Passport Special Opportunities Master Fund, L.P. v. ARY Communications, Ltd., Index No. 604821/2015 (DeStefano, J.)

Order for attachment; Order for deeming proper or additional service

By: Kush H. Parikh | Staff Writer

Plaintiff (brought an action to recognize a money judgment of the High Court of the Republic of Singapore under CPLR 5303., Plaintiff moved to attach the New York assets of Defendants Singapore judgment debtors, for an order deeming that service of process on Defendants by international registered mail and international courier was sufficient and proper and sought permission to serve documents on Defendants by email and overnight courier to Defendants’ counsel.

The Court stated that attachment may be permitted when a plaintiff has claimed and would be allowed a money judgment against a defendant. In addition, it must also be proven that the defendant is a nondomiciliary living without a state, or in the alternative, that the plaintiff’s cause of action is centered on a judgment, decree, or order of a court of the United States or any other court that is entitled to full and credit in the United States. The Court added that attachment against non-domiciliaries has two main purposes – to protect assets for a money judgment or to provide a basis for quasi in rem jurisdiction. Plaintiff has the burden of establishing that there is a plausible cause of action in which Plaintiff can succeed on the merits. Plaintiff must show that the demanded monetary award exceeds the value of any of Defendants’ counterclaims. The Court concluded that Plaintiff’s request for attachment failed to express that the order of attachment was necessary for jurisdictional purposes because “attachment effected after service of the summons cannot serve as the predicate for quasi in rem jurisdiction.” However, Defendants’ behavior has gone beyond simply refusing to pay an arbitral award. Defendants threatened to prosecute and “unseat” the appointed arbitrator in the matter. The Court added that the fact the arbitral award remained unpaid is a sign for the need of security. Therefore, Plaintiff’s order of attachment is granted.

Regarding Plaintiff’s second claim, the Second Department held that service of process by mail on people overseas is permitted as long as the State of designation does not object in its authorization of service. This is the current law under the Hague Convention, and Pakistan, the jurisdiction where Defendants are located, has no objections to the service channel used by Plaintiff. Therefore, the service made upon Defendants “by postal channels” is presumptively proper. In situations where the method of service is challenged, the Court will rule on it in due course.

The Court denied Plaintiff’s request of an order permitting alternative service pursuant to CPLR 308(5). The Court noted that service on Defendants was presumptively valid, and an order directing that an alternative service be accomplished – when prior service is presumptively proper, is therefore unnecessary. Furthermore, the Court emphasized that it regardless of the circumstances, it can never authorize an alternative service that is an infringement of the service that was allowable under the Hague Convention. As such, the procedure that was used here is incorrect.

Passport Special Opportunities Master Fund, L.P. v. ARY Communications, Ltd., Index No. 604821/2015 (DeStefano, J.).

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