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US MARITIME LAW

Lloyd's Maritime and Commercial Law Quarterly

US MARITIME LAW

Robert Force * and Martin Davies

CASES

350. Advantage Sky Shipping LLC v ICON Equipment and Corporate Infrastructure Fund Fourteen Liquidating Trust 1

Admiralty jurisdiction—Rule B attachment—action to enforce letter of undertaking given in South African proceedings—whether maritime contract
Subsidiaries of the defendant brought proceedings in South Africa against the ship Advantage Sky in rem and its owner in personam. Advantage Sky and its owner were the plaintiffs in the present proceedings. They counterclaimed against the subsidiaries in South Africa, claiming damages for wrongful arrest, and sought security in respect of that claim. The South African court granted the plaintiffs’ request but allowed the subsidiaries to post security by giving a letter of undertaking from their parent, the defendant, in which the defendant guaranteed the subsidiaries’ potential liability in the event of an eventual settlement or court judgment. Just weeks later, the plaintiffs sued the defendant in the US District Court for the Southern District of New York, seeking to enforce the letter of undertaking. Relying on Supplemental Admiralty Rule B,2 the plaintiffs successfully applied ex parte to attach funds belonging to the defendant in New York City as security for their claim. The defendant moved for the attachment to be vacated3 on the ground (among others) that the plaintiffs’ claim did not fall within the court’s admiralty jurisdiction and so the special procedures in the Supplemental Admiralty Rules, including Rule B, were not available.
Decision: Attachment vacated.
Held: (1) Although the South African litigation involved maritime claims, those were not the claims at issue before the court in the present proceedings. The letter of undertaking given by the defendant—which was not party to the South African litigation—was to pay any unsatisfied liabilities that its subsidiaries might incur if they lost or settled the case
US Maritime Law

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