INTERLEX
Mariane Thomsens Gade 1C
DK-8000 Arhus C
Ph: +45 2015 2079
hfr@interlex.dk
www.interlex.dk
1. Please give an overview of ship arrest practice in your country.
Arrest of vessels in Denmark can be made fast and on an informal basis, i.e. without POA, original invoices, and notarized and authenticated documents. The rules are quite flexible and the Danish courts work efficiently. The costs of an arrest in Denmark are low.
Applicable Laws
2. Which International Convention applies to arrest of ships in your country?
Denmark is party to the 1952 Arrest Convention which has been implemented in Chapter 4 of the Danish Merchant Shipping Act. Hence, Danish law on arrest of vessels reflects the provisions of the Arrest Convention to a high extent.
3. Is there any other way to arrest a ship in your jurisdiction?
Yes, an arrest under the Danish Administration of Justice Act prevents the owner from transferring title to the vessel or registering new mortgages when the arrest is registered in the Danish Ship Register but the vessel is not detained in a port or otherwise prevented from trading. Therefore, an arrest of a vessel under the Administration of Justice Act is often of little interest; however, it may be applied when there is no maritime claim or when an arrest is made in cargo, freight, or bunkers etc.
4. Are these alternatives e.g. saisse conservatoire or freezing order?
No, the only alternative is an arrest under the Danish Administration of Justice Act which the courts only grant under certain circumstances.
Claims subject to ship arrest
5. For which types of claims can you arrest a ship?
Maritime claims are the basis for arrests according to the Danish Merchant Shipping Act and are defined in accordance with the Arrest Convention. For a list of the individual maritime claims reference is made to the Arrest Convention art. 1.
6. Can you arrest a ship irrespectively of her flag?
Yes.
7. Can you arrest a ship irrespectively of the debtor?
Contrary to the Arrest Convention and the laws of a few other countries, arrest in Denmark requires that execution of the claim can be levied against the owner of the vessel, meaning that the registered owner of the vessel must be liable for the claim/ must be the debtor of the claim (unless the claim is secured by a maritime lien). Consequently, claims for which charterers of the vessel are liable, do not form basis for arrest of the vessel as the owner of the vessel is not the debtor and no execution of the claim against the owner is possible. However, assets owned by the charterers, e.g. bunkers, may be arrested under the Administration of Justice Act.
8. What is the position as regards sister ships and ships in associated ownership?
Sister ship arrest is possible, i.e. vessels that are owned by the same legal entity. Arrest of vessels in associated ownership is not possible as the vessels are not owned by the same legal entities.
9. What is the position as regards Bareboat and Time-Chartered vessels?
Arrest of a vessel under a bareboat or time charter party is not possible as the registered owner is not liable for the claim/is not the debtor of claim. Only where the owner is found to be the debtor of the claim an arrest is possible.
Arrest Procedure
10. Do your Courts require counter-security in order to arrest a ship?
The court usually orders that the claimant has to provide a cash deposit or a guarantee issued by a bank or insurance company as security for claims for compensation due to unlawful arrest and detention of the vessel. Under the Merchant Shipping Act, the security equals 5 days’ loss of hire for the vessel, whereas the security is individually fixed by the court when an arrest is made under the Administration of Justice Act. The arrest will not have any legal effect until adequate security is provided.
11. Is there any difference in respect to arresting a ship for a maritime claim and a maritime lien?
Claims secured by maritime liens have better priority than other claims, e.g. debt secured by mortgage, and include
- wages and other employment payments due to the master and crew,
- harbour, canal, and other waterway dues and pilotage dues,
- claims for compensation for personal injury in connection with the operation of the vessel,
- claims for compensation for damage to property provided that the claim is not based on contract, i.e. a cargo claim is not secured by a maritime lien in the vessel,
- claims for salvage, wreck removal, and contributions to general average.
A vessel can be arrested on the basis of a claim secured by a maritime lien whether or not the registered owner of the vessel is liable for the claim.
The maritime lien is subject to a 1-year time limitation upon which the lien as security is gone – the claim itself is often subject to longer statutory limitations. An arrest for a claim secured by maritime lien prevents the maritime lien from becoming time barred.
12. Does your country recognise maritime liens? Under which International Convention, if any?
Yes, the rules on maritime liens in the Merchant Shipping Act are based on the 1967 Brussels Convention.
13. What lapse of time is required in order to arrest a ship since the moment the file arrives to your law firm?
We are able to prepare the arrest application within 1-2 hours provided that no further information or documents are necessary. The arrest will often be accomplished the same afternoon, if the court receives the arrest application in the morning.
14. Do you need to provide a POA, or any other documents of the claim to the Court?
Copies of the invoices or other material documents are sufficient to substantiate the claim in court. POA is not needed.
15. What original documents are required, what documents can be filed electronically, what documents require notarisation and/or apostille, and when are they needed?
None. If the debtor disputes the authenticity of the documents it may be required to provide the original documents, but this happens rarely in the Danish courts.
16. Will your Courts accept jurisdiction over the substantive claim once a vessel has been arrested?
Yes, unless the dispute is subject to arbitration or foreign jurisdiction/venue; this might be the situation if an arbitration or jurisdiction clause is agreed upon in a contract between the parties. If arbitration or a foreign jurisdiction has been agreed, the court will postpone the confirmatory court proceedings until a decision on the merits of the claim is made by the foreign court or Arbitration Tribunal.
Miscellaneous
17. Which period of time will be granted by the Courts in order for the claimants to take legal action on the merits?
Confirmatory court proceedings to be commenced within a week.
18. Do the Courts of your country acknowledge wrongful arrest?
Yes. The liability of the claimant for wrongful arrest is a strict liability according to the Administration of Justice Act section 639.
19. Do the Courts of your country acknowledge the piercing and lifting of the corporate veil?
Piercing the corporate veil is very difficult under Danish law. In general, a company with limited liability (A/S or ApS in Denmark) is the only liable party for its actions.
20. Is it possible to have a ship sold pendente lite; if so how long does it take?
No. The vessel may only be sold by a forced sale/auction at the bailiff’s court. The forced sale procedure can be commenced when the court has rendered its decision in the confirmatory proceedings, i.e. approved the claimant’s claim. The forced sale procedure often takes up to ½ year, even longer for vessels under foreign ownership due to service of court documents abroad.
