Fairplay: "Rule B" Filings Flood NY
Fairplay's Daily Shipping News spotlighted Blank Rome's Thomas Belknap's insight on Rule B filings in New York, on January 7, 2009.
As market relations deteriorate, a surge of "Rule B" garnishment cases is straining the Southern District Court of New York.
Rule B of US admiralty law allows financial assets of a non-US defendant to be attached in the jurisdiction's banks, with those funds garnered as security for arbitration.
"The maritime bar, the banks, and the district court and its judges are struggling with this flood of Rule B cases," wrote Blank Rome partner Thomas Belknap in the January 2009 issue of the firm newsletter Mainbrace. Rule B cases represented 25% of all new district filings in October and over 30% in November. "These are astonishing statistics," said Belknap.
The onslaught has created a lack of uniformity in how various judges handle such cases. "Even some of the most even-keeled judges seem to be looking for ways to slow down and manage the flood," explained Belknap. "This has led to what some might call innovation, but others have called judicial activism."
"The lack of uniformity has made it challenging to give concrete [legal] advice and no client likes to hear that success or failure comes down to the luck of the draw of the judge, he noted.
© 2009 by Lloyd's Register–Fairplay Ltd. Reprinted by permission.