Memorandum Order

PAUL CROTTY, District Judge

Defendant Petrom S.A. ("Petrom") moves, pursuant to Rule E(4)(f) of the Supplemental Rules for Certain Admiralty and Maritime Claims ("Supplemental Rules"), to vacate Process of Attachment and Garnishment issued by this Court to Plaintiff Blake Maritime, Inc. ("Blake Maritime"). Plaintiff counters that such attachments are necessary and appropriate under Supplemental Rule B(1) and urges this Court to uphold the prior attachments. The Court holds that Plaintiff's use of attachment was appropriate, and nothing in Supplemental Rule E(4)(f) mandates that the attachment be set aside. Accordingly, Defendant's motion to vacate the attachments is denied.

BACKGROUND

On April 12, 2005, Plaintiff Blake Maritime, Inc. ("Blake Maritime") charted its vessel, the Althos, to Defendant Petrom S.A. ("Petrom") to carry a cargo of petroleum products from Romania to two ports in the Mediterranean. (Verified Compl. ¶ 4; Dinu Decl. ¶ 3.) At its second port, the vessel had difficulty discharging the cargo, so it was rerouted — at Petrom's order — to Fos, France. (Verified Compl. ¶¶ 7-8; Dinu Decl. ¶ 4.) This resulted in additional freight costs and expenses. (Verified Compl. ¶ 9; Sach Decl. ¶ 4.) Blake Maritime sent an invoice for additional expenses, but in June 2005, Petrom refused to pay. (Verified Compl. ¶ 9; Sach Decl. ¶¶ 4-5.) Blake Maritime immediately demanded arbitration, but Petrom was slow to respond. (Compl. ¶¶ 11-12; Sach Decl. ¶¶ 6, 8-16.)

On September 15, 2005, Blake Maritime filed its verified complaint with this Court, alleging breach of the Charter Party by Petrom due to its failure to pay sums due and owing under the Charter. (Verified Complaint ¶ 4-9.) Blake Maritime instituted this action to force Petrom into arbitration in London, pursuant to the terms of the Charter Party, and to obtain security for its claim in event that a judgment is entered its favor. (Verified Complaint ¶ 10.)

Blake Maritime alleged that Petrom could not be found within this District, and invoked Supplemental Rule B to attach all property of Petrom that might be found within the District, including assets of Petrom held by, transferred to, or wired through a series of named banks. (Verified Complaint ¶ 13.) The Court directed the Clerk to issue Process of Maritime Attachment and Garnishment on September 15, 2005. Shortly thereafter, on September 19, 2005, service of the attachments resulted in restraints at Citibank and American Express Bank, each for more than the full amount of the claim. (Greenbaum Decl. ¶ 8.) To cure the double attachment, Blake Maritime's attorney immediately instructed American Express Bank to release the restraint. (Greenbaum Decl. ¶ 8.) Notice of these seizures and subsequent releases was provided to Petrom. (Greenbaum Decl. ¶ 8.) One day later, on September 20, 2005, Petrom appeared in the arbitration. (Sach Decl. ¶ 16.)

On October 5, 2005, Petrom moved pursuant to Supplemental Rule E(4)(f) to vacate the attachment at Citibank and release the attached funds. Petrom also moved pursuant Federal Rule of Civil Procedure 12(b)(6) to dismiss or to stay the action pending the outcome of the London arbitration. (Greenbaum Decl. ¶ 1). The Court promptly scheduled a hearing in compliance with Supplemental Rule E(4)(f) and Local Admiralty Rule E. 1, but at the requests of the parties the matter was adjourned twice. A hearing was held on October 24, 2005.

DISCUSSION

Defendant urges that the Second Circuit's decision in Winter Storm Shipping, Ltd. v. TPI, 310 F.3d 263 (2d Cir. 2002), which held that Electronic Fund Transfers ("EFTs") were property within the meaning of Supplemental Rule B, see id. at 278, has spawned a "cottage industry of Rule B attachments." (Def.'s Memorandum of Law in Support of its Order to Show Cause ("Def.'s Memo of Law") p. 4.) Since US Dollar-denominated EFTs are invariably routed through New York, Defendant claims that maritime garnishments of EFTs in New York, in aid of arbitration or as security for payment of judgments rendered by foreign tribunals, have forced this District to resolve numerous secondary disputes over the attachments of EFTs, which must be resolved on an expedited basis. Defendant urges the Court to limit this "new" Rule B litigation by holding that the attachment of Defendant's EFTs was "unfair and abusive," and vacating it.

Defendant believes that attachment was inappropriate because it is a large and "financially outstanding" company, owned by reputable entities including a "huge" Austrian corporation and the Romanian Government. (Def.'s Memo of Law, p. 5.) Defendant claims that, in light of its size and economic prosperity, there is no reasonable dispute as to its ability to pay any judgment that might arise from the pending arbitration. ( Id.) Defendant further urges that, in response to its Rule E(4)(f) motion, Plaintiff must do more than demonstrate literal compliance with Rule B, it must also show "that the attachment was reasonably calculated to serve at least one of the two historic purposes of Rule B: obtaining jurisdiction or securing a judgment." (Def.'s Memo of Law, p. 9). Since Defendant is large and "financially outstanding," the argument continues, there is no necessity, and therefore attachment of its funds should be vacated.

Defendant does not quarrel with the appropriateness of the maritime attachment and garnishment process, except as it applies to EFTs. For this class of "property," it seeks to impose a new requirement upon maritime plaintiffs seeking attachment, the requirement that, in addition to meeting the requirements of Rule B, maritime plaintiff must show a "need" or "necessity" for the security obtained. In so arguing, Defendant seeks to rewrite the law on maritime attachments, as this test is not found anywhere in Supplemental Rule B or E(4)(f), and, until fairly recently, was not found in any of the case law interpreting these rules.

Rule E(4)(f) was adopted in 1985, to address due process concerns about the need for prompt hearings following the seizure of a shipowner's property under Supplemental Rule B. See Suppl. Rule E, advisory committee's note (1985). A defendant may use a post-seizure hearing to attack "the complaint, the arrest, the security demanded, and any other deficiency in the proceeding." Id. On its face, the Rule does not mandate a showing of need or necessity in order for plaintiff to obtain security. In fact, the notes accompanying the 1985 amendments to Supplemental Rule B expressly state: "The rule envisions that the order [of attachment] will issue when the plaintiff makes a prima facie showing that he has a maritime claim against the defendant in the amount sued for and the defendant is not present in the district." Suppl. Rule B, advisory committee's note (1985). There is no mention of a showing of necessity or fairness at all. See id. In admiralty, given the rapid movement of ships, cargo and other assets, the need for obtaining security appears to be presumed by the Rule. See Suppl. Rule B, advisory committee's note (1966); Winter Storm Shipping, 310 F.3d at 267-68; Aqua Stoli Shipping Ltd. v. Gardner Ltd., 384 F.Supp. 2d 726, 727-28 (S.D.N.Y. 2005); Integrated Container Service, Inc. v. Starlines Container Shipping, Ltd., 476 F.Supp. 119, 122 (S.D.N.Y. 1979). While the "any other deficiency" language contained in Supplemental Rule E(4)(f) is broad, it does not suggest that a new test can or should be adopted merely because the definition of property subject to seizure has changed. The better construction is that the district court retains its inherent power to control the issuance of process. See Aqua Stoli Shipping, 384 F. Supp. 2d at 729; Royal Swan Navigation Co. v. Global Container Lines, Ltd., 868 F.Supp. 599, 604 (S.D.N.Y. 1994).

Defendants rely principally on Aqua Stoli Shipping, Inc. v. Gardner Smith Pty Ltd., in which the District Court vacated an order of attachment, in part on the grounds that defendant was a large, stable company, so no attachment was necessary to secure a judgment. Aqua Stoli Shipping, 384 F. Supp. 2d at 729-30. But Defendant's use of Aqua Stoli is misplaced. In Aqua Stoli, the issue before the Court was whether "the hardship the attachment order imposes on [defendant] or others substantially outweighs any benefit to the plaintiff," Aqua Stoli Shipping, 384 F. Supp. 2d at 729, and after balancing, the Court found that the burden of the attachment outweighed the benefit. Id. at 730. In Aqua Stoli, defendant had previously obtained a foreign order arresting plaintiff's vessel, arbitration had commenced, and defendant had made an offer to sell the disputed cargo and hold the proceeds in escrow. Id. at 727. Plaintiff had refused the offer. Id. Moreover, defendant was a well-established company, which apparently was able to demonstrate its financial bona fides. Id. at 729. Finally, there appeared to have been an element of retaliation in plaintiff's decision to obtain the attachment order and to continue attaching assets until the amount attached equaled the value of the vessel that defendant previously had arrested. See id. Under these circumstances, the District Court required plaintiff to demonstrate that process was reasonably calculated to achieve at least one of the two historical purposes of Supplemental Rule B (obtaining jurisdiction or securing a judgment), in addition to the usual showing that plaintiff's request for attachment complied with the technical requirements of Rule B, in order to assure the Court that attachment was not simply a tactical device designed to harass the adversary in on-going litigation. Id.; see Allied Maritime, Inc. v. Rice Corporation, No. 04 Civ. 7029 (SAS), 2004 WL 2284389, at *2-3 (S.D.N.Y. Oct. 12, 2004); Royal Swan Navigation Co., 868 F.Supp. at 604.

The facts of the Aqua Stoli case, which led to the formulation and application of a balancing test, are not present here. First, unlike Aqua Stoli, Defendant in this case had not joined in the arbitration or litigation process anticipated by the Charter Party at the time Plaintiff commenced this lawsuit. Indeed, Defendant still had not joined the arbitration process when the first garnishment was served and an attachment perfected. Second, there has been no showing in this case that the attachment was designed to vex or harass. Indeed, Plaintiff's conduct in promptly releasing the additional attachment, and providing prompt notice to Defendant, support the opposite conclusion. Third, unlike the defendant in Aqua Stoli, who offered sufficient evidence that it was a "large, stable company with no demonstrated history of failing to make good on judgments," Aqua Stoli Shipping, 384 F. Supp. 2d at 729, Defendant in this case offered only pages downloaded from the Petrom website to prove its financial stature. This information is hardly dispositive on the issue of Defendant's long-term stability, particularly in light of its recently privatized status; nor is it any proof of Defendant's willingness and ability to pay a future judgment that might arise from the London arbitration. Finally, while Defendant urges us to adopt the Aqua Stoli decision and its burden-benefit balancing test, Defendant has not identified with any precision exactly what harm it has experienced by way of the attachment.

On these facts, the Court will not interfere with the traditional use and application of process permitted by Supplemental Rule B. There is no doubt that "Plaintiff [made] a prima facie showing that [it] has a maritime claim against the defendant in the amount sued for and that defendant is not found in the District." Suppl. Rule B, advisory committee's note (1985); see also Parkroad Corporation v. China Worldwide Shipping Co., 2005 U.S. Dist. LEXIS 11122, at *3 (S.D.N.Y. June 6, 2005) (quoting advisory committee's note and using this standard to determine whether attachment should be vacated).

Accordingly, the Court will not vacate the attachment of Defendant's assets at Citibank. Nonetheless, if Petrom were willing to submit to in personam jurisdiction and to provide security for the attached property, the Court would vacate the attachment.

SO ORDERED.