Subscribe to RSS FeedWhat happens when you write a cliff-hanger? You get comments likening your efforts to a soap opera. Well, sir, I challenge you to try and wring something interesting from this salt-cured subject that is the maritime law! Tough stuff. Enough though, let's look at what the Second Circuit just did . . .
Like any good soap opera, the plot requires a background story and, in this case, the New York financial world and something called an Electronic Funds Transfer fit the bill. Apparently, a very large percentage of the world's EFT's flow through New York so, say, you want to move money by wire transfer from somewhere foreign to somewhere even more foreign, that EFT's voyage may take it through New York.
Now, in the Supplemental Rules for Admiralty and Maritime Procedure, there is the infamous Rule B which allows for the pre-judgment (meaning before there is an outcome in the case) attachment and seizure of assets provided that the owner of the asset you intend to attach does not have a presence in the district where the asset is located. So let's say there's an arbitration in London against a charterer and let's say there's concern that a potential judgment against the charterer will be uncollectible because the charterer will simply fold up shop. What to do?
Voila, please welcome on stage, Rule B! You see, London counsel calls over to New York counsel and says: "Look here, chap. What we need is for you to seize a charterer's asset with that splendid Rule B thing you boys get to use." So, New York counsel gets an Order of Attachment from the Court, and trots it over to various banks for which charterer is know to use and . . .
Son of a gun, charterer unknowingly sends an EFT to its vendor in, say, Singapore and while en route it passes through New York and -- bingo -- the order of attachment grabs the EFT, bank rings New York counsel and says they're holding funds and charterer is scratching its head wondering what the hell just happened.
This was an increasingly popular legal avenue. Imagine in your mind's eye, the soap opera town with everybody merrily filing Rule B actions under blue skies and with plastic smiles. The camera angle changes to an interior view, doorbell chimes, and a smartly dressed maritime attorney, swings open his law firm's door. And who barges in? The Second Circuit, shoving the attorney aside and shouting: "We got it all wrong. You can't file these Rule B attachments. They're clogging up commerce. They're devaluing the dollar. No more, man! No more."
What you have here gives you the flavor of what the Second Circuit did. You can find the decision online (which is very readable and fairly interesting) if you search for its case name being Shipping Corp. of India v. Jaldhi, et al. More after the commercial break . . .
Underway and making way.
--- JKF
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