The Kingdom of The Netherlands is party to several international conventions within the maritime field, including the International Convention Relating to the Arrest of Sea-Going Ships (Brussels, May 10, 1952).
It is possible to arrest a vessel in the Dutch jurisdiction in order to obtain security only. The petitioner is not obliged to commence substantive proceedings in the Netherlands regarding the claim itself. It is common practice that arrest of ships are made in the Netherlands in order to obtain security, while the main arbitration or court proceedings are being conducted elsewhere. The Dutch court will fix a term for the initiation of proceedings on the merits of the case, in order to maintain validity of the arrest. The term will be fixed at the discretion of the court and varies form eight days from the arrest to several weeks.
Arrest Procedure
Arresting a ship in the Dutch juridiction is a relatively straight forward matter, and can be arranged quickly and at a reasonable cost.
The petitioner must be represented by a Dutch lawyer admitted to the bar. The arrest petition should be submitted at the District Court of the port where the ship has called or is expected to arrive, like Rotterdam, Amsterdam, IJmuiden or Moerdijk. Ships heading for Antwerp in Belgium can be arrested on the roads of Flushings (Vlissingen).
The petition may be filed prior to the vessel entering the port. The petition must contain the following information:
- a brief description of the claim and the legal basis thereof;
- the name and domicile of the Applicant and the Respondent;
- the name of the vessel;
- the place of registry of the vessel;
- an estimate of the amount of the claim, and;
- a description why the claim is enforceable against the vessel.
Documents supporting the allegations should be filed with the petition. A well presented case with available supporting evidence increases the probability of obtaining and maintaining an arrest award.
A ship arrest petition is an ex parte request to the Court. Usually no oral hearing takes place, hence the defendant will not be heard. The Ship Owner or any other interested party may, however, apply for a hearing to be held on short notice, if he wishes to dispute that the legal requirements obtaining arrest are satisfied. Such a hearing will normally be scheduled within a few days.
If the District Court grants the petition for arrest, the court will issue an arrest order. The decision is usually issued within twenty-four hours after receipt of the petition. In urgent cases we can even contact the Court during the weekend and ask and obtain leave for arrest during the weekend.
To effect the arrest the arrest order is served upon the Master of the vessel by the Bailiff. The Port Authority and the Pilots Association are also informed, in order to prevent a vessel from fleeing from the arrest.
It is not necessary for the petitioner to issue any formal Power of Attorney when instructing legal counsel in The Netherlands in connection with an arrest application. In some jurisdictions such Power of Attorney must be submitted to the court, duly notarized and legalized. This may be a time critical factor when preparing for an arrest.
There are no substantial fees payable to the court in connection with an arrest. The petitioner may, at the discretion of the court, be required to post security for wrongful arrest. This is not standing practice, but can sometimes play a role, for example upon request of Owners at a hearing following the arrest.
Claims in respect of which a ship may be arrested
Ships flying the flag of one of the contracting states may be arrested for maritime claims as listed in Article 1 (1) of the 1952 Arrest Convention:
- damage caused by any ship either in collision or otherwise;
- loss of life or personal injury caused by any ship or occurring in connexion with the operation of any ship;
- salvage;
- agreement relating to the use or hire of any ship whether by charterparty or otherwise;
- agreement relating to the carriage of goods in any ship whether by charterparty 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 her 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 agent on behalf of a ship or her 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.
If the claim falls outside the scope of the 1952 Arrest Convention, and is thus not regarded as maritime claim, it is still possible to arrest other objects than the vessel, e.g. the bunkers. From a practical viewpoint, an arrest of the vessel’s bunkers may be as effective as arresting the vessel itself, and may often lead to security being put up. The bunkers must, however, be owned by the debtor, and it is important to keep in mind that under a time charterparty, the bunkers are normally owned by the Charterers, not the Owners.
The arrest of ships flying flags of countries who are not a party to the 1952 Arrests Convention is generally admissible for both maritime claims and non-maritime claims.
Security
If an arrest is granted, the debtor may arrange for the release of the vessel by putting up security as quickly as possible. Security is often put up on the Rotterdam Guarantee Form 2008. This form is traditionally used to put up security in shipping in the Netherlands.
Most P&I Clubs will be prepared to issue a Letter of Undertaking (Club Letter), and this is very often commercially acceptable as a guarantee in order to lift an arrest. It should, however, be noted that some creditors uphold that a Club Letter does not provide sufficient security as required by Article 705 of the Dutch Code of Civil Procedure. In most cases the arrestor will accept a Club Letter from a reputable P&I Club, and the vessel will then be released according to such mutual agreement. However, if the claimant sticks firmly to the formal legal requirement, the debtor may be forced to put up a bank guarantee from a Dutch Bank of good standing.
Liability for wrongful arrest
Arrests are made at the risk of the arresting party. If proceedings on the merits of the case are lost, the arresting party is liable for damages sustained by the Ship Owner as a result of the wrongful arrest. The Ship Owner has a duty to mitigate its damages, such as by way of offering alternative security, thus avoiding unnecessary detention. In some cases Ship Owners are not in a position to offer alternative security. In such cases the stakes are high.
Information
If you would like to investigate the possibility of conservatory arrest of ships and other assets in The Netherlands in further detail or you are the party affected by an arrest, please contact our office 0031 10 209 2777 or by e-mail info@lvh-advocaten.nl.
