Originally from Dispute Resolution Journal

INTERNATIONAL—MARITIME SEQ.—U.N. CONVENTION ATTACHMENT—9 U,S,C, §201 ET

The court held that a vessel owner may, subsequent to the commencement of arbitration, obtain a maritime attachment. In this action the defendant moved to vacate a maritime attachment obtained by plaintiff pursuant lo Rule B (1) of the Supplemental Rules of Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure. The attachment had been obtained after an arbitration proceeding had been initiated in London, England, wherein both parties designated their respective arbitrators pursuant to a charter party. The plaintiff sought court attachment after the defendant rejected its request to post security in the arbitration. The complaint alleges that (he defendant was liable for demurrage under the charter party, as well as under a "side letter" whereby defendant guaranteed payment of demurrage if the receiver of shipment failed to pay demurrage within 60 days after discharge. The dis;iute arose when the receiver failed to pay demurrage upon unloading of the vessel. The first ground for defendant's motion to vacate the attachment is that a guarantee to pay demurrage due from a third party is not a maritime contract, and hence the attachment should not have been issued under Rule B (1) of the Supplemental Rules, The plaintiff agreed with this interpretation but asserted that its claim was against the defendant as the primary obligor for all demurrage. The court held that absent a specific exonerating clause in the ( harter party the ambiguity must be resolved against the defendant. Thus the claim was a traditional maritime claim subject to traditional maritime procedures and attachment process. The defendant's next argument rests on the assertion that a maritime attachment obtained pursuant to Rule B (I) of the Supplemental Rules may not be utilized solely for the purpose of obtaining security. The defendant argued that because plaintiff, prior to this suit and the issuance of the attachment, had already nominated its arbitrator, appeared in the arbitration proceeding and subjected itself to jurisdiction therein, this action was commenced solely to obtain the writ of attachment to secure plaintiff's claim in arbitration and thus was an abuse of the process of the court. The court acknowledged that the plaintiff filed the suit primarily to obtain the benefit of the attachment procedures but concluded that this did not require vacatur of the attachment. the Federal Arbitration Act, 9 U.S,C, §8 expressly provided that a partly "may begin his proceeding hereunder by libel and seizure cf the vessel . . ." The court noted that there was nothing in the Act that suggests that the provisional remedy may not be applied for after the commencement of arbitration. Finally, the defendant urged vacatur of the attachment on the ground that the U,S, Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Convention), 9 U,S,C. 5201 et seq, does not authorize attachments either pre- or post-arbitration. The court, citing Andros Compania Maritime, S.A. v, Andre & Cie., S.A., 450 F,Supp, 88 (S,D,N,Y, I 977), held that the Federal Arbitration Act was not inconsistent with the Convention or its policies.

Paramount Carriers Corp, v. Cook Industries, Inc., 465 F.Supp, 599 (S.D.N.Y. 1979).