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SEALIFT BULKERS, INC. v. REPUBLIC OF ARMENIA

May 30, 1997

SEALIFT BULKERS, INC., Plaintiff,
v.
REPUBLIC OF ARMENIA, et al., Defendants.



The opinion of the court was delivered by: FRIEDMAN

 Sealift Bulkers, Inc. brought this action against the Republic of Armenia and the United States of America seeking payment of certain charges it incurred in transporting a U.S. donation of wheat to the Republic of Georgia. On November 22, 1996, this Court dismissed plaintiff's complaint against the United States for lack of subject matter jurisdiction. Because defendant Armenia has never made an appearance in this action, the Court also ordered plaintiff to file a status report regarding its attempts to serve process on the Republic of Armenia or to file a motion for entry of default and default judgment in accordance with Rule 55 of the Federal Rules of Civil Procedure. That motion is now before the Court. *fn1"

 I. BACKGROUND

 As the background of this action was set out in the Court's previous Opinion of November 22, 1996, the Court shall only briefly discuss the facts here. Defendant Armenia entered into an agreement with plaintiff to charter plaintiff's vessel, The Inger, to transport a U.S. donation of wheat to a port in the Republic of Georgia and to deliver the wheat by rail to Airum, Armenia. Pl.'s Mot. for Default Judgment at 1, Ex. 3 (May 17, 1993 Charter Agreement between Sealift Bulkers and the Republic of Armenia). Upon arriving at its port of destination, Poti, Georgia, The Inger was informed that a civil war had erupted in Georgia. Due to the hostilities in the area, plaintiff requested that Armenia offer an alternative port at which it could discharge the wheat. Armenia would not name an alternative port and apparently expected that The Inger would remain off the coast of Poti, Georgia, pending further developments in the civil conflict. Armenia failed to respond to plaintiff's two subsequent requests for identification of an alternative port. Pl.'s Mot. for Default Judgment at 2, Exs. 4 (c), (e), (f), (h), (i), (z) (various faxes and telefaxes dated from August 30, 1993 to October 18, 1993 between Sealift, Inc., Potomac Marine International, Inc. and International Services Corp., relaying information regarding the status of the civil war in Georgia, Sealift's requests for alternative ports, and Armenia's expectations regarding the parties' agreement).

 After eleven days of waiting off the Georgian coast, plaintiff chartered a second vessel, The Catherine L, upon which it unloaded its cargo. Pl.'s Mot. for Default Judgment at 7, Exs. 4(j), 4(k) (Charter Agreement regarding The Catherine L, September 10, 1993; Message from The Inger to Sealift, Inc. regarding transfer of cargo to The Catherine L, dated September 21, 1993). Thirty-three days after the cargo was transferred to The Catherine L, the rail lines from Armenia to Georgia reopened, and the wheat was discharged from The Catherine L onto rail cars and was eventually transported to Airum, Armenia. Id., Exs. 4(m), (o), (bb), (telefax, message and fax dated from September 20, 1993 to October 25, 1993, regarding discharge and transport of wheat); Ex. 4(dd) (January 14, 1997 Inspection Certificate regarding discharge and condition of wheat).

 II. DISCUSSION

 A. Service of Process Under the FSIA

 Plaintiff demonstrates in its papers that it has carefully followed the service of process requirements of the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1602 et seq. Because no "special arrangement" regarding service exists between the parties in this case under 28 U.S.C. § 1608(a)(1), and because there is no applicable international convention with which plaintiff must abide in order to effect service on Armenia under 28 U.S.C. § 1608(a)(2), plaintiff properly attempted service in accordance with Section 1608(a)(3) of the FSIA. Section 1608(a)(3) provides that when service cannot be effected under Sections 1608(a)(1) or (a)(2), it is to be done by mailing the summons, the complaint and a notice of suit (together with a translation of each into the official language of the foreign sovereign state) by any form of mail requiring a signed receipt, addressed by the Clerk of the Court to the head of the ministry of foreign affairs of the foreign state. 28 U.S.C. § 1608(a)(3); see Pl.'s Mot. for Default Judgment, Ex. 10(a) (July 14, 1995 letter to Clerk of the Court from attorney for plaintiff requesting assistance in effecting service pursuant to 28 U.S.C. § 1608(a)(3)); Ex. 10(b) (Affidavit of Nicholas H. Cobbs in Support of Service of Process under 28 U.S.C. § 1608(a)(3)); Ex. 10(c) (form indicating dispatch of materials to the Ministry of Foreign Affairs, Republic of Armenia by registered mail, dated July 20, 1995). The Republic of Armenia failed to respond to this method of service within thirty days. *fn2"

 Pursuant to Section 1608(a)(4) of the FSIA, plaintiff then had two copies of the summons and complaint and a notice of suit, all translated into Armenian and requiring a signed receipt, forwarded to the Clerk of the Court. Pursuant to the same section of the Act, the Clerk of the Court dispatched all of these papers to the Secretary of State in Washington, D.C., for transmittal through diplomatic channels. On January 22, 1996, the Clerk received a certified copy of a diplomatic note from the State Department confirming that the papers were properly served on the Republic of Armenia on December 15, 1995. See Pl.'s Mot. for Default Judgment, Ex. 10(d) (Affidavit of Nicholas H. Cobbs requesting Foreign Mailing); Ex. 10(e) (January 22, 1996 letter from Carmen A. DePlacido, U.S. Department of State, to Mary Beavers, U.S. District Court Clerk's Office, verifying service). Under 28 U.S.C. § 1608(c)(1), the date of the State Department's transmittal, December 15, 1995, is the date upon which Armenia was properly served. The Court concludes that service has been properly effected on the Republic of Armenia under the Foreign Sovereign Immunities Act.

 Despite the fact that plaintiff properly effected service on defendant on December 15, 1995, the Republic of Armenia failed to enter an appearance, answer or otherwise respond to the complaint. After waiting nearly one year for it to do so, the Clerk of the Court entered default against the Republic of Armenia on December 13, 1996. Armenia still has entered no appearance in this case. Plaintiff has now filed a motion for entry of default judgment and requests the Court to enter judgment against Armenia for the costs it incurred in attempting to deliver the donation of wheat from the United States to Armenia.

 B. Plaintiff's Motion for Entry of Default Judgment

 Under the Foreign Sovereign Immunities Act, if a claimant has properly served a foreign sovereign defendant and the foreign sovereign has failed to respond within sixty days of service, the Court may enter default judgment; but it may do so only if the claimant is entitled to default judgment under both Rule 55 of the Federal Rules of Civil Procedure and under the FSIA itself. The FSIA provides special protections to foreign states against the swift entry of default judgments in addition to the protections normally provided under the Federal Rules. It directs that "no judgment by default shall be entered by a court of the United States . . . against a foreign state . . . unless the claimant establishes [its] claim or right to relief by evidence satisfactory to the court." 28 U.S.C. § 1608(e). Congress intended by this provision to afford foreign sovereigns the same protections against the speedy entry of default judgment that the United States was given under the Federal Rules of Civil Procedure. See Commercial Bank of Kuwait v. Rafidain Bank, 15 F.3d 238, 242 (2d Cir. 1994). *fn3" But neither Section 1608(e) of the FSIA nor Rule 55(e) of the Federal Rules of Civil Procedure "relieves the sovereign from the duty to defend cases and to obey court orders." Id.

 C. Plaintiff's Evidence of Its Right to Judgment

 It is with the protections of the FSIA in mind, and specifically the requirement of Section 1608(e) that plaintiff establish its claim or right to relief with satisfactory evidence, that the Court considers plaintiff's motion for ...


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