Judge Marrero Grants Interlocutory Appeal In Rule B Bond Agreement Case

In a rare move, Judge Marrero has granted a Rule B defendant leave to file an interlocutory appeal of his Order sustaining the attachment of a Surety Bond that had been posted by the defendant as substitute security for attached EFTs.  Central Shipping Company Ltd. v. Internaut Shipping Ltd., S.D.N.Y. Docket No. 09 CV 6222 (S.D.N.Y. Jan. 11, 2010). 

By Opinion and Order dated November 25, 2009, Judge Marrero had denied the rule B defendant's motion to vacate a surety bond it had posted in lieu of attached EFTs, finding that The Shipping Corporation of India v. Jaldhi Overseas Pte. Ltd. and Hawknet, Ltd. v. Overseas Shipping Agencies were inapplicable to the circumstances of the case. In Internaut, after the initial attachment of an EFT, the parties entered into a Bond Agreement whereby the full amount of security requested by the plaintiff was posted; the Attachment Order was vacated; and the EFT released to the Defendant. Judge Marrero found that this agreement was "a contract under which the parties exchanged mutual promises, rights and obligations that they have complied with up to now... [t]hat agreement, embodied in an Order by this Court, is presumptively valid."  Judge Marrero further found that it would be "unwarranted and inequitable" to vacate the Bond because the defendant had received "the substantial benefit of its bargain" for posting the bond, while vacatur could cause the plaintiff to "be deprived of potential benefits that took effect after the Attachment Order challenged here no longer existed."

In response to the Judge's surprising Order, which was contrary to the decisions of several other District Court judges, the defendant in Internaut filed a Motion for Reconsideration, along with a request that the Judge certify the matter for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). Although the request for reconsideration was denied, Judge Marrero found that "the circumstances presented by this case are sufficiently exceptional to warrant leave for an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). In granting the defendant's request, Judge Marrero acknowledged that "[f]ollowing Jaldhi and Hawknet, the rules of maritime law that govern the instant dispute have been in a state of flux in this Circuit", and he recognized that the rulings by the district courts have been "not all in full agreement."  He found that allowing the defendant an immediate appeal would present a "unique aspect of the controversy."

Read a copy of Judge Marrero's Order granting interlocutory appeal

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