Article of Interest

Avoiding Ambush When Foreign Law is Applied in Maritime Arrest Cases
By: Andy Soto

While U.S. courts routinely apply foreign law in diverse matters, the application can have a unique impact on the procedure and outcome of maritime cases. Given the inherent international nature of maritime law, maritime attorneys are often called upon to apply the law of diverse countries that they have not previously studied nor practiced. This can be especially challenging in the context of a suit where the plaintiff has arrested a defendant vessel to enforce a maritime lien. Minimum notice standards for the invocation of foreign law and the limited amount of time the defendant may have to research the foreign law prior to the expedited hearing on a motion to vacate can give an unfair advantage to the plaintiff. Defense counsel for an arrested vessel should take special care to avoid a hearing by ambush in a case where foreign law has been invoked.

There are several reasons why foreign law may be applied to a suit for the arrest of a vessel in a U.S. court. International parties may, for example, include a choice-of-law provision in their maritime contract selecting foreign law. U.S. courts recognize such provisions and are presumed competent to apply the foreign law. Whatever the reason may be for applying foreign law, a party seeking to do so must comply with Federal Rule of Civil Procedure 44.1. The Rule provides, “A party who intends to raise an issue about a foreign country’s law must give notice by a pleading or other writing…” Importantly, the notice is not required to include the substance of the foreign law. In fact, the 1966 committee notes state there is no set time limit for giving notice.

The arrest of a vessel is initiated under Admiralty Rule C with the filing of a verified complaint seeking the enforcement of a maritime lien. The court reviews the pleading and other supporting documents to determine whether a warrant for arrest should issue. Typically, the determination is made ex parte without notice to the vessel owner. The plaintiff’s pleading and maritime lien are not tested by an adversary until after the seizure has already been effectuated. At that point, the vessel owner is forced to move to vacate the arrest.

Because the court is required to set a motion to vacate the vessel arrest for hearing “as promptly as possible” the time to research, prepare, and brief arguments can be limited.  While this may not be a problem when U.S. law is applied, even the most experienced maritime practitioner will be challenged when foreign law is alleged as the legal basis for the maritime lien and arrest. Given the lax timetable for providing notice of application of foreign law under Rule 44.1, and the prompt setting of a hearing on a motion to vacate under Rule E, counsel for the vessel owner may be unprepared to argue the merits of a foreign country’s maritime lien laws.

Further compounding the problem for counsel is the fact that he or she must also be prepared to argue the validity of the alleged maritime lien under both foreign and U.S. law. Should the court decide it does not have sufficient information to apply foreign law, it may proceed under the laws of the U.S. In a worst-case scenario, counsel may be forced to argue the merits of the case under both foreign and U.S. law.   

In light of the above, counsel for the vessel owner should consider devoting time prior to filing their motion to vacate to pin down the precise legal basis for the plaintiff’s alleged maritime lien under both foreign and U.S. law. While the general pleading requirement under Federal Rule of Civil Procedure 8 only requires a “short and plain statement of the claim”, an additional (and sometimes overlooked) pleading standard is applied in maritime arrest actions. In accordance with Admiralty Rule E, the arresting party’s complaint is required to “state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.”

With the more exacting pleading standard in Rule E, counsel representing a vessel owner can ensure that the arresting party has provided sufficient information for the court and counsel to engage in a meaningful analysis of the alleged maritime lien. Where the arrest is based on foreign law, counsel can avoid a hearing by ambush by requiring the specific foreign law to be set forth in the plaintiff’s complaint prior to a hearing on a motion to vacate. When that information has not been provided, counsel should move for a more definite statement prior to filing their motion to vacate. While the additional step may require an investment of time, the benefit to counsel’s ability to research and prepare their argument to vacate under specific foreign law may be outcome determinative.

Andy Soto is an associate at Mills Shirley, LLP in Galveston, Texas where he practices civil litigation.