SEACOR Wins Appeal in U.S. Court

Seabulk Tanker retrofitted in China can trade in U.S.

An appeals court ruling has been issued in favor of the United States Coast Guard and SEACOR Holdings to allow vessels retrofitted outside of the U.S. to be eligible for Jones Act trade.

The U.S. Court of Appeals for the Fourth Circuit reversed a district court decision that the Seabulk Trader was ineligible for Jones Act trade after modifications were made to the tanker in China.

The Seabulk Trader, a 51,000-dwt single hull chemical tanker, had construction done to its hull in China to become a double-hull tanker, which would extend its life under the U.S. Oil Pollution Act of 1990, which scheduled its retirement date in 2011.

The repairs were completed after clearance was given by the USCG. The USCG deemed the work did not constitute a foreign rebuilding or a prohibited foreign installation of required ballast tanks.

The Jones Act states that vessels working in US coastal waters cannot be "rebuilt outside the United States" to maintain a coastwise endorsement.

The USCG granted the vessel a license based on, "the added portions of the hull did not exceed the 10% threshold of added steel-weight set forth in the administrative regulations."

Crowley Maritime, OSG, and the Shipbuilders Council of America disputed the endorsement. A lower court initially ruled in favor of plaintiffs.

The Appeals court found that the district court mistakenly ruled in rejecting the Coast Guard's regulation interpretations. "We further find that the district court erred in ordering Seabulk to provide security during the course of these proceedings. The judgment of the district court is therefore reversed and the case remanded for further proceedings."