Noble Shipping v. Euro-Maritime
DMC Category Rating: Confirmed
Case Note Submitted by Elizabeth S. McKenna, an attorney with the firm of Healy & Baillie, LLP, New York. Healy & Baillie are the International Contributors to the website for the United States of America
On August 11, 2003, Noble filed an action in the Southern District of New York seeking to secure its claim in the London arbitration. Noble’s complaint alleged that HSBC Bank USA ("HSBC USA") had or soon would have assets "believed to be due and owing" to Euro and that Euro was not present in the Southern District within the meaning of Rule B* of the Supplemental Admiralty Rules. That Rule allows a party to attach property as security for a maritime claim where the party whose assets are attached is not "present" (that is, for jurisdictional purposes) within the district where the attachment takes place.
After determining that Noble had made a prima facie case under Rule B, the district court issued a writ of attachment "against all tangible and intangible property belonging to, claimed by or being held for the defendant by HSBC Bank USA in an amount up to and including US$229,450.00," thus permitting Noble to attach Euro’s assets in the Southern District.
In an unrelated transaction, Euro had entered into a charter agreement with a Japanese company, the Marubeni Corporation ("Marubeni"). Marubeni agreed to payment in the amount of US$1,780,096.50 for Euro’s services. Euro’s invoice instructed payment via wire transfer to its account at an HSBC bank in Greece ("HSBC Greece"). As a result of the payment being in United States currency, it had to be routed to HSBC Greece’s account through a bank in the United States, HSBC USA. However, the Euro invoice specified payment to the HSBC Greece account number and stated that the payment through HSBC USA was for Euro’s benefit.
Subsequently, in mid-August 2003 when Marubeni wired funds to Euro, US$229,450.00 of the payment amount was frozen pursuant to the writ of attachment. HSBC USA notified HSBC Greece via wire that it had frozen the above amount as per an ex parte order of maritime attachment. Approximately a week later, HSBC placed the US$229,450.00 in an interest-bearing time deposit account for Euro’s benefit. Neither Marubeni nor its New York subsidiary had made a claim on the attached funds.
Euro sought to distinguish Winter Storm, arguing that the attached funds could not be considered its "property" within the meaning of Rule B because they never reached Euro’s HSBC Greece account. Euro argued that the funds were not its property at the time they were attached at HSBC USA but that they still belonged to Marubeni, as originator, at the precise time of the attachment.
The district court rejected this argument, concluding that under Rule B, funds transferred pursuant to an EFT may be attached as the property of the funds’ intended beneficiary. As such, the US$229,450.00 was a debt due and owing to Euro; thus, the attachment of those funds at HSBC USA was an appropriate remedy and Euro’s motion to vacate the attachment was denied.
These Case Notes have been prepared with care, but neither the Editor nor the International and other Contributors can guarantee that they are free from error, nor that they contain every pertinent point. Reliance should not therefore be placed upon them without independent verification. The Editor and the International and other Contributors disclaim all liability for any loss of whatsoever nature and howsoever arising as a result of others acting or refraining from acting in reliance on the contents of this website and the information to which it gives access. The Editor claims copyright in the content of the website.