On August 27, 2008 Stelios Coutsodontis filed suit in the US District Court for the Eastern District of Louisiana and attached and arrested the vessel Athena under Rules B and D of the Supplemental Rules for Admiralty and Maritime Claims. Coutsodontis demanded $15 million for release of the vessel.

Coutsodontis' claims against the vessel arose from a land-based shareholder dispute that was being litigated in New York, Spain and Greece. He alleged that he owned certain shares in Sea Trade Maritime Corporation, the corporation that held legal title to the Athena, and that he was therefore entitled to share in the vessel's profits.

Coutsodontis also alleged that his shareholder status equated to part ownership of the Athena itself and brought possessory and petitory and partition actions under Rule D of the Supplemental Rules for Admiralty and Maritime Claims.

Sea Trade filed a motion to vacate the arrest and attachment of the vessel, arguing that the federal court did not have admiralty subject-matter jurisdiction, and that as a result the attachment and arrest of the Athena were wrongful as a matter of law. The court agreed with the defendant, holding that Coutsodontis' claims did not support federal maritime jurisdiction, and that the attachment and arrest of the Athena were wrongful. The court ordered the immediate release of the Athena.

Coutsodontis appealed the decision to the US Court of Appeals for the Fifth Circuit. That court affirmed the trial court's holding that federal admiralty jurisdiction was not supported. The claims asserted were not maritime in nature because they did not relate to the "ship in its use as such, or to commerce or navigation on navigable waters, or to transportation by sea or to maritime employment".(1)

Admiralty jurisdiction is not automatic simply because a ship is involved. The supplemental admiralty rules do not create admiralty jurisdiction. If a contract dispute involving the ship is the basis for a Rule B attachment, there still must be a maritime contract to invoke admiralty jurisdiction. Rule D may be used to have to court decide an issue based on actual ownership of the ship itself, but not indirect ownership through shares of stock in the corporation that owns the ship. Where ownership derives from shares in the owning corporation, issues stemming from such ownership likely will require an accounting among owners or shareholders and therefore admiralty jurisdiction will not be invoked.

For further information please contact
Antonio J Rodriguez, Alanson T Chenault or Stephanie Skinner at Fowler Rodriguez Valdes-Fauli by telephone (+1 504 523 2600) or by fax (+1 504 523 2705) or by email (ajr@frc-law.com, atc@frvf-law.com or sskinner@frvf-law.com).

Endnotes

(1) Coutsodontis v Sea Trade Mar Corp, 2009 US App LEXIS 14057 (5th Cir La June 18 2009) (citing Coutsodontis v M/V Athena, Civ A No 08-4285, 2008 WL 4330236, at *2 (ED La September 16 2008).

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