Maritime Attachment & Arrest

• Published date: 02 December 2020
• Subject Matter: Transport, Marine/ Shipping
• Law Firm: Montgomery McCracken Walker & Rhoads LLP
• Author: Mr Robert E. O'Connor

Maritime attachments and vessel arrests are very useful tools for maritime claimants. The successful use of Rule B and Rule C of the Federal Rules of Civil Procedure can provide prejudgment security and potential satisfaction for maritime claims and judgments. The underlying rights and procedures are in many respects unique to maritime law, and they can vary from district to district. Plaintiffs should be familiar with the local rules and consider their exposure to counterclaims and corresponding countersecurity before commencing attachment or arrest proceedings. In turn, defendants or those claiming an interest in any attached or arrested property should consider making a restricted appearance, posting security, and requesting an emergency hearing. This article briefly discusses maritime attachments and arrests under US maritime law.

Rule B: Attachment

Maritime attachment is an ancient remedy that predates not only the Federal Rules of Civil Procedure, but also the formation of the United States. It provides a means to obtain prejudgment security and jurisdiction for claims against an otherwise absent defendant, and to assure satisfaction of judgment if the underlying claims are ultimately successful. These procedures are important to the fundamentally transient maritime industry because, without them, "defendants, their ships, and their funds could easily evade the enforcement of substantive rights of admiralty law." Winter Storm Shipping. Ltd. v. TPI, 198 F. Supp. 2d 385, 387 (S.D.N.Y. 2002).

Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims provides in pertinent part:

(1) ... In an in personam action:

(a) If a defendant is not found within the district when a verified complaint praying for attachment and the affidavit required by Rule B(1)(b) are filed, a verified complaint may contain a prayer for process to attach the defendant's tangible or intangible personal property'up to the amount sued for'in the hands of garnishees named in the process.

(b) The plaintiff or the plaintiff's attorney must sign and file with the complaint an affidavit stating that, to the affiant's knowledge, or on information and belief, the defendant cannot be found within the district. The court must review the complaint and affidavit and, if the conditions of this Rule B appear to exist, enter an order so stating and authorizing process of attachment and garnishment. The clerk may issue supplemental process enforcing the court's order upon application without further court order.

In short, "an attachment should issue if the plaintiff shows that 1) it has a valid prima facie admiralty claim against the defendant; 2) the defendant cannot be found within the district; 3) the defendant's property may be found within the district; and 4) there is no statutory or maritime law bar to the attachment." Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2d Cir. 2006). Usually, a court's initial review of the complaint and entry of an order of attachment and garnishment is conducted ex parte, i.e., without prior notice to or participation of the defendant.

The verified complaint must allege both a maritime claim and a prima facie claim. These are related but separate concepts. Whether a plaintiff alleged a "maritime" claim is a procedural question governed by US maritime law, but whether a plaintiff alleged a "prima facie" claim is a substantive question governed by the law that applies to the claim (potentially, foreign law). The first prong of the analysis'maritime claim'is complicated by quirks of US maritime law. For example, a ship mortgage contract is a maritime contract, and breach of a ship mortgage contract would give rise to a maritime claim. In contrast, a shipbuilding contract is not a maritime contract, and a breach of a shipbuilding contract would not give rise to a maritime claim.

The verified complaint must be supported by an affidavit showing that the defendant cannot be found in the district. In simplest terms, this means that the defendant is not physically located where the attachment is being sought. But it also means, among other things, that the defendant does not have continuous or systematic contacts within the district that would make it subject to the court's general personal jurisdiction. The supporting affidavit will frequently declare that the plaintiff searched the internet and phone books, and that it could not find any contact information for the defendant within the district. However, some courts will nonetheless deny or vacate a maritime attachment if the defendant can be found within a "convenient" adjacent jurisdiction. The applicability of this equitable rule varies from district to district.

Once a plaintiff establishes Rule B's prerequisites, a court "must ... enter an order ... authorizing process of attachment and garnishment." The clerk of the court then issues a writ of maritime attachment and garnishment. Issues concerning when service of process is effective are frequently resolved by court orders permitting alternative service like, for example, daily...