Case of the Day: In re Application of Owl Shipping

The case of the day is In re Application of Owl Shipping, LLC (D.N.J. 2014). Owl Shipping owns the M/V Owl, and Oriole Shipping, LLC owns the M/V Oriole. Owl Shipping chartered the Owl to Dalian International. It alleges that Dalian failed to pay and Owl had to terminate the charter party. Owl claims it is owed more than $1.5 million. Oriole asserted a similar claim against Dalian with respect to a charter of the Oriole. Both agreements called for arbitration in London under English law. Both Owl and Oriole demanded arbitration with the London Maritime Arbitrators Association.

Owl and Oriole wanted to prove that Dalian was having financial difficulties when it entered into the charter parties in order to prove bad faith. They sought leave under § 1782 to obtain discovery from Dalian Suntime International Transportation (USA), Inc., Sunti me America, Inc., and Ms. Magic Sun, who, they said, would have information about Dalian.

The judge held the statutory prerequisites were satisfied. He held, without comment, that the London arbitration was a foreign proceeding. As long-time readers know, whether private foreign arbitrations are indeed foreign proceedings for purposes of § 1782 is a real issue that should have gotten more attention. The Intel analysis was straightforward. The potential witnesses were not parties to the arbitration; there was no evidence on receptivity, and the court applied a presumption of receptivity; there was no suggestion of circumvention of foreign proof-gathering restrictions; and there was no appearance of undue burden, and in any case the witnesses could raise any issues of undue burden after the subpoenas are served.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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