[00:00:00] Speaker 04:
All right.

[00:00:01] Speaker 04:
Thank you for the flexibility this morning.

[00:00:03] Speaker 04:
And counsel, you may proceed.

[00:00:05] Speaker 02:
Thank you, Your Honors.

[00:00:06] Speaker 02:
Good morning.

[00:00:08] Speaker 02:
I am George Gaitas.

[00:00:10] Speaker 02:
I am appearing on behalf of the vessel owner appellants, who are also the award judgment, judgmental arbitration award creditors.

[00:00:22] Speaker 02:
With the permission of the court,

[00:00:24] Speaker 02:
I would like to address first an issue that was raised by motion, and that's the motion, the latest motion to dismiss this appeal, which is docket number 41.

[00:00:42] Speaker 02:
In the motion that was filed by the appellees, they argued that in light

[00:00:51] Speaker 02:
of a decision made by the appellate court of Norway, the judgment of the lower court of Norway has become a nullity.

[00:01:04] Speaker 02:
As it was reversed on August 22, the motion to dismiss was filed this September 22.

[00:01:14] Speaker 02:
We disagree with the idea that the judgment of the lower court in Norway

[00:01:21] Speaker 02:
had become a nullity.

[00:01:23] Speaker 02:
I think metaphorically it may be a nullity, but it remains a court decision in a properly constituted court in Norway, and it has some effect.

[00:01:38] Speaker 01:
What effect does it have?

[00:01:40] Speaker 02:
The effect that it has, Your Honor, it is an adjudication by a court duly constituted, and it may not have collateral

[00:01:51] Speaker 02:
estoppel effect here, but it has the effect that it's an adjudication of facts because it was reversed in Norway only on its facts.

[00:02:02] Speaker 01:
And the facts- There wasn't adjudication of facts within the district court here.

[00:02:08] Speaker 01:
So what does this, how does this change that?

[00:02:12] Speaker 02:
Your honor, there was an adjudication of the facts in the court here in the previous case.

[00:02:18] Speaker 02:
from which we sought relief by means of rule 60B5.

[00:02:28] Speaker 01:
Well, 60B6, as the district court observed, would have permitted you to bring in new evidence, although it would have been too late.

[00:02:35] Speaker 01:
That's apparently not what you tried to do.

[00:02:37] Speaker 01:
You're coming in and saying, well, this different court, considering different evidence, came to a different result, and I'm not sure what difference that should make.

[00:02:45] Speaker 01:
courts wind up coming to different results, particularly when presented with different evidence all the time.

[00:02:52] Speaker 01:
So why does the second decision, in this case from Norway, require a do-over of the first proceeding?

[00:03:00] Speaker 02:
Because, Your Honor, in Norway, it was different evidence, additional evidence, including the testimony of the principals.

[00:03:13] Speaker 01:
There's no reason why that couldn't have presented

[00:03:15] Speaker 01:
to the district court in San Francisco, it wasn't.

[00:03:19] Speaker 01:
So why is there a do-over?

[00:03:22] Speaker 01:
If your client didn't present the evidence that perhaps it should have, why do we do it over?

[00:03:29] Speaker 02:
Our client, Your Honor, did not have the evidence that was presented.

[00:03:32] Speaker 02:
We did not have the chairman of a group of companies that is presiding over our debtor, owned our debtor by 70%.

[00:03:43] Speaker 02:
planned and executed its dissolution without paying arbitration awards that they knew they were pending.

[00:03:53] Speaker 02:
In Norway, the action was brought on a different theory, actually.

[00:03:56] Speaker 02:
It was for the personal liability of the principals of the, Atli Berkshavn is the person we're talking about, of the Berkshavn group.

[00:04:12] Speaker 02:
The issues on the facts were similar.

[00:04:18] Speaker 02:
Who exercised dominion and control over the subsidiaries of our debtors?

[00:04:26] Speaker 02:
And the Norwegian court, after taking detailed evidence, not arriving at the probable cause conclusion, but on a full trial, on the merits, adjudicated that Atley Berkshaven

[00:04:42] Speaker 02:
exercise the decisive influence over this position of Big Gas assets.

[00:04:49] Speaker 02:
He exploited his position as chairman and majority shareholder of Big Gas to transfer assets to another company in which he was also chairman and part owner.

[00:04:58] Speaker 02:
And that's an excerpt from that decision.

[00:05:02] Speaker 02:
It's much more detailed.

[00:05:04] Speaker 02:
It's a trial that lasted three to four days.

[00:05:08] Speaker 02:
So it reached a conclusion which

[00:05:12] Speaker 02:
would give the court here probable cause to reopen.

[00:05:18] Speaker 00:
So I'm not understanding what the appellate court did.

[00:05:21] Speaker 00:
It seems like it reversed that lower court order.

[00:05:25] Speaker 00:
It says that the legal action was not successful and that the defendants in that case are acquitted.

[00:05:34] Speaker 02:
They were acquitted on a theory of liability, personal liability of shareholders and directors

[00:05:43] Speaker 02:
It's an entirely different approach.

[00:05:48] Speaker 00:
So there's two problems.

[00:05:49] Speaker 00:
One, either that case is directly on point, but you're just saying now that it's a totally different legal theory, so how is it relevant for our case?

[00:05:57] Speaker 00:
And two, if it's reversed, it's reversed, so why is not the lower court order a nullity completely?

[00:06:05] Speaker 02:
It's not a nullity, Your Honor, because the findings of fact remain findings of fact.

[00:06:11] Speaker 02:
under our rules of evidence, that record is admissible.

[00:06:19] Speaker 02:
In other cases?

[00:06:21] Speaker 02:
In this country, yes.

[00:06:23] Speaker 00:
So the findings of fact in the lower corridor, even though it's been vacated, is binding on the parties?

[00:06:29] Speaker 00:
It's not binding, Your Honor.

[00:06:30] Speaker 02:
It is additional evidence that a court that decided

[00:06:36] Speaker 00:
It's just persuasive evidence, just like any other evidence.

[00:06:39] Speaker 02:
It is not persuasive.

[00:06:40] Speaker 02:
It is additional evidence that... But is it binding in any way?

[00:06:44] Speaker 00:
Is it binding between the parties?

[00:06:47] Speaker 02:
It is not, Your Honor.

[00:06:48] Speaker 02:
It is not binding, but it cannot be contested that this is what the record shows.

[00:06:54] Speaker 02:
It's additional evidence that the court should include in opening this case again,

[00:07:06] Speaker 02:
under 60B5, because what is at stake is security of nearly $10.5 million.

[00:07:18] Speaker 02:
That security is in effect in the custody of the court, the district court here, because that's where it is.

[00:07:31] Speaker 02:
That's where it is at.

[00:07:32] Speaker 02:
It's in the custody of the court, and it depends

[00:07:37] Speaker 02:
on what the court does with this case, on whether we can realize on the security.

[00:07:43] Speaker 02:
And, for the record, the debtors have sold everything, they have parted with their assets, they have monetized them and they're not in business any longer, but the security remains.

[00:07:55] Speaker 02:
And this is the only chance

[00:07:57] Speaker 02:
that the creditor has to be paid.

[00:08:00] Speaker 02:
And we're not talking about a Mickey Mouse sort of judgment.

[00:08:03] Speaker 02:
We're talking about an award, three arbitration awards in London arbitration.

[00:08:07] Speaker 04:
So, counsel, you're asking us to overturn the district court's ruling on the 60B-5 motion.

[00:08:15] Speaker 04:
Yes.

[00:08:15] Speaker 04:
So normally we would review that.

[00:08:17] Speaker 04:
I understand the district court made a certain, you can almost see a legal conclusion in this case.

[00:08:21] Speaker 04:
Yes.

[00:08:21] Speaker 04:
But we can affirm for any reason in the record

[00:08:26] Speaker 04:
Let's assume the district court could reach this 60B5 motion.

[00:08:30] Speaker 04:
Wouldn't we be reviewing that decision for abuse of discretion?

[00:08:34] Speaker 02:
Yes, sir.

[00:08:36] Speaker 02:
It would be.

[00:08:37] Speaker 02:
All right.

[00:08:37] Speaker 04:
So if we're reviewing for abuse of discretion, and you're asking us to overturn that decision based on a case that's been overturned by the courts in Norway, I'm not seeing how we can say the district court abutes its discretion in not relying on a case that doesn't really exist anymore.

[00:08:56] Speaker 04:
Tell me why my thinking is wrong on that.

[00:08:58] Speaker 02:
At the relevant time, that decision was a decision that was admissible here based on equitable estoppel.

[00:09:15] Speaker 02:
We would not have to be here if the court had accepted it.

[00:09:19] Speaker 04:
But the decision has been overturned.

[00:09:21] Speaker 02:
But the decision was overturned about two months ago.

[00:09:25] Speaker 02:
But not on its facts, on an issue of law that is not an issue of law here, even remotely.

[00:09:34] Speaker 02:
It's another issue of law here.

[00:09:36] Speaker 02:
And that is piercing the corporate veil in these circumstances.

[00:09:39] Speaker 02:
Do you want to reserve some time for rebuttal?

[00:09:43] Speaker 02:
If I can have two minutes?

[00:09:45] Speaker 04:
I'll give you two minutes, sure.

[00:09:47] Speaker 04:
All right, thank you, counsel.

[00:09:48] Speaker 04:
Thank you.

[00:09:56] Speaker 03:
Good morning, Your Honors.

[00:09:57] Speaker 03:
May it please the Court, Keith Leturno... One second.

[00:09:59] Speaker 03:
Okay, now you can go ahead.

[00:10:01] Speaker 03:
Good morning, Your Honors.

[00:10:03] Speaker 03:
May it please the Court, Keith Leturno, for the appellee, Burgshaft-Affermax Limited.

[00:10:09] Speaker 03:
Just for the sake of clarity, Your Honors, there is only one appellee in this case, and that is Burgshaft-Affermax Limited.

[00:10:15] Speaker 03:
There are no other appellees.

[00:10:19] Speaker 03:
There are a variety of reasons why this Court should

[00:10:25] Speaker 03:
affirm what the district court did below.

[00:10:28] Speaker 03:
And I can start with the response that the appellants provided in their cross-motion in response to our cross-motion to dismiss.

[00:10:38] Speaker 03:
And specifically, if we look at docket 45.1, page 10 of 20, the appellants admit that collateral estoppel argument as to the Norwegian district court judgment fails.

[00:10:52] Speaker 03:
If you look at the Ninth Circuit decision in Ornalis v. Oakley, a reverse or dismissed judgment cannot serve as the basis for disposition on the ground of race judicata or collateral estoppel.

[00:11:04] Speaker 00:
Do you disagree with your colleague that there is some binding of, I mean, the factual findings are still remained from the lower corridor in Norway?

[00:11:13] Speaker 03:
Your Honor, I would say that if there is any effect of those findings, it is in law the case in that case.

[00:11:22] Speaker 03:
There's no collateral estoppel effect whatsoever.

[00:11:24] Speaker 03:
Bergsheff-Affermax was not a party to those proceedings.

[00:11:28] Speaker 03:
Those findings, in fact, don't have anything to do with Bergsheff-Affermax's involvement in this matter.

[00:11:34] Speaker 00:
So there's no collateral effect on your client, you're saying, from the Norwegian factual case?

[00:11:40] Speaker 03:
That is correct, Your Honor.

[00:11:41] Speaker 00:
And do you agree that, though, that the appellate court only overturned it based off a legal question that's not really relevant here?

[00:11:50] Speaker 03:
No, Your Honor, I don't.

[00:11:52] Speaker 03:
We've submitted a Norwegian Council's opinion on that point.

[00:11:56] Speaker 03:
And according to our Norwegian Council, the analysis is that unless those arguments are preserved, then the totality of the case is before the court when the Norwegian court makes a decision.

[00:12:11] Speaker 03:
And by vacating that judgment, essentially it vacated all of the findings of fact below.

[00:12:17] Speaker 03:
But even if that is not the case,

[00:12:20] Speaker 03:
There's no collateral estoppel effect.

[00:12:22] Speaker 03:
What they're left with essentially is trying to argue that the existence of purported probable cause is sufficient to basically reopen this case.

[00:12:33] Speaker 03:
That decision with respect to Bipalo has already been decided.

[00:12:40] Speaker 03:
Judge Breyer made that decision basically finding that there was no ability to pierce the corporate veil because the

[00:12:51] Speaker 03:
There was, if you look at the Minority Shareholders Agreement and the declaration of Nikolai Lorentzen, he found that there wasn't domination and control sufficient to establish a piercing the corporate veil.

[00:13:07] Speaker 03:
That essentially is a collateral estoppel against the appellants because the appellants were here in this proceeding and they were also there in the Norwegian proceeding.

[00:13:20] Speaker 03:
From the standpoint of collateral estoppel, that's one basis to argue that Judge Breyer did everything correctly.

[00:13:27] Speaker 03:
Secondly, the vacator order doesn't have any prospective application.

[00:13:32] Speaker 03:
And that's essentially what they were relying upon under Rule 60B5.

[00:13:36] Speaker 00:
That one I'm not so sure.

[00:13:37] Speaker 00:
Why couldn't it be applied prospectively?

[00:13:39] Speaker 00:
Because the effect of that vacator order is that the security guarantees no longer an effect.

[00:13:46] Speaker 00:
But if he reverses that, then it does have effect.

[00:13:50] Speaker 03:
Well, Your Honor, that is simply analyzing it from the standpoint of does the court retain jurisdiction in the event a superior court

[00:14:01] Speaker 03:
overturns it and remands it for additional action.

[00:14:04] Speaker 03:
In terms of what Judge Breyer actually did, he simply released that security.

[00:14:11] Speaker 03:
That was a solitary act.

[00:14:13] Speaker 00:
But it didn't end the security, though, because there's no deadline.

[00:14:16] Speaker 00:
There's no end clause to that security.

[00:14:19] Speaker 03:
Well, there is an end clause to the security in the sense that it's only valid until there is a non-appealable judgment.

[00:14:28] Speaker 00:
See, I don't see that in that language.

[00:14:31] Speaker 03:
Well, it's not, I mean, I'm talking about the LOU itself.

[00:14:34] Speaker 00:
Yeah, me too.

[00:14:36] Speaker 03:
The LOU refers to, basically, it's available until such time as there's no further appeals that are available.

[00:14:45] Speaker 00:
And in our view, the... I mean, is that in the language of the LOU?

[00:14:49] Speaker 00:
I don't see it.

[00:14:51] Speaker 03:
Your Honor, I have to take a look at it again, but my recollection is that it basically says that it stands for security until such time as the court

[00:15:01] Speaker 03:
has reached the final finality in terms of a decision.

[00:15:06] Speaker 03:
In our case, we actually have finality.

[00:15:10] Speaker 03:
We have finality through the mandate that the Ninth Circuit issued on May 10th, 2024.

[00:15:15] Speaker 03:
Went up to the Supreme Court by virtue of a petition for writ of certiorari, which the Supreme Court did not grant.

[00:15:24] Speaker 03:
So effectively, that decision became final for all purposes.

[00:15:29] Speaker 01:
Well, and yet we're here.

[00:15:31] Speaker 01:
So maybe not so final.

[00:15:33] Speaker 03:
Well, Your Honor, we're here because of, in our view, a specious attempt at trying to collaterally attack the decision by Judge Breyer.

[00:15:44] Speaker 01:
But it's your view, it's specious, doesn't really change the fact that this court could decide that the Rule 60 motion should have been granted, in which case there'd still be a life proceeding.

[00:15:56] Speaker 03:
I don't disagree with that, Your Honor.

[00:15:58] Speaker 03:
You have that prerogative.

[00:16:00] Speaker 01:
So maybe not final as you've just described it?

[00:16:04] Speaker 03:
Well, Your Honor, I would say that it is final.

[00:16:08] Speaker 03:
If you take a look at Rule 60C2, it provides that a motion does not affect the judgment's finality or suspend its operation.

[00:16:16] Speaker 03:
And so here we have the judgment was final in May of 2024.

[00:16:22] Speaker 03:
when the appellants filed their Rule 60B-5 motion, they did not file any type of motion to stay the enforcement of that action.

[00:16:31] Speaker 03:
So we've had finality since May of 2024 about this case.

[00:16:38] Speaker 03:
And if that's the case, then we have no quasi-INRM jurisdiction.

[00:16:42] Speaker 00:
But I guess my problem is that the letter does not say

[00:16:45] Speaker 00:
at the final non-appealable judgment, this letter, the security will end.

[00:16:50] Speaker 00:
It just says in the event of a final judgment, all this happens.

[00:16:55] Speaker 00:
So if the Rule 60B motion was reversed, then this letter becomes operative again, correct?

[00:17:02] Speaker 03:
I would have to agree with that, Your Honor, but there's... So it would have prospective effect.

[00:17:06] Speaker 00:
That's where I disagree with

[00:17:08] Speaker 00:
Judge Breiter's opinion, it could be applied prospectively.

[00:17:13] Speaker 03:
Well, Your Honor, I think you are engaging in a semantics with respect to jurisdiction versus the vacatur order.

[00:17:24] Speaker 03:
The vacatur order was very distinct.

[00:17:26] Speaker 03:
It simply said, this security is released.

[00:17:30] Speaker 03:
Yes.

[00:17:32] Speaker 03:
There's no question that the court retains jurisdiction to do what it chooses to do.

[00:17:37] Speaker 03:
But Judge Breyer did not have any expectation that he would have to do anything unless the Superior Court overturned him.

[00:17:46] Speaker 03:
That does not create prospective application.

[00:17:51] Speaker 03:
There was nothing that Judge Breyer expected in terms of that.

[00:17:54] Speaker 00:
Well, I'm just looking at 60B5, and the question is whether or not the judgment could be applied prospectively, and the answer is in this case, yes, but the district court said no.

[00:18:05] Speaker 00:
Don't you think that's wrong?

[00:18:06] Speaker 03:
No, I don't, Your Honor.

[00:18:08] Speaker 03:
I don't agree with your assessment, respectfully, because it did not require.

[00:18:15] Speaker 03:
If you look at the standards for Rule 60B5, it didn't compel anybody to perform or restrain it from performing a future act.

[00:18:24] Speaker 03:
So it's not executory, and it didn't involve a court supervision of changing the contract.

[00:18:29] Speaker 00:
Well, to me it is.

[00:18:30] Speaker 00:
If you look at the letter, it's almost like an executory contract, right?

[00:18:33] Speaker 00:
If a future event happens, then it becomes operative again.

[00:18:37] Speaker 00:
And in this case, if the vetcator order gets reversed, then it becomes operative again.

[00:18:41] Speaker 00:
So it's almost like an executory contract.

[00:18:43] Speaker 03:
Well, Your Honor, but it's not the LOU that we're talking about in terms of whether or not the LOU remains operative in our view.

[00:18:51] Speaker 03:
It's whether or not the court's order

[00:18:54] Speaker 03:
has perspective application.

[00:18:56] Speaker 00:
Yes, and then if the order reverses the Vecator order, then the LOU becomes operative again, so it does have perspective effect.

[00:19:05] Speaker 00:
Do you disagree with that analysis?

[00:19:06] Speaker 03:
I do, Your Honor.

[00:19:08] Speaker 03:
Well, respectfully, if you take a look at the standard that Judge Breyer applied, if you look at

[00:19:19] Speaker 03:
Bear with me for a second.

[00:19:20] Speaker 00:
Well, I'm just looking at the text of 60B5, and it just says if it could be applying it prospectively is no longer inequitable.

[00:19:26] Speaker 00:
And if it has a prospective effect, then it could either be equitable or not.

[00:19:30] Speaker 00:
But as a legal matter, it seems like it's still within the realm of Rule 60B5.

[00:19:36] Speaker 03:
Well, again, Your Honor, I think you have to look at it in terms of whether or not the order issued by Judge Breyer had prospective application.

[00:19:46] Speaker 03:
It's not whether or not the LOU remains

[00:19:48] Speaker 03:
has vitality of its own, is whether or not that vacatior order has any, that vacatior order on its own does not mandate any action.

[00:20:01] Speaker 03:
It would require the act of a superior court to overturn what Judge Breyer did in order to change the outcome.

[00:20:09] Speaker 03:
And from my perspective, that does not create prospective application.

[00:20:14] Speaker 03:
And I think I'm just about out of time, Your Honor.

[00:20:16] Speaker 04:
Anything further from my colleagues?

[00:20:18] Speaker 03:
Thank you very much, counsel.

[00:20:28] Speaker 02:
Thank you, your honors.

[00:20:31] Speaker 02:
Very briefly, my two minutes.

[00:20:33] Speaker 02:
I understood my friend's say to the court that the security was released by order of the district court.

[00:20:46] Speaker 02:
It was not.

[00:20:47] Speaker 02:
was never released by order of the district court.

[00:20:49] Speaker 02:
It was not released by its own terms.

[00:20:52] Speaker 02:
There is nothing in the order of the court save for and after the fact dismissal of the case that was entered about 15 days after we filed our notice of appeal.

[00:21:08] Speaker 02:
And the district court had been divested of its ability to make orders.

[00:21:15] Speaker 00:
So is your point then that if the District Court reversed the vacator order, it would have perspective effect at least on the security?

[00:21:24] Speaker 02:
Please ask me again?

[00:21:26] Speaker 02:
Sure.

[00:21:26] Speaker 00:
If the District Court granted the Rule 60B5 motion and reversed the vacator order, would it have perspective effect at least on the security?

[00:21:36] Speaker 02:
Yes.

[00:21:37] Speaker 02:
Yes.

[00:21:38] Speaker 02:
What we're asking for is to have trial on the merits of these issues.

[00:21:42] Speaker 02:
It's not very difficult because

[00:21:44] Speaker 02:
This court decided here on a probable cause basis.

[00:21:49] Speaker 02:
The court in Norway determined the facts on a full hearing with live witnesses and everything else, with counsel on both sides.

[00:21:57] Speaker 02:
So that's why we contend it has some effect.

[00:22:04] Speaker 02:
And we cited a Supreme Court decision as to what happens in a case where there is a reversal

[00:22:13] Speaker 02:
of the district court on the law, but the facts on remand are found to be that the court accepts those of the district court if they were correctly done.

[00:22:29] Speaker 02:
And this is what we contain here.

[00:22:30] Speaker 02:
And the case is Ford Motor Company versus EOC.

[00:22:37] Speaker 02:
I have a site for it.

[00:22:40] Speaker 02:
458 U.S.

[00:22:41] Speaker 02:
219, page 224, footnote 7.

[00:22:51] Speaker 04:
Thank you, counsel.

[00:22:51] Speaker 04:
Appreciate it.

[00:22:52] Speaker 04:
I appreciate the briefing and argument in this case.

[00:22:55] Speaker 04:
This matter is submitted.