Rule B: Good Riddance to Maritime Pre-judgment Attachments of EFTs

Rule B Attachments

Rule B attachments, as they are called, can get a party's attention. (The reference is to Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (formerly the Rules of Practice in Admiralty and Maritime Cases)). To illustrate: A ship owner commences arbitration under a charter contract against its charter party in London. Neither party does business or is located in New York. Neither party has nor is likely to have property in New York. Claimant brings an action for a maritime attachment and garnishment, ex parte, against the defendant in the Southern District of New York, requesting attachment of all EFTs of which defendant is originator or beneficiary. Plaintiff secures the attachment ex parte, and serves it on numerous New York intermediary banks, not knowing whether in fact such banks handle EFTs for the bank with which defendant has an account and does business as originator or beneficiary. If, say, a party that does business with defendant (assume it has no involvement whatsoever in the London arbitration) instructs its bank to wire money for the account of defendant that passes through a New York intermediary bank (as virtually all dollar-denominated payment orders do), and plaintiff has served the attachment on the intermediary bank, then bingo! The monies are frozen (up to the amount of the attachment).