Due to the condition of the Bankrupt's Estate and other matters bearing upon its administration, I have decided to request that the Bankruptcy Court authorize me to abandon pursuit of the above proceeding or request the formal withdrawal thereof. I have instructed the attorneys representing me in this matter to file a formal application forthwith, obtain the necessary hearing date thereon, give notice to those parties which the Judge requires to be notified and pursue such matter aggressively. It is my expectation that a decision will be forthcoming from the Bankruptcy Judge on such Motion within the next six (6) weeks.
I respectfully request the Chamber before whom the above proceeding is pending to continue this matter pending my request being considered by the Court. Promptly upon the disposition by the Court, I will furnish evidence of the Bankruptcy Judge's ruling to the Tribunal for its action.
The Tribunal notes that since the Respondents did not consent to the Claimant's intended withdrawal of its Claim, and since there are counterclaims pending in this Case, the Claimant's withdrawal would not result in termination of all proceedings in this Case, as the Tribunal would retain its jurisdiction over the counterclaims.
In view of these circumstances, the Claimant shall submit either its formal notice of withdrawal of the claims by 23 February 1987 or submit by 16 April 1987 [its Memorial and evidence].
IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN
DISTRICT OF TEXAS DALLAS DIVISION
MEMORANDUM OF UNDERSTANDING
agreed to on August 9, 1985 between the Islamic Republic of Iranian Air Force and Iran Aircraft Industries on the one part, and Behring International, Inc., on the other part.
WHEREAS at the commencement of the Behring Chapter 11 Proceeding, BII [Behring International, Inc.] asserted a claim of $347,958.42 plus costs, expenses, interest and attorneys fees against IRIAF under or by reason of an agreement entered into on August 14, 1983 (the "August 1983 Agreement") and BII asserted a possessory lien in the warehoused goods as security for the payment of the amounts claimed (the "Possessory Lien Rights"); and
WHEREAS since the commencement of the Behring Chapter 11 Proceeding, additional claims in excess of $50,000 have accrued which Behring DIP [Claimant as debtor in possession] asserts against IRIAF, which claim Behring DIP contended to be secured by the Possessory Lien Rights and other statutorily established rights against the warehoused goods; and,
WHEREAS the Claims Tribunal issued an Interim and Interlocutory Award in Case No. 382 on June 21, 1985 (the "Interim Award") which, among other things, directed BII to deliver the warehoused goods to IRIAF within 45 days of the issuance thereof unless a United States Court of competent jurisdiction establishes measures to protect the possessory lien rights asserted by BII in the warehoused goods; and,
WHEREAS following the entry of the Claims Tribunal's Interim Award, Behring DIP instituted adversary No. 385-3653-M against IRIAF et al. (the "Adversary Proceeding") and obtained ex parte a temporary restraining order (the "TRO") enjoining IRIAF from interfering with Behring DIP's custody and possession of the warehoused goods and protecting Behring DIP's custody and possession pending a further hearing by the Court; and,
1.2. This MOU [Memorandum of Understanding] is subject to approval by the Bankruptcy Court in which the adversary proceeding is pending upon a hearing at such time and after notice to such parties as may be directed by the Court (the "Court Approval"). This MOU is effective and binding upon the parties, subject to such court approval being obtained. Navarro Trustee will forthwith file a motion requesting Court Approval hereof, obtain a hearing date thereon on August 30, 1985 or as soon thereafter as the Bankruptcy Court may schedule the same and cause notice thereof to be given to such parties as may be required by the Bankruptcy Court. Upon Court Approval, the MOU shall be implemented as set forth below. If Court Approval is not given, the MOU shall be of no further effect and a request shall immediately be made for the Court to schedule a hearing upon Navarro Trustee's request for preliminary injunction.
2. CONTINUATION OF TRO
2.1 The TRO shall, by agreement be continued in full force and effect by the Bankruptcy Court pending (i) Court Approval of the MOU... The Agreement to continue the TRO does not constitute and shall not be construed, as a waiver by IRIAF of any rights or privileges which IRIAF enjoys under international law or the domestic law of the United States.
4. IMPLEMENTATION UPON COURT APPROVAL
4.1 Immediately upon Court Approval, the sum of $310,000.00 (Three hundred ten thousand dollars) shall be deposited into the Registry of the Bankruptcy Court by IRIAF as the agreed amount which Navarro Trustee will accept in settlement of the claims through Sep. 1985, described in [the recitals], to be disbursed by the Bankruptcy Court upon the conditions set forth below:
4.2 Navarro Trustee shall, immediately upon Court Approval, deliver possession of the warehoused goods to IRIAF "as is--where is," and an order shall be entered requiring such delivery, provided the deposit mentioned in paragraph 4.1 is made. IRIAF will, at its sole expense, immediately commence removal of the warehoused goods from the Edison Facility and relocate the same at Sterling, Virginia (the "Virginia Facility"), except for those containers with chemicals which are to be disposed as noted below.
4.3 The containers containing chemicals with a limited shelf life and/or which have leaked will be removed and disposed of by a licensed contractor engaged by IRIAF consistent with applicable U.S./Environmental requirements therefor. The spillage in or about the Edison Facility will be cleaned up by such contractor. The cost for removal, disposal and spillage clean-up of such chemicals will be borne by IRIAF. Further, IRIAF will hold Navarro Trustee harmless from all cost, expense or liability of whatever nature incident to or arising out of the removal and disposition of the chemicals and the spillage clean-up.
4.5 IRIAF shall obtain all necessary licenses relating to the removal of the warehoused goods from the Edison Facility and relocation thereof to the Virginia Facility at its sole expense.
4.7 When all warehoused goods have been removed from the Edison Facility, the attorney for IRIAF shall immediately notify Navarro Trustee and the Bankruptcy Court, whereupon the Bankruptcy Court shall order the funds previously paid into the Registry pursuant to paragraph 4.1, together with accrued interest thereon, paid over to Navarro Trustee. Notwithstanding the foregoing notification requirement, the Bankruptcy Court shall order such funds paid over on September 30, 1985 or at such extended date as provided for in paragraph 4.8 below.
5. FINAL JUDGMENT
5.1 Immediately after the removal of all of the warehoused goods from the Edison Facility and relocation at the Virginia Facility by IRIAF and the payment of the funds to Navarro Trustee as provided in Section 4 above, a final order shall be entered in the Adversary Proceeding which:
a. confirms the delivery to and receipt of custody and possession of the warehoused goods by IRIAF on an "as is--where is" basis;
b. confirms payment to Navarro Trustee of the agreed settlement amounts;
e. confirms that the claim filed by BII against IRIAF in the Claims Tribunal, Case No. 382, and the counterclaims asserted against BII in that case by IRIAF are not affected by the MOU, the proceedings herein or by the Order to be entered by the Bankruptcy Court, and that nothing contained in the MOU, or any action taken by the parties pursuant thereto shall waive or release the defenses to the counterclaims or any pre-January 19, 1981 claims of Navarro Trustee against IRIAF;
f. confirms that Navarro Trustee shall assert no claims or demands against IRIAF for warehouse charges in the Claims Tribunal in Case No. 382; and
g. confirms that Navarro Trustee shall have waived, relinquished and released any Possessory Lien Rights and Statutorily Established Rights in and to the warehoused goods.
The Claimant originally requested the Tribunal to issue an award in its favor in the amount of "approximately U.S. $432,230.00 [excluding interest] representing the warehouse and storage costs incurred by Behring from January 15, 1980 through December 31, 1981." As explained in the Interim Award,9 the Claimant obtained at least partial relief for its alleged storage costs accrued after 19 January 1981 pursuant to a United States District Court Order dated 30 December 1981.
5.1. Immediately after the removal of all the warehoused goods from the Edison Facility and relocation at the Virginia Facility by IRIAF and the payment of funds to Navarro Trustee as provided in Section 4 above, a final Order shall be entered in the Adversary Proceeding which:
e. confirms that the claim filed by BII against IRIAF in the Claims Tribunal, Case No. 382, and the counterclaims asserted against BII in that case by IRIAF are not affected by the MOU, the proceedings herein or by the Order to be entered by the Bankruptcy Court, and that nothing contained in the MOU, or any action taken by the parties pursuant thereto shall waive or release the defenses to the counterclaims or any pre-January 19, 1981 claims of Navarro Trustee against IRIAF; and
f. confirms that Navarro Trustee shall assert no claims or demands against IRIAF for warehouse charges in the Claims Tribunal in Case No. 382;
When all of the foregoing conditions of settlement have been either fulfilled, waived or otherwise satisfied, and all I.R.I.A.F. and I.A.C.I. goods presently in the Edison warehouse have arrived at McGuire Air Force Base or on December 15, 1979 whichever is earlier (provided that the failure of the goods to reach McGuire AFB has not been caused or contributed to by the conduct of Behring), IRIAF and Behring will join in a request for a Consent Order directed to the District Court to order such sum to be paid to Behring out of the Trust Account as is necessary to complete payment of the amounts owed by I.R.I.A.F., I.A.C.I. and the Iranian Navy to Behring, plus $1,000,000.00 and any additional amount remaining in the Trust Account is to be returned to I.R.I.A.F. exclusive of interest which accrues after the execution of this Agreement on all sums to which Behring is entitled pursuant to the terms hereof, which accrued interest shall be paid to Behring.
(Emphasis added). The Tribunal finds that according to the above, if any balance remained in the Trust Account, it was to be returned to IRIAF and not to the Claimant. Paragraph 16 of the 1979 Settlement Agreement can therefore not form the basis for the Claimant's allegation that it is entitled to the amount of U.S. $392,798.12 (plus interest). Furthermore, the Claimant has provided no evidence (i.e., copies of documentation allegedly supplied to the Respondents) to indicate that it is owed any sums under the 1979 Settlement Agreement. The record is clear, as noted in the Interim Award, that the Claimant received the respective sums of U.S. $635,000.00 and U.S. $1,000,000.00 provided for under that Agreement. Because the Claimant has provided no documentation to the Tribunal to indicate that there are any other amounts which the Respondents allegedly owe to the Claimant under the terms of paragraph 16, the Claim for the balance of monies in the Trust Account must be rejected.
(1) an award ordering the Claimant to pay IRSL's alleged outstanding bills (plus interest);
(2) an award for restitution of U.S. $213,200.00 (plus interest);
(3) an award for damages in the amount of U.S. $7,626.15 (plus interest) resulting from the alleged loss of the artificial kidney;
(4) an award for damages resulting from the alleged disappearance of goods stored at the Claimant's warehouse in the amount of U.S. $64,456,959.88 (plus interest);
(5) an award for attorney's fees and costs, including the cost of the Expert appointed by the Tribunal, in the amount of U.S. $295,000.00; and
(6) suspension of (a) some parts of the Counterclaim for damages resulting from the alleged disappearance of goods formerly stored at the Claimant's warehouse and (b) the entire Counterclaim for consequential damages in the amount of U.S. $500,000,000.00 until the rendering of an award by the Tribunal in Cases B-1 and B-61.
2. Behring will, within one week after payment of the $635,000.00 pay Arya National Shipping Lines the amount of their outstanding bills documented in accordance with FMC regulations for I.R.I.A.F. and I.A.C.I. shipments arising out of freight forwarding contracts between the parties and with respect to material handled by Behring. Behring represents that all other inland and overseas freight charges for which I.R.I.A.F. and I.A.C.I. have been billed by Behring and for which Behring has received reimbursement from I.R.I.A.F. or I.A.C.I. have been paid.
With regard to the alleged breach of duty by the Claimant, the Respondents essentially assert that the Claimant has failed (i) to allow the goods to be removed from the warehouse and (ii) to use adequate care in storing the goods despite receiving substantial payments.
11. I.R.I.A.F. and I.A.C.I. will arrange for WRAMS, Inc. or other carrier(s) to remove the I.R.I.A.F. and I.A.C.I. and Iranian Navy (if any) materials from the warehouse and transport them to McGuire AFB for trans-shipment to Iran. Behring will cooperate with WRAMS personnel in having the materials removed by having the materials placed at the Edison warehouse loading docks.
14. Behring will, without charge, allow I.R.I.A.F. and I.A.C.I. materials to remain in the Edison warehouse until all such materials are removed for shipment to Iran. However, it is agreed that all materials will be removed from Edison warehouse prior to December 15, 1979, and if said materials have not been removed from the Edison warehouse prior to December 15, 1979, Behring shall nevertheless receive all payments to which it is entitled under this Settlement Agreement unless such inability to remove them is caused or contributed to by the conduct of Behring. In no event will the materials in question be allowed to remain at the Edison warehouse beyond December 15, 1979.16
Behring, in a good faith effort to free its warehouse of defendants' property, authorized and instructed Behring's counsel on or after January 14, 1980, the final day of defendants' authorized use of the warehouse, to cooperate with defendants in accomplishing the removal of the property. In fact, elaborate arrangements were made to transfer and secure the property from Behring's Edison facility to McGuire Air Force Base. To this end and on January 24, 1980, Behring joined the defendants in an application for a Treasury license which would have allowed such a place-to-place transfer.
On April 29, 1980, and pursuant to arrangements including those made with the United States Air Force to secure the property at McGuire Air Force Base, a license for a place-to-place transfer in fact issued from the Treasury. Defendants, however, failed to accomplish the removal of the material during this time period and the license expired pursuant to its own terms on September 29, 1980.
The application for the Treasury license and the Treasury license itself have not been submitted as evidence to the Tribunal. In reply to this contention, the Respondents have asserted that "Behring's allegation that it went so far as to obtain special licenses from the United States Department of Treasury which permitted [the Respondents] to remove its materials from Behring's warehouse is completely false."
[O]n 14th November 1979, the President of the United States froze all Iranian assets in the United States and, thus, [the Respondents were] not able to take any action to remove [their properties] from Behring's warehouse until the Algiers Declarations were adhered to by Iran and the United States of America.
(Emphasis added). The record also includes a Memorandum of Law which was originally filed by the Respondents in the proceedings before the United States District Court. The following statement appears in this Memorandum:
On November 14, 1979, one week after the parties settled their claims, President Carter declared a national emergency and froze all Iranian assets (Executive Order 12170, 44 Fed.Reg. 65729, November 15, 1979, followed by the Iranian Assets Control Regulations, 31 C.F.R., Part 535). The Executive Order and its implementing regulations immobilized the Iranian property stored in the Behring facility and prevented its removal.
(Emphasis added). Considering the above statements and the lack of any persuasive proof establishing any act by the Claimant occurring on or prior to 19 January 1981 that could be construed as a breach of its duty to allow the goods to be removed, the Tribunal finds that it is not proven that such breach occurred during the relevant jurisdictional period.20
A warehouseman has a lien against the bailor on the goods covered by a warehouse receipt or on the proceeds thereof in his possession for charges for the storage or transportation (including any terminal charges), insurance, labor or charges present or future in relation to the goods, and for expenses necessary for the preservation of the goods or reasonably incurred in their sale pursuant to law.
In the same document, the Claimant asserts that, as a warehouseman, it was required to perform services "including but not limited to:... providing adequate, well-secured warehousing space." The Tribunal thus finds that the Claimant itself recognized that it had a duty in relation to the goods and that this duty implied that, at a minimum, it had to take reasonable measures to adequately store the Respondents' property, a duty that did not lapse on 15 December 1979.
THE TRIBUNAL HEREBY AWARDS AS FOLLOWS:
1) The Claim of BEHRING INTERNATIONAL, INC. for storage costs allegedly incurred from 15 January 1980 through 19 January 1981 (plus interest) is dismissed on the merits.
2) The Claim of BEHRING INTERNATIONAL, INC. for the balance in the Trust Account as of 31 December 1981 (plus interest) is dismissed on the merits.
3) The Claim of BEHRING INTERNATIONAL, INC. for sanctions and punitive damages is dismissed on the merits.
4) The Counterclaim of the ISLAMIC REPUBLIC OF IRAN AIR FORCE, IRAN AIRCRAFT INDUSTRIES and THE GOVERNMENT OF IRAN for payment of the Iranian Islamic Republic Shipping Lines' alleged outstanding bills (plus interest) is dismissed on the merits.
5) The Counterclaim of the ISLAMIC REPUBLIC OF IRAN AIR FORCE, IRAN AIRCRAFT INDUSTRIES and THE GOVERNMENT OF IRAN for restitution of U.S. $213,200.00 (plus interest) is dismissed for lack of jurisdiction.
6) The Counterclaim of the ISLAMIC REPUBLIC OF IRAN AIR FORCE, IRAN AIRCRAFT INDUSTRIES and THE GOVERNMENT OF IRAN for damages resulting from the alleged disappearance of goods stored at BEHRING INTERNATIONAL, INC.'s warehouse is dismissed for lack of jurisdiction.
7) The Claim of BEHRING INTERNATIONAL, INC. for attorney's fees and costs is dismissed.
8) BEHRING INTERNATIONAL, INC. is obligated to pay U.S. $60,000.00 to the Respondents as reimbursement for attorney's fees and costs.
9) The Respondents are entitled to a refund of the balance in the Tribunal's account No. 22.214.171.1243. BEHRING INTERNATIONAL, INC. is obligated to pay U.S. $86,267.86 to the Respondents as reimbursement for the costs incurred in connection with the Expert's assistance in this Case.
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