Requirements and steps to apply for the arrest of a vessel

The arrest of a vessel is a unique preservation form enjoyed by Maritime Courts. In consideration of the high value of a vessel per se, the arrest of a vessel may also result in a substantial amount of loss of earnings. For the purpose of protecting vessel operators, the law sets up very strict requirements for the arrest of a vessel.

1.      The application of arrest of vessel could only be filed in connection with maritime claims set up by law.

Those maritime claims include:

(1)     Any loss or damage of property caused by the operation of vessel;

(2)     Personal death and injury that has direct connection with the operation of vessel;

(3)     Maritime salvage;

(4)     Damage or threat of damage caused by vessel to the environment, coast, or interested parties; measures taken to prevent, mitigate or eliminate such damage; compensation paid for such damage; expenses of the rational measures actually taken or prepared to be taken for the recovery of the environment; losses that a third party has suffered or may likely suffer from such damage; and the damages, expenses or losses of similar nature as mentioned in this paragraph;

(5)     Expenses relating to the refloating, clearance, retrieval or destroy of the sunken vessel, shipwreck, vessel aground, abandoned vessel or making them harmless, include the expenses relating to the refloating, clearance, retrieval or destroy of the things remained aboard or making them harmless and the expenses relating to the maintenance of the abandoned vessel and the crew;

(6)     Agreements concerning the use of or charter of vessel;

(7)     Agreements concerning the transportation of cargo or passengers;

(8)     Any loss or damage of or relative to the cargo (including luggage);

(9)     General average;

(10) Tow of vessel;

(11) Pilotage;

(12) Provision of materials or services for the operation, management, maintenance or repair of vessel;

(13) Building, rebuilding, repair, repackage or equipment of vessel;

(14) Fees, charges and expenses of the harbor, canal, wharf, bay or other water courses;

(15) Salary and other payments of the crew, including repatriation expenses paid to the crew and social security funds;

(16) Expenses paid for the vessel or ownership of the vessel;

(17) Insurance premium of vessel (including membership fees of mutual insurance companies) that the owner or bareboat charterer should pay or other persons have paid instead;

(18) Commission, brokerage expenses or agency fees relevant to the vessel that the owner or bareboat charterer should pay or other persons have paid instead;

(19) Disputes relating to the ownership or possession of the vessel;

(20) Disputes between the co-owners concerning the use or proceeds relating to the vessel;

(21) Right of mortgage or rights of similar nature on the vessel;

(22) Disputes arising out of a contract for the sale of vessel;

2.      What kind of vessel is permitted to be arrested?

The maritime applicant is entitled to apply for arrest of two kinds of vessel, the vessel concerned and a sister vessel thereof. The vessel concerned could be applied for arrest if one of the following circumstances occurs:

(1)     The owner of the vessel is held liable for the maritime claim and is the owner of the vessel when it is arrested;

(2)     The bareboat charterer is held liable for the vessel and is the bareboat charterer or owner of the vessel when it is arrested;

(3)     Maritime claims with the right of mortgage or rights of similar nature concerning the vessel;

(4)     Maritime claims relating to the ownership or possession of the vessel;

(5)     Maritime claims with the right of priority concerning the vessel;

An arrestable sister vessel is deemed to be the other vessels of the owner, bareboat charterer, time charterer or voyage charterer who are held liable for the maritime claims at the time of arrest, whilst the claims relating to the ownership or possession of the vessels could only apply for arrest of vessel concerned.

The vessels in military use or public service shall not be arrested.

3.      How to file an application?

(1)     The application for the arrest of a vessel shall be filed towards the maritime court of the place where the vessel is situated.

(2)     The application shall be filed in wiring and shall clearly set forth the claims, reasons and the amount requested for guarantee. ID of the applicant, POA of agent and evidential materials shall be filed alongside the application.

(3)     Provision of counter-guarantee at request of the maritime court. The fact that the applicant, when applying for the arrest of vessel, cannot find out in due time the name or title of the person against whom the application is filed shall not affect the filing of an application.

4.      Time limit for arrest of vessel

The time limit for arrest of vessel in the preservation of maritime claims shall be 30 days. It is only when the maritime applicant files a suit or applies for arbitration within 30 days and if the applicant applies for the arrest of vessel in the process of judicial proceedings or arbitration procedure that the time limit for arrest of vessel shall be permitted to exceed 30 days.

If the applicant has not provided guarantee at the expiration of 30-day time limit, the maritime applicant may request the admiralty court enforcing the arrest to sell the vessel by auction, the request of which shall be raised after filing a suit or applying for arbitration.