William J. Honan (WJH 1922)

Michael J. Frevola (MJF 8359)

HOLLAND & KNIGHT LLP

195 Broadway

New York, NY 10007-3189

(212)513-3200

ATTORNEYS FOR PLAINTIFF

WILHELMSEN PREMIER MARINE FUELS AS

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

WILHELMSEN PREMIER MARINE FUELS AS,

Plaintiff,

-againstUBS PROVEDORES PTY LTD. a/k/a

USS-UBS INTERNATIONAL and

RAECORP INTERNATIONAL PTY LTD.,

Defendants.

07 Civ. 5798 (CM)

MEMORANDUM IN OPPOSITION TO DEFENDANTS'

MOTION TO VACATE MARITIME ATTACHMENT

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 1 of 30
TABLE OF CONTENTS

TABLE OF AUTHORITIES ii

PRELIMINARY STATEMENT 1

STATEMENT OF FACTS 1

ARGUMENT 5

I. Wilhelmsen's Claim is Subject to Admiralty Jurisdiction 5

A. Claims for Provisions of Bunkers to a Vessel Are Inarguably

Maritime 6

B. Claims by a "Supplier" of Bunkers Remain Maritime Even

Where a Local Supplier Actually Provides the Bunkers to the

Vessel on Behalf of a "Broker" 9

C. Wilhelmsen Was Not a Broker, the Agreements Were Not Otherwise

"Preliminary" Contracts, and UBS's Other Arguments Do Not Apply

In This Factual Scenario 14

II. Wilhelmsen has Adequately Stated a Prima Facie Admiralty Claim

Against Raecorp, Thereby Satisfying Wilhelmsen's Burden Under

The Rule E(4)(f) Inquiry 18

A. Plaintiff Has Satisfied Its Burden of Alleging a "Prima Facie

Admiralty Claim" 18

III. The Electronic Fund Transfers That Have Been Attached Are

"Property" Under The Law Of This Circuit 24

IV. Interlocutory Appeal Is Not Warranted 24

CONCLUSION 25

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 2 of 30
TABLE OF AUTHORITIES

CASES

A. Coker & Co. v. Nat'l Shipping Agency Corp.,

No. 99-1440, 1999 WL 311941 (E.D. La. May 17, 1999) 22-23

Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd.

460 F.3d 434 (2d Cir. 2006) 18-19

A/S Dan-Bunkering Ltd. v. M/V ZAMET,

945 F. Supp. 1576 (S.D. Ga. 1996) 10, 12

Compania Sudamericana de Vapores S.A. v. Sinochem Tianjin Co.,

No. 06 Civ. 13765, 2007 WL 1002265 (S.D.N.Y. Apr. 4, 2007) 25

Dolco Invest. Ltd., v. Moonriver Dev., GML,

486 F. Supp. 2d 261 (S.D.N.Y 2007) 19

Dow Chem. Pac. Ltd. v. Rascator Marit. S.A.,

782 F.2d 329 (2d Cir. 1986) 20

Exxon Corp. v. Central Gulf Lines, Inc.,

500 U.S. 603 (1991) 6-8, 14, 16

Exxon Corp. v. Central Gulf Lines, Inc.,

780 F. Supp. 191 (S.D.N.Y. 1991) 16

Fesco Ocean Mgmt. v. High Seas Shipping,

No. 06 Civ. 1055, 2007 WL 766115 (S.D.N.Y. Mar. 12, 2007) 19, 21

F oiks america Reins. Co. v. Clean Water of N.Y., Inc.,

413 F.3d 307 (2d Cir. 2005) 5-6, 16, 18

Galehead, Inc. v. M/VANGLIA,

15 F. Supp. 2d 1304 (S.D. Fla. 1998),

affd in part and rev'd in part, 183 F.3d 1242 (llth Cir. 1999) 10

Galehead, Inc. v. M/V ANGLIA,

183F.3d 1242 (llth Cir. 1999) 9-11

Gulf Marine & Indus. Supplies, Inc. v. New Filipino Mart. Agencies, Inc.,

No. 01-0555, 2001 WL 277924 (E.D. La. Mar. 20, 2001) 11

Hampton Bermuda Ltd. v. M/V STAR SIRANGER,

No. H-05-3074, 2007 WL 677263 (S.D. Tex. Feb. 28, 2007) 12

11

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 3 of 30
Japan Line, Ltd. v. Willco Oil Ltd.,

424 F. Supp. 1092 (D. Conn. 1976) 18

Kossick v. United Fruit Co.,

365 U.S. 731 (1961) 6, 14

Lee v. M/V GEM OF MADRAS,

No. H-05-0631, 2006 WL 568545 (S.D. Tex. Mar. 6, 2006) 12

Linea Naviera Carbotrade v. Mar Caribe De Navegacion,

169 F. Supp. 2d 1341 (M.D. Fla. 2001) 22-24

Maersk, Inc. v. Neewra, Inc.,

No. 05 Civ. 4356 (RCC), 2006 WL 2168452 (S.D.N.Y. Aug. 1, 2006) 22

Minturn v. Maynard,

58 U.S. (17 How.) 477 (1854) 7

N. Pac. S.S. Co. v. Hall Bros. Marine Ry. & Shipbuilding Co.,

249 U.S. 119(1919) 6

N. Tankers (Cyprus) Ltd. v. Backstrom,

967 F. Supp. 1391 (D. Conn. 1997) 20

New England Mut. Marine Ins. Co. v. Dunham,

78 U.S. 1 (1870) 6

Norfolk S. Ry. Co. v. James N. Kirby, Pty Ltd.,

543 U.S. 14 (2004) 5-6, 16, 18

Royal Swan Navigation Co. v. Global Container Lines,

868 F. Supp. 599 (S.D.N.Y. 1994) 19

Salazar v. The ATLANTIC SUN,

881 F.2d 73 (3d Cir. 1989) 22

Seamar Shipping Corp. v. Kremikovtzi Trade Ltd.,

461 F. Supp. 2d 222 (S.D.N.Y. 2006) 24-25

Sea Transp. Contractors v. Indus. Chimiques du Senegal,

411 F. Supp. 2d 386 (S.D.N.Y. 2006) 14-17

SPL Shipping, Ltd. v Gujarat Cheminex, Ltd.,

No. 06 Civ. 15375, 2007 WL 831810 (S.D.N.Y. Mar. 15, 2007) 19, 21

in

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 4 of 30
The GOLDEN GATE,

52 F.2d 397 (9th Cir. 1931) 10,12

Tide Line Inc., v. Eastrade Commodities Inc., No. 06 Civ. 1979,

2006 WL 4459297, 2007 A.M.C. 252 (S.D.N.Y. 2006) 18-19

Tramp Oil & Marine, Ltd. v. M/V MERMAID I,

805 F.2d 42 (1st Cir. 1986) 12

Trans-Tec Asia v. M/V HARMONY CONTAINER,

No. CV 04-1160, 2004 WL 3820556 (C.D. Cal. Dec. 28, 2004) 13

Trans-Tec Asia v. M/V HARMONY CONTAINER,

435 F. Supp. 2d 1015 (C.D. Cal. 2005) 13

Ullises Shipping Corp. v. Fal Shipping Co.,

415 F. Supp. 2d 318 (S.D.N.Y. 2006) 22-23

Universal Shipping, Inc. v. Panamanian Flag Barge,

563 F.2d 483 (1st Cir. 1976) 16

Wajilam Exports (Singapore) Pte. Ltd. v. A TL Shipping Ltd.,

475 F. Supp. 2d 275 (S.D.N.Y. 2006) 22

Winter Storm Shipping Ltd. v. TPI,

310 F.3d 263 (2d Cir. 2002) 24

IV

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 5 of 30
PRELIMINARY STATEMENT

In challenging Wilhelmsen's Rule B attachment of UBS's funds, UBS and Raecorp raise

three principal issues:

1. Is the contract between UBS and Wilhelmsen for the sale and purchase of bunker

fuel a maritime contract notwithstanding Wilhelmsen's status as a "middle-man" and

notwithstanding that the bunker fuel was supplied to the vessel by a Wilhelmsen sub-contractor?

2. Has Wilhelmsen, in its Amended Verified Complaint, stated a prima facie case

against co-defendant Raecorp?

3. Does the Second Circuit's decision in Winter Storm Shipping remain good law

within this District and should the Court certify an interlocutory appeal to permit a challenge of

that decision under 28 U.S.C. §1292?

Wilhelmsen respectfully requests the Court to find (i) that the UBS/Wilhelmsen contract

is maritime in nature, (ii) that Wilhelmsen has stated a prima facie case against Raecorp and (iii)

that the Second Circuit's decision in Winter Storm remains good law and the Court should not

certify the present case for an interlocutory appeal.

STATEMENT OF FACTS1

Wilhelmsen acts as both a broker and a supplier of bunkers to seagoing vessels at a

variety of ports worldwide. Affirmation of Hans Borge ("Borge Aff."), 1f 3. Here, Wilhelmsen

entered into a series of agreements with UBS to provide vessels nominated by UBS with bunkers

in the ports of Sasebo and Naha in Japan. Id. ^ 4. Each time that UBS contacted Wilhelmsen to

bunker a nominated vessel, Wilhelmsen confirmed the terms of that agreement and incorporated

1

 Because of page constraints and the magnitude of supporting information, the Statement of

Facts summarizes the accompanying supports and cites to them for further details.

1

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 6 of 30
the terms and conditions of the local supplier, Sumitomo Corporation Europe Ltd. ("Sumitomo"),

as governing the relationship between UBS and Wilhelmsen. Id. f 5 & Exs. 2, 3. In accepting

UBS's nominations, Wilhelmsen undertook to bunker the nominated vessel under the Sumitomo

terms, and it would be responsible to UBS for a failure to bunker a vessel in the specified

Japanese port at the designated time. Id. ^ 6.

Wilhelmsen did not use its own employees and services to physically supply the bunkers

that were requested by UBS for the nominated vessel. Id. If 7. Instead, as is common in the

bunkering industry, Wilhelmsen used a local supplier to physically supply the vessel in

accordance with its instructions. Id. In doing so, Wilhelmsen contracted with a local supplier,

Sumitomo, to carry out the requested bunkering operations. Id.; see also Affirmation of Alan

Hillgrove ("Hillgrove Aff."), ^ 4. Ten separate times, Wilhelmsen performed under its contract

with UBS by purchasing bunkers from Sumitomo and ordering it to bunker the nominated vessel.

Borge Aff, ^f 4(a)-(j); Hillgrove Aff, If 3(a)-(j). Sumitomo invoiced Wilhelmsen for each of

these ten nominations; all have been paid in full. Borge Aff, | 8; Hillgrove Aff, ^ 4(a)-(j), 6 &

Ex. 1. UBS, however, has not paid Wilhelmsen. Borge Aff, f 10.

UBS claims that it has not been paid by the U.S. government for the Wilhelmsen

bunkerings because Wilhelmsen has failed to produce substantiating documentation. UBS

conveniently failed to introduce a copy of its government contract to support its contention that it

needed the Wilhelmsen documentation to be paid. Why? Because the falsity of UBS's

representation is apparent upon reviewing the terms of UBS's contract with the Defense Energy

Support Center ("DESC"). The UBS/DESC contract clearly states several times that additional

expenses (such as for barging, storage, etc.) are to be included in the bidder's per metric ton,

FOB terms bunker bid:

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 7 of 30
SHIPS' BUNKERS. Unless otherwise stated, the supplies shall be furnished

f.o.b. destination as ships' bunkers into various types and sizes of U.S. military

and federal civilian vessels for immediate consumption by the vessel. Unit prices

are for product delivered inclusive of all delivery charges.

Affidavit of Michael Frevola ("Frevola Aff."), Ex. 2, Page 2 of 76 (emphasis supplied).

NOTE: Offer prices must be "as delivered." Prices should include all delivery

costs, applicable taxes (except those to be listed separately on invoices), and any

other charges, given in US dollars per Metric Ton.

Id., Page 8 of 76 (emphasis supplied).

F.O.B. DESTINATION (NOV 1991)

(a) The term "f.o.b. destination," as used in this clause, means -

(1) Free of expense to the Government, on board the carrier's conveyance,

at a specified delivery point [here, the nominated vessels] ... .

* * *

(b) The Contractor shall -

* * *

(6) Pay and bear all charges to the specified point of delivery.

Id., Page 58 of 76 (emphasis supplied).

Not only does the UBS/DESC contract make clear that UBS has no claim for which UBS

requires the purported Wilhelmsen documentation, but also U.S. government representatives

from both DESC and Military Sealift Command have confirmed that UBS has been paid in full

for the Wilhelmsen bunkerings. See id., || 5-7; Borge Aff, ^ 13 & Ex. 7. hi fact, the Military

Sealift Command Fuels Manager made it quite clear that UBS's "claims" had nothing to do with

the Wilhelmsen bunkerings and that UBS's claims essentially have been manufactured in a

desperate attempt to mitigate the losses UBS has sustained for grossly underbidding on this

government contract that it is committed to perform for the next four years:

/ will assure you that I have personally seen evidenfcej that USS-UBS has been

paid for fuel and services rendered to MSC ships in Sasebo, and Yokohama and

the price that was paid is the daily contract price that has been authorized on

the Contract. That said, USS-UBS has a claim into Defense Fuels, Bunker

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 8 of 30
Contract Division for $3.55 million (us). This claim is not for fuel delivered to

the ship or services to the ships but for storage of fuel in Sasebo and losses

incurred by the Contractor for this fuel when it was sold.

* * *

Lastly, I will tell you that the invoiced price for fuel by USS-UBS was an

average of $243.50 per metric ton higher than any spot market price for fuel in the

area and the invoice price was not LAW with the daily metric ton price allowed by

the DESC Contract. Additionally, USS-UBS has submitted claims for services

such as overtime at $300 per hour for periods of 24, 48, and 72 hours for time that

the Contractor or Sub-Contractor was filling the barge at the distribution

point/refinery/whole seller ... . Obviously, I am not a fool but these are just a few

examples of the USS-UBS claims that have been submitted to Defense Fuels and

forwarded to me.

One last item, less the claims that I have cited above, all invoices for fuel to

MSC's ships since 1 October 2006 thru 23 July 2007 have been paid to USSUBS.

Borge Aff, Ex. 7 (emphasis added).

Wilhelmsen always has quoted a FOB rate (all expenses included to delivery alongside

the nominated vessel) to UBS and never has added on extra transportation or other expenses. Id.

Iff 11-12. Overtime, which UBS alleges it expended, is unheard of in the Japanese bunker

industry. Hillgrove Aff, f 8. UBS's contentions are fabrications designed to shift the equities of

this proceeding in the forlorn hope that it can free the funds that Wilhelmsen has attached to

secure a portion of the damages it has suffered at the hands of UBS.

As the accompanying Borge Affirmation explains in detail, UBS grossly miscalculated its

expenses in reaching a bid price for this government contract. Borge Aff., fflf 14-16. In doing so,

UBS apparently failed to take into account (1) that the industry publications quoting fuel prices

in Tokyo Bay, Japan were quoting a much less expensive product, and (2) were not including the

extremely significant transportation costs involved in employing Japanese coastwise vessels to

transport the bunkers to the remote locals nominated. Id.

UBS also contends that Wilhelmsen acted as a bunker broker in participating in the

bunkering of the vessels at issue in this dispute. A significant part of Wilhemsen's business does

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 9 of 30
involve acting as a bunker broker, and Wilhelmsen is one of the larger bunker brokers in the

world. Id. If 17. In this transaction, however, Wilhelmsen entered into separate contracts with

both UBS and with Sumitomo for the bunkering of the nominated vessel; UBS did not enter into

a direct contract with Sumitomo. Id. Wilhelmsen's compensation for participating in these

transactions never was based on a commission resulting from the confirmation of a contract

between UBS and Sumitomo. Id. UBS also has threatened to sue Wilhelmsen for an alleged

contamination of bunkers. Id. f 18. It likewise reserved its rights at the scheduling conference to

seek counter-security on that claim. See Frevola Aff., Ex. 4, Transcript Page 11. These claims

never would be brought against a broker; but they would against a contractual counterpart.

UBS also claims that the primary purpose of Wilhelmsen's involvement in this case as

providing introductions to local suppliers in Japan and provided extensions of credit to UBS

through which UBS could complete its bunkering transactions with local suppliers. As Mr.

Borge's affirmation explains, Wilhelmsen does offer credit terms in order to position itself

favorably against its competition. As he further explains, however, this hardly is the primary

nature of the services Wilhelmsen offers. See Borge Aff, 119.

ARGUMENT

POINT I

WILHELMSEN'S CLAIM IS SUBJECT TO ADMIRALTY JURISDICTION

Defining whether a contract is subject to admiralty jurisdiction requires a conceptual

approach rather than a spatial approach. Norfolk S. Ry. Co. v. James N. Kirby, Pty Ltd., 543 U.S.

14, 23 (2004) (citation omitted); accord Folksamerica Reins. Co. v. Clean Water of N.Y., Inc.,

413 F.3d 307, 311 (2d Cir. 2005). As facts vary case by case, great importance is placed in

resolving this jurisdictional question on how such contracts have been treated in the past.

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 10 of 30
Folksamerica, 413 F.3d at 311 (noting the Supreme Court's "instruct[ion] that '[precedent and

usage are helpful insofar as they exclude or include certain common types of contract'") (quoting

Kossickv. United Fruit Co., 365 U.S. 731, 735 (1961)).

In analyzing whether a contract is subject to admiralty jurisdiction, courts are required to

"look to the contract's "nature and character" to see 'whether it has 'reference to maritime service

or maritime transactions."" Id. (quoting Kirby, 543 U.S. at 24 (quoting N. Pac. S.S. Co. v. Hall

Bros. Marine Ry. & Shipbuilding Co., 249 U.S. 119, 125 (1919)) and citing New England Mut.

Marine Ins. Co. v. Dunham, 78 U.S. 1, 26 (1870)). The discussion below demonstrates that the

principal objective of the UBS/Wilhelmsen contract was to bunker a vessel and thus provide that

vessel with the motive force to ply the ocean. The provision of bunkers to a vessel has been

treated for at least a century as a fundamental component of maritime commerce.

A. Claims for Provision of Bunkers to a Vessel Are Inarguably Maritime

As an initial matter, there is no question that a contract for the provision of bunkers to a

vessel is a maritime contract subject to admiralty jurisdiction. Exxon Corp. v. Central Gulf

Lines, Inc., 500 U.S. 603, 612 (1991). The underlying transaction for which all parties were

retained - UBS, Wilhelmsen, and Sumitomo - was to bunker U.S. vessels. In Exxon, the

Supreme Court overturned the longstanding judicial exception to admiralty jurisdiction in

connection with agency contracts. The Court analyzed a fuel requirements contract similar to the

UBS/DESC contract here. Exxon directly supplied bunkers to vessels in certain ports (New

York), but subcontracted the physical supply function to local suppliers in ports where Exxon did

not have the capability (Jeddah, Saudi Arabia was involved in the dispute). Id. at 605.

Exxon brought its claims in the Southern District of New York under the court's

admiralty jurisdiction. The district court, relying on nearly a century of precedent holding that

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 11 of 30
"preliminary contracts" and "agency contracts" fell outside the court's admiralty jurisdiction,

rejected Exxon's contention that its claims for the Jeddah bunkering services fell within

admiralty jurisdiction. Id. at 607. The Second Circuit affirmed the district court for the reasons

given in the district court's original decision and further decision on reconsideration. Id.

On appeal, the Supreme Court overruled the "per se exception" to admiralty jurisdiction

in the context of agency contracts and held that Exxon's claims based on the Jeddah bunkering

services were subject to admiralty jurisdiction. Justice Marshall, writing for a unanimous Court,

overruled the exception created by Minturn v. Maynard, 58 U.S. (17 How.) 477 (1854), because

using a bright line rule to exclude contracts regardless of subject matter based on the status of the

claimant was not consistent with the Constitution's grant of federal admiralty jurisdiction:

Finally, the proposition for which Minturn stands - a per se bar of agency

contracts from admiralty - ill serves the purpose of the grant of admiralty

jurisdiction. As noted, the admiralty jurisdiction is designed to protect maritime

commerce, [citation omitted]. There is nothing in the nature of an agency

relationship that necessarily excludes such relationships from the realm of

maritime commerce. Rubrics such as "general agent" and "special agent" reveal

nothing about whether the services actually performed pursuant to a contract are

maritime in nature. It is inappropriate, therefore, to focus on the status of a

claimant to determine whether admiralty jurisdiction exists.

Exxon, 500 U.S. at 611-612 (emphasis added).

Turning to the subject matter of the dispute before the Court, the Exxon Court focused on

whether Exxon's delivery of fuel in Jeddah through a local physical supplier (rather then itself)

constituted a maritime transaction. Holding that the subject matter of both transactions - the

value of the fuel received by the ship - was identical, the Court concluded that Exxon's claims

for the Jeddah bunkering performed by a local physical supplier must be subject to admiralty

jurisdiction because the New York claims clearly qualified as such:

In this case, the only difference between the New York delivery over which the

District Court asserted jurisdiction, see n. 2, supra, and the Jeddah delivery was

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 12 of 30
that, in Jeddah, Exxon bought the fuels from a third party and had the third party

deliver them to the Hooper. The subject matter of the Jeddah claim, like the New

York claim, is the value of the fuel received by the ship. Because the nature and

subject-matter of the two transactions are the same as they relate to maritime

commerce, if admiralty jurisdiction extends to one, it must extend to the other.

Id. at 612-613 (emphasis added).

Here, similar to the Exxon case, UBS contracted with Wilhelmsen to carry out the

supplying of fuel to the vessels. Wilhelmsen entered into a similar transaction by transaction

agreements with UBS for bunkering U.S. government vessels in Japan. By agreeing to supply

those vessels, Wilhelmsen similarly obligated itself to physically fuel the vessels itself or to find

a local supplier from which to purchase fuel to carry out its contractual obligations to UBS. The

correspondence from Wilhelmsen to UBS in which UBS's vessel nomination was confirmed

always referenced Sumitomo's Terms and Conditions as applying to the UBS/Wilhelmsen

transaction. The Sumitomo Terms make clear that Wilhelmsen contracted with UBS to fuel the

designated vessels, and that Wilhelmsen would be liable to UBS for a failure to do so.

Hence, the subject matter of the UBS/Wilhelmsen contracts was to fuel the vessels

nominated by UBS in accordance with the Sumitomo Terms. Wilhelmsen could bunker the

vessels itself, or it could choose to subcontract that obligation to a local supplier. In either case,

the Exxon Court made clear that Wilhelmsen's contract with UBS is a maritime contract

regardless of whether Wilhelmsen performed the bunkering itself or contracted our for the

performance of that obligation. The UBS/Wilhelmsen agreements are classic maritime contracts

for the provision of necessaries to a vessel. Although UBS misrepresents the nature of the

UBS/Wilhelmsen contract, and even fabricates a basis for non-payment in blaming Wilhelmsen

for its purported "failure" to adequately document its bunker invoices, UBS's attempts to avoid

maritime jurisdiction do not withstand close scrutiny.

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 13 of 30
B. Claims by a "Supplier" of Bunkers Remain Maritime Even Where a Local Supplier

Actually Provides the Bunkers to the Vessel on Behalf of a "Broker"

UBS argues that Wilhelmsen acted as a broker in bunkering operations and that

brokerage contracts are not considered maritime contracts. To support this proposition, UBS

cites cases involving charter brokers (brokers retained to locate charterers of vessels for a vessel

owners), insurance brokers (retained to procure vessel insurance), and one case involving a

financial service company. Charter broker and insurance broker claims long have been held to

be non-maritime. Tellingly, however, UBS fails to cite a single fuel broker case to support its

position that a fuel brokerage agreement is not subject to admiralty jurisdiction. It also chooses

not to address a number of bunkering dispute cases that demonstrate that federal district courts

and circuit courts of appeal repeatedly have treated claims such as Wilhelmsen's as subject to

admiralty jurisdiction, whether characterizing the intermediate entity as a "broker,"

"subcontractor," or something else. In at least two cases, courts not only held that admiralty

jurisdiction was proper, but even held that the plaintiff "broker" (i.e., intermediate entity) was

entitled to a maritime lien against the vessel to which the bunkers were supplied.

For example, in Galehead, Inc. v. M/V ANGLIA, 183 F.3d 1242 (llth Cir. 1999), the

alignment of the parties was virtually identical to that of the parties in this proceeding. The

charterer Genesis (equivalent to the U.S. government here) requested the efforts of Polygon

(UBS here) to obtain fuel in Florida. Id. at 1244. Polygon contacted Asamar (Wilhelmsen here)

to supply the fuel. Id. Asamar contracted with Coastal (Sumitomo here) to physically supply the

bunkers to the vessel. Id. As in this case, the bunker confirmation listed Coastal as the physical

supplier and Asamar as the seller. Id. Asamar paid Coastal (just as Wilhelmsen has paid

Sumitomo); Asamar, however, was not paid (just as UBS has not paid Wilhelmsen). Id.

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 14 of 30
A second bunkering occurred with similar parties involved, with the exception that

ChemOil and Marsh were the physical suppliers who supplied the vessel and were paid by

Asamar, with Asamar once again not being paid. Id. A third bunkering occurred without

Asamar's involvement, in which Polygon was listed as the seller and ChemOil and Tesoro were

the physical suppliers. Id. Polygon paid ChemOil and Tesoro, but was not paid by Genesis. Id.

All of Polygon and Asamar's claims were purchased by, and assigned to, Galehead. Id.

Galehead filed a complaint in rem against the vessel, alleging that it had maritime lien

claims against the vessel based on Asamar's and Polygon's bunker claims. Id. Notably, the

district court categorized both Asamar and Polygon as "fuel brokers" based on their intermediate

status in the transaction. See, e.g., Galehead, Inc. v. M/VANGLIA, 15 F. Supp. 2d 1304, 1307

(S.D. Fla. 1998) (stating "[w]hether fuel brokerage services give rise to maritime liens has been

discussed extensively . . . ."). Applying admiralty law, the district court ruled that Polygon had a

maritime lien claim against the vessel and Asamar did not. 183 F.3d at 1244. Galehead

appealed the district court's decision. Id.

On appeal, the Eleventh Circuit affirmed the district court's decision in relevant part. See

id. at 1247. The Eleventh Circuit made clear that both suppliers had claims subject to admiralty

jurisdiction, however, Asamar's maritime claim did not qualify for a maritime lien claim because

there was no showing that Asamar's work was performed "on the order of the owner or a person

authorized by the owner":

[T]o obtain a maritime lien, a person must: (1) provide necessaries; (2) to a

vessel; (3) on the order of the owner or agent. While Polygon satisfies all three of

the elements, Asamar fails on element number three and does not qualify for its

two liens. So, Galehead is entitled to only one lien.

* * *

About the first element, although Polygon did not physically supply the

bunkers, a party need not be the physical supplier or deliverer to have "provided"

necessaries under the statute. See The GOLDEN GATE . . . , 52 F.2d 397, 400

10

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 15 of 30
(9th Cir. 1931); A/S Dan-Bunkering Ltd. v. M/V ZAMET, 945 F. Supp. 1576,

1578-79 (S.D. Ga. 1996). The bunkers were supplied pursuant to an agreement

made between Genesis and Polygon. That agreement caused, or provided for, the

delivery of the fuel to the vessel. Therefore, Polygon "provided" necessaries to the

vessel under the contract irrespective of how, or by whom, the delivery was

carried out. See generally Restatement (Second) of Contracts § 318 cmt. a, illus.

2 (1979) ("A contracts to deliver to B coal of specified kind and quality. A

delegates the performance of this duty to C, who tenders to B coal of the specified

kind and quality. The tender has the effect of a tender by A.").

* * *

The work done by Asamar was not "on the order of the owner or a person

authorized by the owner." Therefore, Galehead is entitled to neither of the two

potential liens arising from the August and September 1995 fuelings. Summary

judgment was proper for Anglia here.

That Asamar has met the first two elements of the statutory test is not much

disputed. But the third element is a problem for Asamar.

Galehead, 183 F.3d 1242, 1244-45 (llth Cir. 1999) (emphasis supplied).

The Eleventh Circuit's decision in Galehead is relevant because it expressly recognizes

that Asamar must be deemed to have (1) provided necessaries (2) to a vessel. While these two

elements do not alone entitle Asamar to a maritime lien, it is unquestionable that the satisfaction

of those two elements qualifies the claim as a maritime claim warranting the use of Rule B. See,

e.g., Gulf Marine & Indus. Supplies, Inc. v. New Filipino Maritime Agencies, Inc., No. 01-0555,

2001 WL 277924 (E.D. La. Mar. 20, 2001) (holding plaintiffs Rule B attachment was proper

because "the Court finds that the plaintiffs have satisfied the requirement of establishing that

their claim is maritime in nature as it concerns the furnishing of necessaries to a vessel.").

Here, the factual similarities between Asamar's position and Wilhelmsen's position make

the two claims virtually indistinguishable. Accordingly, following the Eleventh Circuit's

Galehead decision, this Court should hold that Wilhelmsen's claim is a maritime claim and reject

Defendants' argument that the Order of Attachment should be vacated for lack of admiralty

jurisdiction.

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The Galehead decision is only one of several precedents supporting Wilhelmsen's

position that its claim is maritime in nature. In Tramp Oil & Marine, Ltd. v. M/V MERMAID I,

805 F.2d 42 (1st Cir. 1986), the court decided whether a "fuel broker" in an intermediate position

was entitled to a maritime lien on the vessel. The court denied plaintiffs maritime lien claim, but

its analysis suggested (similar to Galehead) that the plaintiff failed to prevail not because it

lacked a maritime claim, but instead because it could not show that its maritime claim was

entitled to lien status. See, e.g., id. at 46 (suggesting that plaintiff could have secured an

assignment of the physical suppliers' maritime lien to secure its claim); accord Hampton

Bermuda Ltd. v. M/VSTAR SIRANGER, No. H-05-3074, 2007 WL 677263 (S.D. Tex. Feb. 28,

2007) (analyzing intermediate plaintiffs maritime lien claims under admiralty law); Lee v. M/V

GEM OF MADRAS, No. H-05-0631, 2006 WL 568545 (S.D. Tex. Mar. 6, 2006) (same).

In A/S Dan-Bunkering Ltd. v. M/V ZAMET, 945 F. Supp. 1576 (S.D. Ga. 1996), the

plaintiff was an intermediate supplier who paid the local supplier for bunkering the vessel but

was not paid in turn. Id. at 1577-78. The court held that the plaintiff was a provider of

necessaries to the vessel despite not having physically supplied the vessel and despite never

having had title to the bunkers. See id. at 1579. Furthermore, because the court held that the

bunkering request was made by a party with imputed authority of the owner, plaintiffs maritime

claim was entitled to a maritime lien. Id. (holding that "[plaintiff] therefore is entitled to a

maritime lien under the [Commercial Instruments and Maritime Lien Act] just as it would have

been had it physically delivered the fuel to the ship."); see also The GOLDEN GATE, 52 F.2d

397, 400 (9th Cir. 1931) (holding that plaintiff bunker supplier was entitled to a maritime lien

despite not having physically provided the bunkers to the vessel and stating that "it is immaterial

who made the delivery").

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The decisions in Trans-Tec Asia v. M/V HARMONY CONTAINER, No. CV 04-1160,

2004 WL 3820556 (C.D. Cal. Dec. 28, 2004) (Trans-Tec I), related case at 435 F. Supp. 2d 1015

(C.D. Cal. 2005) (Trans-Tec II), provide another example of a federal court's exercise of

admiralty jurisdiction with respect to a dispute arising from a factually-similar transaction.

In the Trans-Tec dispute, plaintiff Trans-Tec entered into contract to procure fuel bunkers

for the defendant vessel's charterer. The charterer contacted Trans-Tec's physical supplier in

Korea to obtain bunkers for the vessel. See Trans-Tec II, 435 F. Supp. 2d at 1019-21. hi turn,

the physical supplier communicated with Trans-Tec to obtain a price quote (including TransTec's standard terms and conditions) for the requested bunkers. See id. The vessel was bunkered

but Trans-Tec's invoice never was paid by the charterer. See id. at 1021. Trans-Tec arrested the

vessel, claiming it had a maritime lien against the vessel based on the bunkers it had furnished to

the vessel. See id. at 1017 & 1019-21.

The court confirms admiralty jurisdiction throughout the Trans-Tec decisions. See

Trans-Tec I, 2004 WL 3820556, at *1 ("In this admiralty case, [Trans-Tec] asserts five causes of

action . . . ." (emphasis added)); Trans-Tec II, 435 F. Supp. 2d at 1017 ("This admiralty case

arises out of a dispute over unpaid bunkers." (emphasis added)). Particularly noteworthy is

Trans-Tec Ifs holding that "[t]he bunker contract was a maritime contract for the sale of goods,"

Trans-Tec II, 435 F. Supp. 2d at 1022-23, notwithstanding the opinion's focus on Trans-Tec's

contractual obligations - i.e., the "middleman" with respect to the bunkering agreement - rather

than those of the physical supplier of the bunkers. Hence, the Trans-Tec decisions again support

the conclusion that claims of a bunkers provider, whether those made by a physical supplier or

by a middleman such as Wilhelmsen, are maritime claims subject to this Court's admiralty

jurisdiction.

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The precedents cited above show that there is no blanket prohibition against admiralty

law governing claims by intermediate parties to a bunkering contract. UBS fails to cite even one

case that so holds. Keeping in mind the Supreme Court's instruction that "[precedent and usage

are helpful insofar as they exclude or include certain common types of contract," Kossick, 365

U.S. at 735, and its further caution not to focus on the status of the parties but rather the nature of

the transaction, Exxon, 500 U.S. at 611-612, the jurisdictional question is reduced down to the

following issue - does a contract for furnishing fuel to a vessel qualify as a maritime contract

such that admiralty jurisdiction is proper? The Exxon Court answered this question

unequivocally - it certainly does, regardless of whether the fuel is provided by the plaintiff

directly or by a third party at the order of the plaintiff. Id. at 612-613. Accordingly, Defendants'

argument that the UBS/Wilhelmsen contract is a brokerage contract that does not fall within

admiralty jurisdiction should be rejected.

C. Wilhelmsen Was Not a Broker, the Agreements Were Not Otherwise "Preliminary"

Contracts, and UBS's Other Arguments Do Not Apply In This Factual Scenario

1. Wilhelmsen was not a broker

An even more fundamental reason exists for rejecting UBS' claim that Wilhelmsen was a

broker and its claim was not maritime: Wilhelmsen did not act as a broker in these transactions.

The late Judge Casey's decision in Sea Transport Contractors v. Industries Chimiques Du

Senegal, 411 F. Supp. 2d 386 (S.D.N.Y. 2006), is instructive in analyzing the relationship

between the parties here. Plaintiff ("STC") was retained by defendant ("ICS") to act on ICS's

behalf in managing various aspects of ICS's business related to shipping its cargo. See id. at 389.

STC sued ICS for breach and commenced a Rule B proceeding in New York. Id. Similar to

UBS here, ICS moved to vacate the attachment order on grounds that the STC/ICS contract was

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not a maritime contract because it was a brokerage contract or, alternatively, it was a preliminary

contract. Id. at 392. Judge Casey rejected ICS's broker argument on the very basis of the

relationship that exists here. He ruled that the STC/ICS contract was not a brokerage contract

because it called for STC creating separate, distinct tiered contracts between ICS and STC,

because STC's profit on the contract would be based on freight differentials, and because STC's

compensation would not be based on commissions. Id. at 394.

Judge Casey's analysis applies equally here. Satisfaction of Wilhelmsen's duties under

the UBS/Wilhelmsen contract did not lead to a contract between UBS and Sumitomo, but rather

a contract between UBS and Wilhelmsen and another between Wilhelmsen and Sumitomo. Like

the freight differential profit to be earned by STC, Wilhelmsen's profit was based on differentials

in the fuel sale price between the two contracts. Wilhelmsen has paid Sumitomo directly for

Sumitomo's provision of the bunkers to the nominated vessels. A broker has no obligation to pay

on behalf of its principal in a broker's contract. Instead, the principal pays for the services

obtained by the broker and the broker receives its commission from the principal. None of these

indicia are characteristic of a brokerage agreement. Furthermore, UBS concedes that two

separate contracts are present here back-to-back rather than one between UBS and Sumitomo on

which Wilhelmsen acted as a broker. Perhaps most significantly, UBS notified Wilhelmsen of a

potential contamination claim and has reserved its right before this Court to seek countersecurity from Wilhelmsen. Such a claim would not properly be made against a broker which

procures a supply contract with a third party. It would be proper, however, against a party which

has undertaken the obligation to supply conforming fuel to a nominated vessel.

UBS has characterized the primary benefit it obtained in the UBS/Wilhelmsen contract as

the financial credit terms that contracting with Wilhelmsen brought. This contention does not

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reflect the law; a court in this district (in the remand of the Exxon case) has ruled expressly

opposite to this argument. See Exxon Corp. v. Central Gulf Lines, Inc., 780 F. Supp. 191, 194

(S.D.N.Y. 1991) (holding that "[t]he furnishing of credit constitutes the furnishing of a necessary

under the Lien Act.") (citing Universal Shipping, Inc. v. Panamanian Flag Barge, 563 F.2d 483

(1st Cir. 1976)). UBS's contention also fails on the facts, as the principal objective of the

UBS/Wilhelmsen contract, as defined by the incorporated Sumitomo Terms, is Wilhelmsen's

obligation to supply fuel to nominated vessels. Exxon, 500 U.S. at 612-13 ("The subject matter

of the Jeddah claim, like the New York claim, is the value of the fuel received by the ship.").

Furthermore, in addition to the bunkers themselves, UBS received the expertise provided

by Wilhelmsen in the logistics, planning, industry contacts, knowledge of fuel classifications and

requirements of particular vessels. Wilhelmsen's advantage over its competitors by the

availability of credit terms was not the primary purpose of the UBS/Wilhelmsen contract. It was

not even an explicit term of that contract. The Second Circuit recently made clear that incidental

non-maritime components are immaterial to admiralty jurisdiction where a contract's principal

objective is maritime commerce. Folksamerica, 413 F.3d at 315. Under Kirby and

Folksamerica, UBS cannot use an incidental financing benefit provided by Wilhelmsen to

remove a bunkering agreement from this Court's admiralty jurisdiction.

2. The UBS/Wilhelmsen contract was not a "preliminary" contract

UBS also argues that the UBS/Wilhelmsen contracts were "preliminary" and outside

admiralty jurisdiction. Judge Casey's Sea Transport Contractors decision explains why UBS's

contention is mistaken, as preliminary contracts do not bind the performing party to perform

functions related to maritime commerce, but rather merely are contracts where the performing

party seeks to procure third parties to engage in activities related to maritime commerce:

16

Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 21 of 30
Nor is the [STC/ICS] Contract otherwise "preliminary." ICS argues that the

[STC/ICS] Contract "is an agreement to procure contracts for the use of another's

vessels" . . ., but this is not the case. First, the contract presently binds ICS to use

STC as exclusive handler of ICS shipping needs [and other shipping functions]

... . Second, it is no mere technical difference to say that this is a contract "to

procure contracts" as opposed to a contract that contemplates or authorizes entry

into other contracts. Were it the former, it would be preliminary for its object

would be satisfied by entry into the future contract. But STC's entry into future

charter parties does not satisfy the terms of the [STC/ICS] Contract. Indeed, one

can imagine numerous situations where subsequent contracts and performance on

or breach of those contracts would violate the terms of the [STC/ICS] Contract,

including specific shipments of, or failures to ship, cargo.

Sea Transport Contractors, 411 F. Supp. 2d at 394 (underlined emphasis in original) (italicized

emphasis added). As discussed earlier, the UBS/Wilhelmsen agreements bound Wilhelmsen to

bunker the nominated vessels. It could satisfy that obligation by hiring a sub-contractor (such as

Sumitomo) to carry out the physical supply function. In the event that Sumitomo was unable to

perform, however, Wilhelmsen's procurement of Sumitomo as a physical supplier did not satisfy

its obligations under the UBS/Wilhelmsen agreements. Rather, Wilhelmsen would have been

compelled to procure a substitute physical supplier or be found in breach its contract with UBS.

This is the precise situation of which the emphasized portion of the excerpt from Judge Casey's

decision above speaks; there is nothing "preliminary" about the UBS/Wilhelmsen agreements.

Wilhelmsen does not dispute that it acts as a fuels broker on numerous occasions in

various transactions worldwide. But in the agreements with UBS, Wilhelmsen's transactions

were organized in a two-tier, back-to-back contract format rather than in the form of a single

contract with Wilhelmsen being paid as a broker for UBS. Just as Judge Casey rejected ICS's

argument that STC acted as a broker in the Sea Transport Contractors case, the very nature of

the two-tiered contracts - which contracts are conceded by UBS - requires this Court to reject

UBS's contentions that Wilhelmsen acted as a broker in this transaction or that the

UBS/Wilhelmsen agreements were "preliminary" contracts.

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3. UBS's other arguments against admiralty jurisdiction

UBS argues that this dispute does not require a neutral federal forum. This contention

relates to a "threshold inquiry" test that the Second Circuit used to employ; which inquiry the

Second Circuit's Folksamerica decision expressed doubt as to whether it survived the Supreme

Court's recent Kirby decision. Folksamerica, 413 F.3d at 313. The Second Circuit used the

"threshold inquiry" twice to reject admiralty jurisdiction where a connection with maritime

commerce was too speculative and attenuated. Id. at 312. hi light of the Folksamerica decision

and the Exxon decision's commentary on bunkering claims' connection with maritime commerce,

UBS's nuetral federal forum argument should be rejected out of hand.

UBS also seeks to analogize finance contracts or guarantees of maritime contracts to the

agreements at issue here. UBS's citation to these cases to support its position reflects a

misunderstanding in the difference between the two types of guarantees: guarantees of payment

(which are not subject to admiralty jurisdiction) and guarantees of performance, which most

certainly are maritime contracts. See, e.g., Japan Line, Ltd. v. Willco Oil Ltd., 424 F. Supp.

1092, 1094-95 (D. Conn. 1976) (citing cases). Therefore, UBS's analogy to these types of cases

simply does not withstand the application of the facts of this dispute.

POINT II

WILHELMSEN HAS ADEQUATELY STATED A PRIMA FACIE

ADMIRALTY CLAIM AGAINST RAECORP, THEREBY SATISFYING

WILHELMSEN'S BURDEN UNDER THE RULE E(4)(f) INQUIRY

A. Plaintiff Has Satisfied Its Burden of Alleging a "Prima Facie Admiralty Claim"

In Aqua Stoli, this Circuit emphasized that "Rule B specifies the sum total of what must

be shown for a valid maritime attachment." 460 F.3d at 447. As noted in Tide Line Inc., v.

Eastrade Commodities Inc., No. 06 Civ. 1979, 2006 WL 4459297, 2007 A.M.C. 252 (S.D.N.Y.

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Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 23 of 30
2007), the Aqua Stoli court "rejected the approach taken by the district court in Royal Swan

Navigation Co. v. Global Container Lines, Ltd, 868 F. Supp. 599 (S.D.N.Y. 1994), which would

impose a fact intensive inquiry.. .before deciding whether an attachment should be vacated." Id.

at 257 (citation omitted). Thus, Judge Wood concluded that the "sum total" language in Aqua

Stoli implies that the "reasonable grounds" standard is too exacting, exceeding the limited

inquiry set out by Congress in Rule B and Rule E(4)(f).

Judge Wood is not alone in this interpretation; almost every district court opinion that has

considered the issue of Rule B attachment burdens post-^wa Stoli has come to a similar

conclusion. See, e.g., Dolco Investments Ltd., v. Moonriver Dev., GML, No. 06 Civ. 12876,

2007 WL 1237997, at *1, 4 (S.D.N.Y Apr. 26, 2007) (agreeing with the "weight of authority"

and applying the prima facie, pleadings-based standard because it more closely comports with

the Second Circuit's rejection of the "broader Rule E(4)(f) inquiry" that the reasonable grounds

test would necessarily include); SPL Shipping, Ltd. v Gujarat Cheminex, No. 06 Civ. 15375,

2007 WL 831810, at *4 (S.D.N.Y. Mar. 15, 2007) (holding that the plaintiffs [adequately stated]

pleadings are sufficient to resist vacatur of the attachment); Fesco Ocean Mgmt v. High Seas

Shipping, No. 06 Civ. 1055, 2007 WL 766115, at *2 (S.D.N.Y. Mar. 12, 2007). Under the prima

facie admiralty claim test, the court looks to the plaintiffs complaint to ascertain whether the

plaintiff has alleged a valid admiralty claim. SPL Shipping, 2007 WL 831810, at *3.

Wilhelmsen's Amended Verified Complaint satisfies this threshold standard by alleging

the following alter ego allegations against Raecorp:

• RaeCorp is the alter ego of, and/or successor to, USS-UBS. Alternatively, RaeCorp so

dominates USS-UBS that this Court should disregard the corporate veils between the

defendants.

• USS-UBS and RaeCorp both have the same sole director, Mr. William Rae.

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• USS-UBS and RaeCorp have the same address: Unit 2, 50 Borthwick Avenue, Murarrie,

QLD 4172, Australia.

• USS-UBS and RaeCorp have the same telephone number: +61 7 3902 0800.

• USS-UBS use the same web address for their website. RaeCorp's website is listed on Mr.

Rae's correspondence as www.raecorpint.com. When that weblink is accessed, the web

user is transferred to the http://www.ubsprov.com.au/ home page, which is the web

homepage for USS-UBS.

• Mr. Rae responds to correspondence related to USS-UBS with a RaeCorp e-mail suffix

(billrae@raecorpint.com) and he uses the terms RaeCorp and USS-UBS interchangeably

in corporate advertising literature (e.g., "All sales are made in accordance with Raecorp's

(USS-UBS hit's) General Terms and Conditions, which are available on request").

Amended Verified Complaint, |t 11-16.

Furthermore, after Raecorp was added as a defendant, a payment made by Raecorp to

Defendants' counsel was intercepted at Bank of America. That payment was made by Raecorp to

pay UBS's outstanding legal invoices with its counsel. Frevola Aff, Ex. 4, Transcript Page 12.

Federal common law governs the issue of piercing the corporate veil in admiralty actions

and, thus, whether Wilhelmsen has stated a claim against Raecorp. See, e.g., Dow Chem. Pac.

Ltd. v. Rascator Maritime S.A., 782 F.2d 329, 342 (2d Cir. 1986) (citations omitted). Under

federal common law, piercing the corporate veil is appropriate in two circumstances:

The individual [or corporate parent] must have used the corporate entity to

"perpetuate a fraud or have so dominated and disregarded" the corporate entity's

form that the entity "primarily transacted [the individual's or parent's] business

rather than its own corporate business."

Id. (quoting district Court decision) (citations omitted). Thus, proving fraud is not essential to

piercing the corporate veil. Northern Tankers (Cyprus) Ltd. v. Adam Backstrom, 967 F. Supp.

1391, 1399-1401 (D. Conn. 1997). It does, however, provide an additional basis for piercing the

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Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 25 of 30
corporate veil. Aside from fraud/inequity, a plaintiff can pierce a corporate veil by showing that

a person or corporation exercises dominion and control over its alter ego.

Several local district courts recently have applied the prima facie admiralty claim

standard to veil-piercing in the context of Rule B attachments. In SPL Shipping v. Gujarat,

defendant Nirma Ltd. sought to vacate a Rule B order of Maritime Attachment pursuant to Rule

E(4)(f) obtained by plaintiff SPL on an alter-ego theory of liability. 2007 WL 831810, at *1. In

that case, Nirma, a limited liability company, made a payment to SPL against a freight certificate

attendant to a charter party agreement between SPL and Gujarat to which Nirma was not a party.

Id. Judge Karas based his decision finding that SPL had stated a valid admiralty claim against

Nirma on the theory of alter ego liability and denying the vacatur motion on the following:

Plaintiff has essentially made three allegations against Nirma: first, that Nirma

has in this case, and in other cases, made payments on behalf of Gujarat to third

parties; second, that "there existed such unity of ownership and interest... that no

separation exists between" Nirma and Gujarat, such that the "corporate form has

been disregarded"; and third, that Nirma has "dominated and used" Gujarat "for

their own purposes such that there is no meaningful difference between the three

entities and there has been an intermingling of funds between the several entities".

2007 WL 831810 at *4.

Using this same pleadings-based standard for determination, Judge Buchwald upheld a

maritime attachment based on alter ego liability and denied defendants' motion for vacatur in

Fesco Ocean Management v. High Seas Shipping, 2007 WL 766115 at *4. hi Fesco, the

allegations upon which Judge Buchwald relied to uphold the attachment were that "United" was

merely a shell corporation of "High Seas," employed solely to hold or transfer money on behalf

of High Seas, so as to defraud hinder or delay creditors of High Seas and make payments on

behalf of High Seas. 2007 WL 766115, at *3.

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The foregoing decisions show that Wilhelmsen's burden at this stage is minimal, whether

that burden is defined by the prima facie admiralty claim standard or by the reasonable grounds

standard. In Ullises Shipping Corp. v. Fal Shipping Co., 415 F. Supp. 2d 318 (S.D.N.Y. 2006),

Plaintiff sustained its burden merely by showing that the alter ego had paid one invoice of the

primary defendant. In A Coker & Co. v. Nat'l Shipping Agency, No. 99-1440, 1999 WL 371941

(E.D.La. May 17, 1999), it was met by showing insufficient capitalization, the alter ego's

guarantee of the primary defendant, and that the two companies may have shared offices.

Wilhelmsen has shown Raecorp's payment of a UBS invoice; it likewise has submitted

documentation to this Court showing common addresses, common telephone numbers, common

principals, intermingled advertising and e-mail addresses. UBS's counsel's admissions at the

recent scheduling conference indicate that UBS is insufficiently capitalized.

Even if this Court were to apply the more stringent "reasonable grounds" test suggested

by Defendants, "plaintiffs . . . should not be required to prove their case" at the Rule E(4)(f)

hearing stage. Wajilam Exp. (Singapore) Pte Ltd. v. ATL Shipping Ltd., 475 F. Supp. 2d 275,

279 (S.D.N.Y. 2006). Rather, the hearing is only for the purpose of determining whether there

were reasonable grounds for the issuance of the ex parte order for the process of maritime

attachment and garnishment. Salazar v. The ATLANTIC SUN, 881 F.2d 73, 79-80 (3d Cir.

1989); Maersk, Inc. v. Neewra, Inc., No. 05 Civ. 4356 (RCC), 2006 WL 2168452, at *10

(S.D.N.Y. Aug. 1, 2006); Ullises Shipping Corp., 415 F. Supp. 2d at 326. Courts inquiring

further merely review the limited evidence present - taking into account the short turn around

time involved with a Rule E(4)(f) hearing - and determine whether plaintiff may be able to prove

its contentions. Maersk, 2006 WL 2168452, at *10; Lima Naviera Carbotrade v. Mar Caribe

De Navegacion, 169 F. Supp. 2d 1341, 1359-60 (M.D. Fla. 2001).

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In Ullises Shipping, Judge Scheindlin held that one payment of a charter hire invoice of

the principal defendant by an alleged alter-ego was sufficient grounds to maintain the attachment

over the alleged alter-ego, despite both Defendants having shown hundreds of millions of dollars

of capitalization, separate corporate filings, affidavits supporting corporate separateness, and

similar evidence, hi upholding the multi-million dollar attachment over the alleged alter-ego

because of the payment made on behalf of the corporate affiliate, Judge Scheindlin ruled:

Although this is not conclusive evidence, [plaintiff] has met its burden of

showing reasonable grounds for attaching the assets [of the alter ego

defendant].

Ullises Shipping Corp., 415 F. Supp. 2d at 326 (emphasis added). Here, Raecorp was paying

UBS's legal bills when that payment was intercepted by the attachment order. Like Ullises, this

payment satisfies the inquiry an should cause the alter ego attachment to be sustained.

Other district courts have used similar grounds to maintain maritime attachments in cases

similar to the case at bar. In A. Coker & Co. v. Nat 'I Shipping Agency Corp., No. 99-1440, 1999

WL 311941, at *2 (E.D. La. May 17, 1999), plaintiff produced a document showing that the

alleged alter egos were affiliates, that the principal defendant had insufficient capital to perform

its obligations under the charter party, and that the alleged alter ego guaranteed the primary

defendant's performance. Plaintiff also showed that the alter ego might have been acting as a

conduit for NSAC. On this basis, the court upheld the attachment against the alter ego, stating:

[Plaintiff] has not definitively established that Summit Marine and NSAC are

alter egos. At this preliminary stage, however, [plaintiff] need only show probable

cause. [Plaintiff] has met this burden.

Id. at *2 (emphasis added).

The Lima Naviera court used similar reasoning:

While characterizing [plaintiffs] evidence as not conclusive, and recognizing that

the decision to continue the attachments was not a final determination of

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commonality and control between the three entities, Judge Corrigan [properly]

concluded that the attachment was supported by probable cause.

Lima Naviera Carbotrade v. Mar Caribe De Navegacion, 169 F. Supp. 2d 1341, 1359-60 (M.D.

Fla. 2001) (emphasis added). Using either standard, Wilhelmsen's burden to maintain the

attachment order against Raecorp does not require abundant proof, but rather indicia that

Wilhelmsen may be able to show that UBS and the newly created Raecorp are alter egos.

Perhaps most significantly, however, Mr. Rae's affirmation does not even seek to

controvert Wilhelmsen's alter ego allegations. For these reasons, this Court should reject

Raecorp's contention that the attachment order against it should be vacated.

POINT III

THE ELECTRONIC FUND TRANSFERS THAT HAVE BEEN

ATTACHED ARE "PROPERTY" UNDER THE LAW OF THIS CIRCUIT

Defendants argue this Court should not follow Winter Storm Shipping Ltd. v. TPI, 310

F.3d 263 (2d Cir. 2002) or limit it similar to Judge Rakoff s decision in Seamar Shipping Corp. v.

Kremikovtzi Trade Ltd., 461 F. Supp. 2d 222 (S.D.N.Y. 2006). This Court addressed this issue at

the scheduling conference. See Frevola Aff, Ex. 4, Transcript Page 10 ("There is no split.

Electronic fund transfers in this circuit are attachable under Winter Storm, and Aqua Stoli does

not change that.") In the interests of space limitations, Wilhelmsen will not recite the numerous

recent district court decisions in this district which support the Court's holding on this issue.

POINT IV

INTERLOCUTORY APPEAL IS NOT WARRANTED

Defendants contend that interlocutory appeal is warranted because (1) vacating the

attachment would terminate the case because Wilhelmsen contends that the dispute is subject to

London arbitration; and (2) a substantial ground for difference of opinion exists. As for

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Defendants' first contention, Wilhelmsen has not demanded arbitration and intends to proceed on

the merits in New York. On the second issue, this Court is aware of the multitude of recent

decisions in this district which have decided this issue just as this Court has indicated it will.

There is only one decision, Seamar, which has broken ranks, and it has been roundly rejected.

See, e.g., Compania Sudamericana de Vapores S.A. v. Sinochem Tianjin Co., No. 06 Civ. 13765

(WHP), 2007 WL 1002265, at *4 (S.D.N.Y. Apr. 4, 2007) (comparing sole Seamar decision to

multitude of decisions following Winter Storm). Further, Judge Pauley's analysis denying the

application for interlocutory appeal in Compania Sudamericana likewise applies here, and this

Court should reject Defendants' request for certification for interlocutory appeal. Id. at *5.

CONCLUSION

Because Wilhelmsen's agreements with UBS are maritime contracts subject to admiralty

jurisdiction, because it has pled a prima facie admiralty claim against Raecorp, because it has

attached UBS's property in this jurisdiction, and because UBS has not shown the extraordinary

circumstances necessary to warrant a grant of certification for interlocutory appeal, this Court

should deny Defendants' motion in its entirety.

Dated: New York, New York

September 20, 2007

HOLLAND & KNIGHT LLP

By:

William J. Honan (WJH 1922)

Michael J. Frevola (MJF 8359)

195 Broadway

New York, NY 10007-3189

Tel: (212)513-3200

Fax: (212)385-9010

Attorneys for Plaintiff

Wilhelmsen Premier Marine Fuels AS

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Case 1:07-cv-05798-CM-HBP Document 22 Filed 09/20/2007 Page 30 of 30