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Bahamas Company Argues New York Lacks Jurisdiction

In our article, "Supreme Court Framework for Extraterritorial Cases," we analyzed the requirements international cases face before being tried under United States laws, such as the requirement that the "focus" of the relevant statute pertain to regulating foreign organizations. However, finding the proper jurisdiction is the first hurdle an international lawsuit must overcome before proceeding in the U.S.

On February 24, 2017, Progress Bulk Carriers LDT ("Progress"), a Bahamas-based company, urged the U.S. District Court for the Southern District of New York to dismiss a lawsuit brought by Albus Denizcilik Ltd Sti ("Albus"), which is based in Turkey, on the grounds that the Court lacked jurisdiction over Progress.

Albus filed a motion to enforce a $769,000 London arbitration award from 2014 that Progress has failed to pay. The arbitration arose from alleged unpaid rental fees for the use of a container ship Progress chartered in 2010. Further, Progress returned the ship to the wrong location and with less fuel than was required.

Progress argued that Albus' motion did not outline any basis for the Southern District's jurisdiction over it. According to Progress, Albus must identify specific property or business over which the Court has jurisdiction in order for jurisdiction to be proper, and Progress has no such property or business.

However, Albus' original complaint noted that MedBrokerage & Management Corp. ("MedBrokerage"), a Long Island-based shipping and cargo brokerage firm, holds Progress assets and paid legal costs for a case in which Progress was a plaintiff. MedBrokerage denied paying any legal bills in the case or possessing Progress property and attempted to block Albus from obtaining relevant documents that may support its theory. Ultimately, MedBrokerage's motion to prevent discovery was denied, which may prove to help Albus maintain the case's jurisdiction.

The legal team at SFMS has significant experience litigating international matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier (nlussier@sfmslaw.com) or Chiharu Sekino (csekino@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

SOURCES

Jahner, Kyler. "Shipper Says NY Lacks Jurisdiction Over Arbitration Award," Law360. Last modified on February 28, 2017.

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