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Arresting a Ship in Ireland, by Dermot Conway, Conway Solicitors


Conways Solicitors
35, South Terrace, Cork
Munster, Ireland
Tel: +353 21 4901000
Fax: +353 21 4905624
Email: dermot@conways.ie
Web: www.conways.ie

Ireland is a party to the 1952 Arrest Convention (the 1952 convention).

As such, while the mechanism within Ireland may be somewhat different, the manner and rights afforded under the convention equally apply in Ireland as they do in other convention states.

This brought a more international mechanism of arresting vessels in Ireland which had a long history dating back to the Court of Admiralty (Ireland) Act 1867.

This particular act allowed for Actions to be recoverable both in rem and in personam.

The act went on to allow for several different type of claims to be entertained under this act.

1. Wages of a seaman.
2. Any claim for building, equipping or repairs of a vessel.
3. Claims for damage done for a vessel.
4. Claims for supplies to a vessel.
5. All claims in respect of salvage.
6. The enforcement of any registered mortgage as against the ship.
7. Any claim in respect of damage pertaining to goods being transported.

In 1989 the Courts (Maritime Conventions) Act, was passed for the purposes of adopting the convention.

Article 1.1 of the convention sets out the basis under which an arrest may be made under the convention. These may be specified by:

(a) Damage caused by any ship either in collision or otherwise,
(b) Loss of life or personal injury caused by any ship
(c) Salvage
(d) Agreement relating to the use or hire of a ship whether by charter or otherwise
(e) Agreements relating to the carriage of goods in any ship whether by charter or otherwise
(f) Loss or damage to goods including baggage carried in any ship
(g) General average
(h) Bottomry
(i) Towage
(j) Pilotage
(k) Goods or materials whether applied to the ship or her operation or maintenance
(l) Construction, repair or equipment of any ship or dock charges and dues
(m) Wages of the Captain or crew
(n) Masters dispersements including dispersements made by shippers, charters or agents on behalf of the ship or her owner
(o) Disputes as to the title or ownership of any ship
(p) Disputes between co-owners of any ship as to the ownership, possession, employment or Earnings of that ship
(q) The mortgage or hypothecation of any vessel

Procedure for Arresting a Vessel in Ireland

In Ireland, proceedings must be brought in rem before the Admiralty Judge of the High Court.

This is preceded by the issuing of a summons in the Central Office in the High Court setting out the claim in its entirety.

The is accompanied then by an Affidavit by either the arresting party or the solicitor for the arresting party setting out the basis why the convention applies and the grounds under which an arrest warrant is sought and on what basis an arrest warrant should be granted.

Within the context of the proceedings, the solicitor for the arresting party must give an undertaking to the Admiralty Marshall to indemnify the Admiralty Marshall for all losses and expenses incurred in arresting a vessel.

It is the requirement in such proceedings that an indemnity is granted by the arresting party to the solicitor acting for the arresting party.

The arresting solicitor will liaise with the Admiralty Marshall in the filing of the papers in the Central Office and the location of an available Judge, usually the Admiralty Judge.

The application will them subsequently be heard ex-parte (without the other side being present). One of the bits of information that is contained within the Affidavit is the port at which it is believed the vessel will be found.

Upon the granting of an arrest warrant, the Admiralty Marshall will then liaise with local Revenue Customs and Excise Officers of the Revenue Commissioners of Ireland to place on board the vessel a watchman who will present the order to the Master, if the Master is on the vessel.

Aftermath of an Arrest

Several things can happen in respect of a vessel that has been arrested.

1. Firstly, the arresting party can enter discussions with the owners of the vessel for the purpose of agreeing an amount to be discharged to include the Admiralty fees.
2. A bond can be put in place in order to secure the release of the vessel until such time as the issue have been resolved.
3. The vessel can remain under arrest until such time as the final case is heard and the merits of the claim of the arresting party have been determined.

Release of a Vessel

The release of a vessel is secured upon application by the arresting party for that release. This may be done in either one of the two circumstances outlined above where either the amount has been agreed between the parties and transfers made or an undertaking has been given by the P & I club wherein an amount has been agreed for the purposes of an undertaking from the P & I club or indeed a bond lodged with the arresting parties solicitors. At that point an application is again made to the Admiralty Judge in the High Court for the purpose of securing the release of the vessel. At this point, the Admiralty Judge will ensure or seek to ensure that the undertaking given at the arresting stage is and will be complied with.

Third parties – In Ireland, it is possible for a third party who also have a claim against the same vessel to enter what is known as a caveat against release.

This means where an agreement has been made, for example, between the owners and the original arresting party to pay the debt that where the third party so wishes they may lodge this caveat against release which means that should the arresting party turn up to seek to release the vessel, that the caveat would prevent to application being successful on the basis that there is another claim there seeking to maintain a hold on the arrest of the vessel.

Prevention of Measures

The owner of any vessel may however take precautionary steps in order to try and protect their interest.

They may do so by entering a caveat against the issuance of an arrest warrant issuing. This would have the effect of the solicitor for the owner effectively entering an undertaking to enter an appearance in such proceedings and to deal with those proceedings and on that basis, the arrest warrant would not issue.

In such a situation, the ship owner must, within 12 days of the service of the proceedings, provide security for the claim, together with costs.

Sister Ship Arrests

Under the convention, it is perfectly possible to arrest a sister ship of the vessel under which the original claim is actually founded. In Ireland, it has been held by the High Court that such a power, however, only exists in relation to sister ships of convention countries.

This was upheld by the Supreme Court.

Sale of a Vessel

If no security is forthcoming or indeed no settlement agreement has been reached whereby the arresting party and the ship owners can progress matters, it is possible for an application to be made to the courts in Ireland to have the vessel sold.

Where a buyer is found through the court appointed ship broker, the Admiralty Marshall becomes the vendor and the vessel is sold “as is”.

Where the vessel is being sold prior to the conclusion of the case, the funds from the sale will be lodged in the court and then subsequently, once the case is determined, the monies will be distributed as per the order of the court.

It should be noted as is the case with the Admiralty expense, where the matter has been concluded by agreement between the parties, where the vessel is sold the Admiralty Marshalls are the first expenses to be discharged and rank highest in terms of priority.

It should also be noted that the buyer is responsible for the ship brokers fees and that there is stamp duty of 10% of the sale price which is liable to the courts via the Admiralty Marshall. This stamp duty comes from the proceeds of the sale of the vessel and is deducted as a matter of course from funds lodged in court.

After the Admiralty expenses and the stamp duty and auctioneer fees, the registered mortgage then takes priority.

Wrongful Arrest

Where a vessel has been wrongfully arrested, the arresting party may be held liable for the full cost of both the proceedings and the damages for the wrongful arrest.

In order to defeat such an application, the arresting party will have to show that security would not have been obtainable to deal with the claim but for arresting the vessel and that the continued arrest of the vessel was justified.

Current Trends

In Ireland, there has been a marked increase in relative terms for the number of warrants for arrest in light of the current economic global downturn.

This has often meant that Admiralty Marshall expense and legal costs have formed major components of the total bill as a result of the jurisdiction within which such applications must be made, the High Court of Ireland, and accordingly, it is the feature of post arrest cases that significant negotiations take place.

It does however have the unique and distinct feature in litigation in Ireland for forcing those people who are on receiving ends of arrest warrants, to focus their minds and deal with the problem expeditiously.