MARPOL Compliance Alert: D.C. Court of Appeals Shuts the Door on APPS Relief

Gregory F. Linsin and Dana S. Merkel

Achieving sustained compliance with the requirements of Annex I of the International Convention for the Prevention of Pollution from Ships (“MARPOL”) has been a challenge for the commercial maritime industry. In far too many situations, the detection of noncompliant activity by the U.S. Coast Guard has resulted in criminal prosecutions with devastating consequences for the vessel operator, owner, and crew, and the risks for the maritime industry are only increasing as the deadlines for Annex V compliance loom. This article explains a proven system for commercial vessel owners to minimize or even eliminate these substantial enforcement risks.

APPS Violations and Angelex

The Act to Prevent Pollution from Ships (“APPS”), which implements MARPOL in the United States, authorizes the Coast Guard to detain any vessel if there is reasonable cause to believe the “ship, its owner, operator, or person in charge” may be liable for APPS violations. There have been many legal challenges over the years to the U.S. Coast Guard’s enforcement authority, including its jurisdiction over the vessels, bond amounts demanded, and non-monetary bond requirements, but all have failed. In December 2018, in the case of Angelex Ltd. v. United States, the D.C. Court of Appeals rejected the last untested avenue for potential relief for a vessel owner under APPS. Continue reading “MARPOL Compliance Alert: D.C. Court of Appeals Shuts the Door on APPS Relief”

Noteworthy Maritime Publications

Navigating Maritime Arbitration: The Experts Speak

Blank Rome Partner John D. Kimball co-authored Navigating Maritime Arbitration: The Experts Speak (February 2019, Juris Legal Information, Arbitration Law), which brings together a collection of essays concerning virtually all aspects of maritime arbitration in the United States, with a strong focus on New York due to the volume of arbitrations the state holds.

The book features chapters written by a wide range of experienced arbitrators and attorneys who are widely recognized as being among the leading experts in maritime arbitration. In addition to John’s chapter, “Arbitrators’ Dilemma: Stick Your Head in The Sand?,” Blank Rome Partner Thomas H. Belknap, Jr., authored chapter 11, “Enforcing and Challenging Arbitral Awards.”

To learn more, please visit arbitrationlaw.com/books/navigating-maritime-arbitration-experts-speak.


United States, Ports & Terminals 2019

Blank Rome Partner Matthew J. Thomas authored the “United States” chapter in Ports & Terminals 2019, a Getting the Deal Through publication by Law Business Research Ltd (2018).

To learn more, please visit blankrome.com/publications/united-states.

Court-to-Court Communication and Letters of Request in Cross-Border Litigation and Asset Tracing

Rick Antonoff and Evan Jason Zucker

An increasingly global economy and the ease with which money and other property is transferred across national borders has led to more cross-border litigation and a call for greater cooperation and communication between foreign courts. But the ability for courts to communicate across borders has its limits. Recently, in In re Zetta Jet USA, Inc.,1 a chapter 7 trustee asked a U.S. bankruptcy court to authorize sending a letter from the U.S. court to an Australian court, under 28 U.S.C. § 1781, asking the Australian court to continue an injunction against moving a vessel located in Australia pending the resolution of an avoidance action in the United States against the vessel’s purported owner. The U.S. court refused to issue such a letter after concluding that a letter from a U.S. court requesting the Australian court to continue an injunction would be an unwarranted interference by the U.S. court in the Australian proceeding, and would offend principles of international comity by suggesting how the Australian court should rule on the injunction as well as preempting the Australian court’s consideration of whether to vacate the injunction.2

Background

Zetta Jet USA, Inc. (“Zetta US”) and Zetta Jet PTE (“Zetta Singapore,” and together with Zetta US, collectively, the “Zetta Entities”) operated an international luxury travel business that fell into financial distress largely due to allegedly fraudulent activity of its principal, Geoffrey Owen Cassidy. On September 15, 2017, Zetta US and Zetta Singapore each filed a voluntary petition for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Central District of California (the “U.S. Bankruptcy Court”). The cases were subsequently converted to chapter 7 cases and Jonathan King (the “Trustee”) was appointed the chapter 7 trustee. Continue reading “Court-to-Court Communication and Letters of Request in Cross-Border Litigation and Asset Tracing”

Risk Management Tools for Maritime Companies

COMPLIANCE AUDIT PROGRAM

Blank Rome Maritime has developed a flexible, fixed-fee Compliance Audit Program to help maritime companies mitigate the escalating

risks in the maritime regulatory environment. The program provides concrete, practical guidance tailored to your operations to strengthen your regulatory compliance systems and minimize the risk of your company becoming an enforcement statistic. To learn how the Compliance Audit Program can help your company, please visit blankrome.com/complianceauditprogram.


MARITIME CYBERSECURITY REVIEW PROGRAM

Blank Rome provides a comprehensive solution for protecting your company’s property and reputation from the unprecedented cybersecurity challenges present in today’s global digital economy. Our multidisciplinary team of leading cybersecurity and data privacy professionals advises clients on the potential consequences of cybersecurity threats and how to implement comprehensive measures for mitigating cyber risks, prepare customized strategy and action plans, and provide ongoing support and maintenance to promote cybersecurity and cyber risk management awareness. Blank Rome’s maritime cyber risk management team has the capability to address cybersecurity issues associated with both land-based systems and systems onboard ships, including the implementation of the Guidelines on Cyber Security Onboard Ships and the IMO Guidelines on Maritime Cyber Risk Management in Safety Management Systems. To learn how Blank Rome’s Maritime Cyber Risk Management Program can help your company, please visit blankrome.com/cybersecurity or contact Kate B. Belmont (kbelmont@blankrome.com, 212.885.5075).


TRADE SANCTIONS AND EXPORT COMPLIANCE REVIEW PROGRAM

Blank Rome’s Trade Sanctions and Export Compliance Review Program ensures that companies in the maritime, transportation, offshore, and commodities fields do not fall afoul of U.S. trade law requirements. U.S. requirements for trading with Iran, Cuba, Russia, Syria, and other hotspots change rapidly, and U.S. limits on banking and financial services, and restrictions on exports of U.S. goods, software, and technology, impact our shipping and energy clients daily. Our team will review and update our clients’ internal policies and procedures for complying with these rules on a fixed-fee basis. When needed, our trade team brings extensive experience in compliance audits and planning, investigations and enforcement matters, and government relations, tailored to provide practical and businesslike solutions for shipping, trading, and energy clients worldwide. To learn how the Trade Sanctions and Export Compliance Review Program can help your company, please visit blankrome.com/services/cross-border-international/international-trade or contact Matthew J. Thomas (mthomas@blankrome.com, 202.772.5971).