Vessel Arrests and How to Avoid Them

Jun 01, 2014

By Bruce A. McAllister, Esq*. and Robert D. McIntosh, Esq.**

 

There was an interesting article in the last edition of Compass, stating how a claimant can enforce a lien against a yacht owner and collect on a claim by obtaining a court order empowering the U.S. Marshal to seize the yacht.

 

The article did not explain that the warrant of arrest need not require that any notice be given to the yacht owner prior to seizing the yacht. Such arrests, which require that the owner hand over immediate possession of the yacht to the U.S. Marshal or a designated (and expensive) custodian, are often used to pressure a yacht owner into a settlement of a claim, which might otherwise be negotiated more equitably.

 

Upon perceiving a specific threat, a vessel owner may be able to protect his vessel from being arrested by filing a complaint in the U.S. District Court where the vessel lies, or where the threatened arrest would take place, and posting a bond in that court in the full amount of the claim plus 12 percent. The complaint would refer to the threatened arrest as a "cloud" on the title of the vessel. The bond would stand as security for the claim, and the court then should refuse to order the arrest of the vessel.

 

While the procedure may strike a vessel owner as needlessly expensive, it may be cost effective in cases where the yacht is about to be engaged in a cruise or other activity and an arrest on a questionable claim is threatened.

 

The complaint should be filed in the U.S. District Court under Supplemental Admiralty Rule D and the relevant local U.S. District Court Rules, and with reference to 46 USC Sec. 31343(c)(2).  Although the statute refers to a U.S. documented vessel, this filing was effective in a case where the vessel was foreign flagged.

 

*Of Counsel, Alley, Maass, Rogers & Lindsay, P.A.

** Partner, McIntosh Schwartz P.L.