The World in U.S. Courts: Spring 2016 - Arbitration | February.22.2016
Plaintiff Crescendo Maritime obtained an arbitral award in the U.K. of approximately USD20 million against defendant "BOCOM," a Chinese bank, in connection with a failed shipbuilding contract. Crescendo sought to enforce the award against USD4.8 billion in assets held by BOCOM in a branch bank in New York, relying upon the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention"). BOCOM objected, arguing among other things that the Court could not enforce the award because it lacked jurisdiction over BOCOM or the assets, which were unrelated to the subject matter of the arbitration.
The District Court agreed that enforcement of the award would require that a basis exist for jurisdiction over BOCOM or BOCOM's New York assets, and found jurisdiction over the assets under a "quasi in rem" theory. The Court noted that the physical presence of assets in a jurisdiction was a sufficient basis to enforce an arbitral award where the arbitral body properly exercised jurisdiction over the defendant to begin with, which was true in the case at bar. The Court agreed that general personal jurisdiction over BOCOM was unlikely to exist, but concluded that its ruling on quasi in rem jurisdiction made it unnecessary to decide that question or whether specific personal jurisdiction over BOCOM could be exercised.
[Editor's note: The Crescendo Maritime case is also addressed in the Personal Jurisdiction/Foreign Sovereign Immunities Act/Forum Non Conveniens section of this report.]