Opinion
08 Civ 09683 (SHS).
December 16, 2009
OPINION ORDER
On October 27, 2009, defendant PT Tirta Samudera Caraka filed a motion to reopen this action, vacate the Order of Maritime Attachment and Garnishment dated November 12, 2008, and release any funds attached pursuant to that Order from the Court's registry. In response, plaintiff contends that the Order of Maritime Attachment is valid and the funds should not be released because (1) the U.S. Court of Appeals for the Second Circuit's holding in Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009) was incorrect; (2) electronic funds transfers ("EFTs") were attachable property at the time they were attached in this action; (3) Jaldhi does not apply to funds held in the court registry, rather than by banks; (4) the Court should not give Jaldhi retroactive effect; and (5) it would be inequitable for the Court to vacate the Order of Maritime Attachment at this time. These arguments are unavailing.
The Second Circuit held in Jaldhi that "[b]ecause EFTs in the temporary possession of an intermediary bank are not property of either the originator or the beneficiary under New York law, they cannot be subject to attachment under [Supplemental Maritime] Rule B." 585 F.3d at 71. This is the law in this Circuit. Thus, EFTs are no longer attachable property, regardless of plaintiff's contention to the contrary. Similarly, the restrained funds remained within the scope of the holding in Jaldhi even once the garnishee banks transferred the funds to the court registry. Mere re-labeling of the funds does not change their origin. The fact that on June 23, 2009, the Court directed the garnishee banks to transfer the attached funds to the court's registry also does not change the fact that the funds were attached as EFTs and, as we subsequently learned in Jaldhi, EFTs are not subject to attachment. The fact that counsel for both Bountiful Pro Limited and PT Tirta, Samudera Caraka consented to the entry of the June 23, 2009 Order does riot change the fact that the Court lacked jurisdiction to attach the EFTs that the garnishee banks subsequently deposited into the Court registry. Finally, the Second Circuit recently determined that its holding in Jaldhi applies retroactively. Hawknet, Ltd. v. Overseas Shipping Agencies, 587 F.3d 127 (2d Cir. 2009). Accordingly, Bountiful Pro Limited's arguments are unavailing and the attached funds must be released.
For the reasons set forth above, IT IS HEREBY ORDERED that the Order of Maritime Attachment and Garnishment in this action dated November 12, 2008 is hereby vacated and the complaint is dismissed without prejudice.
SO ORDERED: