--

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

}C

DEVAL DENIZCILIK VE TICARET A.S.,

Plaintiff,

-againstREPINTER INTERNATIONAL SHIPPING

CO. S.A. ",. and MIACHART CORPORATION

LLC.,

Defendants.

}C

07 CIV 3397 (JGK)

ECF CASE

DEFENDANTS' REPLY MEMORANDUM OF LAW IN FURTHER

SUPPORT OF MOTION FOR COUNTER-SECURITY

Of Counsel:

Mary Ann C. Marlowe (MM-0723)

" Christopher P. Keane (CPK-4394)

KEANE & MARLOWE, LLP

Attorneys forDefendants

REPINTER INTERNATIONAL

SHIPPING CO. S.A. and

MIACHART CORPORATION LLC

197 Route 18 South Suite 3000

East Brunswick, New Jersey 08816

(732) 951-8300

- - -

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Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 1 of 14
TABLE OF CONTENTS 

TABLE OF AUTHORITIES.......................................................................................ii 

ARGUMENT.........................................................................................................1 

POINT I. DEFENDANTS HAVE SATISFIED ALL PREREQUISITES FOR A 

GRANT OF COUNTER-SECURITY PURSUANT TO RULE 

E(7)(a)1

..............................................................................................................1 

 A. Both Repinter and Miachart are “Persons” Who Have Given Security”........1 

 

B. Guarantors Have the Right to Assert Counterclaims and Request CounterSecurity...................................................................................1 

POINT II. PLAINTIFF MISCHARACTERIZES DEFENDANTS’ “FIRST 

COUNTERCLAIM” ...................................................................2 

POINT III. COUNTER-SECURITY FOR BSC’S UNPAID HIRE SHOULD BE 

GRANTED...............................................................................3 

 

 A. Privity between Plaintiff and Sub-Charterer Is Not A Prerequisite...............3

 

 B. Counter-Security is Warranted Under English and New York Law.............4

 POINT IV. SECURITY FOR BSC’S CLAIM IS APPROPRIATE UNDER 

RULE E(7)...............................................................................5

 A. A Rule E(7) Analysis vs a Rule E(4)(f) Analysis...................................6

B. Defendants’ Breach of Contract Counterclaims and Request for CounterSecurity Should be Analyzed Under the Appropriate Standards Applicable to 

Rule E(7).................................................................................6 

 

C. Defendants’ Counterclaim is “Ripe” Even Under a Rule E(4)(f) “Ripeness” 

Standard .................................................................................7 

 

D. This Court Has the Discretion to Award Defendants Counter-Security in Any 

Event......................................................................................9 

 

 E. Defendants’ Counterclaims Are Well Supported....................................9 

CONCLUSION.....................................................................................................10 

i

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 2 of 14
 TABLE OF AUTHORITIES 

FEDERAL CASES 

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

460 F.3d 434 (2d Cir. 2006)...........................................................................................6 

Bottiglieri Di Na Vigazione v. Tradeline LLC, 

472 F. Supp. 2d 588 (SDNY 2007)............................................................................6, 7 

Daeshin Shipping Co., Ltd. v. Meridan Bulk Carriers, Ltd., 

2006 WL. 3462120 (SDNY 2006)....................................................................... 1, 7-10 

D.C.R. Trucking v. Aetna Cas. and Sur. Co., 2002 LEXIS 26308 

 (E.D.N.Y. 2002)..................................................................................................................2 

Dongbu Exp. Co., Ltd. v. Navios Corp., 

944 F. Supp. 235 (SDNY 1996).....................................................................................3 

Duferco Intern. Steel Trading v. T. Klaveness Shipping A/S, 

333 F.3d 383 (2d Cir. 2003)...........................................................................................3 

Finecom Shipping Ltd. v. Multi Trade Enters. AG, 2005 LEXIS 25761, 2 (SDNY 

2005) ..............................................................................................................................9 

Greenwich Marine, Inc. v. S.S. ALEXANDRA, 

339 F.2d 901 (2d Cir. 1965).......................................................................................5, 6 

In re Complaint of Kreta Shipping, S.A., 

2000 WL. 33249253 (SDNY 2000)...............................................................................4 

Jessica Howard Ltd. v. Norfolk Southern R.R. Co., 

316 F.3d 165 (2d Cir. 2003)...........................................................................................3 

Staronset Shipping Ltd. v. North Star Navigation Inc., 

659 F. Supp. 189 (SDNY 1993).................................................................................5, 6 

Titan Navigation, Inc. v. Timsco, Inc., 

808 F.2d 400 (5th Cir. 1987) .........................................................................................6 

Travelodge Hotels, Inc. v. SD Hospitality, Inc 2007 LEXIS 47971 (D.Minn. 

2007) ..............................................................................................................................2 

Verton Navigation, Inc. v. Caribica Shipping Ltd., 1991 LEXIS 6722 

 (SDNY 1991)......................................................................................................................2 

ii

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 3 of 14
DOCKETED CASES 

Hibiscus Shipping, Ltd. v. Novel Commodities S.A., 

No. 04 Civ. 2344, at 3-4 (SDNY 2004) .........................................................................9 

FEDERAL RULES 

 

Admiralty, Maritime Claims, Supplemental Rule B .........................................5, 7 

 Admiralty, Maritime Claims, Supplemental Rule E(4)(f) ...............................5, 6, 7 

 Admiralty, Maritime Claims, Supplemental Rule E(7)(a) ..........................1, 2, 6, 7, 9 

 

MISCELLANEOUS 

Robert J. Zapf, In Rem Procedures: A Sea Change Underway—Recent and 

Proposed Changes to the Admiralty Rules, 15 U.S.F. Mar. L.J. 77, 107 (2002-

2003) ..............................................................................................................................1 

iii

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 4 of 14
ARGUMENT

POINT I: DEFENDANTS HAVE SATISFIED ALL PREREQUISITES FOR A 

 GRANT OF COUNTER-SECURITY PURSUANT TO RULE E(7)(a) 1

A. Both Repinter and Miachart are “Persons” Who Have “Given Security”

Plaintiff’s opposition brief was filed prior to the issuance of the Travelers bond which was 

issued and accepted on behalf of both defendants. Plaintiff’s brief acknowledges only the prior 

attachment of Miachart’s assets, and suggests that counter-security should be denied because 

Repinter has not given security. Since both defendants have now given security, both have 

satisfied the first prerequisite of Rule E(7)(a). 

Moreover, prior to the Rule’s amendment in 2000, it required counter-security when “the 

defendant or claimant...has given security.” As of December 1, 2000, the Rule required 

countersecurity “when a person has given security”(emphasis added).2

 Thus, Miachart qualifies 

as either a “defendant” under the old phrasing or a “person” under the new. This is consistent 

with the Rule’s strict construction. See Daeshin Shipping Co., Ltd. v. Meridan Bulk Carriers, 

Ltd., 2006 WL 3462120,*1 (SDNY 2006) (non-party assignee of plaintiff’s claim need not post 

countersecurity since rule applies only to “plaintiffs”). Thus, under a plain reading of “person 

who has given security,” Miachart clearly qualifies. 

B. Guarantors Have the Right to Assert Counterclaims and Request Counter-Security

 

1

 Rule E(7)(a) states as follows: When a person who has given security for damages in the original action 

asserts a counterclaim that arises from the transaction or occurrence that is the subject of the original action, a 

plaintiff for whose benefit the security has been given must give security for damages demanded in the 

counterclaim unless the court for cause shown, directs otherwise. (emphasis added) 

2

 The change reflected a general move away from the use of the word “claimant,” which was largely eliminated 

from the Supplemental Rules in the 2000 amendments. See Robert J. Zapf, In Rem Procedures: A Sea Change 

Underway—Recent and Proposed Changes to the Admiralty Rules, 15 U.S.F. Mar. L.J. 77, 107 (2002-2003). 

1

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 5 of 14
Plaintiff’s reliance upon Miachart’s being a “mere[] Guarantor” with no counterclaims of its 

own is equally misplaced. (Opp. Brf. at 3-5) A “person” who may give and request security 

under Rule E(7)(a) is not limited to a contractual partner. Nor does one’s guarantor status limit 

its ability to assert counterclaims or seek counter-security. Quite to the contrary, a guarantor 

may assert any defense or raise any counterclaims available to its principal. See D.C.R. Trucking

v. Aetna Cas. and Sur. Co., 2002 LEXIS 26308, *14 (E.D.N.Y. 2002) (absence of privity did not 

preclude defendant-guarantor’s counterclaim for indemnification).3

 See also to the same effect, 

Travelodge Hotels, Inc. v. SD Hospitality, Inc 2007 LEXIS 47971 (D.Minn. 2007) 

POINT II: PLAINTIFF MISCHARACTERIZES DEFENDANTS’ “FIRST 

 COUNTERCLAIM”

It is axiomatic that claims and counterclaims arising out of a vessel charter are considered 

“arising out of the same transaction” for purposes of Rule E(7). Verton Navigation, Inc. v. 

Caribica Shipping Ltd., 1991 LEXIS 6722 (SDNY 1991). Plaintiff’s claims and Defendants’ 

counterclaims all arise from Charter No. 1. Point II of Plaintiff’s brief does not contest this wellestablished principle, but is erroneously premised upon an incorrect identification of Defendants’ 

“first counterclaim” as being Deval’s refusal to accept the Defendants’ tendered LOU. (Opp. 

Brf. at 5-6). Defendants’ counterclaims begin at paragraph 30 of Defendants’ Verified Answer 

and Counterclaims and are precisely quantified at paragraphs 37 of Defendants’ Verified Answer 

and Counterclaims. 4

 Accordingly, none of Plaintiff’s arguments regarding Defendants’ first 

counterclaim need be considered and, as correctly stated by Plaintiff, “The Court need go no 

further.” 

 

3

 This is consistent with the absence of a guarantor’s need for privity under English law. See paragraph three of the July 19, 2007 

Reply Declaration of David Martin Semark (“Semark Reply Decl.”) and Exhibit 1 thereto. 

4

 (a) $556,127 in hire withheld from Charterers by Sub-Charterers, BSC, by reason of Owners’ breaches of Charter 

No. 1; (b) $390,322 to cover Charterers’ exposure BSC’s claim as a result of Owners’/Master’s actions. 

2

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 6 of 14
POINT III: COUNTER-SECURITY FOR BSC’S UNPAID HIRE SHOULD BE 

 GRANTED.

A. Privity between Plaintiff and Sub-Charterer Is Not A Prerequisite 

Plaintiff argues, without citing any support, that because it is not in privity with BSC, 

Defendants’ counterclaim for the unpaid charter hire withheld by subcharterer is “entirely 

misdirected”. This contention lacks any merit. 

With respect to the sub-charter, the $556,127 in unpaid hire constitutes “contract damages” 

and the $390,322 constitutes “consequential damages.” See Jessica Howard Ltd. v. Norfolk 

Southern R.R. Co., 316 F.3d 165, 169-70 (2d Cir. 2003). However, with respect to the headcharter, both are consequential damages. As discussed below, the unpaid hire is a consequential 

damage stemming from Plaintiff’s breach of the head-charter which can be recovered by 

Defendants despite the fact that Deval is not a signatory to the sub-charter. 

In Dongbu Exp. Co., Ltd. v. Navios Corp., 944 F.Supp. 235 (SDNY, 1996), a charterer 

sought security arising from an owner’s termination of the charter. The owner moved for a 

reduction of the attachment and for countersecurity. The court granted both as well as security to 

the charterer for its potential liability to the subcharterers due to the owner’s breach. 

Plaintiff’s attempted distinction between the counterclaims for unpaid charter hire and for 

Defendants’ exposure to BSC’s claims is also unprecedented. Courts generally order full 

indemnification for liability to a third party caused by a breach by one of the parties before the 

court. See Duferco Intern. Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383 (2d Cir. 

2003)(cargo owner ordered to indemnify charterer for full amount of the latter’s liability to 

owner, where charterer’s breach against owner caused by cargo owner’s breach against 

charterer.) Further, indemnity in the maritime context is also an equitable concept, presumably 

3

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 7 of 14
immune from such distinctions as Deval attempts to draw. See In re Complaint of Kreta 

Shipping, S.A. 2000 WL 33249253 (SDNY 2000)(“[i]n the absence of any contractual 

relationship, the obligation to indemnify may be imposed as a matter of equity ”). 

As noted above, Defendants seek consequential damages arising from claims relating to 

Plaintiff’s breach of the head charter. Given that Defendants’ damages are consequential and stem 

from Plaintiff’s breach of the head charter, Defendants can recover the unpaid hire under the 

subcharter and, it follows, counter-security for same. 

B. Counter-Security is Warranted Under English and New York Law

Plaintiff argues that Defendants’ counterclaim for BSC’s unpaid hire is allegedly “frivolous” 

in that: (1) no evidence allegedly exists that BSC legitimately deducted hire pursuant to a charter 

party clause (Opp. Br. at 6); (2) no connection allegedly exists between Deval’s breaches and 

BSC’s withholding hire. (Opp. Br. at 7); (3) Defendants have allegedly never claimed the vessel 

was off-hire (id.); and (4) Deval allegedly cannot be liable to Defendants under English law. (Id.) 

All of the above are factually and/or legally incorrect. 

 (1) Clause 34 of both Charterparties provides that: “in the event of loss of time either in port 

or at sea...by any refusal of the Master or crew to perform their duties, the hire shall be 

suspended...” 5

 Moreover, under English law, which governs herein, a charterer has a right to 

withhold hire where the shipowner breach has deprived him of the use of the ship (the so-called 

right of “equitable set-off”)( Semark Reply Decl., ¶ 2 and Exh. 17). Thus, not only is there a 

provision in the charterparties which permits BSC to withhold hire, there is a general right to do 

so under English law. 

 

5 See Semark Reply Decl., ¶29; See also id. at ¶ 7 noting that the head and subcharterparties are “back-to-back” in 

all material respects, including the redelivery dates and redelivery places. 

4

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 8 of 14
(2) In its Complaint, BSC refers to “breach of stevedore damage provisions contained in the 

charter party and failure to make significant repairs” which deprived BSC of its use of the 

Vessel.(Argyrakis Decl. Exh. 3, ¶¶ 7-9) Defendants, in turn, allege it was Plaintiff’s 

responsibility to make the repairs and that the Master’s conduct in obstructing the repair efforts 

constituted a repudiation of the charter which entitled BSC to withhold hire. (Semark Reply 

Decl., ¶ 16(j)). BSC’s solicitors concur with Defendants, noting that Deval’s actions caused 

Repinter’s breach under Charter No. 2.6 

(3) Defendants have, in fact, claimed off hire damages between April 4th and May 5th when 

neither BSC nor Repinter had use of the vessel. Repinter should recover hire already paid to 

Deval, which then can be credited against the claim for hire rightfully withheld by BSC under 

the sub-charter as a result of Deval’s breaches under Charter No. 1. 7

(4) Deval’s unsupported claim that it can not be liable to Defendants for the unpaid hire 

under English law (Opp. Br. at 7) should be flatly rejected in light of the “equitable set-off” 

doctrine discussed in no. (1) above and Exhibit 17 to the Semark Reply Declaration. 

POINT IV: SECURITY FOR BSC’S CLAIM IS APPROPRIATE UNDER RULE E (7)

In Point IV Plaintiff argues that Defendants’ second counterclaim is an “unripe indemnity 

claim.” Plaintiff not only erroneously characterizes Defendants’ claim, it erroneously invokes a 

Rule E(4)(f) vacatur analysis. Neither decision relied upon by Plaintiff8

 in this regard concerned 

counter-security. Staronset concerned the propriety of the attachment obtained by Plaintiff 

shipowner under Rule B. Similarly, Greenwich Marine addressed the propriety of an arrested 

 

6

 Semark Reply Decl., ¶ 34 and April 24, 2007 letter from BSC’s solicitors to Defendant’s solicitors attached as 

Exh. 18. 

7

 Defendants’ request for counter-security has been reduced from $1,500,326 to $1,421,786 for the reasons stated in 

the Semark Reply Declaration at ¶¶ 37-42 

8 See Opp. Brf. at 8-9 citing Greenwich Marine, Inc. v. S.S. ALEXANDRA, 339 F.2d 901, 908 (2d Cir. 1965) and 

Staronset Shipping Ltd. v. North Star Navigation Inc., 659 F. Supp. 189, 190 (SDNY Nov. 9, 1993). 

5

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 9 of 14
vessel by the charterer who sought to secure a loss sustained by a subcharterer. Plaintiff’s 

inappropriate focus upon a Rule E4(f) analysis underscores its inappropriate application herein.9

A. A Rule E(7) Analysis vs a Rule E(4)(f) Analysis 

 A thorough discussion of a Rule E(7) analysis for counter-security is set forth in Titan 

Navigation, Inc. v. Timsco, Inc., 808 F.2d 400 (5th Cir. 1987), wherein the Fifth Circuit stated 

that, given the “straightforward”nature of the rule’s language and its manifest intent, absent “for 

cause shown,” counter-security should be granted. Id. at 403. Plaintiffs herein have not 

demonstrated “for cause shown” which includes enforcing one’s privileged position (such as in 

the case of seamen), showing financial inability, or demonstrating a frivolous counterclaim. Id. at 

403-4. The nature and purpose of a Rule E(4)(f) vacatur analyses employed in attachment and 

arrest cases, such as those cited by Plaintiff herein, is quite different. Under Rule E(4)(f), a 

plaintiff must demonstrate a valid (“ripe”) prima facie admiralty claim against the defendant, 

absent which a vacatur must be granted. See Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 

460 F.3d 434, 445 (2d Cir. 2006). 

B. Defendants’ Breach of Contract Counterclaims and Request for Counter-Security 

Should be Analyzed Under the Appropriate Standards Applicable to Rule E(7)

Defendants’ breach of contract counterclaims10 are based upon Plaintiff’s breach of 

provisions 8 and 32 of Charter No.1. Courts distinguish breach of contract claims from 

indemnity claims by examining the allegations in the complaint. In Bottiglieri Di Na Vigazione 

v. Tradeline LLC, 472 F. Supp. 2d 588, 590 (SDNY 2007), the cou rt determined the claim was 

 

9

 Correctly anticipating Defendants’ challenge to these decisions, plaintiff included a footnote string citation to three 

Rule E(7) counter-security decisions at page 9, n.8 of its brief. The footnote citation adds no support to Plaintiff’s 

misplaced reliance upon Staronset Shipping and Greenwich Marine and only further supports Defendants’ request 

for countersecurity herein. 

10 See Exh. 5 to the May 24, 2007 Marlowe Declaration at ¶¶ 30-37 

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Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 10 of 14
an indemnity claim because, unlike Defendants’ counterclaims herein, that plaintiff did “not 

allege that any act by defendant increased plaintiff’s potential liability” to a third party. Id. at 

591. 

The distinction between a Rule E(4)(f) vacatur analysis and a Rule E(7) analysis for countersecurity is even more clearly seen in Daeshin Shipping, supra, wherein this court granted both 

defendant’s motion for counter-security and its motion to reduce the security initially attached by 

the plaintiff. For the Rule E(4)(f) vacatur motion, the court examined whether the claim against 

the plaintiff was ripe (id at *8); for the Rule E(7) counter-security motion, the court examined 

whether the claims were colorable and arose from the same transaction. Id. at *9. Accordingly, 

the issue of “ripeness” is an inappropriate consideration for an evaluation of Defendant’s breach 

of contract counterclaims and request for counter-security. 

C. Defendants’ Counterclaim is “Ripe” Even Under a Rule E 4(f) “Ripeness”Standard

Even if ripeness were a relevant consideration, Defendants’ counterclaim must be considered 

“ripe.” Basic contract law dictates that in breach of contract claims, “[t]he cause of action will 

date from the date of breach.” Bottiglieri, 472 F. Supp. 2d at 590. Deval’s breaches of Charter 

No. 1 accrued well before the New York Rule B attachment proceedings. Defendants’ 

counterclaims are thus ripe even if a Rule E(4)(f) analysis were applicable. 

Finally, even if Defendants’ second counterclaim were an indemnity claim, it would be ripe. 

Indemnity claims are ripe when the claimant offers evidence of a suit or a claim against it by a 

third party. See Daeshin, 2005 LEXIS 22409 at *7-8. In its Rule E(4)(f) motion, the Daeshin 

defendant argued that the plaintiff’s indemnity claim was premature because no lawsuit had been 

initiated against the plaintiff. Id. at *7 The court deemed the claim ripe, however, since 

arbitrators had been appointed and correspondence circulated asserting specific damage claims. 

7

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 11 of 14
Id. Moreover, the court found that “it is not unduly speculative to assume that the physical 

damage claims are being asserted down the chain of charter parties and that plaintiff has a 

reasonable belief that it faces potential liability.” Id. The fact that no lawsuit had been initiated 

against the plaintiff was not controlling. Id. 

The Defendants’ second counterclaim herein is ripe for the same reasons. First, when BSC 

sued Defendants in New York, it put both parties on notice that BSC “will soon” commence 

London Arbitration proceedings against [] Repinter in accordance with the terms of the 

contract.”11 Second, the “London Arbitration proceedings have been commenced under all three 

fixtures [charters].” Deval, Repinter, and BSC have now appointed arbitrators down the 

chartering chain (Semark Reply Decl. at ¶¶ 8(a)-(c) and Exhs. 3-4). The parties are, in fact, 

waiting for Plaintiff Deval herein to present its claim in the “head reference” Id. at ¶ 11. When 

Plaintiff does so, “the factual allegations will be passed down the chartering chain and the 

contrary case passed upwards” as per the Tribunal procedural directions. 

Moreover, no negative inference should be drawn about the viability of Defendants’ 

counterclaims because Defendants had not, as of June 29th, asserted such counterclaims or 

commenced arbitration proceedings against BSC in the arbitration. (Semark Reply Decl. ¶¶10, 

13). Deval’s failure to have appointed an arbitrator or to have served any claim submissions as 

of that date has deterred the progress in London upon which Plaintiff now disingenuously 

attempts to capitalize by characterizing Defendants’ second counterclaim as “unripe.”12 This 

will be done “down the chain” once Deval has served its claims submissions and/or evidence in 

 

11 See para. 12 of BSC’s Verified Complaint attached to the June 29, 2007 Declaration of G. Arghyrakis’, Exh. 2. 

12 Deval’s nominated arbitrator was successfully challenged as being a barrister and not being a “commercial man.” 

Plaintiff has made no attempt to nominate another arbitrator, so no panel has been constituted and no submissions 

have been served. 

8

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 12 of 14
the head-reference (Semark Reply Decl., ¶13) 

D. This Court Has the Discretion To Award Defendants Counter-Security in Any 

 Event

Even if this Court finds that Defendants’ second counterclaim is an “unripe indemnity 

claim,” the trial court possesses broad discretion in ordering countersecurity. Finecom Shipping 

Ltd. v. Multi Trade Enters. AG, 2005 LEXIS 25761, *2 (SDNY 2005). For example, a claim 

letter has been deemed sufficient to sustain an attachment of a defendant’s assets even though a 

third party had yet to commence an action against the plaintiff. Hibiscus Shipping, Ltd. v. Novel 

Commodities S.A., No. 04 Civ. 2344, at 3-4 (SDNY 2004). Plaintiff is now fully secured and 

the London arbitrations have commenced. Unless this Court deems Defendants’ counterclaims 

frivolous, their request for counter-security should be granted as a denial would undermine the 

very goal of Rule E(7) to put the parties on an equal footing with respect to security. 

E. Defendants’ Counterclaims Are Well Supported

While the presumptive grant of counter-security is conditioned upon a colorable 

counterclaim, it is not the function of this Court to determine the facts or interpret the charter 

party. That is the function of the London arbitrators. This Court need only determine whether 

Defendants’ counterclaims are frivolous. Daeshin, 2005 LEXIS 22409 at *9. 

It cannot be genuinely denied that Defendants’ counterclaims herein are colorable, to say the 

least. Plaintiff’s assertion to the contrary is not supported by the facts or the law. ( Opp. Br. at 

8). Mr. Arghyrakis suggests (¶8) that Defendants are liable for the stevedore damage under 

Charter No. 2 because the BSC Complaint places responsibility upon Repinter to repair the 

damage to the vessel. However, Mr. Arghyrakis fails to note that, given the Owner/Charterer 

relationship of Repinter to BSC in Charter No. 2, Repinter’s liability therein is passed up to 

9

Case 1:07-cv-03397-JGK Document 30 Filed 07/26/2007 Page 13 of 14
Deval as the Owner under Charter No. 1 in a “back to back” fixture. Thus, if Repinter, as 

disponent owner under Charter No. 2, is found liable for the damage, then Repinter can, in turn, 

recover from Deval the damages owed to BSC arising from Deval’s breach under the back-toback terms under Charter No. 1. 

Nor is there any genuine issue as to whether the charters are back-to-back. The November 

15, 2006 fixture recap incorporated the terms of Charter No. 1 into Charter No. 2 with a few 

amendments. (Semark Reply Decl., ¶5 and Exh. 2 thereto (“Otherwise as per Owners B-T-B 

Head C/P dtd 4/13/06 other than logical alterations or unless already agreed in main terms....” ) ) 

Since the charters are back-to-back, the owners under both would be liable and Repinter as the 

disponent owner under Charter No. 2, can recover from Owner Deval under Charter No. 1. 

CONCLUSION

For all the foregoing reasons and those in the Reply Declaration of David M. Semark filed 

herewith, Defendants respectfully request that (1) Defendants be granted counter-security in the 

total amount of $1,421,786 (2) Plaintiff be specifically directed to provide Defendants with 

counter-security in the form of either a bond, bank guaranty, or letter of undertaking from 

Plaintiff’s P&I Club, and (3) Plaintiff be enjoined from pursuing its claims against Defendants in 

the London arbitration until it has posted appropriate counter-security herein.13

Dated: New York, New York KEANE & MARLOWE 

 July 25, 2007 Attorney for Defendants 

 s/_________________________ 

 Mary Ann C. Marlowe (MM 0723) 

 197 Route 18 South Suite 3000 

 East Brunswick, NJ 08816 

 

 

13 See Daeshin Shipping Co. Ltd v. Meridian Bulk Carriers, Ltd., 2005 LEXIS 22049 (SDNY 2005) at *11 granting 

Defendants’ request to enjoin Plainntiff from pursuing its claims against the Defendant in the London arbitration 

until counter-security posted based upon the language of Rule E(7). 

10

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