The Court’s extension of application of the personification doctrine equitably to
interpleader context was correct. The personification theory was developed with
noble intentions: to promote the flow of commerce and to ensure fairness in the
resolution of admiralty disputes. An indiscriminate application of the personification
doctrine would impede both of these objectives by rendering the interpleader regime
effectively useless, encouraging duplicative litigation and giving some admiralty
claimants an undue advantage.
63
First, the decision fulfilled the purpose of the interpleader action. Interpleader
exists to resolve numerous competing claims facing a stakeholder. By joining all
claimants in the same action, interpleader relieves the stakeholder of the cost of
multiple suits and protects the stakeholder from the risk of multiple liabilities.
64 The
dilemma faced by shipowners in this case is exactly the scenario that interpleader
phenomenon seeks to address. That is, each party faced multiple claims in respect of
a single obligation and asked the court to determine the entitlement of competing
claimants and, in the interim, to grant equitable relief in the form of an anti-suit
injunction to restrain the competing claimants from initiating proceedings
elsewhere.
65
Moreover, the equitable personification doctrine adopted by the Second Circuit
serves the interest of equity and prevents duplicative payments. The real conflict is
between O.W. Bunker and the actual fuel suppliers as to which entities are entitled to
payment. For their part, the shipowners have already prepared bunker payments;
they simply do not know whom they should pay and wish to avoid double payment.
As a matter of practice, the shipowners need only pay O.W. Bunker for the fuel. But
the physical suppliers may threaten to arrest the shipowners’ ships, claiming the
existence of maritime liens. Out of fear that arrests could frustrate their operations,
the shipowners may surrender and preemptively pay the physical suppliers, even
though they already paid O.W. Bunker. If the court chose not to allow the interpleader actions, the shipowners could have faced double obligations to both
O.W. Bunker and the physical suppliers. Therefore, it is proper that the court
declined to adhere rigidly to the personification theory and did not force the
shipowners to pay twice for something they received only once. Although the
claimants’ argument that in rem and in personam actions are distinct is correct in
some contexts, in all cases there was only one delivery of fuel to each ship, which
created one debt to each ship and to each owner.
66 Therefore, the in personam
actions against the shipowners and the in rem action against the ships are not two
different claims. The shipowners should only pay for that delivery of fuel once.
In addition, the court’s decision in this case will prevent some admiralty claimants
from obtaining undue advantage and protect the entire maritime industry. Courts
around the world encountered the same interpleader application after the collapse of
63 See Schwab (2012), p. 280.
64 See State of Texas v. State of Florida, 306 U.S. 398, 407, 412 (1939).
65 Pincus et al. (2015).
66 UPT Pool, 2015 AMC at 2077–79.
686
J. Xu
interpleader context was correct. The personification theory was developed with
noble intentions: to promote the flow of commerce and to ensure fairness in the
resolution of admiralty disputes. An indiscriminate application of the personification
doctrine would impede both of these objectives by rendering the interpleader regime
effectively useless, encouraging duplicative litigation and giving some admiralty
claimants an undue advantage.
63
First, the decision fulfilled the purpose of the interpleader action. Interpleader
exists to resolve numerous competing claims facing a stakeholder. By joining all
claimants in the same action, interpleader relieves the stakeholder of the cost of
multiple suits and protects the stakeholder from the risk of multiple liabilities.
64 The
dilemma faced by shipowners in this case is exactly the scenario that interpleader
phenomenon seeks to address. That is, each party faced multiple claims in respect of
a single obligation and asked the court to determine the entitlement of competing
claimants and, in the interim, to grant equitable relief in the form of an anti-suit
injunction to restrain the competing claimants from initiating proceedings
elsewhere.
65
Moreover, the equitable personification doctrine adopted by the Second Circuit
serves the interest of equity and prevents duplicative payments. The real conflict is
between O.W. Bunker and the actual fuel suppliers as to which entities are entitled to
payment. For their part, the shipowners have already prepared bunker payments;
they simply do not know whom they should pay and wish to avoid double payment.
As a matter of practice, the shipowners need only pay O.W. Bunker for the fuel. But
the physical suppliers may threaten to arrest the shipowners’ ships, claiming the
existence of maritime liens. Out of fear that arrests could frustrate their operations,
the shipowners may surrender and preemptively pay the physical suppliers, even
though they already paid O.W. Bunker. If the court chose not to allow the interpleader actions, the shipowners could have faced double obligations to both
O.W. Bunker and the physical suppliers. Therefore, it is proper that the court
declined to adhere rigidly to the personification theory and did not force the
shipowners to pay twice for something they received only once. Although the
claimants’ argument that in rem and in personam actions are distinct is correct in
some contexts, in all cases there was only one delivery of fuel to each ship, which
created one debt to each ship and to each owner.
66 Therefore, the in personam
actions against the shipowners and the in rem action against the ships are not two
different claims. The shipowners should only pay for that delivery of fuel once.
In addition, the court’s decision in this case will prevent some admiralty claimants
from obtaining undue advantage and protect the entire maritime industry. Courts
around the world encountered the same interpleader application after the collapse of
63 See Schwab (2012), p. 280.
64 See State of Texas v. State of Florida, 306 U.S. 398, 407, 412 (1939).
65 Pincus et al. (2015).
66 UPT Pool, 2015 AMC at 2077–79.
686
J. Xu