The case of the day, Greatship (India) Ltd. v. Marine Logistics Solutions, LLC (S.D.N.Y. 2012), is another example of what I think is an unfortunate trend in the cases: application of ordinary notions of personal jurisdiction in recognition and enforcement proceedings.
Greatship was the owner of two Indian-flagged anchor handling tug supply vessels, the Greatship Amrita and the Greatship Anjali. Marsol was an offshore logistics company registered in Dubai. Marsol chartered the two ships. The parties later agreed to early re-delivery of the ships and entered into settlement agreements that provided for Marsol to pay Greatship more than $2 million for outstanding time charter hire and compensation for the early re-delivery. The settlement agreement provided or arbitration in London in the event of a dispute.
Greatship alleged that Marsol failed to pay and it commenced an arbitration. The arbitrators awarded Gretship more than $2.1 million in damages, which Marsol failed to pay. Greatship then sought recognition and enforcement of the award in New York. Marsol moved to dismiss for lack of personal jurisdiction. The court agreed, finding that Marsol lacked sufficient minimum contacts with New York, or even the United States, to justify jurisdiction under the due process clause.
The court didn’t really discuss the quasi in rem issue, but it seems to me that any court in a state where the losing party in an arbitration (or the judgment debtor) has property that can be taken in satisfaction of the judgment or the award should have jurisdiction to the extent of the property. The case has already been litigated and decided. The only issue is collection. So I don’t see why it should be necessary, to satisfy the constitution, that there be a connection between the property and the underlying claim. The losing party has a connection with the state at least insofar as he or she keeps property there. This is particularly so in the arbitration context because neither lack of personal jurisdiction nor related defenses such as venue or forum non conveniens is an expressly permitted ground for refusing recognition and enforcement under the New York Convention. I’ve posted on this a few times, but I’d point readers to the discussion of the Constellation Energy case, which has a link to a relevant report from the International Commercial Disputes Commitee of the Association of the Bar of the City of New York that is well worth reading.