1.2 Purpose
The purpose of this chapter is to examine the device known as the interpleader action
prevailing in common law jurisdictions, in the present context, the United States.
The focus of the discussion is on protection of shipowners through interpleader
actions in the context of a case, one of several, arising from the collapse and ensuing
bankruptcy of O.W. Bunker.
1.3 Structure
Following the Introduction, the chapter first provides a chronological background to
the phenomena of interpleader actions and the device of anti-suit injunctions through
a perusal of the relevant case law and introduces the fundamentals of in rem and in
personam actions within the admiralty jurisdictions of common law courts and
focuses on the personification theory peculiar to the judicial realm in the United
States. The discussion then moves on to the decision rendered by the Second Circuit
in the subject case followed by an analysis of it. The chapter’s conclusion points to
judicial inconsistencies which need to be addressed in the interests of bunkers
supplies in particular and the shipping industry as a whole.
2 Background
2.1 Interpleader and Anti-suit Injunctions
Interpleader is a specialized joinder mechanism designed to address situations when
multiple persons have competing claims to the same specific piece of property or
fund.
9 In U.S. v. High Technology Products, Inc.,
10 it was held that interpleader is an
equitable proceeding that affords a party who fears being exposed to the vexation of
defending multiple claims to a limited fund or property that is under his control, a
procedure to settle the controversy and satisfy his obligation in a single proceeding.
An interpleader action originates when the plaintiff holds property on behalf of
another, but does not know to whom the property should be transferred. Interpleader
brings all such persons into the same action so that the same court may resolve their
respective rights in a single action. Because interpleader actions are remedial in
nature, the governing rules and statutes are to be liberally construed to prevent
stakeholders from being subject to multiple liabilities, as well as to protect them
9 Tittle v. Enron Corp., 463 F.3d 410, 425 (5th Cir. 2006); Rhoades v. Casey, 196 F.3d 592, 600 n.8
(5th Cir. 1999).
10 497 F.3d 637, 641 (6th Cir. 2007).
Shipowner Protection in the Wake of the Collapse of O.W. Bunker: The. . .
679
The purpose of this chapter is to examine the device known as the interpleader action
prevailing in common law jurisdictions, in the present context, the United States.
The focus of the discussion is on protection of shipowners through interpleader
actions in the context of a case, one of several, arising from the collapse and ensuing
bankruptcy of O.W. Bunker.
1.3 Structure
Following the Introduction, the chapter first provides a chronological background to
the phenomena of interpleader actions and the device of anti-suit injunctions through
a perusal of the relevant case law and introduces the fundamentals of in rem and in
personam actions within the admiralty jurisdictions of common law courts and
focuses on the personification theory peculiar to the judicial realm in the United
States. The discussion then moves on to the decision rendered by the Second Circuit
in the subject case followed by an analysis of it. The chapter’s conclusion points to
judicial inconsistencies which need to be addressed in the interests of bunkers
supplies in particular and the shipping industry as a whole.
2 Background
2.1 Interpleader and Anti-suit Injunctions
Interpleader is a specialized joinder mechanism designed to address situations when
multiple persons have competing claims to the same specific piece of property or
fund.
9 In U.S. v. High Technology Products, Inc.,
10 it was held that interpleader is an
equitable proceeding that affords a party who fears being exposed to the vexation of
defending multiple claims to a limited fund or property that is under his control, a
procedure to settle the controversy and satisfy his obligation in a single proceeding.
An interpleader action originates when the plaintiff holds property on behalf of
another, but does not know to whom the property should be transferred. Interpleader
brings all such persons into the same action so that the same court may resolve their
respective rights in a single action. Because interpleader actions are remedial in
nature, the governing rules and statutes are to be liberally construed to prevent
stakeholders from being subject to multiple liabilities, as well as to protect them
9 Tittle v. Enron Corp., 463 F.3d 410, 425 (5th Cir. 2006); Rhoades v. Casey, 196 F.3d 592, 600 n.8
(5th Cir. 1999).
10 497 F.3d 637, 641 (6th Cir. 2007).
Shipowner Protection in the Wake of the Collapse of O.W. Bunker: The. . .
679