George Moundreas & Co SA v. Jinhai Intelligent Manufacturing Co Ltd, HNA Group Co., Ltd., Hainan Airlines Holding Co., Ltd., and Grand China Logistics Holding (Group) Co. Ltd.

At a glance

Parties

George Moundreas & Co SA (Panama; based in Greece) v. Jinhai Intelligent Manufacturing Co Ltd (f/k/a Jinhai Heavy Industry Co Ltd and Zhoushan Jinhaiwan Shipyard Co Ltd), HNA Group Co., Ltd., Hainan Airlines Holding Co., Ltd., and Grand China Logistics Holding (Group) Co. Ltd. (all China)

Case no.

No. 20-CV-2626 (VEC)

Court

U.S. District Court, Southern District of New York (Judge Valerie Caproni)

Forum and rules

Petition to confirm and enforce foreign arbitral awards under the Federal Arbitration Act and the New York Convention (9 U.S.C. § 201 et seq.)

Treaty

New York Convention

Underlying award(s)

Two London arbitration awards in favour of Moundreas against Jinhai, including an award of 25 September 2019

Sector

Shipbuilding; shipbroking commissions

Outcome

Petition dismissed against HNA, Hainan and Grand China for lack of personal jurisdiction (18 January 2021). Jurisdictional discovery refused. Petitioner ordered to show cause why the case should not be dismissed against Jinhai for failure to serve.

Amount

The awards totalled approximately USD 2.3 million.

The dispute

Moundreas, a shipbroker, and Jinhai, a Chinese shipbuilder, entered into five Commission Agreements in 2011 and 2012 in connection with a shipbuilding agreement. Jinhai did not pay the commissions. Moundreas began arbitration in London and obtained two awards totalling about USD 2.3 million. In March 2020 it petitioned the Southern District of New York to confirm and enforce the awards against Jinhai and three companies that were not parties to the arbitration: HNA Group, Hainan Airlines and Grand China Logistics. It argued that all four companies were alter egos within a single business entity headed by HNA. The three non-party respondents moved to dismiss for lack of personal jurisdiction and improper venue. In the alternative, they asked for dismissal because enforcement proceedings were already pending in China.

Key holdings

1. No general jurisdiction in New York. HNA, Hainan and Grand China are incorporated and headquartered in China. Their New York contacts fall short of the Daimler 'exceptional case' standard, whether those contacts are taken one by one or together. The contacts relied on were real estate, events, a media team, flights into JFK and bulk carriers calling at New York ports. Registration to do business and appointment of a local agent carry only limited weight. pp. 6–15
2. The Court did not decide whether the alter-ego theory was adequately pleaded. Even if all the respondents' contacts are combined, the group is not 'at home' in New York, because its collective New York contacts pale in comparison to its worldwide activity. pp. 15–17
3. No specific jurisdiction under C.P.L.R. § 302(a). The awards arose from a foreign arbitration between foreign companies about shipbuilding at a Chinese shipyard. The claim does not arise from the respondents' New York business or from HNA's New York real estate, and exercising jurisdiction would also offend due process. pp. 17–21
4. The petitioner waived any quasi in rem theory based on attaching HNA's New York property, because it neither pleaded nor briefed one. p. 17 n. 9
5. Rule 4(k)(2) gives no alternative basis. The claim arises under federal law, but the respondents' contacts with the United States as a whole do not support general jurisdiction. Exercising jurisdiction would also be unreasonable: the case has no nexus to the United States, and confirmation actions are pending in China. pp. 21–25
6. Jurisdictional discovery is refused, because more evidence of New York business dealings would not cure the deficiencies. The Court did not reach the venue objection or the objection based on the concurrent Chinese proceedings. pp. 2 n. 1, 25–26

Procedural history

1. 2011–2012Moundreas and Jinhai entered into five Commission Agreements.
2. 25 September 2019An award was rendered in the London arbitration. The arbitrator issued two awards in total in favour of Moundreas, for about USD 2.3 million.
3. Before filing in New York, Moundreas began two actions in China to enforce the awards. Both were still pending at the date of the judgment.
4. March 2020Petition to confirm and enforce the awards filed in the Southern District of New York. An Amended Petition followed.
5. 18 January 2021Opinion & Order: the motion to dismiss by HNA, Hainan and Grand China was granted for lack of personal jurisdiction, and jurisdictional discovery was denied. The Petitioner was ordered to show cause by 29 January 2021 why the case should not be dismissed against Jinhai for failure to serve.

Tribunal, counsel and experts

Decided by

• Valerie Caproni Judge, U.S. District Court, Southern District of New York

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Keywords

• New York Convention
• enforcement
• confirmation of foreign award
• personal jurisdiction
• general jurisdiction
• specific jurisdiction
• Daimler v. Bauman
• alter ego
• non-signatory
• Rule 4(k)(2)
• quasi in rem jurisdiction
• jurisdictional discovery
• C.P.L.R. § 302
• shipbuilding
• commission agreements
• HNA Group
• Hainan Airlines
• London arbitration

Summary generated with AI from the published documents — refer to the award for the authoritative text.