David Cinotti Authors Article in the New Jersey Law Journal, “What to Know About New Jersey Court’s Ruling in 'Quasi-in-Rem' Jurisdiction Case for Arbitral Awards”

David Cinotti, Partner at Pashman Stein Walder Hayden P.C., recently authored an article in the New Jersey Law Journal titled, “What to Know About New Jersey Court’s Ruling in 'Quasi-in-Rem' Jurisdiction Case for Arbitral Awards.” The article discusses a recent New Jersey district-court case, Simplot India v. Himalay Food International, which held that the court lacked personal jurisdiction to enforce a foreign arbitral award under the New York Convention against an Indian respondent.  The petitioner, which won the arbitration, argued that the court had quasi-in-rem jurisdiction over the respondent, which lost the arbitration, because the respondent’s New Jersey affiliate owed the respondent money from goods that the respondent sold the affiliate.  The court concluded that the petitioner had to show that the respondent had a clear right to money in the affiliate’s New Jersey bank account to assert quasi-in-rem jurisdiction. 

The article suggests that the court took an unduly restrictive approach to quasi-in-rem jurisdiction because it did not apply caselaw holding that due process is satisfied in an action to enforce a judgment where the judgment-debtor has any property (tangible or intangible), or consider the respondent’s intangible right to payment, which should have been deemed located in New Jersey, where the affiliate was located. The article contends that “an award-debtor can reasonably be haled into court where it has a property right—tangible or intangible—that could be used to satisfy an arbitral award in whole or in part.”

The article concludes:

“In future cases under the New York Convention, parties should consider making broader arguments about the types of property rights that can support quasi-in-rem jurisdiction including focusing on intangible property rights that might be deemed located in the state where enforcement is sought.”

To read the full article, click here.