . . in good
condition, and outturn by the carrier or by the stevedore, for whose conduct the carrier is
responsible, in damaged condition.” Vana Trading Co. v. S.S. “Mette Skou”, 556 F.2d 100, 104
(2d Cir. 1977); see also Caemint Food, Inc. v. Brasileiro, 647 F.2d 347, 351-52 (2d Cir. 1981)
(“[P]laintiff has the burden, which remains with it throughout the case, of proving that ‘the goods
were damaged while in the carrier’s custody.’” (quoting Pan-Am. Hide Co. v. Nippon Yusen

17

(Kabushiki), Kaisha, 13 F.2d 871 (S.D.N.Y. 1921) (Hand, J.))). In addition to claims for damaged
goods, COGSA applies equally to non-delivery. Saray, 2021 WL 1199470, at *15 (collecting
cases). Moreover, “if a carrier deviates unreasonably from a bill of lading, it breaches that contract
of carriage and ‘ousts’ the provisions contained therein,” and therefore violates COGSA. Ataei v.
M/V Barber Tonsberg, 639 F. Supp. 993, 999-1000 (S.D.N.Y. 1986).
“If plaintiff . . . establishes a prima facie case for recovery,” it will “be entitled to prevail
unless the carrier brings itself within one of the exceptions” for defenses to liability set forth in the
statute. Caemint Food, 647 F.2d at 352. For instance, the carrier shall not be responsible for “loss
or damage arising or resulting from,” among other things, “[a]rrest or restraint of princes, rulers,
or people, or seizure under legal process” or “any other cause arising without the actual fault or
privity of the carrier and without the fault or neglect of the agents or servants of the carrier.” 46
U.S.C. § 30701 note, § 4(2). If the carrier-defendant proves that the breach implicates one of
COGSA’s exceptions, the burden shifts back to the plaintiff “to show concurrent negligence on
the part of the carrier.” Sunpride (Cape) (Pty) Ltd. v. Mediterranean Shipping Co., No. 01 Civ.
3493 (CSH), 2003 WL 22682268, at *30 (S.D.N.Y. Apr. 14, 1982) (citing In re Ta Chi Nav. Corp.,
S.A., 667 F.2d 225, 227-29 (2d Cir. 1982)); see also Republic of France v. French Overseas Corp.,
277 U.S. 323, 334 (1928) (explaining that after the respondents “brought itself within the exception
under its bill of lading, the burden is on petitioners to show that respondents’ negligence was the
cause of or contributed to the loss”).
The parties both contend that the Pomerene Bills of Lading Act, 49 U.S.C. § 80101 et seq.
(the “Pomerene Act”), which governs all bills of lading “issued by a common carrier for the
transportation of goods,” inter alia, “from a place in a State to a place in a foreign country,” id.
§ 80102(5), applies to this dispute as well. Saray Br. at 2-5; MTS Br. at 6-8; accord 46 U.S.C.

18

§ 30701 note, § 3(c)(4) (“[N]othing in [COGSA] shall be construed as repealing or limiting the
application of any part of . . . the Pomerene Bills of Lading Act . . . .” (internal quotation marks
omitted)). The Pomerene Act provides, in pertinent part, that a common carrier conducting
business pursuant to a negotiable to-order bill of lading (such as the Original Bills of Lading) “is
justified in delivering the cargo to ‘a person lawfully entitled to their possession’ or to one in actual
possession of the bill of lading.” Ace Bag & Burlap Co., Inc. v. Sea-Land Serv., Inc., 40 F. Supp.
2d 233, 239 (D.N.J. 1999) (quoting 49 U.S.C. § 80110); see also Int’l Harvester Co. v. TFL
Jefferson, 695 F. Supp. 735, 738 (S.D.N.Y. 1988) (similar). If, however, “the carrier delivers the
goods to a person not entitled to their possession,” the carrier “is liable for damages.” 49 U.S.C.
§ 80111(a)(1). Thus, the common carrier “must deliver goods covered by a bill of lading on
demand of . . . the holder of a negotiable bill for the goods,” “[e]xcept to the extent a common
carrier establishes an excuse provided for by law,” 17 id. § 80110(a)(1), and “delivery to a person
not entitled to the goods without production of the bill of lading is prima facie a conversion of the
goods and a breach of contract” under the Act. Allied Chem. Int’l Corp. v. Companhia de
Navegacao Lloyd Brasileiro, 775 F.2d 476, 482 (2d Cir. 1985) (internal quotation marks and
brackets omitted). 18

17

As relevant here, one such exception to liability for “failure to deliver goods” under the
Pomerene Act is if “the goods have been sold lawfully to satisfy the carrier’s lien.” 49 U.S.C.
§ 80111(d)(2).
18

To be clear, the Amended Complaint does not assert a cause of action under the
Pomerene Act. Rather, Saray alleges a single cause of action under COGSA. See Am. Compl. ¶ 1
(“This is an admiralty and maritime claim . . . brought under the United States Carriage of Goods
by Sea Act . . . .”). With that said, “the failure in a complaint to cite a statute, or to cite the correct
one, in no way affects the merits of a claim,” Velez v. Sanchez, 693 F.3d 308, 324 (2d Cir. 2012)
(internal quotation marks omitted), so long as it gives “full notice of the circumstances giving rise
to the plaintiff’s claim for relief,” Morris v. Schroder Cap. Mgmt. Int’l, 445 F.3d 525, 530 n.3 (2d
Cir. 2006) (citation omitted). Here, the Amended Complaint alleges that MTS “breached, failed
and violated its duties and obligations as [a] common carrier” generally, Am Compl. ¶ 6, and such
19

Further, as noted above, the Court applies federal maritime common law when interpreting
the relevant provisions in the Original Bills of Lading. See supra IV.A; see also APL Co. Pte. Ltd.
v. Kemira Water Sols., Inc., 890 F. Supp. 2d 360, 366 (S.D.N.Y. 2012) (looking to federal
“common law principles of contract formation and interpretation” (internal quotation marks
omitted)). In so doing, the Court is mindful that “contracts for carriage of goods by sea must be
construed like any other contracts: by their terms and consistent with the intent of the parties.”
Kirby, 543 U.S. at 31. “The Court must ‘construe contract language most strongly against its
drafter,’ but ‘only . . . where the contract is ambiguous—where it is susceptible of two reasonable
and practical interpretations.’” MSC Mediterranean Shipping Co., 579 F. Supp. 3d at 493-94
(quoting Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 762 F.3d 165, 179 (2d Cir. 2014)).
C.

Liability
As explained below, the Court makes three primary conclusions of law: first, Saray has

standing to sue under the Merchant Clause of the Original Bills of Lading; second, any duty by
MTS to Saray under COGSA (and/or the Pomerene Act) and/or the Original Bills of Lading ceased
upon the Resin’s return to the Port of Houston in accordance with the Redelivery Notice issued by
U.S. Customs which constituted a valid restraint of princes; and third, regardless of whether MTS
could be liable following the Resin’s return to the Port of Houston, MTS’s sale of the Resin to
Polymerline was an exercise of a valid maritime lien against the Resin and recognized in the
Original Bills of Lading. Thus, MTS is not liable to Saray. The Court further finds that Saray is
liable to MTS for MTS’s attorneys’ fees in connection with its successful recovery from exercising
the carrier’s lien.

duties clearly arise under the Pomerene Act as well as COGSA. Accordingly, the Court will
construe Saray’s Amended Complaint as raising a claim under the Pomerene Act.
20

1.

The Merchant Clause

As the Court noted in its Opinion and Order on summary judgment, “an entity that falls
under a Merchant Clause can sue on a bill of lading.” Saray, 2021 WL 1199470, at *12-13; see
also, e.g., Polo Ralph Lauren, 215 F.3d at 1222-23; All Pacific Trading, Inc. v. Vessel M/V Hanjin
Yosu, 7 F.3d 1427, 1431-32 (9th Cir. 1993). As the Court previously analyzed, the Original Bills
of Lading contain a so-called “Merchant Clause” defining “Merchant” as “the shipper, consignee,
receiver, holder of this Bill of Lading, owner of the cargo or person entitled to possession of the
cargo and the servants and agents of any of these.” Terms and Conditions § 1(f). The clause
further provides that any “Merchant” “shall be jointly and severally liable to the Carrier [MTS] for
the payment of all Charges, and for the performance of the obligations of any of them under this
Bill of Lading.” Id. By including such a broad Merchant Clause, the Original Bills of Lading
clearly “intend[] to bind the ‘owner’ and the ‘person entitled to possession’ of the” Resin, and thus
“[give] the owner or person entitled to the goods a right to sue under it.” Saray, 2021 WL 1199470,
at *13 (citing Kirby, 543 U.S. at 31). However, at the time of summary judgment, Court was
unable to determine, based on the disputed evidence then presented, whether Saray was the holder
of the Original Bills of Lading and thus fell under their definition of “Merchant.” Id. at *14-15.
That is no longer the case. Having now assessed the evidence adduced at trial, the Court
concludes that Saray is a “Merchant” under the Original Bills of Lading’s Merchant Clause. Fidan
testified at trial that once MTS finalized the Original Bills of Lading, they were sent to Oxyde, and
MTS did not retain any copies. Tr. at 116:5-11. Fidan also testified that MTS finished preparing
the Original Bills of Lading around the time or shortly after the Sealand New York left Houston,
which occurred on or around February 19, 2017. Id. at 60:18-20, 115:25-116:4, 118:1-7. Sarayli
testified that Saray received the Original Bills of Lading from Oxyde via courier at the “end of

21

February,” id. at 22:16-23:9, 99:5-15, 105:14-22; Sarayli Decl. ¶¶ 8-9, and that Saray has been in
possession of the Original Bills of Lading ever since, Tr. at 22:21-25; Sarayli Decl. ¶ 10.
The Court has no reason to question Sarayli’s testimony. First, no other party has claimed
possession of the Original Bills of Lading. Second, Sarayli’s testimony is consistent with other
evidence in the record. For example, when MTS first notified Oxyde of the Redelivery Notice,
Oxyde’s employees stated that the “full set of Original [Bills of Lading] are in Turkey” (where
Saray is located) and that Oxyde would attempt “to locate the Original [Bills of Lading] and return
them back to MTS.” Exh. 63 at 44. Moreover, in June 2017, during MTS’s negotiations with
MSC, MTS informed MSC that Oxyde had reported it was “not able to get hold of Saray, the
owners of this cargo,” and that “they are the people who have to make the decision as to what to
do with the shipment.” Exh. 62 at 37. These statements are consistent with Oxyde having
couriered the Original Bills of Lading to Saray because (1) Saray is located in Turkey and (2) given
that these Bills of Lading were “negotiable” or “to order,” their holder would have been entitled
to take possession of the Resin upon delivery, and thus would be considered “the owners of the
cargo” under the Original Bills of Lading. Tr. at 126:11-18; see also Ancile Inv. Co., 784 F. Supp.
2d at 309 n.7. Accordingly, because Saray was and has been in possession of the Original Bills of
Lading since the end of February 2017, it qualifies as a “Merchant” under the Merchant Clause
and therefore may sue on the Original Bills of Lading.
2.

Restraint of Princes

As noted in the Court’s Findings of Fact, pursuant to the Original Bills of Lading, MTS
agreed to ship sixty-five containers of the Resin from Houston to Istanbul. See Dkt. 184 at 23,
¶¶ 1, 5, 8. That delivery, however, did not occur. Id. ¶ 19. Thus, Saray has established a prima

22

facie case for non-delivery under COGSA, see Saray, 2021 WL 1199470, at *15, 19 and the burden
shifts to MTS to prove that it exercised due diligence or that non-delivery resulted from one of the
excepted causes under COGSA. See Bally, Inc. v. M.V. Zim Am., 22 F.3d 65, 69 (2d Cir. 1994).
The Court concludes that MTS has established its entitlement to the “restraint of princes”
defense to any liability under COGSA and similar provisions under the Original Bills of Lading
for its failure to deliver the Resin. COGSA provides that “[n]either the carrier nor the ship shall
be responsible for loss or damage arising or resulting from . . . (g) [a]rrest or restraint of princes,
rulers, or people, or seizure under legal process.” 46 U.S.C. § 30701 note, § 4(2). The defense
“refers to a sovereign’s exercise of its power controlling and divesting the dominion or authority
of an owner over its ship.” Sedco, Inc. v. S.S. Strathewe, 800 F.2d 27, 33 n.3 (2d Cir. 1986). It
covers “any forcible interference with the voyage or adventure at the hands of the constituted
government, or ruling power of any country, whether done by it as an enemy of the State to which
the ship belongs, or not.” Lekas & Drivas, Inc. v. Goulandris, 306 F.2d 426, 430 (2d Cir. 1962)
(Friendly, J.). “In order for the restraint of princes defense to shield a carrier from liability,”
however, “the restraint must be a proximate cause of the loss.” Sedco, 800 F.2d at 33. Similarly,
Clause 14(b) of the Terms and Conditions in the Original Bills of Lading states that MTS’s
“liability with respect to the Goods shall cease on the delivery or other disposition of the Goods in
accordance with the orders or recommendations given by any government or authority of any
person acting or purporting to act as or on behalf of such government or authority.” Terms and
Conditions § 14(b).
Here, the evidence shows that U.S. Customs issued a Redelivery Notice for the Resin to
MSC while the Resin was in the middle of its journey from Houston to Istanbul. See Redelivery

19

In addition, no party disputes that the Resin was delivered to MTS in good condition.
23

Notice; see also Tr. at 168:6-11; Fidan Aff. ¶ 22. That Redelivery Notice “required [MSC] to
redeliver the merchandise to U.S. Customs” for further “examination,” noting that failure to do so
could result in sanctions of “liquidated damages.” Redelivery Notice at 1; see also Fidan Aff. ¶ 22
(testifying that “Customs can assess a fine of three times the value of the cargo against the [vessel
owning common carrier] if their order is not complied with”). Accordingly, MSC had no choice
but to offload the Resin at Sines—the first relay point in its journey—and then arrange for the
Resin to be reshipped back to Houston as quickly as possible. Tr. at 130:12-14, 168:12-14; Fidan
Aff. ¶ 22. The Court therefore concludes that the Redelivery Notice was the only reason for (and
therefore the proximate cause of) the Resin being redelivered to the Port of Houston on April 6,
2017. See Fidan Aff. ¶ 24 (“The 65 containers were returned to the port of Houston on April 6th,
2017.”). Accordingly, the Redelivery Notice constitutes a restraint of princes under COGSA.
In reaching this conclusion, the Court rejects Saray’s argument that the Redelivery Notice
was insufficient to constitute a “seizure” or restraint by the United States government. Dkt. 192
at 13:12-14:2. At the final pretrial conference, Saray’s counsel asserted that “these shipments were
never seized by the government” because “the government never took custody or control” but
rather eventually “released” the goods and “allowed the goods to be delivered . . . per whatever
arrangements were made privately.” Id. But the Second Circuit has defined “restraint” broadly to
encompass “any forcible interference with the voyage or adventure at the hands of the constituted
government.” Lekas & Drivas, 306 F.2d at 430 (internal quotation marks omitted) (emphasis
added). The defense covers far more than permanent seizure or complete destruction of cargo by
a government. In fact, courts frequently find the defense applicable when goods are temporarily
detained by a government’s customs administration. See, e.g., Transatlantic Marine Claims
Agency, Inc. v. M/V Ever/Refine, No. 96 Civ. 9141 (JSR), 1997 WL 603806, at *1-2 (S.D.N.Y.

24

Sept. 30, 1997) (holding that an order from U.S. Customs directing “the cargo moved . . . to a
nearby bonded warehouse” for a period of less than a week “for the purpose of conducting a
customs inspection” “satisfie[d] the ‘restraint of princes’ exception” under COGSA); Benjamin v.
M.V. Balder Eems, 639 F. Supp. 1497, 1498-99 (S.D.N.Y. 1986) (finding the restraint of princes
exception implicated when “the Dominican National Police, the Dominican Customs Service and
the Dominican Port Authority, pursuant to a search warrant . . . opened the container and searched
its contents for drugs” over the course of a single day); see also Altrix Int’l, Inc. v. Seaboard
Marine, Ltd. Inc., No. 93-2234-CIV-MARCUS, 1996 WL 870729, at *9 (S.D. Fla. Feb. 28, 1996)
(assuming “that the United States Customs Service[’s] . . . examination of the subject cargo and
h[olding] the product at its facility . . . for more than a day” constituted a restraint). 20 That U.S.
Customs directed the shipment to return to the United States, and subsequently delayed any future
journey to Turkey by almost two months pending its documentation review, is more than sufficient
to constitute a restraint of princes under COGSA. 21
Saray further argues that “the focus here” should not be on “the redelivery order of [U.S.
Customs], but rather, the choices MTS made after the cargo was released by customs and cleared
for re-export.” Saray Br. at 5. According to Saray, MTS’s decision to sell the Resin to Polymerline

20

In fact, in Lekas & Drivas, Judge Friendly held “[i]t cannot be disputed that the
voyage . . . was affected by ‘restraint of princes, rules, or people’ under . . . COGSA” when an
“order of the Greek Government” directed the carrier “to proceed via Suez and the Cape of Good
Hope,” as opposed to its original route, even though such order did not constitute any government
seizure whatsoever. 306 F.2d at 430.
21

For similar reasons, the Redelivery Notice also was an “order[] or recommendation[]
given by any government or authority,” thereby implicating Clause 14 of the Terms and Conditions
to the Original Bills of Lading. Terms and Conditions § 14(b). Indeed, the language of Clause 14
arguably encompasses a broader swath of governmental actions, as it includes “recommendations”
as well as “orders.”
25

following its release from U.S. Customs was “an entirely unreasonable act, and thus an
unreasonable deviation.” Tr. at 10:25-11:1. This argument has many flaws.
First, to the extent Saray is arguing that MTS’s sale constituted an “unreasonable
deviation” in breach of the Original Bills of Lading and in violation of COGSA, see Ataei, 639 F.
Supp. at 999-1000, neither the Original Bills of Lading nor COGSA continued to govern the
parties’ relationship following redelivery in Houston. Clause 14(b) states that “[t]he liability of
the Carrier [i.e., MTS] with respect to the Goods [i.e., the Resin] shall cease on the delivery or
other disposition of the Goods in accordance with the orders or recommendations given by any
government or authority or any person acting or purporting to act as or on behalf of such
government or authority.” Terms and Conditions § 14(b) (emphasis added). The Redelivery
Notice—i.e., an “order[] . . . given by [the] government” of the United States—directed that the
Resin be immediately redelivered to U.S. Customs at the Port of Houston for further inspection.
Redelivery Notice. The Resin was redelivered to the Port of Houston in accordance with that order
on April 6, 2017. Fidan Aff. ¶ 24. From that day forward, MTS’s liability with respect to the
Resin, including, for example, for any unreasonable deviation in shipment, “ceased” because that
was the date on which MSC complied with the governmental order of redelivery. Furthermore,
the Clause Paramount of the Original Bills of Lading states that “[t]he provisions of
COGSA . . . shall govern before loading on and after discharge from the vessel and throughout the
entire time the Goods or Containers or other packages are in the care, custody and/or control of
the Carrier.” Terms and Conditions § 4(a). Thus, COGSA ceased to apply after the Resin was
returned to the Port of Houston for inspection by U.S. Customs, because that was the moment
when the Resin was no longer in MTS’s “care, custody and/or control.”

26

Second, even if COGSA and the Original Bills of Lading somehow still governed the
parties’ relationship vis-à-vis the Resin following its release from U.S. Customs, the Redelivery
Notice proximately caused MTS’s sale of the Resin, and thus the sale is covered by the restraint
of princes defense. See Sedco, 800 F.2d at 33. “In admiralty the touchstone of proximate cause is
foreseeability . . . .” 2 T. Schoenbaum, Admiralty & Mar. Law § 5:5 (6th ed. 2022); accord Exxon
Co., U.S.A. v. Sofec, Inc., 517 U.S. 830, 839 (1996) (“In ruling upon whether a defendant’s
blameworthy act was sufficiently related to the resulting harm to warrant imposing liability for
that harm on the defendant, courts sitting in admiralty may draw guidance from, inter alia, the
extensive body of state law applying proximate causation requirements and from treatises and
other scholarly sources.”); see also Petition of Kinsman Transit Co., 338 F.2d 708, 723-25 (2d Cir.
1964) (noting that “[f]oreseeability of danger is necessary to render conduct negligent” under
federal admiralty law, and that “when courts will agree that the link has become too tenuous—that
what is claimed to be consequence is only fortuity”). Here, the Court finds that the sale of the
Resin was a foreseeable consequence of the Redelivery Notice. From the moment U.S. Customs
issued its Redelivery Notice, the Resin began incurring additional freight charges for its return
journey from Sines to Houston. Fidan Aff. ¶ 25. In addition, it incurred $400 per container in
detention and demurrage charges for each day of the roughly two months that it sat on the dock at
the Port of Houston pending inspection by U.S. Customs. Fidan Aff. ¶ 28; Tr. at 124:6-15. These
fees accrued on the Resin itself, thereby decreasing its value each day. See Tr. at 176:18-21 (Fidan
testifying that “if the cost on the cargo rises, the difference between the cargo value and the cost
of the cargo will . . . get smaller and smaller so the value of the cargo goes down”). In fact, by
June 5, 2017—shortly before its release—the Resin had already incurred fees equal to roughly
98% of its original purchase price: $1,268,150 in fees in comparison to the $1,297,500 which Saray

27

initially paid. See Exh. 36; Fidan Aff. ¶ 28. Thus, it is foreseeable that someone would attempt to
sell the Resin to recoup those losses stemming from the delay caused by the Redelivery Notice
rather than pay more money to reship the Resin to Turkey.
Third, MTS’s sale of the Resin was not only a valid exercise of its carrier’s lien under the
Original Bills of Lading, see infra IV.C.3, but also an entirely reasonable decision. Clause 14 of
the Terms and Conditions states following “delivery or other disposition of the Goods in
accordance with the orders or recommendations given by any government or authority,” “the
Carrier [i.e., MTS] shall be entitled to full Charges on Goods received for Carriage and the
Merchant shall pay any additional costs resulting from the above mentioned circumstances”—i.e.,
the restraint of princes. Terms and Conditions § 14. As the Court previously concluded, Saray
was a “Merchant” at this time since Saray was contemporaneously in possession of the Original
Bills of Lading. See supra IV.C.1. Saray was thus responsible for all “Charges”—“freight,
deadfreight, demurrage, and all expenses and money obligations incurred,” Terms and Conditions
§ 1(c), including those associated with the redelivery, id. § 14(c). Saray even admitted as much at
trial. See Tr. at 45:10-46:5, 65:16-66:10; see also Sarayli Decl. ¶ 22. Yet when it came time to
pay those fees, Saray was nowhere to be found despite claiming to have hired a lawyer to
investigate the redelivery, Tr. at 87:25-88:17, despite claiming to have been aware of the dailyincurring fees, id. at 87:17-20, and despite MTS’s repeated attempts to notify Saray of said charges,
Fidan Aff. ¶ 36; Exhs. 65-67, 69 at 3; Tr. at 129:1-10, 130:15-17, 131:12-14. Because MTS was
left holding the bag, its only options were to allow the Resin to pass to the General Order, in which
case it would continue accruing increased daily demurrage and detention fees and ultimately be
sold at auction at a discounted price, or to pay the negotiated fees itself, take possession of the
Resin, move it to a cheaper warehouse, and sell it at a profit over the charges it paid to MSC. The

28

latter is the obvious choice, and Saray does not provide any basis for why it would have been more
reasonable for MTS to have acted otherwise. Accordingly, even if COGSA and the Original Bills
of Lading still governed the parties’ relationship following redelivery of the Resin, MTS’s decision
to sell the Resin was a direct, a proximate, and an entirely reasonable result of the Resin being
detained and Saray’s failure to pay the fees associated with that detention.
Finally, the Court notes that Saray has failed to prove that MTS’s negligence caused the
restraint of princes—the Redelivery Notice. See French Overseas Corp., 277 U.S. at 334. Neither
party called any witnesses from U.S. Customs, Oxyde, or MSC—the entities that may have had
direct knowledge of the reason for the Redelivery Notice. See Fidan Aff. ¶ 29 (“As far as we
know, during those two months after the cargo came back to Houston, U.S. Customs was dealing
with both MSC and Oxyde during their investigation.”). The only trial evidence providing any
indication as to why U.S. Customs demanded redelivery of the Resin is an email between Officer
Cruz and Oxyde in which Cruz stated that the “[s]hipment is under document review and further
inspection.” Exh. 84 at Oxyde000028. Saray points to what it characterizes as “an abundance of
evidence that a number of prior MTS shipments, unrelated to Saray, were also recalled by CPB.”
Saray Br. at 4. But even if MTS had caused redeliveries in the past, Fidan testified that MTS was
not responsible for preparing any of the customs documentation for the Resin. Tr. at 114:8-24;
Fidan Aff. ¶¶ 19-20. Thus, because “documentation review” is the only reason in the record
concerning the redelivery of the Resin, there is no evidentiary basis to find MTS responsible for
the redelivery since it did not prepare the documentation.

29

Accordingly, Saray has failed to prove that MTS is liable under COGSA 22 and/or the
Original Bills of Lading.
3.

The Carrier’s Lien

The Court’s determination that MTS has a valid defense to any liability could end its
liability analysis in favor of MTS. However, because it is relevant to the Court’s determination of
MTS’s entitlement to attorneys’ fees and because both parties address the issue, the Court will also
rule on the validity of MTS’s sale of the Resin. See Saray Br. at 5; MTS Br. at 10-12. The Court
concludes that MTS possessed a valid lien on the Resin under federal maritime law, and MTS’s
sale of the Resin to Polymerline was a proper exercise of that lien.
“A maritime lien is a privileged claim upon maritime property, such as a vessel, arising out
of services rendered to or injuries caused by that property.” In re World Imports Ltd., 820 F.3d
576, 583 (3d Cir. 2016) (citation omitted). “For centuries, courts have held that people who own
and operate a vessel have a lien on the cargo transported on their ships.” Logistics Mgmt., Inc. v.
One (1) Pyramid Tent Arena, 86 F.3d 908, 913 (9th Cir. 1996); see also Arochem Corp. v. Wilomi,
Inc., 962 F.2d 496, 499 (5th Cir. 1992) (similar); The Bird of Paradise, 72 U.S. (5 Wall.) 545, 555

22

The Court’s conclusion that the restraint of princes defense shields MTS from COGSA
liability applies equally to any liability under the Pomerene Act. The Pomerene Act provides, in
relevant part: “Except to the extent a common carrier establishes an excuse provided by law, the
carrier must deliver goods . . . .” 49 U.S.C. § 80110(a) (emphasis added). Thus, the duty to deliver
goods under the Pomerene Act is subject to any defenses “provided by law,” and the “restraint of
princes” is a valid defense under COGSA. See 46 U.S.C. § 30701 note, § 4(2)(g). Moreover, the
Pomerene Act holds that “[a] common carrier is not liable for failure to deliver goods to the
consignee or owner of the goods or a holder of a bill if,” inter alia, “the goods have been sold
lawfully to satisfy the carrier’s lien” or “the goods have not been claimed.” 49 U.S.C. § 80111(d).
As discussed infra IV.C.3, MTS’s sale of the Resin was a “lawful[]” exercise of a valid carrier’s
lien. And as also discussed supra, at the time the Resin was released from the custody of U.S.
Customs, Saray was nowhere to be found and did not come forward with the Original Bills of
Lading to claim the Resin. Accordingly, there can be no liability for MTS under the Pomerene
Act.
30

(1886) (“Legal effect of such a lien is, that the ship-owner, as carrier by water, may retain the
goods until the freight is paid, or he may enforce the same by a proceeding in rem in the District
Court.”); In re 4,885 Bags of Linseed, 66 U.S. (1 Black) 108, 113 (1861) (“The lien of the carrier
by water for his freight, under the ordinary bill of lading, although it is maritime, yet it stands upon
the same ground with the carrier by land, and arises from his right to retain possession until the
freight is paid . . . .”). This right applies equally to NVOCCs, like MTS. See, e.g., Logistics Mgmt.,
86 F.3d at 914 (“NVOCCs have an in rem maritime lien for unpaid freight against the cargo that
they are responsible for transporting.”).
Courts have also long endorsed the parties’ ability to provide for such a lien by contract.
See, e.g., In re World Imports Ltd., 820 F.3d at 583 (“[L]iens on cargo may arise out of contracts
to pay freight.”); Logistics Mgmt., 86 F.3d at 914 (“Contractual provisions regarding liens on cargo
for freight are enforceable in admiralty.”); The Bird of Paradise, 72 U.S. at 555 (“Parties . . . may
frame their contract of affreightment as they please, and of course may employ words to affirm
the existence of the maritime lien, or to extend or modify it. . . . [A]nd where they so agree, the
settled rule in this court is, that the law will uphold the agreement and support the lien.”).
Moreover, under the Pomerene Act,
[a] common carrier issuing a negotiable bill of lading[23] has a lien on the goods
covered by the bill for
(1) charges for storage, transportation, and delivery (including demurrage
and terminal charges), and expenses . . . incidental to transporting the goods
after the date of the bill; and
(2) other charges for which the bill expressly specifies a lien is claimed to
the extent the charges are allowed by law and the agreement between the
consignor and carrier.

23

As noted, the Original Bills of Lading are negotiable bills of lading. Fidan Aff. ¶ 10; Tr.
at 126:11-18.
31

49 U.S.C. § 80109.
Maritime liens typically attach from the moment the cargo is loaded onto the ship. See
Osaka Shosen Kaisha v. Pac. Exp. Lumber Co., 260 U.S. 490, 499-500 (1923) (“[T]he obligation
between a ship and cargo is mutual and reciprocal and does not attach until the cargo is on board
or in the master’s custody.”). And because the lien is “possessory in nature, . . . it is ordinarily lost
by unconditional delivery of the cargo.” Arochem Corp., 962 F.2d at 499-500 (emphasis in
original); see also In re World Imports Ltd., 820 F.3d at 584 (“A lien for unpaid freight ‘arises
from the right of the ship-owner to retain the possession of the goods until the freight is paid,’ and
thus is lost upon ‘unconditional delivery to the consignee.’” (quoting The Bird of Paradise, 72
U.S. at 555)). “The parties to the transaction, however, may agree that the lien survives beyond
discharge.” Arochem Corp., 962 F.2d at 500; see also The Eddy, 72 U.S. (5 Wall.) 481, 495-96
(1866) (“Parties may agree that the goods shall be deposited in the warehouse of the consignee
or . . . owner, and that the transfer and deposit shall not be regarded as a waiver of the lien, and
where they so agree the courts of admiralty will uphold the agreement and support the lien . . . .”).
In fact, “because it would frustrate commerce to require shipowners to retain their liens only by
actual possession of the impacted cargo, a shipowner enjoys a strong presumption that, absent a
clear indication to the contrary, he has not waived his cargo lien upon delivery of that cargo.” In
re World Imports Ltd., 820 F.3d at 584 (footnotes omitted); see also N.H. Shipping Corp. v.
Freights of the S/S Jackie Hause, 181 F. Supp. 165, 169 (S.D.N.Y. 1960) (“The right of the vessel
[to a cargo lien] is so strong in the eyes of the admiralty that it will only be considered relinquished
by the most unequivocal and express terms or the most absolute and unconditional surrender.”
(citing The Bird of Paradise, 72 U.S. at 545)).

32

In this case, the Original Bills of Lading provide for a “Carrier’s Lien” in Clause 17. That
Clause states
The Carrier shall have a lien on the Goods, inclusive of any Container owned or
leased by the Merchant, as well as on any Charges due any other person, and any
documents relating thereto, which lien shall survive delivery, for all sums due under
this contract or any other contract or undertaking to which the Merchant was a party
or otherwise involved, including, but not limited to, General Average contributions,
salvage and the cost of recovering such sums, inclusive of attorney fees. Such lien
may be enforced by the Carrier by public or private sale at the expense of and
without notice to the Merchant. The Merchant agrees to defend, indemnify, and
hold the Carrier . . . harmless from and against all liability, loss, damage or expense
which may be sustained or incurred by the Carrier relative to the above . . . .
Terms and Conditions § 17. Thus, the Original Bills of Lading recognize that MTS (the “Carrier”)
had a lien on the Resin (the “Goods”) for the return freight and detention and demurrage fees (the
“Charges” 24) due to MSC (“any other person”). That lien attached on February 10, 2017—the day
the Resin was loaded onto the Sealand New York. Fidan Aff. ¶¶ 15-17. Moreover, to the extent
redelivery of the Resin to the Port of Houston on April 6, 2017 constituted “delivery” for the
purposes of the maritime lien analysis, the Original Bills of Lading provide that the carrier’s lien
“shall survive delivery.” Terms and Conditions § 17. And finally, while maritime liens are
typically enforced through in rem actions against the cargo or in personam actions against the
shipper, see Schoenbaum, supra, § 9:1, here, the Original Bills of Lading provide that the lien
“may be enforced by the Carrier by public or private sale at the expense of and without notice to
the Merchant.” Terms and Conditions § 17. Even so, counsel for MTS sent two formal letters
announcing its intent to exercise a maritime lien, see Exhs. 68, 69, and the second letter explicitly

24

See Terms and Conditions §§ 1(c) (defining “Charges” as “freight, deadfreight,
demurrage and all expenses and money obligations incurred and payable bay the Merchant”);
14(b)-(c) (stating that upon “delivery or other disposition of the Goods in accordance with the
orders or recommendations given by any government or authority[,] . . . . the Merchant shall pay
any additional costs resulting from the above mentioned circumstances”).
33

requested that Oxyde “forward this letter-notice to the person or entity claiming ownership of the
shipment,” Exh. 69. And MTS only sold the Resin after being authorized to do so by order of
Judge Atlas. Dkt. 23 at 1; Fidan Aff. ¶ 41. Because Judge Atlas’s order expressly noted “that all
rights are reserved for Saray to pursue any and all claims related to the return of the $820,000.00
against MTS or any other party,” Dkt. 23, it logically follows (and would only seem fair) that MTS
would be able to assert its maritime lien as a defense to such claims, see Johnson Prods. Co. v.
M/V La Molinera, 628 F. Supp. 1240, 1248 (S.D.N.Y 1986) (dismissing claim for damages against
a defendant who “properly exercised its lien for unpaid freight on the shipment”). Thus, the Court
finds that MTS possessed a valid lien on the Resin under federal maritime law, as recognized in
the Original Bills of Lading, and that it properly exercised that lien.
Saray’s only argument to the contrary is that “MTS would have in fact had a proper lien if
it had actually delivered the cargo to Istanbul, then they would have a lien,” but that “[h]aving the
cargo returned to Houston for seven months and then selling it, not a proper lien.” Tr. at 38:1619; see also Saray Br. at 5. But this is contrary to law because, as discussed above, a carrier
typically loses its lien (rather than the lien attaching) upon unconditional delivery of the cargo.
See In re World Imports Ltd., 820 F.3d at 584; Arochem Corp., 962 F.2d at 499-500; The Bird of
Paradise, 72 U.S. at 555. Moreover, as noted above, MTS’s lien attached when the Resin was
loaded onto the Sealand New York, and survived redelivery to the Port of Houston per the terms
of the Original Bills of Lading. See The Eddy, 72 U.S. at 495-96.
Thus, because MTS possessed a carrier’s lien on the Resin and its sale of the Resin to
Polymerline was a valid exercise of that lien, MTS is not liable to Saray for its sale of the Resin.

34

D.

Attorneys’ Fees
Having determined that judgment should be entered in favor of MTS, the Court now turns

to MTS’s claim for attorneys’ fees. See Dkt. 74. MTS argues that such fees are warranted under
the language of Clause 17 of the Terms and Conditions of the Original Bills of Lading. Dkt. 185
¶ 59; MTS Br. at 6. Saray does not appear to dispute this. See Saray Br. at 2.
“Under the bedrock principle known as the American Rule, each litigant pays his own
attorney’s fees, win or lose, unless a statute or contract provides otherwise.” Marx v. Gen. Revenue
Corp., 568 U.S. 371, 382 (2013) (internal quotation marks and brackets omitted). In that vein,
“[t]he general rule in admiralty is that attorneys’ fees are not recoverable by the prevailing party.”
Genesis Marine, L.L.C. of Del. v. Hornbeck Offshore Servs., L.L.C., 951 F.3d 629, 631 (5th Cir.
2020) (internal quotation marks omitted). “In keeping with the basic tenets of contract law,”
however, “attorney fees and costs may be awarded where the bill of lading provides for the award
of attorney fees.” OOCL (USA) Inc. v. Transco Shipping Corp., No. 13 Civ. 5418 (RJS), 2015
WL 9460565, at *7 (S.D.N.Y. Dec. 23, 2015) (internal quotation marks omitted).
In this case, Clause 17 in the Original Bills of Lading states that the carrier’s lien applies
to “all sums due under this contract or any other contract or undertaking to which the Merchant
was a party or otherwise involved, including . . . the costs of recovering such sums, inclusive of
attorney fees.” Terms and Conditions § 17. Thus, the parties clearly expanded the scope of the
general maritime lien to include the costs to MTS of successfully invoking the terms of the Bill of
Lading, such as attorneys’ fees to enforce the carrier’s lien over unpaid charges. Clause 17 goes
on to state that “[t]he Merchant agrees to defend, indemnify, and hold the Carrier . . . harmless
from and against all liability, loss, damage or expense which may be sustained or incurred by the
Carrier relative to the above.” Id. As such, Saray (the Merchant) has a duty to “indemnify”—i.e.,

35

reimburse—MTS for its attorneys’ fees because such fees are included in the “expense which
[MTS] sustained or incurred . . . relative to” its enforcement of the carrier’s lien. See Chevron
Oronite Co. v. Jacobs Field Servs. N. Am., Inc., 951 F.3d 219, 231 (5th Cir. 2020) (“In federal
maritime cases, . . . the duty to indemnify and hold harmless includes costs and attorney’s fees.”
(internal quotation marks and brackets omitted)); E*Trade Fin. Corp. v. Deutsche Bank AG, 374
F. App’x 119, 123 (2d Cir. 2010) (“[T]he parties’ intention to indemnify attorneys’ fees is
unmistakably clear from language stating that E*TRADE ‘shall be indemnified and held harmless
by the Seller . . . .”). Accordingly, the Court finds that MTS is entitled to attorneys’ fees under
Clause 17 of the Terms and Conditions in the Original Bills of Lading.
That said, the only reference to attorneys’ fees in the Original Bills of Lading appears in
that carrier’s lien clause. This indicates two things. First, the proper method for MTS to obtain
reimbursement for attorneys’ fees is by exercising its carrier’s lien. As discussed previously,
MTS’s sale of the Resin was a valid exercise of this lien. See supra IV.C.3. Second, the amount
of attorneys’ fees that MTS is able to recover is limited to whatever it can obtain by exercising its
carrier’s lien. As noted in the Court’s Findings of Fact, MTS sold the Resin to Polymerline at a
price of $820 per metric ton, for a net amount of $1,238,528. Fidan Aff. ¶ 41; Tr. at 139:5-20;
Exh. 27. MTS, however, used $846,590.54 to reimburse itself for other expenses—the detention
and demurrage fees and return freight. Fidan Aff. ¶¶ 42-43; Tr. at 140:7-21. That sum was already
used for a valid purpose under the carrier’s lien clause, and so it cannot also be used for attorneys’
fees. In other words, the amount MTS may recover in attorneys’ fees for MTS is limited to the
$344,310 surplus from the sale of the Resin. See Fidan Aff. ¶ 43; see also supra n.16.
Furthermore, those fees shall not include anything attributable to an unsuccessful litigation
strategy in this or related litigation. See S.E.C. v. Yorkville Advisors, LLC, No. 12 Civ. 7728 (GBD)

36

(HBP), 2015 WL 855796, at *12 (S.D.N.Y. Feb. 27, 2015) (“Courts may reduce fee applications
for time spent on unsuccessful arguments.”). But see Rozell v. Ross-Holst, 576 F. Supp. 2d at 527,
538 (S.D.N.Y. 2008) (“[A] court should not disallow fees for every motion that a prevailing party
did not win.”). Thus, MTS may not recover any fees incurred in prosecuting its unsuccessful
motion for summary judgment. Nor may MTS recover fees for bringing its counterclaim for unjust
enrichment which it has since abandoned, or any fees related to MTS Logistics Inc. v. Saray Dokum
ve Madeni Aksam Sanayi Turizm A.S., No. 21 Civ. 4016 (JPC) (S.D.N.Y.)—the related action that
MTS initiated on May 5, 2021.
The Court orders the parties to meet and confer to attempt to reach an agreement on the
amount of MTS’s attorneys’ fees that fall within these parameters, and only if agreement cannot
be reached will the Court conduct another conference and/or schedule additional submissions. See
In re Keurig Green Mountain Single-Serve Coffee Antitrust Litig., Nos. 14 Md. 2452 (VSB) (SLC),
21 Civ. 7504 (VSB), 2023 WL 3304287, at *12 (S.D.N.Y. May 8, 2023) (directing the same).
V. Conclusion
For the foregoing reasons, MTS is not liable to Saray under COGSA, the Pomerene Act,
or general maritime law. The Court awards MTS attorneys’ fees in an amount to be determined.
The parties shall meet and confer to attempt to reach an agreement on MTS’s attorneys’ fees
consistent within the findings in supra IV.D. If an agreement is reached, by August 21, 2023, the
parties shall submit a joint stipulation as to the amount of MTS’s attorney’s fees. If negotiations

37

are unsuccessful, by August 21, 2023, the parties shall each file a letter setting forth their positions
on the appropriate sum of MTS’s attorneys’ fees.
SO ORDERED.
__________________________________
JOHN P. CRONAN
United States District Judge

Dated: August 11, 2023
New York, New York

38