Propetrol Limited v. QMF Energy DMCC

Background

Propetrol Limited filed a petition seeking to enjoin, or stop, an arbitration that QMF Energy DMCC had initiated against it in New York before the Society of Maritime Arbitrators. Although the court issued an electronic summons for QMF, the opinion states that QMF had not yet been served when the court ruled.

Propetrol later submitted a proposed order to show cause seeking two forms of relief: a temporary restraining order and preliminary injunction staying the arbitration, and authorization to serve QMF by alternate methods. Propetrol proposed express courier service to QMF’s registered office in the United Arab Emirates, along with email and first-class mail to QMF’s local New York counsel for the arbitration. Propetrol’s materials acknowledged that this counsel was not authorized to accept service for QMF in this federal case.

Emergency Relief

The court denied without prejudice Propetrol’s requests for a temporary restraining order and preliminary injunction. Federal Rule of Civil Procedure 65(b) requires specific facts in an affidavit or verified complaint showing that immediate and irreparable harm will occur before the other side can respond, as well as a written certification by the attorney about efforts to give notice and why notice should not be required. The local rule also requires a clear and specific affidavit-based showing of good and sufficient reasons for proceeding without an ordinary motion.

The court found that Propetrol had made none of those required showings. It stated that Propetrol could bring its request through a properly served and filed notice of motion under the federal and local rules. Because the court denied the request for failure to comply with those procedural requirements, it expressly did not reach or comment on the merits of the application to stay the arbitration.

Alternate Service

The court also denied without prejudice Propetrol’s request for authorization to use alternate service. Under Federal Rule of Civil Procedure 4(e)(1), service may follow the law of the state where the federal court is located. Propetrol relied on New York Civil Practice Law and Rules § 308(5), which permits a court-directed method of service when service by the statute’s other methods is impracticable.

The court found that Propetrol had provided only a conclusory assertion that ordinary service would be impracticable. Its declarations and exhibits did not describe actual prior attempts to serve QMF directly, and its memorandum did not show due diligence or prior attempts under the other service methods. The court explained that although § 308(5) does not require proof of due diligence or actual prior attempts as such, it does require a showing of impracticability under the facts and circumstances of the particular case. Propetrol’s reliance on general statements about the difficulty and expense of serving QMF in the United Arab Emirates, drawn from an unrelated case, did not satisfy that requirement. The court also rejected Propetrol’s complaint that QMF’s arbitration counsel would not accept service in this separate federal action.

Disposition

The court declined to enter Propetrol’s proposed order to show cause for emergency relief. It denied without prejudice the requests for a temporary restraining order and preliminary injunction and denied without prejudice the application for leave to serve QMF by alternative means. The opinion did not decide whether Propetrol was entitled to stop the arbitration.