BOW WAVE 370

Bow Wave 370--Night Before Xmas Edition

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(c)2006 WavyLine.com	Issue No 370 25 Dec 06
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Son of Darwin: "Wilma" at the Kiel Canal
3. Response to Rule B comment
4. Late Breaking News of Santa
5. Risk Managed Christmas Greetings
6. And Finally...

1. Welcome

New Readers this week include:-

Capt. Rob Rowe of Morris Marine Services in Singapore Nathalie Theunen of Marsh Antwerp
Kate Ott of Health Systems International in Indianapolis Anne Miglorine of the Zenith Bank in the UK
Mark Trevitt of the St Pauls
James Munn of the Galatea Agency

News of Readers

The Lloyd’s Market Association (LMA), the body which represents all underwriting businesses at Lloyd’s, has announced the appointment of David Gittings as Chief Executive. Mr Gittings, was formerly Group Head of Risk at Wellington Underwriting PLC

Betina Goodall of freight derivatives broker Clarksons Securities has been elected as the new chairman of the FFA Brokers Association for 2007.

Note from the Editor

This festive edition of Bow Wave appears with intentions serious and somewhat humourous. We wish Readers all the joy and consolations of the season. Thank you for your support during 2006.

Our next edition, in time for New Year's Eve, will attempt as always to peer into the future.

Enjoy!

2. Son of Darwin: "Wilma" at the Kiel Canal

Klaus Lehmbecker writes:-

Some 4 weeks ago the German managed (Altes Land) heavy lift vessel WILMA , built by in 1999 with cranes each having a capacity of 275 tonnes, and having the bridge forward and carrying a Filipino crew passed the locks in the evening from Holtenau in the direction of Brunsbüttel on the Kiel Canal . All went well at the Holtenau bridge but with a bang an upright crane-arm hit the 1986 built and rather modern bridge at Levensau, just aside from the old Levensau bridge (built 1896), which is now entertaining tripled traffic on the B76 raod between Schleswig and Kiel!

The hole in the steel caisson is about 4 metres wide and 6 long. The road tarmac remained intact by 30 cm. But for 2 and a half hours the authorities closed the old bridge after the accident was reported by the Master and Pilot, who were on the bridge forward and unaware of the crew working on deck to put the ships gear into position for the next cargo lifting somewhere near Hamburg! It will take some months to repair the hole in the bridge and it was sheer luck the crane broke and gave way rather than the bridge. Just imagine if it had been a derrick...what a disaster.

Consequences: German shipowners are weeping over the fact that they have no Masters/Officers to man their many vessels now returning for tax reasons to the German flag. They should be penalized heavily by withdrawal of all tax reliefs still existing for newbuildings. They have been trying to make the fast money for decades now and have used (rather abused) available personnel over pensionable age .,They have also taken the benefit of manpower resources from East Germany, post reunification, not to mention others in Eastern Europe. Finally the ships have been manned by Filipinos.

And such crews on a heavy-lifter? There is every possibility of a disaster given the non-observation of all the rules of Quality and Management! At the front they do not know what is being done at the end of the vessel! And the public has to assume the cost of time and money spent !

I did not see the "Wilma" accident in your November report, but it seems worthwhile reporting all the same.

contact Klaus at:-

klholin@netzservice.de

3. Response to Rule B comment

Mike Frevola of Holland + Knight writes:-

At Douglas Lindsay's request, I take the opportunity to respond (at some length) to Simon Harter's commentary in Bow wave issue 369--in response to Douglas Lindsay's summary of my presentation at the Lloyd's Maritime Academy Ship Arrest Conference on 05Dec06.

Mr. Harter correctly states the essence of Judge Rakoff's holding in Seamar Shipping v. Kremikovtzi Trade, 2006 WL 3335578 (S.D.N.Y., Nov. 17, 2006), in that it vacated an attachment where the assets frozen were not sent by the defendant, but rather were funds on which the defendant was referenced as a beneficiary. In a vacuum, the Seamar decision appears to be a relatively inconsequential holding amongst the myriad Rule B decisions recently issued by courts in the United States District Court for the Southern District of New York. The significance of the Seamar decision, however, is its treatment of the recent decision of the United States Court of Appeals for the Second Circuit in Aqua Stoli Shipping Ltd. v. Gardner Smith Pty. Ltd., 460 F.3d 434 (2d Cir. 2006), to limit the attachment of electronic funds transfers ("EFTs") to those on which the defendant is the originator.

The freezing of EFTs as "property" of a defendant first was approved in the Second Circuit's decision in Winter Storm Shipping, Ltd. v. TPI, 310 F.3d 263
(2d Cir. 2002). In that decision, the Second Circuit held that an EFT on which the defendant was the originating party was intangible "property" in which the defendant had an interest and, consequently, subject to maritime attachment under Rule B. The court noted, but rejected, the contention that the attachment should be vacated because all of the states in the Unites States had adopted legislation which prevented the attachment of wire transfers at an intermediary financial institution. Instead, the Winter Storm Shipping court relied upon a criminal forfeiture decision to support the basis for reversing the district court's order vacating the attachment.

The Aqua Stoli Shipping decision, on its face, supports the unfettered use of Rule B to freeze EFTs (both where the defendant is the originator and where the defendant is the beneficiary). That decision held that the district courts could not employ a "need-based" inquiry to vacate facially-proper maritime attachments. During oral argument of the Aqua Stoli Shipping appeal, however, Chief Judge Walker of the Second Circuit (who subsequently authored the panel's decision) stated to counsel as follows: "My question is I think that things are a little out of kilter. They seem to be a little out of kilter when one takes a look at the overall legal picture and I'm not quite sure what to do about it" (quoting audio recording of oral argument of March 2, 2006). In the actual decision, at footnote 6, Chief Judge Walker questioned whether Winter Storm Shipping was w ell-founded because of the criminal forfeiture precedent upon which the Winter Storm Shipping decision relied (stating that "[t]he correctness of our decision in Winter Storm seems open to question, especially its reliance on [the criminal forfeiture precedent], to hold that EFTs are property of the beneficiary or sender of an EFT."). I do not know if Mr. Harter was present in the courtroom during the oral argument on the Aqua Stoli Shipping appeal. But the comments of Chief Judge Walker during oral argument, combined with his unnecessary -- but clearly intentional -- questioning of Winter Storm Shipping in footnote 6, lead to the inescapable conclusion that Winter Storm Shipping will be subject to heavy scrutiny the next time that the question of whether EFTs are attachable property is presented to the Second Circuit.

Judge Rakoff seized upon footnote 6 in Aqua Stoli Shipping to limit Winter Storm Shipping to its facts. Previous district courts, before Aqua Stoli Shipping, had allowed the freezing of EFTs on which the defendant was the originator or the beneficiary. Indeed, Judge Rakoff noted these previous district court decisions, but specifically stated that he would not interpret Winter Storm Shipping broadly (and allow other than the freezing of EFTs on which the defendant was the
originator) because of Judge Walker's questioning of the soundness of the Winter Storm Shipping decision in footnote 6 of the Aqua Stoli Shipping decision.

In the Aqua Stoli Shipping appeal, The Clearing House Association L.L.C. and the Federal Reserve Bank of New York both filed amicus curiae ("friend of the court") briefs seeking to have Winter Storm Shipping overruled. The Aqua Stoli Shipping panel properly did not revisit the EFT issue decided by Winter Storm Shipping, because the question presented on appeal was whether the "need-based" inquiry employed by the district court was sound. The EFT issue was not relevant to the appeal. Nevertheless, in response to those briefs, Chief Judge Walker included footnote 6. Now, in the Seamar decision, Judge Rakoff not only squarely has presented the EFT question for appeal, but he also has certified the question for immediate resolution by the Second Circuit. Assuming that the appeal goes forward, that decision could be issued as early as May 2007.

At the Fall Meeting of the Maritime Law Association of the United States, held in San Francisco in October, banking interests representing The Clearing House Association L.L.C. and the Bankers' Association for Finance and Trade made a presentation to the Practice and Procedure subcommittee for the Supplemental Admiralty Rules, seeking to convince the Maritime Law Association to recommend a change of Rule B to the Advisory Committee on the Federal Rules of Civil Procedure. There is no indication that this attempt to legislatively change Rule B has succeeded. It is unquestionable that the banking interests again will file an amicus curiae brief in the Seamar appeal to the Second Circuit. Unlike in Aqua Stoli Shipping, however, this time the soundness of Winter Storm Shipping will be directly in question on appeal.

It is on the foregoing facts that I suggested in my presentation that the time to use Rule B to freeze electronic fund transfers may be coming to an end. I stand by that suggestion. As for the future of Rule B in its historic context, United States courts have recognized the validity, indeed the necessity, of the use of maritime attachments in the traditional sense (i.e., for seizing ships, cargo, freights, bank accounts, and other property of an absent defendant) for over two centuries. On this issue I agree with Mr. Harter wholeheartedly: there is no question that these traditional usages will continue unaffected as before.

As a final comment, Douglas Lindsay also mentioned that "existing Rule B attachments will be allowed to run their course, but that new ones will very shortly not be admitted." This is speculation on my part that I offered at the Ship Arrest Conference, but based on how appellate court decisions often are treated. Here, if Winter Storm Shipping were overruled, the possibility exists that the hundreds of attachments of EFTs that were carried out and which have resulted in security being posted, etc. could be challenged and sought to be vacated on the ground that the
attachment was upheld or allowed under the overruled Winter Storm Shipping decision. For purposes of predictability, in such cases courts often will
permit the previous decisions to remain in place
and only apply the decision prospectively to future attachments. Indeed, it would appear that this
issue might merit its own amicus curiae brief to
the Second Circuit should the Seamar appeal proceed forward.

In closing, I thank Simon Harter for his commentary and Bow Wave for allowing me this opportunity to respond. As Mr. Harter noted, the law in this area is complex and the more clarification given, the better that all concerned may understand this rapidly-evolving area of US maritime law.

Contact Mike at:-

michael.frevola@hklaw.com

4. Late Breaking News of Santa

The multipurpose vessel RICKMERS X-MAS, under command of Captain S. Claus will perform her first voyage under the Rickmers flag on 24 December, and is scheduled to be re-delivered to her owners on 6 January 2007.

The ship, formerly known as the RICKMERS SANTA, was built in 2003, has a deadweight capacity of approximately 30 000 tc (tons chocolate) and is equipped with two heavy gift cranes capable of lifting even the heaviest parcels under the Christmas tree.

The vessel has adjustable tweendecks in order to reduce broken stowage due to varying dimensions of presents, Christmas trees and foodstuff carried. In addition, dehumidifying devices are installed in all holds, ensuring proper condition of gingerbread and chocolate throughout the festive season. Before her charter, the vessel has also undergone an extensive refit with the installation of extra compartments for Mr. Claus’ reindeer and sleighs as well as accommodation for the dwarfs.

http://www.rickmers-linie.com/news_images/RickmersChristmas2006_72dpi.jpg

5. Risk Managed Christmas Greetings

From Nick Angus comes this careful wording

Due to the increasingly litigious nature of the world we live in, we regret that we are constrained into offering you the following Christmas message:

From us (hereinafter called the ‘Wishors’) to you (hereinafter called the ‘Wishee’) please accept without obligation, implied or implicit, our best wishes for an environmentally conscious, socially responsible, politically correct, low stress, nonaddictive, gender neutral, celebration of the winter solstice holiday, practised within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasions and/or traditions of others, or their choice not to practice religious or secular traditions at all.

Also, a financially successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted forthcoming calendar year, but with due respect for the calendars of choice of other cultures or sects whose contributions to society have helped make Britain great, (not to imply that Britain is necessarily greater than any other country or is the only ‘Britain’ in the western hemisphere), and having regard to the species, race, creed, colour, age, physical ability, religious faith, choice of computer platform or dietary preference of the Wishee.

By accepting this greeting you are bound by these terms, inter alia that:

1. This greeting is subject to further clarification or withdrawal.

2. This greeting is freely transferable provided that no alteration shall be made to the original greeting and that the proprietary rights of the Wishor are acknowledged.

3. This greeting implies no promise by the Wishors to actually implement any of the wishes.

4. This greeting may not be enforceable in certain jurisdictions and/or the restrictions herein may not be binding upon certain Wishees in certain jurisdictions and is revocable at the sole discretion of the Wishors.

5. This greeting is warranted to perform as reasonably may be expected within the usual application of good tidings, for a period of one year or until the issuance of a subsequent holiday greeting, whichever comes first.

6. The Wishors warrant this greeting only for the limited replacement of this wish or issuance of a new wish at the sole discretion of the Wishors.

Any references in this greeting to ‘Father Christmas’, or any other festive figures, whether actual or fictitious, dead or alive, shall not imply any endorsement by or from them in respect of this greeting, and all proprietary rights in any referenced third party names and images are hereby acknowledged.

By Order of the Wishors.

6. And Finally...

Many thanks to Frazer Hunt for these:-

CHRISTMAS CAROLS FOR THE DISTURBED

* 10. Obsessive Compulsive Disorder - - - Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle,Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells, Jingle Bells,

P.S.

Thanks to Paul Dixon's Joke of the Day for these:-

Christmas Eating Tips

1. Avoid carrot sticks. Anyone who puts carrots on a holiday buffet table knows nothing of the
Christmas spirit. In fact, if you see carrots, leave immediately. Go next door, where they're serving rum balls.

2. Drink as much eggnog as you can. And quickly. Like fine single-malt scotch, it's rare. In fact, it's even rarer than single-malt scotch. You can't find it any other time of year but now. So drink up! Who cares that has 10,000 calories in every sip? It's not as if you're going to turn into an
eggnog-aholic or something. It's a treat. Enjoy it. Have one for me. Have two. It's later than you think. It's Christmas!

3. If something comes with gravy, use it. That's the whole point of gravy. Gravy does not stand alone. Pour it on. Make a volcano out of your mashed potatoes. Fill it with gravy. Eat the volcano. Repeat.

4. As for mashed potatoes, always ask if they're made with skim milk or whole milk. If it's skim, pass. Why bother? It's like buying a sports car with an automatic transmission.

5. Do not have a snack before going to a party in an effort to control your eating. The whole point of going to a Christmas party is to eat other people's food for free. Lots of it. Hello?

6. Under no circumstances should you exercise between now and New Year's. You can do that in January when you have nothing else to do. This is the time for long naps, which you'll need after circling the buffet table while carrying a 5 Kilo plate of food and that vat of eggnog.

7. If you come across something really good at a buffet table, like frosted Christmas cookies in the shape and size of Santa, position yourself near them and don't budge. Have as many as you can before becoming the center of attention. They're like a beautiful pair of shoes. If you leave them behind, you're never going to see them again.

8. Same for pies. Apple. Summer fruits, Mincemeat. Have a slice of each. Or, if you don't like mincemeat, have two apples and one Summer. Always have three. When else do you get to have more than one dessert?

9. Did someone mention fruitcake? Granted, it's loaded with the mandatory celebratory calories, but avoid it at all cost. I mean, have some standards.

10. One final tip: If you don't feel terrible when you leave the party or get up from the table, you haven't been paying attention.

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