Seetransport Wiking Trader Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala

• Decision Date: 25 May 1993
• Docket Number: No. 372,D,372
• Citation: 989 F.2d 572
• Parties: SEETRANSPORT WIKING TRADER SCHIFFARHTSGESELLSCHAFT MBH & CO., KOMMANDITGESELLSCHAFT, Plaintiff-Appellee, v. NAVIMPEX CENTRALA NAVALA and Uzinexportimport, Defendants-Appellants. ocket 92-7580.
• Court: U.S. Court of Appeals — Second Circuit

Page 572

989 F.2d 572

1993 A.M.C. 2693

SEETRANSPORT WIKING TRADER SCHIFFARHTSGESELLSCHAFT MBH &amp CO., KOMMANDITGESELLSCHAFT, Plaintiff-Appellee, v. NAVIMPEX CENTRALA NAVALA and Uzinexportimport, Defendants-Appellants.

No. 372, Docket 92-7580.

United States Court of Appeals Second Circuit.

Argued Oct. 23, 1992.

Decided March 16, 1993.

As Amended May 25, 1993.

L. Kevin Sheridan, Smithtown, NY (Radu Herescu, New York City, of counsel), for defendants-appellants.

William J. Brady, III, New York City (John G. Poles, Christopher J. Papajohn, Poles, Tubelin, Patekis & Stratakis, New York City, of counsel), for plaintiff-appellee.

Before: OAKES, NEWMAN and PIERCE, Circuit Judges.

PIERCE, Circuit Judge:

Defendants Navimpex Centrala Navala ("Navimpex") and Uzinexportimport ("Uz") appeal from a judgment entered in the United States District Court for the Southern

                District of New York, Vincent L. Broderick, Judge, which granted, inter alia, plaintiff Seetransport Wiking Trader Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft's ("Seetransport") cross-motion for summary judgment and denied the defendants' motion for summary judgment.  Seetransport Wiking Trader v. Navimpex Centrala, 793 F.Supp. 444 (S.D.N.Y.1992).   For the reasons set forth below, we reverse the judgment of the district court insofar as it granted the plaintiff's cross-motion for summary judgment and denied the defendants' motion for summary judgment.   We remand the case with instructions to grant the defendants' motion for summary judgment as to the cause of action in which plaintiff seeks to enforce the arbitral award, on the ground that the enforcement of such award is time-barred.   We further remand the case for the purpose of determining, with respect to the remaining cause of action, whether the decision of the Court of Appeals of Paris is enforceable in France and thus should be enforced by the district court
                

BACKGROUND

Seetransport is a corporation organized under the laws of the Federal Republic of Germany and engaged in maritime commerce as a shipowner and operator. Navimpex was a trading company organized under the laws of the Socialist Republic of Romania and was engaged in the business of shipbuilding.

On or about January 26, 1980, Seetransport and Navimpex entered into a Contract of Sale for the building and sale by Navimpex to Seetransport of four bulk carriers. According to the complaint, the carriers were to be delivered over a two year period from November or December of 1980 to February or March of 1982. Several disputes arose between the parties and the contract was never performed. Pursuant to Article XIII of the Contract of Sale, the parties submitted their disputes to arbitration before the Court of Arbitration of the International Chamber of Commerce in Paris, France (the "I.C.C."). In accordance with the Contract of Sale, French "material" law governed the interpretation of the contract. The arbitrators, after holding hearings, issued their interim and final awards, on November 2, 1982, and March 26, 1984, respectively. Pursuant to the final award, Navimpex was directed to pay Seetransport six million deutsche marks, plus interest, at the rate of eight percent per year, from January 1, 1981 until the date of effective payment. Navimpex was further directed to pay Seetransport 72,000 U.S. dollars as reimbursement for Navimpex's unpaid share of the cost of the arbitration.

Dissatisfied with the decision of the arbitrators, Navimpex appealed to the Court of Appeals of Paris "for the annulment of the arbitration award." The Court of Appeals issued its decision on March 4, 1986, dismissing Navimpex's appeal.

On March 28, 1988, Seetransport commenced this action in the United States District Court for the Southern District of New York, naming Navimpex as the sole defendant. In its complaint, Seetransport asserted two causes of action. One cause of action alleged that Seetransport was entitled to have the decision of the Court of Appeals of Paris converted into a United States judgment. A second cause of action sought, pursuant to the provisions of 9 U.S.C. §§ 201-208 (1988), entitled the "Convention on the Recognition and Enforcement of Foreign Arbitral Awards," enforcement of the foreign arbitral award issued by the I.C.C. Seetransport demanded judgment in the amount of $6,250,000.00, with interest.

Seetransport attempted to serve Navimpex both by delivering a copy of the Summons and Complaint, along with a Romanian translation thereof, to the Romanian Commercial Counselor's Office in New York, as an agent of Navimpex, and also by having the Clerk of the Court for the Southern District of New York mail a copy of the Summons and Complaint to Navimpex at its last known address. Thereafter, the Clerk received a postal receipt indicating that the Summons and Complaint had been received. However, unknown to Seetransport, at the time of service of process Navimpex answered the complaint and asserted a number of affirmative defenses; thereafter, Navimpex moved for summary judgment on the basis of several of its affirmative defenses, namely: the district court lacked in personam jurisdiction; service of process was insufficient; the action for recognition and enforcement of the foreign arbitration award was time-barred by the applicable statute of limitations; and an indispensable party to the action, Uz, had not been joined and was not within the jurisdiction of the district court. In support of its summary judgment motion, Navimpex submitted an affidavit from the person who had been the general manager of Navimpex from 1984 until the end of June 1987, at which time he became the deputy general manager of Uz. According to this affidavit, Navimpex had been dissolved in late June 1987 by a decree of the State Council of the Socialist Republic of Romania. By that same decree, all of Navimpex's assets and liabilities were taken over by Uz.

                Navimpex had been dissolved by a decree of the State Council of the Socialist Republic of Romania.   That same decree transferred Navimpex's personnel to a newly formed company, Uz
                

In turn, Seetransport moved for an order pursuant to Rule 19 of the Federal Rules of Civil Procedure to join Uz as a party defendant and cross-moved for summary judgment against both defendants. In its summary judgment motion, Seetransport asserted that the district court should recognize the judgment of the Court of Appeals of Paris, or alternatively, recognize the arbitral award issued by the I.C.C.

The district court first examined whether it had subject matter jurisdiction over the action, which, as it recognized, implicated the Foreign Sovereign Immunities Act ("FSIA"), codified at 28 U.S.C. §§ 1330, 1332(a)(2)-(4), 1391(f), 1441(d) and 1602-1611 (1988 & Supp. II 1990). The court determined that since Navimpex was a foreign trading company, wholly owned by the Romanian Government, it qualified as an "agency or instrumentality" of a foreign state and therefore, under § 1603(a), could be treated as a foreign state. The court then determined that Navimpex lacked sovereign immunity under the newly enacted 28 U.S.C. § 1605(a)(6). As the court noted, § 1605(a)(6) appeared to be the applicable jurisdictional provision because it expressly provided "that a foreign state (or under the applicable definitions its instrumentality), lacks immunity where the action is brought to confirm an award made pursuant to an agreement to arbitrate if the agreement or award is governed by a treaty or other international agreement binding upon the United States which calls for the recognition or enforcement of arbitral awards." Seetransport Wiking Trader, 793 F.Supp. at 446.

However, as the court further observed, Section 3 of Public Law 100-640, which the district court believed was the statute that added § 1605(a)(6), ¹ provided that " '[t]he amendments made by this Act shall apply to actions commenced on or after the date of the enactment of this Act [November 9, 1988].' " Seetransport Wiking Trader, 793 F.Supp. at 446 (quoting Admiralty Suits Against Foreign States, Pub.L. No. 100-640, 102 Stat. 3333, 3334 (1988)). Because the underlying suit was commenced in March 1988, the district court felt it necessary to address the impact of Section 3 on the issue of subject matter jurisdiction. Although it did express a desire to avoid unfair retroactive application, the court determined that subject matter jurisdiction existed, essentially because the action could have been discontinued and recommenced after November 9, 1988, without incurring any statute of limitations problems. The court stated that Navimpex's failure to raise the question of the effective date of § 1605(a)(6) supported its conclusion that Seetransport's failure to refile The court then addressed the statute of limitations issue. After examining French law, the court determined that the arbitral award became final on March 4, 1986, the date on which the Court of Appeals of Paris dismissed Navimpex's appeal. Thus, since 9 U.S.C. § 207 permits an action seeking to confirm an arbitral award to be brought within " 'three years after an arbitral award falling under the Convention is made ... [,]' " the court concluded that the statute of limitations did not bar this suit, which had been commenced on March 28, 1988. Seetransport Wiking Trader, 793 F.Supp. at 447-48 (quoting 9 U.S.C. § 207).

the complaint on November 10, 1988--when this could have readily been done without incurring any statute of limitations problem--was not a fatal technical jurisdictional error.

Turning to the issue of personal jurisdiction and service of process, the district court noted that 28 U.S.C. § 1330(b) granted federal courts jurisdiction over a foreign state so long as service is made in accordance with the procedures set forth in 28 U.S.C. § 1608, combined with actual notice, all of which, it determined, were satisfied by Seetransport. Moreover, the court determined that...