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Bibby Offshore Ltd. v. EMAS Chiyoda Subsea, Inc.

United States District Court, S.D. Texas, Corpus Christi Division

July 28, 2017

BIBBY OFFSHORE LIMITED, Plaintiff,
v.
EMAS CHIYODA SUBSEA, INC., Defendants.

          ORDER DENYING MOTION TO VACATE

          JASON B. LIBBY UNITED STATES MAGISTRATE JUDGE.

         Pending is Ocean Lion Shipping Ltd.'s (“Ocean Lion”) Motion to Vacate. (D.E. 64). The Motion is DENIED without prejudice.

         This case arises from a maritime contract dispute between Plaintiff Bibby Offshore Limited (“Bibby”) and Emas Chiyoda Subsea, Inc. (“EMAS”).[1] (D.E. 1 and 43).[2] Bibby moved for and was granted a writ of attachment commanding the seizure of the M/V LEWEK EXPRESS (“the Vessel”) pursuant to Rule C of the Supplemental Rules for Admiralty or Maritime Claims. (D.E. 47 and D.E. 43, Page 7).[3] In its Amended Verified Complaint, Bibby alleges it is entitled to a maritime lien against the Vessel for “necessaries.” (D.E. 43). Ocean Lion, [4] making a restricted appearance as claimant and owner of the Vessel pursuant to Rule E(8) of the Supplemental Rules for Admiralty Or Maritime Claims, [5] asserts the arrest should be vacated as the services performed by Bibby were not “necessaries” and were not provided “to a vessel” pursuant to the Commercial Instruments and Maritime Liens Act (“CIMLA”), 46 U.S.C. § 31301 et seq.[6]

         I. BACKGROUND

         BHP Billiton (“BHP”) is currently developing, in at least three phases, an oil and gas field located off the coast of Trinidad and Tobago known as the Angostura field. There are three contracts involved in this matter related to the third phase of development, “the [overall] purpose of which was to install three subsea gas production wells and to connect those wells by a 12” subsea flow line to a Gas Export Platform installed during an earlier phase of development.” (D.E. 43; D.E. 64-1, Page 2; D.E. 64-2, Pages 9-10; and D.E. 66, Page 3). The first is a contract between EMAS and BHP where EMAS agreed to perform installation, tie-in and subsea work. (D.E. 43, D.E. 64-1, Page 4 and D.E. 64-2). The second is an Offshore Installation Services Agreement (“OISA”) between Bibby Subsea ROV, LLC and EMAS where “Bibby Subsea ROV, LLC agreed to provide certain goods and services to EMAS, including the use of certain vessels owned and/or operated by Bibby Subsea ROV, LLC or a related or affiliated company.” (D.E. 43, Page 4 and D.E. 64-3). Bibby was then nominated by Bibby Subsea ROV, LLC to perform work on its behalf under the OISA and a work order was signed between Bibby and EMAS. (D.E. 43, Page 4 and D.E. 64-2). In this work order, Bibby identifies the M/V BIBBY SAPPHIRE as the vessel performing the contracted diving and engineering work. (D.E. 64-2, Page 1, Paragraph 1 “Scope”). Bibby, as detailed in the work order, was to perform the following scope of work:

The purpose of this document is to outline the scope of work (SOW) for the diving support of the BHP Angostura Phase 3 Development. Diving support operations will include: engineering, metrology, jacket prep working including cleaning, J-Tube and Riser Clamp Installation, J-Tube and Riser Installation, Riser Guard Installation, Spool Installation, Flexible Jumper Tie-In and any ancillary equipment associated with these operations in Trinidad at the GEP and ARIPO Jackets.”[7] (D.E. 64-2, Page 10 and D.E. 66, Page 3).

         The third contract is a sixty (60) month charter agreement where EMAS chartered the Vessel, a reeled pipe-lay vessel specially designed and equipped to safely lower flexible oil and gas pipelines to the seafloor, from Ocean Lion. (D.E. 64-4).

         In its complaint, Bibby asserts it “provided the M/V BIBBY SAPPHIRE, as well as diving personnel, to perform the necessary installation, tie-in and subsea work that was being performed by EMAS and the M/V LEWEK EXPRESS. To perform the necessary pipe-laying work in the BHP Angostura field offshore Trinidad, the M/V BIBBY SAPPHIRE and Bibby's diving personnel worked in conjunction with the M/V LEWEK EXPRESS such that she could perform her particular function. Without the M/V BIBBY SAPPHIRE and Bibby's diving personnel, the M/V LEWEK EXPRESS would not have been able to complete it scope of work...EMAS, as the owner, operator and/or charter, was authorized to, and did in fact, incur the necessaries provided by Bibby to the M/V LEWEK EXPRESS.” (D.E. 43, Pages 5 and 7). Bibby further asserts that after providing these services, it issued invoices but never received full payment. (D.E. 43, Page 6). Bibby argues it is owed $14, 710, 495.25 for the work and services provided. (D.E. 43, Page 6).

         II. LEGAL STANDARD

         Once a defendant's property has been attached, the defendant can move to vacate the attachment under Rule E(4)(f) of the Supplemental Rules for Admiralty and Maritime Claims.[8] Rule E(4)(f) permits the Court to look beyond the complaint, consider evidentiary submissions by the parties, and to hold a hearing, if requested. White Rosebay Shipping S.A. v. HNA Grp. Co. Ltd., No. 2:12-cv-96, 2013 WL 441014, at *3 (S.D. Tex. Feb. 5, 2013)(citations omitted). A ruling under Rule E(4)(f) is not intended to resolve the dispute between the parties, but “only to make a preliminary determination of whether there are reasonable grounds for issuance of the arrest warrant.” Id.

         The parties dispute whether a probable cause or preponderance of the evidence standard applies.[9] Courts have held that at a Rule E(4)(f) hearing, a plaintiff must show reasonable grounds for the arrest and attachment and that it should be maintained. Seatrade Grp. N.V. v. 6, 785.5 Tons of Cement, No. H-05-2771, 2005 WL 3878026, at *2 (S.D. Tex. Dec. 7, 2005)(citations omitted); see also Vinmar Int'l Ltd. v. MT CLIPPER MAKISHIO, No. H-09-3829, 2009 WL 6567104, at *1 (S.D. Tex. Dec. 9, 2009)(citations omitted). “The plaintiff must show by a preponderance of the evidence that it is entitled to a valid lien.” Id. (citation omitted). “This requires the plaintiff to make a prima facie showing that it is entitled to the damages sought and secured by the arrest and attachment.” Id. However, as previously found by this Court in Olendorff, whether a hearing and discovery have taken place should be taken into consideration regarding the applicable standard:

Several district courts, including courts for the Southern District of Texas, have applied a preponderance of the evidence standard to Rule E motions to vacate after providing the party asserting jurisdiction an opportunity for discovery and an evidentiary hearing.
Preponderance of the evidence is the level of proof required for Plaintiff to carry the day at trial. Thus, at some point, Plaintiff must prove the jurisdictional facts of its case by a preponderance of the evidence, either at the Rule E hearing or at trial. While a plaintiff initially need only make a prima facie showing that a defendant is amenable to suit, when a district court permits jurisdictional discovery and conducts a full evidentiary hearing on the issue of jurisdiction, the plaintiff must then prove its jurisdictional facts by a preponderance of the evidence.

Olendorff Carriers GMBH & Co., Grand China Shipping (Hong Kong) Co., Ltd., No. 2:12-cv-74, 2013 WL 3937450, at *2 (S.D. Tex. July 30, 2013)(citations omitted)(emphasis added). Similar to the case at hand, this Court, in White Rosebay, limited its analysis to the allegations of the complaint as no post-attachment hearings, jurisdictional discovery or evidentiary hearings had taken place. White Rosebay Shipping S.A. v. HNA Group Co. Ltd., No. 2:12-cv-96, 2013 WL 441014, at *3 (S.D. Tex. Feb. 5, 2013); see also Olendorff, 2013 WL 3937450, at *2. Based on the allegations of the complaint, this Court then concluded the plaintiff had pled sufficient facts to maintain the maritime attachment as the complaint provided reasonable grounds to proceed. Id. at 5. Similarly, in the present case, Ocean Lion does not request a post-attachment hearing and it opposes Bibby's request for jurisdictional discovery, asserting “[n]o amount of discovery will change the nature of necessaries, nor the legal requirement that necessaries be provided ‘to a vessel' in order for a maritime lien to accrue…Bibby already possesses full knowledge of the services it provided; there are no ‘supplemental facts' for Bibby to learn about ...


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