Sing Fuels Pte Ltd. v. M/V Lila Shanghai

• Decision Date: 17 May 2023
• Docket Number: Civil Action 4:20-cv-58
• Parties: SING FUELS PTE LTD., Plaintiffs, v. M/V LILA SHANGHAI (IMO 9541318), Defendant.
• Court: U.S. District Court — Eastern District of Virginia

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SING FUELS PTE LTD., Plaintiffs, v. M/V LILA SHANGHAI (IMO 9541318), Defendant.

Civil Action No. 4:20-cv-58

United States District Court, E.D. Virginia, Newport News Division

May 17, 2023

MEMORANDUM OPINION

Raymond A. Jackson United States District Judge

Before the Court is M/V LILA SHANGHAI'S (‘‘Defendant”) Motion For Post-Judgment Anti-Suit Injunction (“Motion”) requesting a post-judgment injunction prohibiting Sing Fuels (“Plaintiff') from taking any action against Defendant on claims arising from the July 2019 fuel supply in South Africa. ECF Nos. 64, 65. Defendant filed the Motion on February 7, 2023 and Plaintiff responded in opposition on February 21, 2023. ECF No. 64; ECF No. 70. A hearing was held before this Court on February 23, 2023. Having heard from both parties and reviewed the parties' filings, this matter is ripe for judicial determination. After considering the filings, the evidence heard at the hearing, and the law of this Circuit, the Court GRANTED the Motion for Post-Judgment Anti-Suit Injunction. ECF No. 72. Now, the Court issues the instant opinion to further explain the basis of the Order, I. FACTUAL AND PROCEDURAL HISTORY

On April 22, 2020, Plaintiff filed a Complaint. ECF No. 1. The Complaint alleged that the Defendant was liable for $532,312.48 for a supply of fuel in South Africa in July 2019. Id. at 3. On April 24, 2020 this Court issued a Warrant of Arrest. ECF No. 6. Defendant's Vessel Autumn Harvest, posted a $750,000 letter of undertaking to substitute for the vessel, and agreed to appear, file a claim, and defend the suit. ECF No. 10 at 1. Defendant answered the complaint on June 1, 2020. ECF No. 15.

On February 23,2021, this Court held a bench trial. ECF No 41. On April 20, 2021, this Court issued a Memorandum Opinion and Order explaining that Defendant sufficiently demonstrated no privity of contract to hold Defendant liable for a maritime lien. ECF No. 45. On May 20, 2021, Plaintiff appealed the decision. ECF No. 48. The Court of Appeals for the Fourth Circuit (“Fourth Circuit”) published a decision affirming the ruling of this Court. Sing Fuels Pte Ltd. v. M/V Lila Shanghai, 39 F.4th 263 (4th Cir. 2022).

On December 5, 2022, Plaintiff sent a notice to Defendant reiterating the same claim already litigated during the bench trial and appeal. ECF No. 64 at Exhibit 1. Plaintiff issued the same demand letter previously given to Defendant. See ECF No. 31 at Exhibit 7. In a letter to Plaintiff on December 7,2022, Defendant explained that this claim had already been fully litigated and decided by this Court. ECF No. 64 at Exhibit 2. Nevertheless, Plaintiff continues to insist that its “claim will be pursued until the Vessel is arrested in a favorable jurisdiction, and payment is received in full.” Id. at Exhibit 3. Plaintiff further stated that “the Vessel is currently en route [to] Mozambique, which is a jurisdiction which entitles [Plaintiff] to enforce the unpaid claim against the Vessel.” Id. at Exhibit 1.

Defendant filed the Motion on February 7, 2023 and Plaintiff responded in opposition on February 21, 2023. ECF No. 64; ECF No. 70. A hearing was held before this Court on February 23, 2023. ECF No. 71. On February 23, 2023, the Court issued an order granting Defendant's Motion for Post Judgment Anti-Suit Injunction. Order Granting, ECF No. 72. Now, the Court issues the instant Opinion to further explain the basis of the Order.

II. LEGAL STANDARD

The Fourth Circuit has declined to adopt a test regarding when a district court may impose an anti-suit injunction after a judgment has been entered. BAE Sys. Tech. Sol. &amp Servs., Inc. v. Republic of Korea's Def Acquisition Program Admin., 884 F.3d 463, 479 (4th Cir. 2018). Other circuits have outlined at least two approaches for determining if a foreign anti-suit injunction is warranted: the “liberal” test and the “conservative” test. Id. ^[[1]] Both weigh factors favoring an injunction against the effect of an injunction on international comity. Id. The principal difference is that the liberal approach accords less weight to international comity concerns. See Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 10 F.3d 425, 431 (7th Cir. 1993). But international comity remains a significant consideration, even in courts endorsing the liberal approach. See E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984,990-91,994 (9th Cir. 2006) (under the liberal standard, a court must perform a “detailed analysis” to determine whether the impact on international comity would be “tolerable”).

While a district court with jurisdiction over the parties may prohibit them from proceeding with a lawsuit in a foreign country, the court should use that power “sparingly.” Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 881 (9th Cir. 2012) (internal quotation marks and citation omitted). Analysis of the propriety of a foreign anti-suit injunction is a three-step process under either of the approaches. First, the court resolves the threshold considerations of whether the parties and issues are the same. The court considers whether “(1) ‘the parties are the same in both [the foreign and domestic lawsuits],'” and whether “(2) ‘resolution of the case before the enjoining court is dispositive of the action to be enjoined.'” Canon Latin Am., Inc. v. Lantech (CR), S.A., 508 F.3d 597, 601 (11th Cir. 2007) (quoting Paramedics Electromedicina Comercial, Ltda v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645,652 (2d Cir. 2004)); see E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 991 (9th Cir. 2006) (same). This standard also has been stated as “whether parallel suits involve the same parties and issues.” Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11,18 (1st Cir. 2004) (same).

Second, the court assesses the effect of the foreign suit if it were to proceed. The Courts of Appeals that have discussed this assessment agree that the district court should consider the following four factors: “whether the parallel litigation would ‘(1) frustrate a policy in the enjoining forum; (2) be vexatious; (3) threaten the issuing court's in rem or quasi in rem jurisdiction; [or] (4) prejudice other equitable considerations....'” Software AG, Inc. v. Consist Software Sols., Inc., 323 Fed.Appx. 11,12 (2d Cir. 2009) (quoting Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 500 F.3d 111, 119 (2d Cir. 2007) (alterations, ellipses, and internal quotation marks omitted)); see In re Unterweser Reederei Gmbh, 428 F.2d 888, 896 (5th Cir. 1970), aff'd on rehearing en banc, 446 F.2d 907 (1971), rev'd on other grounds sub nom. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907 (1972) (stating factor (2) as “be vexatious or oppressive”). The Second Circuit also considers a fifth factor-whether allowing the foreign suit to proceed would ‘“result in delay, inconvenience, expense, inconsistency, or a race to judgment.*” Software AG, 323 Fed.Appx. at 12 (2d Cir. 2009) (quoting Karaha Bodas Co., 500 F.3d at 119 (2d Cir. 2007)). If any of the four elements is present, an anti-suit injunction may be proper.

Lastly, the district court must consider principles of comity. See O'Keefe v. Chisholm, 769 F.3d 936,937 (7th Cir. 2014) (“[P]rinciples of‘ equity, comity, and federalism' determine whether [anti-suit injunctions] are appropriate.”); Paramedics, 369 F.3d at 654-55 (“Principles of comity weigh heavily in the decision to impose a foreign anti-suit injunction.”); Karaha, 335 F.3d 357, 366 (5th Cir. 2003) (“When a preliminary injunction takes the form of a foreign antisuit injunction, we are required to balance domestic judicial interests against concerns of international comity.”); see also E. & J. Gallo Winery, 446 F.3d at 991 (stating that “the impact on comity” must be “tolerable”). This is because even though an “injunction operates only against the parties, and not directly against the foreign court,... such an order effectively restricts the jurisdiction of the court of a foreign sovereign.” China Trade & Dev. Corp. v. M.V Choong Yong, 837 F.2d 33, 35 (2d Cir.1987) (citing Peck v. Jenness, 48 U.S. (7 How.) 612, 625,12 L.Ed. 841 (1849); United States v. Davis, 767 F.2d 1025, 1038 (2d Cir. 1985)). Because of this effect, “an anti-foreign-suit injunction should be ‘used sparingly', U.S. v. Davis, 767 F.2d at 1038, and should be granted ‘only with care and great restraint.' Canadian Filters (Harwich) v. Lear-Siegler, 412 F.2d 577,578 (1st Cir. 1969).” China Trade, 837 F.2d at 36 (citing Laker Airways, 731 F.2d at 927; Compagnie Des Bauxites De Guinea v. Ins. Co. of N. Am., 651 F.2d 877, 887 (3rd Cir. 1981)); see E. & J. Gallo Winery, 446 F.3d at 989 (“[T]he power to enjoin [the parties] from proceeding with an action in the courts of a foreign country... should be used sparingly.”).

III. DISCUSSION

The Court will address the relevant factors to this case in turn. For the reasons below, the Court finds that factors support the issuance of an anti-suit injunction in this matter. Further, issues of international comity are lessened in this case as there is currently no suit in a foreign jurisdiction.

A. Same Parties and Issues

First, the court resolves the threshold considerations of whether the parties and issues are the same. Defendants argue that Plaintiffs threaten to re-arrest the same ship for the same claims that have already been decided by this Court and affirmed by the Fourth Circuit. ECF No. 65 at 8.

Plaintiff argues that its demand letter to Defendant and subsequent communication does not attempt to dispute or collaterally attack the judgment of this Court. ECF No. 70 at 1-6. Plaintiff further argues that the threshold requirements are not met because the only parties to the underlying action were Sing Fuels...