## Facts

- Deiulemar Compagnia Di Navigazione (Deiulemar) chartered a vessel owned by Pacific Eternity, S.A. and Golden Union Shipping Co. S.A. (collectively, Pacific).
- The charter party included a speed warranty that the ship would make approximately 12–13 knots and required the owners to keep the vessel in efficient operating condition.
- The charter party also contained a clause calling for arbitration in London for disputes arising under the agreement.
- During the voyage, the vessel allegedly failed to reach the warranted speed and required mechanical repairs.
- At the end of Deiulemar’s voyage, Pacific planned to continue repairs and then sail the vessel out of United States waters.
- Deiulemar sought permission for its marine consultant to board and inspect the vessel to determine the cause of the reduced speed and document the vessel’s condition for an anticipated breach-of-charter claim.
- Pacific refused to allow the requested inspection.
- Before any merits action was filed in federal court, Deiulemar filed a petition in the District of Maryland under Federal Rule of Civil Procedure 27 to perpetuate evidence by compelling an inspection.
- Pacific moved to dismiss, arguing that the request belonged in the London arbitration (which Pacific had initiated), that Rule 81 barred the district court’s involvement, that subject-matter jurisdiction was not established, and that Deiulemar was using Rule 27 as a tool to search for new evidence rather than to preserve existing proof.
- The district court granted the Rule 27 petition, permitted the inspection, and kept the resulting evidence under seal pending appeal.

## Issues

1. Whether Deiulemar satisfied Rule 27’s requirements so the district court could order an inspection to perpetuate evidence even though the parties’ dispute was headed to London arbitration.
2. Whether Federal Rule of Civil Procedure 81 barred the district court from granting Rule 27 relief because the underlying controversy was subject to arbitration.
3. Whether the petition improperly sought broad, pre-complaint discovery rather than preservation of evidence at risk of loss.

## Decision

- The Fourth Circuit affirmed the district court’s order granting Deiulemar’s Rule 27 petition and permitting the inspection.
- The court held that the district court could act to preserve evidence in aid of arbitration where the Rule 27 requirements were met and circumstances showed a real risk the evidence would be altered or unavailable.
- The court rejected Pacific’s argument that Rule 81 prohibited the proceeding, reasoning that the Rule 27 petition was not a Title 9 (FAA) enforcement action on the merits of arbitration but an independent action to perpetuate evidence.
- The case was remanded with instructions for the district court to transfer the sealed evidence to the arbitrator in the pending London arbitration.

## Legal Principles

- Rule 27 authorizes a federal court to order limited pre-suit testimony or evidence preservation when the petitioner expects to be a party to an action cognizable in federal court, cannot presently bring it, and needs preservation to prevent a failure or delay of justice.
- A dispute destined for arbitration does not automatically defeat Rule 27 relief if the underlying claim (such as a maritime charter-party dispute) would otherwise fall within federal subject-matter jurisdiction.
- Rule 27 is not a substitute for ordinary discovery; relief should be confined to preserving identifiable evidence facing imminent loss or change.
- Rule 81 does not bar a Rule 27 preservation proceeding merely because the merits are arbitrable; a court may order preservation where necessary and then direct that the preserved material be provided to the arbitral forum.

## Conclusion

The Fourth Circuit held that, in light of the impending repairs and the vessel’s planned departure from U.S. waters, the district court properly used Rule 27 to compel an inspection to preserve evidence for a London arbitration over alleged charter-party breaches, and Rule 81 did not strip the court of authority because the petition was an independent preservation action rather than an FAA merits proceeding.


Deiulemar Compagnia Di Navigazione v. M/V Allegra, 198 F.3d 473 (1999)