## Facts

- Bay Casino, LLC entered a three-year bareboat (demise) charter with SeaCo Ltd. for the M/V Royal Empress to operate shipboard gambling.
- The charter granted Bay Casino full use and exclusive control of the vessel and required Bay Casino to maintain the vessel at its own expense.
- The agreements repeatedly identified SeaCo as “Owner” and Bay Casino as “Charterer,” and required Bay Casino to post a conspicuous onboard notice stating SeaCo owned the vessel and Bay Casino held it under a demise charter.
- SeaCo was to contribute skills, knowledge, and financing and was entitled to profit participation and consulting fees.
- Bay Casino alleged SeaCo defaulted and breached the charter, and sought to secure its claims by proceeding against the vessel in rem.
- Bay Casino obtained process for arrest of the vessel and maritime attachment and garnishment; defendants moved to vacate under Supplemental Rule E(4)(f), sought to substitute a $200,000 bond, and sought $1,069,000 countersecurity under Supplemental Rule E(7).
- The court conducted an evidentiary hearing on the Rule E motions.

## Issues

1. Whether the arrest and maritime attachment/garnishment should be vacated under Supplemental Rule E(4)(f) because the arrangement was allegedly a joint venture, depriving Bay Casino of a maritime in rem basis for process.
2. Whether Bay Casino should be required to post $1,069,000 countersecurity under Supplemental Rule E(7) for defendants’ counter- and cross-claims, and whether a reduced/substitute bond should be ordered.

## Decision

- The court denied the motion to vacate and upheld the warrant of arrest and the maritime attachment and garnishment.
- The court concluded the parties’ agreement functioned as a bareboat (demise) charter rather than a joint venture.
- The court declined to substitute a $200,000 bond in lieu of the existing security.
- The court denied defendants’ request to require Bay Casino to post $1,069,000 in countersecurity.

## Legal Principles

- In deciding whether an arrangement is a bareboat charter or a joint venture, courts focus on allocation of possession, command, and navigation, and operational responsibilities and expenses, rather than profit-sharing or financing features alone.
- A charter granting the charterer full use and exclusive control, coupled with maintenance obligations and contractual indicia identifying owner/charterer status, supports characterization as a demise charter.
- Under Supplemental Rule E(4)(f), arrest and attachment are sustained where the plaintiff shows reasonable grounds for the process and a prima facie maritime claim; the opposing party must show a defect warranting vacatur.
- Countersecurity under Supplemental Rule E(7) is discretionary and equitable; it may be denied where the original process is supported by reasonable grounds and the counterclaims do not justify the requested security.

## Conclusion

The court sustained the vessel’s arrest and attachment because the agreement placed operational control and responsibility with the charterer consistent with a bareboat charter, and it refused to order substantial countersecurity or a reduced substitute bond while the underlying maritime contract dispute proceeded.


Bay Casino, LLC v. M/V Royal Empress, 20 F. Supp. 2d 440 (E.D.N.Y. 1998)