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Case 1:07-cv-03397-JGK Document 21-6 Filed 06/21/2007 Page 1 of 4
GE01JGE B. FREEHILL

WILLIAM L JUSKA. JR.

JAMES L ROSS'

ERIC E. LENCK

JOHN J. WAlSW

PATRICK J. BONNER'

PETER J. GUTOWSKI

MARK F. MULLER

WAYNE D. MEEHAN'

DON P. MURNANE. JR.A

1HOMAS M. RUSSO

THOMAS M. CANEVARI 1

MICHAEL FERNANDEZ'

JOHN F. KARPOUSIS' A

MICHAEL E. UNGER"

WlWAM J. PALLAS"

GINA M. VENEZIA' A

LAWRENCE J. KAHN'

BARBARA G. CARNEVALE'

MANUEL A. MOUNA

JUSTIN T. NASTRO'

PAMELA L SCHULTZ'"

DANIEL J. FITZGERALD"A

MICHAEL C. ELUOTT'

LAW OFFICES OF

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June 5, 2007

Our Ref: 229-07/MEU

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Total Number of Pages: 3

Via Telefax (212) 805-7912

Honorable John G. Koeltl

United States District Judge

United States Court House

500 Pearl Street, Room 910

New York, NY 10007-1581

Re: DEV AL SHIPPING & TRADING CO. v. REPINTER INTERNATIONAL

SHIPPING CO. LTD. and MIA CHART CORPORATION

07cv3397 (JGK) - SDNY

Dear Judge Koeltl,

On behalf of Plaintiff Deval Shipping & Trading Co., we write in response to the

yesterday's telefax .ITomDefendants' counsel.

Currently before the Court is Defendants' motion to compel Plaintiff to accept an LOU as

substitute security for funds restrained pursuant to Rule B. It is plain from the text of Rule

E(5)(a) that the only substitute security which a Plaintiff must accept is a bond. Nonetheless,

Plaintiff has indicated repeatedly that it is willing to accept certain other forms of substitute

security, including an LOU, so long as that substitute security is reasonably certain to result in

payment to Plaintiff within a reasonable time upon proper demand.

NYDOCSI/284600.1

Case 1:07-cv-03397-JGK Document 21-6 Filed 06/21/2007 Page 2 of 4
Hon. John G. Koeltl

June 5, 2007

Much has been made of the issue of whether the C.R. O'Farrell Syndicate (Lloyds'

Syndicate Number 1036) is or was in run-off.! What is clear, even from the submissions of

Defendants' counsel, is that Syndicate 1036 underwent a change in its structure as of2005 and is

now apparently part of a complex and convoluted chain of seven entities.2 Plaintiff has asked

the simple question: In the event that Plaintiffs claim is successful, who is to pay the money

under the LOU? To date, no response has been received. Plaintiffs own multiple inquiries with

Syndicate 1036 have all gone unanswered since May 25.

2

Quite apart from the fundamental question of who is behind the LOU and what does

Plaintiff need to do to get paid, there are a number of difficulties with the wording of the LOU

proposed by Defendants. As noted to Your Honor in our letter of yesterday, such issues are

really best left to be resolved by the parties' London solicitors as the issues regarding the

wording arise in the context of English law and arbitration. To that end, Plaintiffs London

solicitor has today written again to Defendants' solicitor seeking to work out a suitable

agreement as to wording. Given that Plaintiff is willing to accept paper security in a form other

than a bond in lieu of$I.1 million in cash, it is necessary that Plaintiffbe assured that the LOU is

in acceptableformtomeetits needs. .

Responding to Defendants' point that further funds have been restrained since the

conference on June 1, in HBC Hamburg Bulk Carriers GmbH & Co. KG v. Proteinas y Oleicos

S.A. de C.V., 2005 U.S. Dist. LEXIS 8009 (S.D.N.Y. May 4, 2005), the court held that a

plaintiff may continue to restrain funds of a defendant up to the fun amount of security set forth

in the Court's order. Here, Plaintiff has not yet achieved full security. The fact that the

continued restraint of their funds is causing a problem for Defendants is no different than

Plaintiffs problem resulting trom Defendants' failure to pay amounts due and owing under the

charter party. Moreover, the financial difficulty caused to Defendants is yet more evidence of

the need for Plaintiff to obtain solid security for its claims.

We respectfully submit that the issues raised by Defendants' letter of yesterday are

capable of being resolved by the parties' respective London solicitors, and that by all accounts

the solicitors are, in fact, moving toward resolution.

1 Given the numerous questions as to the status of Syndicate 1036,sanctions under Rule 11 as

suggested by opposing counsel are clearly not warranted. The allegation that undersigned

counsel failed to make a reasonable inquiry before making a representation to the Court is

regrettable and untrue.

2 The LOU is purported to be given on behalf of the Charterers P&I Club (which is a brand name

for a liability policy and not a separate legal entity). The LOU is suggested to be signed by

Michael Else & Company (the exclusive underwriting agents for the policy) on behalf of C.R.

O'Farrell Syndicate 1036. That entity is no longer writing policies as an independent syndicate

but now is said to operate as a "sub-syndicate" within "umbrel1asyndicate 2999". The Umbrella

Syndicate is in turn managed by agents Limit Underwriting Limited, which is part of QBE

European Operations, a division of the QBE Insurance Group.

NYDOCS 11284600. J

FREEHILL HOGAN & J\tIAHAR LLP

Case 1:07-cv-03397-JGK Document 21-6 Filed 06/21/2007 Page 3 of 4
Hon. JoIm G. Koeltl

June 5, 2007

3

We thank the Court for its courtesy and attention to the foregoing.

Respectfully,

FRE

~

.EH LL;:OGAN & MAHAR

I

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. V'

Mi ael EAlnger

MEV/me

cc: By Email

Mary Ann Marlowe, Esq.

Keane & Marlowe, LLP

NYDOCSI/284600.1

FREEHILL HOGAN & :MAHAR LLP

Case 1:07-cv-03397-JGK Document 21-6 Filed 06/21/2007 Page 4 of 4