Arrest of ships

The jurisdiction of the Netherlands has been labelled an arrest haven for its pragmatic system of arresting seagoing vessels. Local courts and members of the maritime bar are well aware of the tremendous consequences of an arrest. The unspoken rule "vessels are meant to sail" is leading when the court is to weigh the position of parties involved.

The proceedings are surprisingly straightforward: the advocate drafts the petition to the court – this may be done in hours or less, depending on the availability of information. The court may decide within a day or even immediately on the petition. For unusually pressing matters outside office hours, a list with the home addresses of Judges on duty has been circulated amongst the members of the maritime bar.

Attached to the petition are some skeleton exhibits, evidencing parties, the claim at stake and the basis of the claim. There is no need to pay a guarantee into court. The court will put up a time bar for the arrestor to instigate proceedings on the merits of the case which can be in any jurisdiction, be it arbitration or court proceedings.

After the arrestor has obtained permission from the court, the bailiff will board the vessel to serve the court order. The port agency is informed on the arrest and this is barring tugs, boatmen and pilots from servicing the vessel automatically.

The Netherlands are party to the Brussels arrest convention 1952, so the arrest cannot be made for just any claim. The pragmatic, straightforward and ex parte-nature of the procedure seems adverse to owners, but it is not. It is counterbalanced by the strong and fast rule that should the claim be successfully challenged in the applicable arbitrational or court proceedings, the arrest will count as a tort, making the arrestor liable for damages incurred by the arrest. A party will therefore have to think twice before effecting an arrest.

Owners confronted with an arrest have three options to set the vessel free.

For one they may simply settle the claim for which the arrest permission has been granted. Alternatively, they can put up a bank guarantee or club letter, replacing the arrest. In Rotterdam we are gratefully making use of the Rotterdam guarantee form (download pdf). The arrestor can draw under the guarantee when he wins the case on the merits of the case before the competent court or arbitrational tribunal, and as soon as this decision is no longer subject to appeal. As such the arrestor seems better off with the vessel as underlying security, since he can have the vessel auctioned off as soon as he has an enforceable decision, whether still subject to appeal or not. On the other hand, owners may be bankrupted and ships may perish before the arrestor has the claim awarded, so the arrestor will be better off with a Rotterdam Guarantee form. It is give and take, and again resulting in a well-balanced system. The form has proven its worth and it does away for the need to negotiate the formal wording of the guarantee.

The third option open to owners is to try their luck in court; they will then have to instigate summary proceedings against the arrestor. The claim will be to have the arrest lifted or the guarantee returned. Our firm has conducted these proceedings successfully on behalf of owners within the day the arrest was effected.

The court will order the arrestor to lift the arrest, if the arrestee has convinced the Court that the claim is lacking substance or that certain formalities have not been met. The presiding judge may give the order to have the arrest lifted speaking from the bench in very pressing matters. The release from the arrest is informal: usually some telephone calls will have to be made, maybe some confirmations by e-mail. It can be done within minutes.

For claims against time charterers a creditor may consider to arrest bunkers. There are also arrests to be made when information is needed, for instance on bunker consumption or cargo handling: electronic data (engine room logs) may be "arrested" and a surveyor may board the vessel under a court order to read out, or at least to copy and preserve electronic data.

Contact:

Harmen Hoek

+31 (0)10 205 21 80