THE owner of the two ferries seized by the U.S. Marshals is asking the federal court to order the immediate release of the vessels, saying that their arrest was improper.
As an alternative, the court was also asked to approve the use of a real property mortgage on Tinian Dynasty Hotel and Casino as a substitute security in place of the vessels.
Tinian Shipping and Transportation, Inc. is the owner of MV Saipan Express and MV Tinian Express.
In a motion filed in federal court, Tinian Shipping’s attorneys G. Anthony Long and Rupert P. Hansen, said their client and the plaintiff, World Fame Shipping Ltd., “expressly selected a system of law in Hong Kong which does not recognize a maritime lien for necessaries.”
Such choice indicated that World Fame’s arrest of the vessels is improper and that the ferries should therefore be released, the attorneys said.
The U.S. Marshals on Thursday seized the two ferries that carry passengers between Saipan and Tinian following the court’s issuance of warrants for the arrest of the vessels.
World Fame, a Hong Kong-based company, is claiming that Tinian Shipping failed to pay its debt.
World Fame alleged that between 1998 and the present year, it provided various “necessaries” to Tinian Shipping’s vessels.
The “necessaries” included management services, vessel repairs and maintenance, insurance premiums, recruitment and training services.
Hansen, in Tinian Shipping’s motion for release, said the arrest of the vessels occurred without the owner having any prior knowledge of the proceeding or any opportunity to be heard.
Hansen said it is in recognition of this legal disability to vessel owners that a provision of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure exists to allow for swift rectification, when necessary, of an improper vessel arrest.
Under such provision, Hansen said, World Fame should be required to show why the arrest of the vessels should not be vacated.
Hansen said World Fame’s complaint alleges that this dispute is governed by the U.S. Federal Maritime Lien Act and its maritime lien rights afforded to persons who provided “necessaries” to vessels.
“However, U.S. maritime law firmly recognizes the right of parties to a maritime contract to select a law to govern their contractual relations with binding effect,” he said.
Hansen said the contract sued upon provides that “this agreement shall be governed by the law of the Hong Kong Special Administrative Region.”
Hong Kong, the lawyer said, does not recognize a true “maritime lien” for those who provide materials and supplies to a vessel.
In his declaration in support for setting of substitute security, Long said the arrest of the vessels has caused great financial hardship to Tinian Shipping and its guarantors.
The arrest, Long said, has drastically impeded the effort to raise capital through the operation of Tinian Dynasty.
“Additionally, because the vessels are one of the primary means of transportation of people and goods between Saipan and Tinian, the arrest of the vessels has caused and continue to cause substantial financial hardship and public inconvenience on the community of Saipan and Tinian by impeding the flow of workers and goods between Saipan and Tinian, and the flow of tourism from other ports of the world to Tinian,” he added.
The court set a hearing on the motions for Friday.
