International Politics And Maritime Law Collide In Texas: Ministry Of Oil Of The Republic Of Iraq V. 1,032,212 Barrels Of Crude Oil, Et Al.

$100 million worth of disputed crude oil remains onboard a tanker about 60 miles offshore of Galveston, Texas, awaiting lightering, while a federal judge in Houston weighs the intricacies of international and maritime law.2

On July 28, 2014, the Ministry of Oil of the Republic of Iraq ("Iraq") filed suit in the Galveston Division of the Southern District of Texas, seeking to seize the cargo pursuant to Rules B, C, and D of the Federal Rules of Civil Procedure, Supplemental Rules for Admiralty or Maritime Claims. Iraq alleges the crude oil was illegally produced by the Kurdistan Regional Government of Iraq3 ("Kurdistan"), pumped through the Iraq-Turkey Pipeline and loaded onboard the MT UNITED KALAVRYTA.4 A warrant of attachment issued, but the cargo never came into the jurisdiction.5

Kurdistan entered a restricted appearance under Rule E(8) and filed a motion to vacate the attachment order. Kurdistan argued that 1) it was premature for the Court to consider vacatur, because the cargo had not yet been seized; 2) the Court lacked jurisdiction because the alleged conversion, if any, took place on land, within the Kurdistan region of Iraq; and 3) seizure of the cargo is barred under the Foreign Sovereign Immunities Act ("FSIA"). Iraq argued among other things that the conversion occurred at the time the oil was transferred from Turkish possession and loaded at Kurdistan's instruction onboard the MT UNITED KALAVRYTA as she lay in navigable waters off of Ceyhan, Turkey. After a reply and sur-reply, the Court heard oral arguments on August 22, and ruled on August 25.

As to prematurity, the plain language of Rule E(4)(f) suggests that a motion to vacate is only cognizable after property is arrested or attached.6 However, in treating Kurdistan's motion to vacate as a jurisdictional challenge, Judge Miller found the motion ripe for consideration, stating that "it would be illogical and inconsistent with the court's independent review duties to permit a jurisdictional attack only after an arrest has occurred."

On jurisdiction, the Court noted the current state of the law: "A party seeking a federal forum for an alleged maritime tort claim 'must satisfy conditions both [1] of location and [2] of connection with maritime activity.'"7 Based in part upon statements in Iraq's pleadings, the Court found that Kurdistan's alleged act of conversion occurred on land when Kurdistan exercised dominion over the crude oil without Iraq's consent. Thus, failing the...