Admiralty
Maritime Law
Writ of Maritime Garnishment
Attachment to Certain Funds in a U.S. Bank Account
Charter Party Agreement
Alter Ego Theory of Liability
Federal Maritime Law v. State Law
Appeal from the United States District Court for the Southern District of Texas USDC No. 4:24-CV-219
The Charter Agreement, executed on May 21, 2021, provided that CH Offshore would charter the Vessel to Mexiship Ocean for an initial period of eighteen months. The agreement further stipulated that CH Offshore could terminate the agreement if Mexiship Ocean failed to promptly pay for the charter hire and if, upon notice, the failure to pay persisted. Once the charter period expired, Mexiship Ocean was to redeliver the Vessel in a timely manner. Failure to return the Vessel accordingly would result in an enhanced hire rate but would not extend the duration of the charter.
In September of 2022, CH Offshore initiated arbitration proceedings against Mexiship Ocean to recover damages for unpaid charter hire.
Later, in May of 2023, with the Vessel still in Mexiship Ocean’s possession, CH Offshore integrated its claim for the Vessel’s redelivery in the arbitration proceedings, seeking an injunction requiring Mexiship Ocean to return the Vessel.
The present action began with an accidental email. In January of 2024, CH Offshore was copied on an email between Mexiship Ocean’s CEO, Edgardo Armando Perez Robert (“Mr. Perez”), and a representative from Seahorse Marine & Energy Joint Stock Company (“Seahorse”) related to a charter between those two entities. The email included an attachment of a settlement agreement (the “Settlement Agreement”) between Mexiship Ocean and Seahorse, which provided that Seahorse would return a deposit from Mexiship Ocean in an amount of $808,238.72 (the “Settlement Refund”). CH Offshore brought the present action to secure its debt—and enforce the arbitration award—by attaching the property that the Settlement Agreement revealed: Mexiship Ocean was to receive the Settlement Refund and direct it to a U.S. bank account at Vantage Bank, with the beneficiary listed as Mexiship Ocean CCC LLC (“Mexiship Texas”), a U.S. company. The complication central to the current dispute is whether defendant Mexiship Ocean or non-party Mexiship Texas owns the funds that CH Offshore seeks to attach.
CH Offshore filed suit in the Southern District of Texas on January 19, 2024, seeking a writ of garnishment to attach funds held in the Vantage Bank account under Rule B of the Federal Rules of Civil Procedure Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (“Rule B”) and damages for “conversion of the Vessel arising out of Mexiship Ocean’s unlawful refusal to return the Vessel.” CH Offshore brought this suit to “enforce its Partial Final Award issued in” the Singapore arbitration and to “obtain security for its still pending claims.” On January 23, 2024, the district court granted CH Offshore’s request for a writ of garnishment against Vantage Bank up to the amount of $3,370,976.88.
After the limited discovery period expired, CH Offshore filed a proposed order on September 30, 2024, stating that the district court should grant it leave to amend its complaint to join Mexiship Texas and Mr. Perez as named defendants under an alter ego theory of attachment and to plead “Texas state attachment law as an alternative basis for maintaining the attachment of the funds held at Vantage Bank.” Mexiship Texas opposed this amendment, both in form and substance.
“Maritime attachment is a distinctive admiralty remedy that was a part of American jurisprudence at the time the Constitution was adopted.” Ultra Deep Picasso, 119 F.4th at 441 (quoting Boland Marine & Indus., LLC v. Bouchard Transp. Co., No. 1:20-CV-66-LY-ML, 2020 WL 10051743, at *2 (W.D. Tex. Feb. 28, 2020)). As such, we recognize the important role it plays in the context of maritime disputes, wherein parties cross both jurisdictional and oceanic lines. In the federal context, Rule B provides an avenue for attaching a defendant’s property in a maritime action for the purpose of “securing a respondent’s appearance and assuring satisfaction in case the suit is successful.” Malin, 817 F.3d at 244 (quoting Swift & Co. Packers v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 693 (1950)). Texas state law also provides a parallel attachment law subject to separate requirements. See, e.g., Licea v. Curacao Drydock Co., 952 F.3d 207, 215 (5th Cir. 2015). CH Offshore’s challenges on appeal relate to both federal and state pathways for attachment. We take each claim in turn.
(…) We (…) consider whether CH Offshore has met its burden for a Rule B attachment. See Ultra Deep Picasso, 119 F.4th at 441. To meet this burden, we review whether CH Offshore has demonstrated each of four parts: 1) it has a valid prima facie admiralty claim against the defendant; 2) the defendant cannot be found within the district; 3) the defendant’s property may be found within the district; and 4) there is no statutory or maritime law bar to the attachment. Id. (quoting Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2nd Cir. 2006), abrogated on other grounds by Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009)). While our court has not “expressly endorsed Aqua Stoli’s four-part test,” it has employed the test, emphasizing the first three requirements. Ultra Deep Picasso, 119 F.4th at 441 (discussing the third requirement); K Invs., Inc. v. B.-Gas, Ltd., No. 21-40642, 2022 WL 964210, at *2 (5th Cir. Mar. 30, 2022) (per curiam) (discussing the first two requirements). We adopt the same approach here, requiring CH Offshore to demonstrate that each of the four test elements is met.
(…) Our court has recognized that “for maritime attachments under Rule B, the question of ownership is critical.” Malin, 817 F.3d at 246 (cleaned up). Thus, the central question before the district court, and now on appeal, is whether Mexiship Ocean has a recognizable direct ownership claim over the Settlement Refund in the Vantage Bank account, despite Mexiship Texas being the account’s named beneficiary.
While neither the district court order nor party briefing examines the Settlement Agreement with supporting law, there are relevant precedents on the question of ownership of the funds at issue and on the distinction between ownership and beneficiary status. Texas law on ownership is of particular import, as our court has held that when there is a void regarding how federal maritime law would treat the type of interest at issue, we can “look to state law to determine property rights,” because “precedent in federal admiralty law is so thin that we should turn to state law more directly on point.” Malin, 817 F.3d at 246–47.
For one, our court has held that control, rather than named beneficiary status, is the primary factor in determining ownership. In the bankruptcy context, a panel of our court acknowledged that “control is the primary determinant of ownership of bank accounts . . . .” In re IFS Fin. Corp., 669 F.3d 255, 262, 264 (5th Cir. 2012); see also In re Southmark Corp., 49 F.3d 1111, 1116–17 (5th Cir. 1995) (noting that whether the debtor had “unfettered discretion to pay creditors of its own choosing, including its own creditors . . . is . . . particularly important” (footnotes omitted)). In In re IFS, our court drew on Texas garnishment law in particular, recognizing that “Texas law counsels that the legal titleholder to a bank account is not always the owner of its contents,” and that courts should “examine the individual facts of each case,” rather than the legal relationship between the parties. In re IFS, 669 F.3d at 262.
(…) There is at least sufficient evidence that requires further analysis and explication from the district court, especially as it pertains to the question of control vis-à-vis ownership. Because the evidence of control is complex but was not discussed in the district court’s order, we find that the district court abused its discretion by failing to engage with the relevant evidence and caselaw regarding the Rule B attachment. See McKinney ex rel. NLRB, 783 F. 3d at 298. The district court remains closest to the evidence produced, especially given the lengthy discovery disputes in this case, and is therefore well-positioned to draw out where control and, therefore, ownership of the Settlement Refund lies on remand.
The second issue on appeal is whether the district court erred in denying CH Offshore leave to amend its complaint. CH Offshore included its request for leave to amend in a proposed order—filed in place of a typical brief at the district court’s direction—in response to Mexiship Texas’s motion to vacate the writ of garnishment. CH Offshore sought leave to amend to include a state-law basis for attachment using an alter ego theory of liability.
(As discussed above, CH Offshore’s core claim for attachment rests on the terms of Mexiship Ocean’s Settlement Agreement and attaching to the Settlement Refund. But the parties also dispute the extent to which CH Offshore could reach additional funds in Mexiship Texas’s Vantage Bank account. To reach these additional funds, CH Offshore initially pled that Mexiship Ocean operates as an alter ego of Mexiship Texas, such that any of the latter’s funds could be reached to secure the debt of the former. Due to Rule B, which requires the defendant to not be present in the jurisdiction with the property, an alter ego claim would necessarily destroy federal jurisdiction—i.e., with a successful alter ego theory, if Mexiship Texas is found in the district, Mexiship Ocean would inherit the same jurisdictional properties. CH Offshore admits as much and does not present this argument on appeal as a basis for its existing Rule B attachment claim. Instead, as discussed further below, it intends to plead an alter ego theory purely in the alternative to its Rule B claim. Fn 4).
(U.S. Court of Appeals for the Fifth Circuit, Dec. 19, 2025, CH Offshore v. Mexiship Ocean, Docket No. 24-20525)
