Category: Arbitration/Litigation

Gulf Coast Update: Applying Doiron for Assessing Maritime Contracts Outside the Oilfield Services Arena

David G. Meyer

Whether a particular contract is “maritime” is a legal question that can often arise in disputes subject to potential adjudication in the U.S. court system. There can be several reasons for this. One concerns determining whether a civil action can be heard in federal court versus state court. If a maritime contract is at issue, a case might be litigated in federal instead of state courts, and/or a plaintiff might have the ability to file an action in federal court for a pre-judgment arrest or attachment of a vessel or other property of a defendant.

While a seemingly simple question, courts and litigants have long struggled with assessing whether or not a particular contract is a maritime one. In 2004, in an effort to provide clarity and guidance on the issue, the U.S. Supreme Court issued its decision in Norfolk v. Kirby in which it held:

“To ascertain whether a contract is a maritime one, we cannot look to whether a ship or other vessel was involved in the dispute, as we would in a putative maritime tort case. Nor can we simply look to the place of the contract’s formation or performance. Instead, the answer depends upon … the nature and character of the contract, and the true criterion is whether it has reference to maritime service or maritime transactions.1”

The Fifth Circuit Court of Appeals’ Test for Assessing Whether a Contract Is Maritime

The U.S. Fifth Circuit Court of Appeals’ jurisdiction includes the states that generate the majority of oil and gas drilling, exploration, and production activities in the United States’ inshore and offshore waters off the Gulf of Mexico (Texas, Louisiana, and, to a lesser extent, Mississippi and Alabama). It is common practice in that industry for service contracts to contain provisions assigning defense, indemnity, and additional insured obligations between the contracting parties for casualties that occur in the course of work under the contract. Continue reading “Gulf Coast Update: Applying Doiron for Assessing Maritime Contracts Outside the Oilfield Services Arena”

Enforcing and Challenging Maritime Arbitral Awards in the United States

Thomas H. Belknap, Jr.

When we speak of maritime arbitral awards in the United States, we could mean one of three kinds: 1) “domestic” awards, 2) “nondomestic” awards, or 3) “foreign” awards. This distinction is important, because it controls what law applies to matters of recognition and enforcement. To understand the source and importance of these distinctions, we must start with the Federal Arbitration Act (“FAA”).[1]

The FAA and the New York Convention

The FAA is in three chapters. Chapter 1 is titled “General Provisions,” and it applies generally except where there is a conflict with a provision of one of the other applicable chapters. Chapter 2 is titled “Convention on the Recognition and Enforcement of Foreign Arbitral Awards” and is the implementing legislation for the international treaty of the same name (also called the “New York Convention”), to which the United States is a party.

Chapter 1 of the FAA expressly defines “maritime transactions” to mean “charter parties, bills of lading of water carriers, agreements relating to wharfage, supplies, furnished vessels or repairs to vessels, collisions, or any other matters in foreign commerce which, if the subject of controversy, would be embraced within admiralty jurisdiction.” Section 2 of the FAA states that a “written” arbitration agreement “in any maritime transaction or a contract evidencing a transaction involving commerce…shall be valid, irrevocable, and enforceable” on the same basis as any other contract term. Continue reading “Enforcing and Challenging Maritime Arbitral Awards in the United States”

Removal of Maritime Claims: Is There Still a Conflict?

Noe S. Hamra

In the United States, state and federal courts operate on a dual track, with the difference that state courts are courts of “general jurisdiction” (i.e., hearing all cases not specifically reserved to federal courts), while federal courts are courts of “limited jurisdiction” (i.e., hearing cases involving “diversity of citizenship” or raising a “federal question”). In some cases, however, a defendant found in state court can transfer the case to federal court (also known as “removal”).

Until recently, it was well established that general maritime claims could not be removed from state court based solely on the federal court’s admiralty jurisdiction under 28 U.S.C. § 1333. Section 1333(1), also known as the saving-to-suitors clause, provides “[t]he district courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled….” Continue reading “Removal of Maritime Claims: Is There Still a Conflict?”

A Bump in the Road for the Collection of Evidence for Use in Foreign Legal Proceedings

Mainbrace | March 2018 (No.1)

W. Cameron Beard and Lauren B. Wilgus

As discussed in prior issues of Mainbrace, parties to for­eign legal proceedings can collect evidence in the United States for use abroad by invoking a U.S. statute, 28 U.S.C. § 1782 (“section 1782”). Section 1782 is a powerful tool, and allows either foreign courts or foreign litigants to seek orders directly from U.S. federal district courts for the taking of testimony or the disclosure of documents in this country. Notably, litigants can often obtain section 1782 relief quickly and without undue burden or delay, because the statute can be invoked independently of, and does not require prior resort to, the Hague Evidence Convention.

Various disputes regarding the proper scope of section 1782 have arisen over the years. Some of the major disputes have been conclusively resolved. For exam­ple, in 2004 the U.S. Supreme Court resolved a significant conflict among the lower federal courts, and ruled that under section 1782 a foreign party may obtain broad dis­covery of the kind generally available in U.S. litigation, even if such discovery would not be allowed under the laws of the foreign forum where litigation is pending. Other vexing issues, however, remain unresolved. For example, the ques­tion of whether section 1782 may be used for the collection of evidence for purely private arbitrations remains unsettled. We have discussed these and other issues previously. Continue reading “A Bump in the Road for the Collection of Evidence for Use in Foreign Legal Proceedings”

NY Bankruptcy Courts Grapple with Territorial Limits

Mainbrace | March 2018 (No.1)

Rick Antonoff, Michael B. Schaedle, Bryan J. Hall, and Matthew E. Kaslow

In a pair of recent opinions from the U.S. Bankruptcy Court for the Southern District of New York, two judges took varying approaches to the issues of 1) their ability to assert personal jurisdiction over foreign defendants, and 2) applica­tion of U.S. laws to transactions that occur, at least in part, outside of the United States.

The first opinion, from Judge Sean H. Lane, denied the defendants’ motion to dismiss a lawsuit seeking to avoid and recover money initially transferred to correspondent bank accounts in New York designated by the defendants, before being further transferred outside of the United States to complete transactions under investment agreement executed outside of the United States and governed by foreign law. On remand after a district judge ruled that the defendants’ use of correspondent banks in the United States was sufficient for the bankruptcy court to have personal jurisdiction over them, Judge Lane held that the doctrine of international comity and the presumption against extra­territoriality did not prevent application of U.S. law to avoid transfers under the Bankruptcy Code. The second opinion, from Judge James L. Garrity, Jr., dismissed a bankruptcy trustee’s claims to avoid and recover transfers under U.S. bankruptcy law that occurred entirely outside the territory of the United States. Continue reading “NY Bankruptcy Courts Grapple with Territorial Limits”

The Courts Strike Down Oilfield Contractor Penalty Liabilities

On December 18, 2017, the U.S. Court of Appeals for the Fifth Circuit dismissed the U.S. government’s appeal regarding a Bureau of Safety and Environmental Enforcement (“BSEE”) Notification of Incident of Noncompliance (“INC”) civil penalty issued against an oilfield contractor. This development brings closure to the long-standing question of whether BSEE has authority to enforce civil and criminal penalties against offshore contractors.

Continue reading “The Courts Strike Down Oilfield Contractor Penalty Liabilities”

Enforcement in the United States of Foreign Judgments that Incorporate Monetary “Penalty” Provisions

Mainbrace | October 2017 (No.4)

W. Cameron Beard

While the United States is a party to an international convention on the enforcement of foreign arbitral awards,  it is not a party to any similar instrument regarding the enforcement of foreign court judgments. Nevertheless, foreign court judgments providing civil as opposed to criminal relief can be enforced in the United States, generally pursuant to the laws of individual states where judgment enforcement is sought. Continue reading “Enforcement in the United States of Foreign Judgments that Incorporate Monetary “Penalty” Provisions”

FCPA under the New Administration

Mainbrace | October 2017 (No.4)

Mayling C. Blanco, Carlos F. Ortiz, Shawn M. Wright, and Ariel S. Glasner

 

 

 

The single most frequently asked question by our international clients over the past several months is whether there will be changes in white collar prosecution priorities under the new administration, specifically with respect to the Foreign Corrupt Practices Act (“FCPA”). The FCPA, which criminalizes the payment of bribes to foreign officials around the world, has been subject to enforcement trends and scrutiny during its 40-year history.

Continue reading “FCPA under the New Administration”

Collection of Evidence in the U.S. Pursuant to 28 U.S.C. Section 1782 for Use in Foreign Private Arbitrations

Mainbrace | June 2017 (No. 3)

W. Cameron Beard and Lauren B. Wilgus

Critical evidence, needed for the resolution of a dispute abroad, may be located in the United States. A key witness may reside in the United States, or important financial or other documentary evidence may be found only in this country. As we have discussed in previous articles,1 section 1782 of the United States Code (“section 1782”) offers a powerful tool for the collection of evidence in the United States for use in foreign legal proceedings. The statute allows either a foreign tribunal or a party to foreign proceedings to apply directly to a U.S. federal court for an order directing that a witness be examined or that evidence be disclosed for purposes of a foreign legal proceeding. The procedure is highly efficient; by taking advantage of section 1782, foreign litigants can often avoid and bypass the unwieldy and time-consuming requirements of letters rogatory or requests for evidence collection under the Hague Convention on the Collection of Evidence Abroad in Civil or Commercial Matters.

Continue reading “Collection of Evidence in the U.S. Pursuant to 28 U.S.C. Section 1782 for Use in Foreign Private Arbitrations”

Enforcement of Foreign Judgments and Foreign Arbitral Awards in the United States

Mainbrace | March 2017 (No. 2)

William R. Bennett and Lauren B. Wilgus

Our clients regularly seek our assistance in recovering foreign arbitral awards and foreign judgments from debtors and/or their alleged alter egos in the United States. Each case has its unique facts that dictate the level of effort that we must make to bring about a successful outcome. For example, obtaining a recovery from an alleged alter ego may require a Rule B attachment followed by significant factual discovery, while obtaining a recovery from a debtor with assets and business connections in the United States may require less effort. Regardless of the facts that may be unique to each matter, the basic framework to seek a recovery, discussed herein below, is the same.

The United States has been a signatory of the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) since 1970; however, it is not currently party to any international treaty for the recognition of foreign judgments. Unlike foreign arbitral awards, which are governed by the New York Convention, no treaty outlines the circumstances under which U.S. courts may recognize foreign judgments. In the United States, for instance, only the principle of comity, the common law, and individual states’ laws allow U.S. courts to recognize and enforce foreign judgments.

Continue reading “Enforcement of Foreign Judgments and Foreign Arbitral Awards in the United States”

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