Maritime Contracts
November 14, 2017
December 1, 2017
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Sovereign Immunity, Part I

Imagine you own a company that ships products internationally. You regularly negotiate contracts with exporters, either those who are seeking to ship products into the United States or U.S. exporters who are seeking to ship products overseas. You have experience speaking with parties, hiring a captain and a crew, mapping the voyage, and taking care of all customs paperwork. You also know how to deal with banks to make sure that the relevant parties have the proper guarantees and letters of credit in place. You have been involved in large deals that involved multiple parties in multiple jurisdictions and multiple banks covering the various parties. You know what insurance is relevant and where to purchase it.

After working on a deal for some time, you are satisfied that everything has been negotiated properly and are ready to go ahead with shipping the goods. Trucks carrying large containers drive to the dock where your large cargo ship waits to take its cargo. A crane located by the dock takes containers out of the various trucks and places them on the ship. When that is done, the captain and crew take a walk through to make sure there is proper inventory and that the inventory is secure. Once completed, the ship sets sail.

The saying is that out in the ocean every ship is an island unto itself. Out in the ocean, another large ship heads toward your ship and crashes into it. The impact of the crash creates a gaping hole in the hull of the ship, causing it to start sinking. The captain announces on a loud speaker that everyone should abandon ship. The captain and crew jump onto small lifeboats that takes them to safety.

A subsequent investigation into the crash reveals that a foreign government owns the ship that crashed into your ship. That other boat was out in the ocean on government business. The captain of the foreign ship and his crew were not happy about being out at sea for so long, so they all decided to have a few drinks. A few drinks turned into many drinks and eventually the entire crew was drunk. After drinking, many of them returned to their jobs despite their limited ability to work, including the captain. The captain directed the ship to turn straight toward your ship, causing the collision and ensuing loss.

When you discover all of this information, you want to sue the foreign government for negligence and want the government to pay for the damage.

Suing the Foreign Government

You discover that the foreign government holds a significant account in the New York Federal Reserve Bank. You want to get a judgment in United States Federal Court that will attach the judgment to the foreign government’s New York account so you can collect money for damages in the United States. However, you discover that the foreign government may be protected by the Foreign Sovereign Immunities Act of 1976 that limits judgments against foreign governments in United States Court. Part II will discuss this further.

Involved in the maritime business. Contact the Kolodny law firm, experienced and knowledgeable maritime lawyers.

(image courtesy of Erwan Hesry)

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