As we know, more than 80% of global trade is moved by sea.. In the course of regular trade, ships can face disputes related to collisions, salvage, towing, pollution, cargo claims, passengers, charters, and insurance..
A dispute may usually be followed by a maritime claim covering one or more of the following :
- damage caused by any ship either in collision or otherwise;
- loss of life or personal injury caused by any ship or occurring in connection with the operation of any ship;
- salvage;
- agreement relating to the use or hire of any ship whether by charter party or otherwise;
- agreement relating to the carriage of goods in any ship whether by charter party or otherwise;
- loss of or damage to goods including baggage carried in any ship;
- general average;
- bottomry;
- towage;
- pilotage;
- goods or materials wherever supplied to a ship for its operation or maintenance;
- construction, repair, or equipment of any ship or dock charges and dues;
- wages of Masters, Officers, or crew;
- Master’s disbursements, including disbursements made by shippers, charterers, or agents on behalf of a ship or its owner;
- disputes as to the title to or ownership of any ship;
- disputes between co-owners of any ship as to the ownership, possession, employment, or earnings of that ship;
- the mortgage or hypothecation of any ship
A ship arrest is a special legal measure that allows a claimant to treat the ship itself as the defendant (‘in rem’ claim) in order to secure their claim..
The International Convention Relating to the Arrest of Seagoing Ships, Brussels, 10 May 1952 (the Arrest Convention 1952) is the dominant convention on the arrest of ships..
The convention states that a ship flying the flag of any state that is a signatory to the convention may be arrested in the jurisdiction of any of the other contracting states in respect of any maritime claim..
The convention defines “Arrest” as the detention of a ship by a judicial process to secure a maritime claim but does not include the seizure of a ship in execution or satisfaction of a judgment..
This means that while “arresting” a ship is a legal process in which a court holds or detains the ship to ensure a maritime claim is addressed (like a debt or dispute related to shipping), it is different from “seizing” a ship to sell or use its value to pay off a court judgment..
There may be different ways in which a ship may be arrested.. For example, in South Africa, the ways in which one may arrest a ship in South Africa are as follows:
Arrest in rem:
A maritime claim may be enforced by an action ‘in rem’ if the claimant has a maritime lien as recognised by the Act over the property to be arrested..
These are for seamen’s and master’s wages; salvage; damage received by or done by a ship; and bottomry and respondentia bonds..
Alternatively, an arrest may be made where the owner (or demise charterer) of the property to be arrested would be liable to the claimant in an action ‘in personam’ where the owner would be personally liable in a direct action against them..
Arrest in personam:
An arrest ‘in personam’ may occur when the Defendant is a:
- person resident or carrying on business at any place in South Africa;
- person whose property within the Court’s area of Jurisdiction has been attached by the claimant to found or confirm jurisdiction;
- person who has consented or submitted to the jurisdiction of the Court;
- if the court has jurisdiction over him or her in terms of Chapter lV of the Insurance Act, No. 27 of 1943, which relates to business underwritten by underwriters at Lloyds; or
- company, if the company has a registered office in South Africa..
The property arrested may be any property belonging to the defendant and may include bunkers, rights to freight or hire due (which are situated where the defendant’s debtor is located), rights to monies in a bank account, and rights in a pending action against a fund..
Security arrest:
The third category of arrests is that of security arrests which is utilised in cases where a claim is or will be arbitrated in a foreign jurisdiction or in South Africa irrespective of the law that governs the matter..
Security arrests are thus sought by a court order which enables the claimant to arrest the vessel for the purpose of providing security although South African law may not govern the merits of the case..
So how does a ship arrest actually happen..??
A ship arrest is commonly exercised to enforce a maritime claim and an important part of a maritime lawyer’s arsenal. Shipowners fear an arrest of their vessels and often will take steps to provide security to obtain the release of their vessel, Sometimes the arrest leads to an eventual settlement of the claim.
Below is a video taken from a ship arrest that was recently undertaken by Philip Teoh recently which illustrates the process of a ship arrest clearly in Malaysia..
It was a challenging arrest because the vessel that was being arrested refused to lay down the ladder for the arresting team and the Malaysian Maritime Enforcement Agency was called to assist..