## Facts

- Shipping Corporation of India Ltd. (SCI) chartered a vessel to Jaldhi Overseas Pte Ltd. (Jaldhi) to carry iron ore from India to China.
- A dispute arose over amounts allegedly owed to SCI; the merits were subject to arbitration in England.
- To secure its maritime claim, SCI obtained an ex parte maritime attachment under Supplemental Admiralty Rule B in the Southern District of New York.
- The attachment order targeted “all of Jaldhi’s property” in the district, including electronic fund transfers (EFTs) passing through New York intermediary banks.
- SCI attached about $4.8 million in EFTs temporarily held by New York intermediary banks; roughly $4.6 million involved transfers where Jaldhi was the beneficiary, and the remainder where Jaldhi was the originator.
- The district court vacated the attachment in part, concluding that EFTs where Jaldhi was only the beneficiary were not Jaldhi’s attachable property, and certified an interlocutory appeal.
- SCI appealed and Jaldhi cross-appealed; major New York banks participated as amicus, citing operational burdens from EFT attachments.

## Issues

1. Whether an EFT in the hands of a New York intermediary bank is “property” of the defendant (as originator or beneficiary) that may be attached under Supplemental Admiralty Rule B.
2. Whether the court should overrule prior circuit precedent permitting Rule B attachment of such intermediary-bank EFTs.

## Decision

- The Second Circuit held that EFTs in the temporary possession of intermediary banks are not property of either the originator or the beneficiary under New York law and therefore are not subject to Rule B attachment.
- The court overruled its prior decision authorizing such attachments.
- The court directed that Rule B attachments of intermediary-bank EFTs be vacated.

## Legal Principles

- Rule B permits attachment only of “the defendant’s tangible or intangible personal property” found within the district when the defendant cannot be found there.
- State law determines whether the defendant has a property interest in an item sought to be attached under Rule B.
- Under New York U.C.C. Article 4A, neither the originator nor the beneficiary has a property interest in an EFT while it is in transit through an intermediary bank; their rights run against their respective banks at specified stages of the transfer.
- Because intermediary-bank EFTs are not the defendant’s property, their fleeting presence in New York does not supply a valid res for Rule B attachment.

## Conclusion

The court ended the practice of attaching in-transit EFTs at New York intermediary banks under Rule B by holding that such transfers are not the defendant’s property under New York law, and it overturned prior circuit precedent that had allowed those attachments.


Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009)