United States District Court, E.D. Louisiana
SPACE SHIPPING LTD.
ST SHIPPING & TRANSPORT PTE LTD., ST SHIPPING AND TRANSPORT INC., AND GLENCORE INTERNATIONAL AG
ORDER AND REASONS
E. FALLON UNITED STATES DISTRICT JUDGE
before the Court is a motion to vacate maritime attachment
filed by South Maritime Pte Ltd. ("South Maritime"
or "Movant") and ST Shipping & Transport Pte
Ltd. ("ST Shipping PTE") under Supplemental Rule
E(8)1. See Rec, Doc. 10. The Movant seeks to vacate
the attachment of South Maritime's property, the M/T
ALPINE ETERNITY (the "Vessel"), and certain
property aboard the Vessel. The Court held a post-arrest
hearing, pursuant to Rule E(4)(f), on October 19, 2017.
Having considered the parties' submissions and applicable
law, the Court now issues this Order and Reasons.
Space Shipping Ltd. ("Space Shipping") filed a
Verified Complaint in the Eastern District of Louisiana,
seeking to attach the M/T ALPINE ETERNITY and other property
abroad the Vessel. On October 12, 2017, the Court issued a
Writ of Foreign Attachment, which was served upon the master
of the Vessel. South Maritime has moved to vacate the
attachment, claiming it owns the Vessel and not the
Defendants. It is undisputed, nonetheless, that Defendant ST
Shipping PTE owns the bunker fuel (the "Bunkers")
abroad the Vessel, which is worth $475, 000.00, and the
parties have agreed on their value and release with
satisfactory security being posted. The parties, however, do
dispute ownership or control of the Vessel.
Admiralty Rule B of the Federal Rules of Civil Procedure
allows a maritime attachment of property when a plaintiff
satisfies the applicable filing, notice, and service
requirements and shows that: (1) the plaintiff 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) (abrogated on
other grounds by Shipping Corp. of India Ltd. v. Jaldhi
Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009)); see
also Fed. R. Civ. P., Supp. Adm. Rule B. Following a
Rule B attachment, Supplemental Admiralty Rule E(4)(f)
("Rule E") allows a party claiming an interest in
the property to contest and move to vacate the attachment.
See Fed. R. Civ. P., Supp. Adm. Rule E(4)(f);
Williamson v. Recovery Ltd. Partnership, 542 F.3d
43, 51 (2d Cir. 2008), cert, denied, 555 U.S. 1102
(2009). The interested person after filing the motion is
entided to a prompt hearing at which the plaintiff is
required to show why the arrest or attachment should not be
vacated. See Fed. R. Civ. P. Supp. Adm. Rule
E(4)(f). The attachment must be vacated if the plaintiff
fails to sustain his burden of showing that the requirements
of Rules B and E are satisfied. Aqua Stoli Shipping
Ltd., 460 F.3d at 445.
purposes of a Rule E(4)(f) post-arrest hearing, the attaching
party must present sufficient evidence to show probable cause
for the attachment. Diesel Specialists v. M/VMohawk
Transp., LLC, 2009 WL 1036085, * 1 (E.D. La. 4/17/09)
(Engelhardt, J.); see also Naftomar Shipping and Trading
Co. v. KMA Intern., S.A., 2011 WL 888951, *3 (S.D. Tex.
3/3/11) (Rainey, J.) ("plaintiff bears the burden to
establish probable cause for the arrest") (quoting
A. Coker & Co., LTD. v. Nat'l Shipping Agency
Corp., et al., 1999 WL 311941, *1 (E.D. La. 5/17/99)
(Vance, J.) (internal citations omitted)). Thus, a
"district court may certainly vacate the [attachment] if
it determines, after hearing from both parties, that the
requirements of Rule B have not actually been met."
Williamson, 542 F.3d at 52. Moreover, a Rule E(4)(f)
hearing is not intended to definitively resolve the dispute
between the parties; instead, the district court makes a
preliminary determination of whether reasonable grounds exist
for the arrest. Naftomar, 2011 WL 888951, at *3.
undisputed that South Maritime, who is not a defendant, is
the registered owner of the M/T ALPINE ETERNITY. Nonetheless,
Plaintiff argues that Defendant ST Shipping PTE is the
beneficial owner of the Vessel and in actual possession and
control of the Vessel. In cases where the beneficial owner is
not the same as the registered owner, an attachment can be
upheld if there are sufficient allegations that the
beneficial owner in fact controls the vessel. See
Nqfiomar, 2011 WL 888951.
Allegation of Alter Ego
claims that an alter ego relationship between the Defendants
and South Maritime exists and allows an attachment of the
Vessel. Under Fifth Circuit jurisprudence, when an alter ego
relationship is claimed as it is here, Plaintiff is required
to also plead specific facts demonstrating that this
relationship was somehow used to perpetrate a fraud or
injustice against the Plaintiff Space Shipping. See
Shadix-Marasco v. Austin Reg'l Clinic P.A., No.
A09-CA-891 LY, 2010 WL 2232804, at *6 (W.D. Tex. June 1,
2010) ("[b]ecause fraud is an element of the alter ego
doctrine, a plaintiff pleading alter ego must satisfy the
heightened pleading requirements of Federal Rule of Civil
Procedure 9(b), which the Fifth Circuit interprets
'strictly'") (citing Bridas SARI. C. v.
Government of Turkmenistan, 447 F.3d 411, 416 (5th Cir.
case, Plaintiff has failed to plead in its Complaint that the
corporate relationship between Defendants and South Maritime
was to effect fraud against Space Shipping. The bare
allegation in the Complaint that ST Shipping PTE is the
'iiltimate beneficial owner" of the Vessel is just
that - a bare allegation. See, e.g., Austral Asia Pte.
Ltd., 2012 WL 2567149, at *2 (vacating writ premised on
conclusory allegation that defendant was the "true
beneficial owner" of the property); Dry Handy
Investments, Ltd. v. Corvina Shipping Co. S.A., 988
F.Supp.2d 579, 583 (E.D. Va. 2013) (quashing writ of
attachment over a vessel because the allegation that the
vessel was "legally, equitably and beneficially
owned" by alleged alter-ego was insufficient).
Furthermore, the only other factual allegation in the
pleading concerning South Maritime or its relationship to
Defendant ST Shipping PTE is that the two companies share an
office location. Compl. ¶ 81. But this fact alone is
insufficient to satisfy the Plaintiffs burden. See Vitol,
S.A., 708 F.3d at 546 ("shared office space on its
own is insufficient to compel a conclusion that [parent
entity's and individuals] dominated and controlled [the
further claims in the Complaint that Defendant ST Shipping is
a 50-percent owner of South Maritime. See Compl.
¶ 81. However, and very importantly, Movant entered into
evidence at the post-arrest hearing affidavit showing the
contrary: ST Shipping is, in fact, not a 50-percent owner of
South Maritime. Instead, South Maritime is wholly owned by
South Compass Maritime Pte. Ltd.-not Defendant ST
Shipping-and South Compass Maritime is not a party here. To
hold this Vessel under seizure to permit discovery and even
amendment in the hope that something might turn up to justify
permanent arrest on the basis of such an amorphous record is