ContiChem LPG v. Parsons Shipping Co.

ContiChem LPG (plaintiff) contracted with Parsons Shipping, Ltd. (Parsons) (defendant) for use of Parsons’s ship to transport cargo. The arbitration provision provided that disputes were to be resolved by arbitration in London under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (convention). The ship was unseaworthy, causing damages to ContiChem. ContiChem sought to use the ship as a security interest for its claims; however, the ship was subject to mortgages held by Den Norske Bank ASA (Den Norske). ContiChem filed a petition requesting that Parsons be compelled to arbitrate in London and requested that Parsons’s bank accounts be held as security for the arbitration award. ContiChem also sought a temporary restraining order (TRO) and preliminary injunction to restrict the transfer of funds from Parsons’s Unibank account pending arbitration. ContiChem advised Unibank that it would be transferring funds to Parsons’s Unibank account as payment for use of the ship and served a TRO on Unibank to prevent any payments from Parsons’s Unibank account to Den Norske. ContiChem then made the transfer to Unibank. The district court granted the TRO restricting the transfer of funds from Parsons’s account. Den Norske intervened, arguing that it was owed the funds. The district court granted Den Norske and Parsons’s motions to vacate the TRO and ContiChem’s attachment to the account and to deny the preliminary injunction that was granted by the court. ContiChem appealed, arguing that the court’s rulings should be reversed under New York Civil Practice Law and Rules (CPLR) and the Admiralty Supplemental Rule (ASR).