Monjasa A/S v. M/V Peristil

Filing 49

ORDER: The Court DENIES Defendant's Motion 33 to Vacate Arrest and for Summary Judgment and DENIES Plaintiff's Motion 48 to Strike Defendant's Sur-Reply or, in the Alternative, to Allow Additional Briefing. The Court directs counsel to confer and to submit no later than July 1, 2013, a jointly proposed case-management plan and schedule to resolve all remaining issues in this matter. Signed on 06/12/2013 by Judge Anna J. Brown. (bb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

MONJASA A/S,

3:12-cv-01489-BR

Plaintiff,
OPINION AND ORDER
v.
M/V PERISTIL, her tackle,
engines, etc. in rem,
Defendant.

M. CHRISTINE HELMER
ELIZABETH TEDESCO MILESNICK
Miller Nash LLP
3400 U.S. Bancorp Tower
111 S.W. Fifth Avenue
Portland, OR 97204
[phone]
RICHARD V. SINGLETON II
JEREMY A. HERSCHAFT
Blank Rome LLP
405 Lexington Avenue
New York, NY 10174-0208
[phone]
Attorneys for Plaintiff

1 - OPINION AND ORDER

JOHN C. MERCER
TODD A. ZILBERT
ROBERT I. SANDERS
Wood Tatum
6915 S.W. Macadam Avenue, Suite 115
Portland, OR 97219
[phone]
Attorneys for Defendant
BROWN, Judge.
This matter comes before the Court on the Motion (#33) of
Defendant M/V PERISTIL to Vacate Arrest and for Summary Judgment.
Defendant seeks an order under Supplemental Admiralty Rule
E(4)(f) of the Federal Rules of Civil Procedure vacating the
arrest of Defendant on the ground that Plaintiff Monjasa A/S did
not have a maritime lien when it filed this action, which is a
necessary prerequisite for an in rem action and vessel arrest.
In the alternative, Defendant moves for summary judgment under
Federal Rule of Civil Procedure 56 on the grounds that Plaintiff
has failed to state a claim upon which relief can be granted
because this Court lacks in rem jurisdiction.
Plaintiff requests by letter (#48) dated May 10, 2013, that
the Court strike Defendant’s Sur-Reply Memorandum Regarding
Indian Authority or allow additional briefing as to the issue of
how an Indian court would decide the Motion (#33) pending before
this Court.

The Court construes Plaintiff’s letter request (#48)

as a Motion to Strike Defendant’s Sur-Reply or, in the
Alternative, to Allow Additional Briefing.
2 - OPINION AND ORDER

For the reasons that follow, the Court DENIES Defendant’s
Motion (#33) to Vacate and for Summary Judgment and DENIES
Plaintiffs’ Motion (#48) to Strike Defendant’s Sur-Reply or, in
the Alternative, to Allow Additional Briefing.

BACKGROUND
I.

Pertinent Factual Background.
The following facts are undisputed unless otherwise noted:
Plaintiff is a limited partnership under the laws of

Denmark.
ships.

Plaintiff supplies fuel oil to ocean-going and other

Defendant is an ocean-going, Croatian flag vessel owned

by Peristil Maritime, Inc., and managed by Jardroplov
International Maritime Ltd.
From April 1, 2010, until at least July 7, 2012, Defendant
was time-chartered from Peristil Maritime to charterer Carbofer
Maritime Trading ApS, a Danish business organization with a place
of business in Copenhagen.
In January 2012 Plaintiff sold and delivered 245.69 metric
tons of bunker fuel to Defendant through Carbofer at a price of
$192,866.65 with interest on the unpaid balance accruing at 2%
per month.
Plaintiff’s “Bunker Confirmation” provides:
Terms & Conditions Jan 2012 to apply.
website:

www.monjasa.com.”

3 - OPINION AND ORDER

“Monjasa Group

Copy available on our

The bunker fuel was consumed by Defendant.
Plaintiff issued Invoice 40395 dated January 24, 2012, in
the amount of $192,866.65 addressed to “M/V PERISTIL and/or
master and/or Owners and/or charterers and/or managers and/or
operators and/or Carbofer Maritime Trading ApS.”
Invoice 40395 only to Carbofer in Denmark.

Plaintiff sent

Payment of the

Invoice was due February 13, 2012.
Carbofer did not timely pay the Invoice and has not
responded to demands by Plaintiff to pay the Invoice.
II.

Procedural Background.
A.

The India proceedings.

On approximately April 13, 2012, Plaintiff filed a
proceeding in the High Court of Gujarat at Ahmedabad in Admiralty
seeking the arrest of Defendant, which was at the port of
Magdalla in the State of Gujarat, India, at the time.
The initiating pleading in that proceeding is called the
“Plaint.”

Decl. of Jeremy A. Herschaft in Support of Mem. in

Opp'n to Def.'s Mot. to Vacate Arrest and for Summ. J., Ex. A.
The Plaint named “Monjasa A/S” as plaintiff and “M.V. ‘Peristil’
and her Owners/Managers/Charterers and all other Persons
concerned and/or interested in her” as defendants and sought to
recover sums due to Plaintiff under Invoice 40395 for the
delivery of fuel to Defendant in Hong Kong.

Id.

In the Plaint Plaintiff made a number of statements,
4 - OPINION AND ORDER

including:
By this suit, the Plaintiff is seeking the
arrest, sequestration, condemnation and sale
of the Defendant Vessel for securing and/or
satisfying the Plaintiff’s claim in
arbitration in the principal sum of USD
1,92,866.65 accrued interest USD 6,557,47
(till 06th April 2012). . . . [Plaint at
¶ 3.]
The Defendant Vessel has used and/or consumed
and/or benefited [sic] from the said bunkers
and/or has availed of the same for
prosecuting her voyages. The Plaintiff has,
however, not been paid in respect of the said
bunkers supplied. The Plaintiff has
therefore been constrained to file the
present Suit seeking security of its claim in
arbitration, to be invoked as under
applicable terms and conditions. [Plaint at
¶ 3.]
The supply was effected at the request of the
Master/charterers/owner and the vessel is,
therefore liable in rem, to make payment to
the Plaintiff. [Plaint at ¶ 11.]
The Plaintiff is therefore filing this Suit
seeking security for the impending
arbitration, which the Plaintiff shall invoke
soon. [Plaint at ¶ 12.]
The Plaintiff’s claim arises by reason of
Bunkers supplied by the Plaintiff to the
Defendant Vessel. The Plaintiff submits that
the Bunkers are essential for the operation
of the vessel. The supply of Bunkers was a
supply of goods or materials supplied to a
ship for her operation or maintenance and
also constitute “necessaries.” The same
therefore give rise to and/or constitute a
maritime claim and/or maritime lien against
the Defendant Vessel-Vessel [sic] for the
Bunkers supplied. [Plaint at ¶ 15.]
The Plaintiff’s claim is a recognized
maritime claim. . . . . Such a claim has
5 - OPINION AND ORDER

also been recognized as constituting a valid
maritime claim, by the Supreme Court of India
in the case of m.v. Elizabeth. The Plaintiff
is entitled to proceed in rem and this
Hon’ble Court has jurisdiction to entertain
and try and dispose of the Suit under the
provisions of the Admiralty Courts Act, 1861
and the provisions and principles of
admiralty law as applicable and having force
in India. In addition, the supplies to the
time chartered vessel, made as aforesaid,
were effected as per a contract containing
General Terms and Conditions of the Plaintiff
Group which incorporate the Maritime law of
the United States. Under the said law such
supplies would give rise to a maritime lien.
The Plaintiff thus has a maritime claim
and/or maritime lien against the Defendant
Vessel. The Plaintiff is entitled to obtain
security for the said claim in arbitration by
the arrest, sequestration, detention and
condemnation of the Defendant Vessel.
[Plaint at ¶ 18.]
Upon the ex parte application of Plaintiff, the High Court
of Gujarat issued an Oral Order on April 16, 2012, approving the
arrest of Defendant, and Defendant was subsequently arrested at
Magdalla, India.

Herschaft Decl., Ex. B.

The April 16, 2012, Oral Order provides in part:
Ms. Padrami Sheth, learned counsel for
plaintiff, submitted that the claim is with
respect to supply of the bunkers i.e. the
necessaries which is supplied on the faith
and credit of the defendant vessel. Ms.
Sheth further submitted that the plaintiff is
commencing the Arbitration proceedings and
the present suit is filed as well as to
secure the claim in Arbitration. In support
of the above submission, Ms. Sheth has relied
upon the decision of Bombay High Court
reported in Islamic Republic of Iran v/s.
M.V. Mehrab & Ors. And in the case of J.S.
Ocean Linner [sic] LLC V/s Golden Progress
6 - OPINION AND ORDER

and also of this Court in Admiralty Suit No.
10 of CROFT SALES AND DISTRIBUTION LTD V/s.
M.V. Basil & others confirmed by the Division
Bench of this Court. [Oral Order at ¶ 2.]
Having heard Ms. Sheth, learned counsel for
the plaintiff, on going through the record
and considering the prima facie case
established by the plaintiff and upon the
plaintiff giving an undertaking in writing to
the Registar of this Court to pay such sums
by way of damages as this Court may award as
compensation in the event of the defendant
and/or any party sustaining prejudice by this
order, I do order that the Registrar of this
Court do issue a warrant for the arrest of
the defendant vessel M.V. PERISTIL along with
her hull, engines, gears, [etc.], and all
appurtenances, at present lying at the Port
at Magdalla. . . . [Oral Order at ¶ 3.]
On April 19, 2012, the High Court of Gujarat issued an Oral
Order permitting Defendant’s owner to deposit security in the
amount of $251,884.19 in the court’s registry and releasing
Defendant from the April 16, 2012, arrest order.

Peristil

Maritime provided substitute security by depositing $251,884.19
into the High Court’s registry and obtained Defendant’s release
from arrest.
These proceedings in the High Court of Gujarat will
hereinafter be referred to collectively as “the India
proceedings.”
B.

The present action.

On August 16, 2012, Plaintiff commenced the present action
by filing a Verified Complaint (#1) against Defendant pursuant to
the Federal Rules of Civil Procedure, Supplemental Admiralty Rule
7 - OPINION AND ORDER

C.

In its Complaint, Plaintiff set out the facts relating to the

proceedings in Gujarat, India, representing that it would dismiss
its lawsuit in India and return the security to Peristil Maritime
if this Court ordered the arrest of Defendant.

Compl. at ¶ 18.

On August 16, 2012, the Court issued an Order Authorizing
Issuance of Warrant for Arrest of Vessel (#9-1) and a Warrant for
Arrest of Vessel (#12), pursuant to which Defendant was arrested
at Kalama, Washington.
On August 16, 2012, Plaintiff also filed a “Purshis” with
the High Court of Gujarat to withdraw the India proceedings and
agreed to release the security that had been provided as part of
those proceedings.

The parties do not dispute such security was

returned to Peristil Maritime.
On August 17, 2012, Peristil Maritime provided $251,884.19
as substitute security for Defendant, and Defendant was released
from arrest in Kalama.
This Court heard oral argument on Defendant’s Motion to
Vacate Arrest and for Summary Judgment on April 4, 2013.

At oral

argument the Court requested the parties to provide supplemental
briefing on whether the cases cited in the High Court’s April 16,
2012, Oral Order identified clearly the basis upon which the
vessel was seized in the India proceedings.

The Court also

requested the parties to submit a stipulation as to whether the
Court has jurisdiction to arrest a vessel located in Kalama,

8 - OPINION AND ORDER

Washington.

On May 10, 2010, the parties filed a Stipulation

About the Court’s Jurisdiction Over the Columbia River (#47) in
which the parties stipulate:
[T]hat the District of Oregon has
jurisdiction to arrest a vessel (assuming all
other prerequisites for an arrest are
established) afloat on the Washington side of
the Columbia River at Kalama, Washington,
pursuant to the Oregon Admission Act, 11
Stat. 383 (1859), Local Admiralty Rule LR
1056-1, and The Annie M. Smull, 1 Fed Cas.
983 (D. Or. 1872)(under the act admitting
Oregon into the Union, Admission Act, Oregon
district court has jurisdiction to arrest
vessel moored at Kalama); see also Nielsen v.
State of Oregon, 212 U.S. 315 (1909), limited
by Heath v. Alabama, 474 U.S. 82, 91 (1985);
W.J. Jones & Sons v. Stocker, 271 F. Supp.
437, 438 (D. Or. 1967)(citing The Annie M.
Smull).
The Court took this matter under advisement on May 6, 2013.

STANDARDS
I.

Motion to Vacate.
The parties do not dispute Plaintiff bears the burden to

show why the Court should not vacate the arrest of Defendant.
See Fed. R. of Civ. P., Supp. Admiralty Rule E(4)(f).
An in rem action may be brought under Rule C of the
Supplemental Admiralty Rules “to enforce any maritime lien.”
Fed. R. Civ. P., Supp. Admiralty R. C(1)(a).

Rule C(3)(a)(I)

provides the district court may issue a warrant for arrest of the
vessel or other property that is the subject of the action upon
9 - OPINION AND ORDER

the filing of a verified complaint:
(3) Judicial Authorization and Process.
(a) Arrest Warrant.
(I) The court must review the complaint and any
supporting papers. If the conditions for an in
rem action appear to exist, the court must issue
an order directing the clerk to issue a warrant
for the arrest of the vessel or other property
that is the subject of the action.
After property is arrested under Rule C, the defendant may
contest it under Rule E(4)(f).
1017-1.

See also Local Admiralty R.

At a Rule E hearing, the defendant “can attack the

complaint, the arrest, the security demanded, or any other
alleged deficiency in the proceedings.”

Fed. R. Civ. P., Supp.

Admiralty R. E advisory committee's note (1985 amends.).

The

plaintiff has the burden “to show why the arrest . . . should not
be vacated.”

Fed. R. Civ. P., Supp. R. E(4)(f).

See also Local

Admiralty R. 1017-1.
The plaintiff need not prove its case at the Rule E(4)(f)
hearing.

Instead the plaintiff only needs to show “probable

cause” for the issuance of the warrant or writ (i.e., that the
plaintiff is “reasonably likely to prevail” on the merits of the
contested issue).

See OS Shipping Co. Ltd. v. Global Mar.

Trust(s) Private Ltd., No. 11 cv 377, 2011 WL 1750449, at *5 (D.
Or. May 6, 2011).

This “reasonable grounds/probable cause”

requirement “translates roughly to requiring that plaintiff show
entitlement to a maritime lien.”

10 - OPINION AND ORDER

Newport News Shipbuilding and

Dry Dock Co. v. S.S. Independence, 872 F. Supp. 262, 265 (E.D.
Va. 1994).
II.

Summary Judgment.
Summary judgment is appropriate when there is not a “genuine

dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”

Washington Mut. Ins. v. United

States, 636 F.3d 1207, 1216 (9th Cir. 2011).

See also Fed. R.

Civ. P. 56(a).
The court must draw all reasonable inferences in favor of
the nonmoving party.
(9th Cir. 2010).

Sluimer v. Verity, Inc., 606 F.3d 584, 587

"Summary judgment cannot be granted where

contrary inferences may be drawn from the evidence as to material
issues."

Easter v. Am. W. Fin., 381 F.3d 948, 957 (9th Cir.

2004)(citing Sherman Oaks Med. Arts Ctr., Ltd. v. Carpenters
Local Union No. 1936, 680 F.2d 594, 598 (9th Cir. 1982)).

DEFENDANT’S MOTION TO VACATE ARREST
AND FOR SUMMARY JUDGMENT
I.

Issue Before the Court.
Defendant contends Plaintiff has not met its burden to prove

that even if Plaintiff had a valid maritime lien against
Defendant under United States law, such lien survived when the
vessel was arrested in India and subsequently released after the
11 - OPINION AND ORDER

posting of security.
Pursuant to the “probable-cause” standard, the Court does
not make findings of fact as to the ultimate merits of
Plaintiff’s claim against Defendant.

Instead the Court, based on

the record to date, will only determine whether Plaintiff has
satisfied the probable-cause standard by showing that if
Plaintiff had a valid maritime lien under United States law, such
lien had not been discharged at the time this Court issued the
Warrant for Arrest.
The parties do not dispute any of the facts material to
Defendant’s Motion.

The question, therefore, is whether the

undisputed facts as applied to the relevant law entitle Defendant
to judgment as a matter of law.
II.

Applicable Law.
As noted, Defendant contends in its Motion to Vacate that

even if Plaintiff had any claim that entitled it to arrest
Defendant, it was a claim for a maritime lien under United States
law.1

Accordingly, Defendant contends United States law applies

for purposes of deciding its Motion.
Plaintiff asserts United States law applies to this matter.
Plaintiff relies on the choice-of-law provision in Plaintiff’s
Terms and Conditions, which provides the maritime law of the
1

Defendant notes it does not agree Plaintiff ever had a
valid maritime lien against Defendant. Defendant only assumes
this fact arguendo for purposes of its pending Motion.
12 - OPINION AND ORDER

United States applies.
provide:

Specifically, the Terms and Conditions

“This Contract shall be governed by and construed in

accordance with Title 9 of the United States Code and the
Maritime Law of the United States.”

Compl., Ex. C at ¶ 16.

To

support its position, Plaintiff cites to Trans-Tec Asia v. M/V
HARMONY CONTAINER, 518 F.3d 1120 (9th Cir. 2008), in which the
Ninth Circuit concluded:

“Absent a strong showing that it should

be set aside, the parties' choice of law provision, as part of a
freely negotiated private international agreement, unaffected by
fraud, undue influence, or overweening bargaining power . . .
should be given full effect.”

Id. at 1127-28 (citations and

quotations omitted).
Trans-Tec involves a set of facts similar to those present
here.

The plaintiff in Trans-Tec was a fuel supplier who brought

an action under 46 U.S.C. § 31342 against the defendant-vessel
and its owner for unpaid bunker fuels provided by the plaintiff
to the defendant-vessel upon demand of the vessel’s charterer.
The plaintiff's standard contract terms included a provision that
United States law applied to the transaction with the charterer.
Unlike here, however, the issue in Trans-Tec was whether the
choice-of-law provision was incorporated into the contract
governing the transaction that gave rise to the plaintiff’s
claims.

Id. at 1123-24.

The Ninth Circuit determined Malaysian

law controlled the issue of contract formation and then concluded

13 - OPINION AND ORDER

the choice-of-law provision was incorporated into the contract
pursuant to Malaysian law.

Id. at 1124-25.

Unlike in Trans-Tec, the issue here is if Plaintiff had a
valid lien under United States law, whether that lien still
existed at the time the Court granted the Warrant for Arrest;
i.e., the issue here is not whether a maritime lien ever existed
under United States law.

The Court, therefore, concludes United

States law governs for purposes of Defendant’s Motion.
Nevertheless, the Court also concludes, as explained below, that
India law is relevant to determining the effect of the India
proceedings on Plaintiff’s alleged maritime lien.
III. Creation of a Maritime Lien under United States Law.
Plaintiff asserts it has a maritime lien and an in rem claim
against Defendant pursuant to Section 31342 of the Federal
Maritime Lien Act (FMLA), 46 U.S.C. § 31301, et seq.

Section

31342 provides:
(a) Except as provided in subsection (b) of this
section, a person providing necessaries to a vessel on
the order of the owner or a person authorized by the
owner–
(1) has a maritime lien on the vessel;
(2) may bring a civil action in rem to enforce the
lien; and
(3) is not required to allege or prove in the
action that credit was given to the vessel.
(b) This section does not apply to a public vessel.
The Ninth Circuit has held “[f]uel bunkers are necessaries
within the meaning of § 31342.”
14 - OPINION AND ORDER

Trans-Tec, 518 F.3d at 1128.

FMLA “imposes no restriction on the nationality or other identity
of the supplier or the vessel, and no geographic restriction on
the place of provision of the necessaries.”

Id. at 1129.

Moreover, charterers and their agents are presumed to have the
authority to bind the vessel by the ordering of necessaries.
at 1127-28 (citations omitted).

Id.

Thus, if Plaintiff has a valid

maritime lien under United States law, it was created because
Plaintiff provided fuel bunker to Defendant at the request of
Carbofer, Defendant’s time-charterer.
IV.

Effect of India Proceedings on United States Maritime Lien.
As noted, the issue before the Court is even if Plaintiff

had a valid maritime lien against Defendant under United States
law, was that lien discharged in the India proceedings.
In the United States a valid maritime lien is essential to
commence an action in rem to enforce such a lien.

The Rock

Island Bridge, 73 U.S. 213, 215 (1867)(“The lien and the
proceeding in rem are, therefore, correlative -- where one
exists, the other can be taken, and not otherwise.”).

Thus, “any

action in rem pursuant to Supplemental Rule C to enforce a
maritime lien on a vessel must be premised on the existence of a
valid maritime lien at the time that the action was filed.”
Petroleos Mexicanos Refinacion v. M/T KING A, 554 F.3d 99,
102-103 (3d Cir. 2009)(citations omitted).
Plaintiff contends the proceedings in India were in personam
15 - OPINION AND ORDER

(as opposed to in rem) against the vessel owner and/or charterer
and, therefore, did not have any effect on Plaintiff’s in rem
arrest to perfect its United States maritime lien.

Plaintiff

bases its argument on the proposition that India law, unlike
United States law, does not recognize a maritime lien based on
the provision of necessaries to a vessel.

According to

Plaintiff, therefore, the seizure of Defendant in India was an
“attachment” in an in personam action rather than an “arrest” in
an in rem action.
Defendant, on the other hand, argues for a “one-arrest” rule
and contends the basis upon which the arrest in India occurred
does not matter.

According to Defendant, after a vessel is

seized, security is posted, and the vessel is released, the
vessel may not again be seized based on the same claim.
A.

In personam and in rem actions under United States law.

Under United States law in personam and in rem actions may
arise from the same claim and may be brought separately or in the
same action.

Fed. R. Civ. P., Supp. Admiralty R. C(1)(b).

See

also Belcher v. M/V MARATHA MARINER, 724 F.2d 1161, 1163 (5th
Cir. 1984).
An in rem action in the United States is an action against
the named property itself.

Ventura Packers, Inc. v. F/V JEANINE

KATHLEEN, 424 F.3d 852, 858 (9th Cir. 2005).

“[T]he theoretical

basis for the maritime lien rests on the legal fiction that the
16 - OPINION AND ORDER

ship itself caused the loss and may be called into court to make
good.”

Id. (citations omitted).

“Thus, the holder of a maritime

lien has ‘the right to proceed in rem directly against the
vessel’ that is the fictional cause of the loss.”

Id. (quoting

Chugach Timber Corp. v. N. Stevedoring & Handling Corp. (In re
Chugach Forest Prod., Inc.), 23 F.3d 241, 245 (9th Cir. 1994)).
As noted, an action in rem is initiated by the filing of a
verified complaint and arrest of the property.

Fed. R. Civ. P.,

Supp. Admiralty R. C. (2), (3).
An in personam action, on the other hand, is based on
personal liability, usually of the vessel owner.
724 F.2d at 1165.

See Belcher,

Supplemental Admiralty Rule B provides a

mechanism for commencing an in personam maritime action in
federal court by seizing property of the defendant and
authorizing the attachment or garnishment of that property.

See

Fed. R. Civ. P., Supp. Admiralty R. B(1).
In Belcher the Fifth Circuit explains the difference between
an arrest proceeding and an attachment proceeding:
Attachment does in many respects resemble
arrest. In each proceeding the vessel is
seized and it may later be sold to satisfy a
judgment. In each, the vessel itself may be
released and other security substituted.
Nevertheless, not only do the issues in the
two actions differ; the basic theory on which
each is brought is different. In the in rem
proceeding the owner bears no personal
liability. The vessel is sold solely to
satisfy the lien. If the proceeds of the
17 - OPINION AND ORDER

sale are inadequate, there is no liability on
the owner's part for the residue. Indeed the
admiralty court will not render a personal
judgment against the owner in excess of the
amount of the release bond. Only a personal
action against the owner can establish such
liability. In the attachment action, the
object of the action is a personal judgment
for the full sum due. The vessel is seized
only to compel the owner's appearance by
subjecting to the court's control property
within its territorial jurisdiction. If the
proceeds of sale of the vessel do not satisfy
the judgment, the owner remains liable for
the balance of the debt.
724 F.2d at 1165 (citations omitted).
B.

Effect of substitute security.

When process of arrest or attachment has issued, the seized
property may be released upon posting of a sufficient bond.

Fed.

R. Civ. P., Supp. Admiralty R. E(5)(c)(“such process shall be
stayed, or the property released, on the giving of security, to
be approved by the court or clerk, or by stipulation of the
parties, conditioned to answer the judgment of the court
. . . .”).
1.

In rem proceedings

In an in rem proceeding to enforce a maritime lien, the
posting of a bond or other security transfers the plaintiff’s
maritime lien from the arrested property to the substitute
security.

Alyeska Pipeline, 703 F.2d at 384.

See also So. Or.

Prod. Credit Ass’n v. Oil Screw Sweet Pea, 435 F. Supp. 454, 458
(1977)(citing G. Gilmore & C. Black, The Law of Admiralty, § 9-98
18 - OPINION AND ORDER

at 798-800 (2d ed. 1975); Ventura Packers, 424 F.2d at 859 (“In
effect, Ventura Packers’ necessaries lien was transferred from
the three fishing vessels to the security posted by the
Owners.”).

In the absence of fraud or misrepresentation, the

release of a vessel upon the posting of security discharges the
lien against the vessel.

Alyeska Pipeline, 703 F.2d at 384

(citing U.S. v. Ames, 99 U.S. 35 (1879), and Sweet Pea, 435 F.
Supp. at 459)).

The discharge of a lien upon release of a vessel

occurs by operation of law.

Sweet Pea, 435 F. Supp at 459.

In the case of Sweet Pea, Port Welding, a ship
repairer, had filed a prior action in rem against the vessel and
in personam against the vessel’s owner seeking recovery for
repairs that it had performed on the vessel.

Id. at 456.

In

that action the vessel had been arrested and subsequently
released upon a stipulated payment of $5,000 security to the
court.

The parties later entered into a stipulated judgment for

$25,000 in favor of Port Welding, $4,000 of which was paid out of
the security deposited with the court.

Id. at 457.

The vessel’s

secured lender brought a case to foreclose a preferred ship
mortgage.

Port Welding intervened on the ground that it had

priority in the proceeds from the sale of the vessel.
457-58.

Id. at

The court held Port Welding’s lien on the vessel was

discharged upon its acceptance of the security and release of the
vessel in the prior action.
19 - OPINION AND ORDER

Accordingly, Port Welding was “not

entitled to any portion of the proceeds from the sale of the
SWEET PEA because it did not hold a maritime lien on the vessel
at the time it was sold.”
2.

Id. at 460.

In personam proceedings

The substitute security does not discharge a lien in an
in personam proceeding as it does in an in rem proceeding because
the basis of an in personam action is personal liability rather
than the liability of the arrested property.

Belcher, 724 F.2d

at 1165 (“[T]he attachment bond does not substitute for a lien
but only for the owner’s personal liability.”).
3.

Proceedings in foreign jurisdictions

To determine whether Plaintiff’s maritime lien was
discharged in the India proceedings, the Court must determine
whether Plaintiff’s maritime lien was invoked.

If so,

Plaintiff’s maritime lien would have been discharged upon the
posting of substitute security and the release of the vessel.
The subsequent arrest of the vessel in Kalama, therefore, would
have been invalid.

The Court notes the question of the

enforceability of United States maritime liens in foreign courts
“carries difficulties because few other jurisdictions recognize
maritime liens with the same liberality as the United States.”
Thomas Schoenbaum, Admiralty & Mar. Law § 9-8 (5th ed. 2012)
(“[O]utside the U.S. the general rule obtains that a foreign
maritime claim should be enforced as a maritime lien only if
20 - OPINION AND ORDER

there is a maritime lien under both foreign law and the law of
the forum.”)(citations omitted)).

Specifically, “the United

States is one of a handful of countries that recognizes a
maritime lien for the provision of necessaries.”

Trans-Tec, 518

F.3d at 1123 (citing William Tetley, Maritime Liens and Claims
551 (2d ed. 1998)).

See also Trans-Tec, 518 F.3d at 1123 n.4

(fewer than thirty countries, among them the United States,
France, and those nations that signed on to the 1926 Brussels
Convention, recognize such a lien; the 1926 Brussels Convention
provides a maritime lien for necessaries under limited
circumstances)(citing Tetley at 551).2
Although it does not appear that the Ninth Circuit has
determined the effect a prior action in a foreign jurisdiction
has on a maritime lien arising under United States law, other
courts have looked to the law of the foreign jurisdiction as a
threshold matter to determine whether the plaintiff’s maritime
lien was invoked in the earlier proceedings.

For example, in

Belcher the plaintiff fuel supplier filed an in rem action
against the defendant vessel, had the vessel arrested, and
alleged the plaintiff had provided fuel to the vessel but had not
been paid for it.

724 F.2d at 1163.

Before bringing an action

in the United States, the plaintiff initiated an action in the

2

India is not one of the identified signatories to the 1926
Brussels Convention. Tetley at 1419-20.
21 - OPINION AND ORDER

Netherlands in which the vessel was attached to satisfy the
alleged outstanding debt.

Id.

In the Dutch action the vessel

owner secured the release of the vessel by posting a letter of
undertaking as security for the claim.

Id.

The vessel owner

asserted the plaintiff's maritime lien was discharged when the
owner provided security to release the vessel from attachment.
Id. at 1165.

The court disagreed.

The Fifth Circuit held the

pending action in the Netherlands was an attachment against the
vessel owner and was not the equivalent of an arrest in an in rem
action against the vessel itself.

Id. at 1164.

The court relied

on the fact that Dutch law does not recognize maritime liens and,
therefore, does not provide a mechanism by which such a lien can
be enforced.

Id.

The plaintiff's maritime claim under United

States law, therefore, existed despite the pending Dutch
proceeding.

Id. at 1165.

The court found there would not be any

hardship imposed on the vessel owner by continuing the United
States proceeding because the United States proceeding could be
stayed pending resolution of the Dutch proceeding and the same
letter of undertaking stood as security in both actions.
1165-66.

Id. at

The court also noted the plaintiff would be deprived of

its opportunity to prove its in rem claim if the United States
case was dismissed and the plaintiff failed to prevail in the
Dutch action.

Id. at 1166.

Similarly in The Kongsli, 252 F. 267 (D.C. Me. 1918),
22 - OPINION AND ORDER

the district court held when French law did not provide a
procedure to enforce a lien in rem arising out of a maritime
collision, a pending action in a French court in Algeria in which
the vessel had previously been seized and released upon posting
of security did not extinguish the plaintiff’s maritime lien
arising under United States law.
According to Defendant, however, the holding in Matter
of Topgallant Lines, Inc., 154 B.R. 368 (S.D. Ga. 1993), aff’d
without opinion by sub nom. McAllister Towing v. Ambassador, 20
F.3d 1175 (11th Cir. 1994), controls and the “one-arrest” rule
applies regardless whether the prior foreign proceeding was in
rem or in personam.

The Court disagrees.

Topgallant was a bankruptcy proceeding in which some of
the claimants had previously brought seizure proceedings in
Germany.

In the German proceeding the vessel owner posted

alternative security, and the vessel was released.

Id. at 372.

In the bankruptcy proceeding the German claimants argued they
were entitled to assert their maritime lien against the vessel’s
freights because the proceedings were in personam actions as
Germany does not provide a procedure for bringing in rem actions
against vessels themselves.

Id. at 379-80.

The Topgallant court

held the German claimants, by accepting bank guarantees, agreed
to transfer the liens that they sought to enforce from the vessel
to the security represented by the guarantees and that they must
23 - OPINION AND ORDER

look to the bank guarantees for satisfaction of their claims.
Id. at 380.
Although it is difficult to reconcile the differences
between the holdings in Belcher and Topgallant, the Court is not
persuaded Topgallant supports the broad “one-arrest” rule as
Defendant advocates.

Topgallant did not involve nor did it

address the issue of a subsequent arrest of the same vessel.
Moreover, although the Topgallant court acknowledged the holding
in Belcher, it did not rely on Belcher and instead focused on the
language of the guarantees in which the issuer agreed to
“unconditionally, inevocably and absolutely and without time
limit, stand security . . . as surety for all claims for which
the seizure was ordered.”

Id. at 380.

In addition, and perhaps

more importantly, the German claimants in Topgallant were in
possession of a security from the foreign proceedings.

Here

Plaintiff dismissed the foreign action, albeit voluntarily, and
returned the security posted in India to Peristil Maritime.
Thus, if the Court dismissed this case, Plaintiff would no longer
have any guarantee that would satisfy its claim for the unpaid
fuel.
Accordingly, the Court must determine whether the seizure in
India was an in rem arrest that implicated Plaintiff’s maritime
lien or an in personam attachment as Plaintiff asserts.

24 - OPINION AND ORDER

4.

India law

Rule 44.1 of the Federal Rules of Civil Procedure
provides:

When "determining foreign law, the court may consider

any relevant material or source, including testimony, whether or
not submitted by a party or admissible under the Federal Rules of
Evidence.”

Rule 44.1 gives the court wide latitude in

determining foreign law.

Schoenbaum § 9-8 at n.26.

“The

existence of a right to a lien under foreign law can be proved in
several different ways, such as through an affidavit by a foreign
legal expert or through an authoritative legal treatise or law
review article.”

Id.

Here Plaintiff submitted the Declaration (#37) of V. K.
Ramabhadran in Support of Memorandum in Opposition to Defendant’s
Motion to Vacate Arrest and for Summary Judgment and a treatise
on maritime law in India to support its position that India law
only recognizes maritime liens in certain instances, and none of
those instances includes a claim for necessaries supplied to a
ship.

Ramabhadran attests India law recognizes both in rem and

in personam claims in admiralty cases.
¶¶ 4, 9.

Ramabhadran Decl. at

India courts, however, recognize only a limited class

of maritime liens that are restricted to five types of claims,
none of which are relevant to this discussion.
Ramabhadran explains:

Id. at ¶ 6.

“Under Indian law, the supply of

necessaries to a ship does not create a maritime lien against the
25 - OPINION AND ORDER

ship.

Specifically, under Indian law a maritime lien is not

created where, as here, a party supplies fuel to a Vessel and the
ordering party fails to pay.”

Id. at ¶ 7.

In addition, “[t]he

Indian in rem arrest statute is very broad and can be used to
arrest a vessel in cases where a plaintiff merely has a maritime
in personam claim against the shipowner.”

Id. at ¶ 9.

Ramabhadran's testimony is supported by Maritime
Practice in India, a treatise on Indian law relied on by
Plaintiff.

Chapter 8 titled “Maritime liens” provides:
For the claims under subparagraphs . . .
(b) [Any claim for necessaries supplied to
any ship] . . . . of Chapter 7 there is no
maritime lien but only a right in rem . . .
under Indian rules of conflict of laws, a
foreign maritime lien may not be recognised
[sic] and enforced as such by the Indian
courts even though the proper law of the
claim accords it a maritime lien status, e.g.
a preferred ship's mortgage, necessaries,
. . . under United States law.

Shrikant Hathi & Binita Hathi, Maritime Practice in India, 7th
ed. (2012).

Decl. of Elizabeth Tedesco Milesnick in Support of

Pl.'s Mem. re Indian Authority, Ex. D.
Applying this understanding of India law, the Court
finds the basis of the seizure in the India proceedings was not
and could not have been an exercise of any maritime lien that
arose under United States law.

As an initial matter, although

Plaintiff made a number of allegations in the Plaint that the
Defendant-vessel was itself liable and a maritime lien would

26 - OPINION AND ORDER

exist under United States law, the seizure of the vessel occurred
pursuant to the High Court’s April 16, 2012, Oral Order.

The

Court, therefore, looks to the High Court’s Oral Order to
determine the purpose and effect of the seizure.

The use of the

word “arrest” in the Oral Order does not support a conclusion
that the basis for the arrest was an in rem claim based on a
maritime lien because the use of an in rem arrest in India is
used for both in rem and in personam claims.

The April 16, 2012,

Oral Order, however, references Plaintiff's claim for
“necessaries,” which, as noted, does not give rise to a maritime
lien under India law.

Moreover, the India court does not mention

United States maritime law nor a maritime lien in its April 16,
2012, Oral Order.

Instead, the High Court references three India

cases, all of which involve the use of in rem arrests to secure
claims in future and pending arbitrations.

None of those cases

refers to or appears to relate to maritime liens.3
In summary, the Court concludes on this record that the
seizure of Defendant in the India proceedings was not an arrest

3

At the Court’s direction, the parties provided
supplemental briefing on whether the cases cited in the High
Court’s April 16, 2012, Oral Order clarified the basis upon which
Defendant was arrested in the India proceedings. In its
supplemental briefing, Defendant argued India would not allow a
second arrest of the vessel based on international law. This
Court, however, does not find Defendant’s argument persuasive
because the question before the Court is not whether India law
would allow for a second arrest of the vessel, but whether the
India proceedings discharged Plaintiff’s maritime lien arising
under United States law.
27 - OPINION AND ORDER

to enforce a maritime lien.

The subsequent posting of security

and release of Defendant, therefore, did not discharge any
maritime lien Plaintiff may have arising under United States law.
Accordingly, the Court also concludes Plaintiff has sustained its
burden of showing it had “probable cause” to seek arrest of the
vessel in this action on the basis that if it had a valid
maritime lien under United States law, that lien was not
discharged in the India proceedings.
V.

Additional Arguments by Defendant.
A. Validity of Plaintiff’s in personam claim.
Defendant contends Plaintiff did not have a valid in

personam claim in the India proceedings.
is not relevant to this matter.

This argument, however,

The effect of India proceedings

is the issue before the Court rather than the validity of the
claim asserted by Plaintiff in the India proceedings.

In

addition, counsel for both parties represented to the Court at
oral argument that Defendant has a pending counterclaim in the
India proceedings against Plaintiff for wrongful arrest.

Thus,

the adjudication of that claim will address any harm that
Defendant alleges was caused by the first arrest.
B. Judicial estoppel.
Defendant also asserts under its Second Affirmative Defense
of “unclean hands” that Plaintiff is judicially estopped from
taking a position that is inconsistent with Plaintiff’s position
28 - OPINION AND ORDER

in the India proceedings.

In other words, Defendant contends

Plaintiff is estopped from asserting its claim in the India
proceedings was an in personam action in light of the fact that
Plaintiff asserted its right to an in rem claim and maritime lien
in its Plaint.

Defendant points to references in Plaintiff’s

Plaint in which Plaintiff alleges a maritime lien would arise
under United States law.
"Judicial estoppel is an equitable doctrine that precludes a
party from gaining an advantage by asserting one position, and
then later seeking an advantage by taking a clearly inconsistent
position."

Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778,

782 (9th Cir. 2001).

The Ninth Circuit "has restricted the

application of judicial estoppel to cases where the court relied
on, or 'accepted,' the party's previous inconsistent position."
Hamilton, 270 F.3d at 783.
As noted, Plaintiff makes numerous statements in its Plaint
regarding its maritime claim, including an assertion that it had
a maritime lien under United States law.

It is not clear,

however, whether Plaintiff was seeking to have the India High
Court enforce that lien.

Plaintiff instead appears to have been

requesting seizure of the vessel as security for a future
arbitration.

As noted, in the April 16, 2012, Oral Order, the

India High Court did not reference United States law or a
maritime lien but only cites to India cases apparently relied on

29 - OPINION AND ORDER

by Plaintiff.

The High Court also referenced other statements

made by Plaintiff such as Plaintiff’s assertion of a claim for
necessaries and the fact that the lawsuit was filed “as well to
secure the claim in Arbitration.”

None of these statements,

however, relate to a maritime lien.

Thus, even if the Court were

persuaded Plaintiff took an inconsistent position in the India
proceedings, the issue of judicial estoppel is not applicable
here because the High Court does not appear to have relied on the
alleged inconsistent position.

PLAINTIFF’S MOTION TO STRIKE OR, IN THE ALTERNATIVE,
TO ALLOW ADDITIONAL BRIEFING
The Court acknowledges the May 10, 2013 letter (#48) of
Plaintiff’s counsel’s requesting the Court to strike Defendant’s
Sur-Reply (#44) Memorandum Regarding Indian Authority on the
grounds that it was not responsive to the issue that the Court
requested supplemental briefing on and Defendant raised
additional issues such as how an India court would decide the
Motion before the Court.

In the alternative, Plaintiff requests

the opportunity to respond to the issues raised in Defendant’s
Sur-Reply.
As noted, the Court has construed Plaintiff’s letter as a
Motion to Strike or, in the Alternative, to Allow Additional
Briefing.

Even though the Court has considered Defendant’s

supplemental arguments and even though Defendant’s Sur-Reply was
30 - OPINION AND ORDER

not entirely responsive to the Court’s direction, the Court finds
Plaintiff has not been prejudiced and the Court need not take
additional briefing on the issues raised.

CONCLUSION
For these reasons, the Court DENIES Defendant’s Motion (#33)
to Vacate Arrest and for Summary Judgment and DENIES Plaintiff’s
Motion (#48) to Strike Defendant’s Sur-Reply or, in the
Alternative, to Allow Additional Briefing.
The Court directs counsel to confer and to submit no later
than July 1, 2013, a jointly proposed case-management plan and
schedule to resolve all remaining issues in this matter.
IT IS SO ORDERED.
DATED this 12th day of June 2013.

/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge

31 - OPINION AND ORDER