## Facts

- ContiChem chartered the M/V *World Rainbow* from Parsons to carry LPG under a charter party requiring London arbitration under the New York Convention.
- ContiChem alleged the vessel was unseaworthy and that maintenance-related delays caused about $3 million in damages.
- While pursuing London arbitration, ContiChem sought U.S. provisional relief to secure a potential arbitral award by targeting Parsons’s Unibank account and freight payments.
- ContiChem obtained an ex parte TRO in the Southern District of New York restraining transfers of Parsons’s funds at specified banks, supported by a $100,000 undertaking and premised on New York CPLR provisional-remedy provisions.
- When the TRO was served, Parsons’s Unibank account had a zero balance.
- After service, ContiChem wired to that account freight money it owed Parsons, causing funds to enter the restrained account.
- Den Norske, a mortgagee with asserted priority security interests in Parsons’s freight proceeds and related assets, intervened and opposed the restraint.
- The district court vacated the TRO and denied a preliminary injunction and attachment, describing the TRO as improperly obtained.
- ContiChem appealed.

## Issues

1. Whether New York CPLR § 7502(c) authorized attachment or injunctive relief in aid of a foreign-seated, New York Convention arbitration absent a showing that an eventual award would be rendered ineffectual without such relief.
2. Whether a maritime attachment under Admiralty Supplemental Rule B could be sustained where the targeted account contained no property at the time of service.
3. Whether a claimant may create attachable property by paying its own debt into an empty restrained account after service to manufacture a res within the district.
4. Whether the requested state-law and admiralty provisional remedies were compatible with the New York Convention framework and the parties’ chosen London forum.

## Decision

- The Second Circuit affirmed the district court’s orders vacating the TRO and denying preliminary injunctive and attachment relief.
- CPLR § 7502(c) relief was unavailable on this record because ContiChem did not satisfy the statutory requirement that, without provisional relief, any eventual arbitral award likely would be rendered ineffectual.
- Rule B relief could not rest on funds that were not present when process was served and were later introduced by the claimant’s own payment.
- The court rejected ContiChem’s attempt to manufacture attachable property in the district by wiring freight into an otherwise empty account after serving the TRO.
- The court also credited concerns that the requested relief was inconsistent with the London-seated arbitration arrangement and complicated by Den Norske’s asserted superior interests.

## Legal Principles

- Under CPLR § 7502(c), provisional relief in aid of arbitration is extraordinary and requires a concrete showing that, without such relief, a prospective arbitral award will likely be rendered ineffectual.
- Maritime attachment under Admiralty Supplemental Rule B requires the defendant’s attachable property to exist in the district at the time of service; later-acquired funds generally cannot cure an initial absence of a res.
- Courts will not permit a party to create attachable property through unilateral post-service transfers designed to generate jurisdictional leverage and security.
- In foreign-seated arbitrations governed by the New York Convention, U.S. courts may deny provisional measures that are unjustified under governing standards and that risk interfering with the parties’ chosen arbitral forum or conflicting with prior creditor interests.

## Conclusion

The Second Circuit upheld vacatur of the ex parte restraint and denial of further security because the targeted account held no property when served, ContiChem attempted to create attachable funds by its own payment after service, and the stringent requirements for provisional relief in aid of a London-seated Convention arbitration were not met.


ContiChem LPG v. Parsons Shipping Co., 229 F.3d 426 (2d Cir. 2000)