1. Please give an overview of ship arrest practice in your country.
The International Convention for the Unification of Certain Rules relating to the Arrest of Seagoing Ships, Brussels, 1952 (1952 Arrest Convention) was ratified by the Seimas of Lithuania in March of 2002 and is successfully applied by the Lithuanian Courts.
Depending on the amount of the security required a request to arrest a ship should be submitted either to the City Court of Klaipeda or to the County Court of Klaipeda. The city court deals with the claims in the amount up to 100 000 Litas only. When the amount of claim is higher, then an arrest application should be made to the County Court of Klaipeda. There is no specialized maritime court or judges in Lithuania. Majority of ship arrest cases are dealt by the County Court and less by the City Court of Klaipeda. The County court is also the court of appellation for the decisions of the City Court. The judges of the County court of Klaipeda are well experienced with the ship arrest practices and an Order for Ship’s arrest can be obtained without serious problems.
For smaller cases (in the amount up to 100 000 Litas) a ship arrest application should be presented to the City court of Klaipeda. That court has about 30 judges and they are less experienced with the ship arrest practices. However generally the ship’s arrest order can be obtained quickly from both Courts.
There is a stamp duty payable on the civil claims that are to be pursued in the Lithuanian Courts. 50% of the stamp duty to be paid before an arrest application is presented to the Court. The amount of stamp duty payable is calculated on basis of the claim amount. No stamp duty for ship arrest application to be paid when a ship arrest is needed as security of maritime claim that is to be pursued in Arbitration or in foreign court.
2. Which International Convention applies to arrest of ships in your country?
The International Convention for the Unification of Certain Rules relating to the Arrest of Seagoing Ships, Brussels, 1952 (1952 Arrest Convention) and The International Convention on Maritime Liens and Mortgages (Geneva 1993) are ratified by Lithuanian Seimas and applicable.
3. Is there any other way to arrest a ship in your jurisdiction?
A Ship that is registered and flying the State flags of the State that is a Member to the 1952 Arrest Convention can be arrested only in respect of the claims enumerated in the Article 1 of the Convention. Other ships can be arrested in respect of maritime and non-maritime claims.
In accordance with the Article 12(1) on the Law of Klaipeda State Sea Port the Harbour Master may refuse clearance of the vessel in case that there are unpaid port charges or fines in respect of that vessel or the vessel has damaged the port’s infrastructure, until such charges, fines and/or claims have been paid or secured..
4. Are these alternatives e.g. saisse conservatoire or freezing order?
5. For which types of claims can you arrest a ship?
The types of claims in for which a ship can be arrested are enumerated in the Arrest Convention Para a) to q) of Article 1(1).
6. Can you arrest a ship irrespectively of the flag?
In accordance with the Article 8(1) of the 1952 Arrest Convention a ship flying the State flag of the Member State of the Convention can be arrested only for the claims enumerated in the Article 1 of the Convention. A Ship that does not fly the State flag of the State that is Member to the 1952 Arrest Convention can be arrested for any claims under provisions of Code of Civil Proceedings.
7. Can you arrest a ship irrespectively of the debtor?
Until now, the practice is such that we can arrest a ship irrespectively of the debtor. Several appeals filed on behalf of the arrested ship owners trying to challenge such arrest have been unsuccessful so far.
8. What is the position as regards sister ships and ships in associated ownership?
Under provision of the Arrest Convention a claimant may arrest the particular ship in respect of which the debt arose or any other ship owned by the debtor. Therefore arrest of a sister ship is permitted, except in respect of the claims mentioned in the Article 1(1), o-q.
Ships in the associated ownership can be arrested if it can be proved that the same persons beneficially own them. Demonstration on the company’s website a list of vessels under the name of company’s fleet might be sufficient to prove that.
9. What is the position as regards Bareboat and Time-Chartered vessels?
Part 4 of the Article 3 of the 1952 Ship Arrest Convention shall apply in respect of arrest of a Bareboat chartered vessels. Such vessel can be arrested in respect of maritime claims created by the Bareboat Charterer, or any other vessel that is owned by the Bareboat Charterer can be arrested.
In case of Time-chartered vessel, the position is uncertain. We believe that the first instance court would grant an arrest of a Time-Chartered vessel, but such arrest might be lifted later if appealed against it.
10. Do your Courts require counter-security in order to arrest a ship?
No counter security is required before arresting the vessel. The court on request of the ship’s interest may order the arrestor to establish counter-security within certain period of time. If this is not complied with, the Court makes an order to lift the arrest then. Against such order can be appealed within seven days. It can take up to three months then until the Court of Appellation makes decision. All that time the ship will remain arrested. Therefore, very rarely counter-security is requested and established.
11. Is there any difference in respect to arresting a ship for a maritime claim and a maritime lien?
In case of maritime claim it is allowed to arrest either the ship in respect of which the maritime claim arose or any other sister ship. The subject to the maritime lien is the offending ship only. It can be enforced against the ship regardless of who was in control or possession of the vessel when the events which gave rise to maritime lien occurred. Maritime lien is not enforceable against a sister ship. Otherwise, there is no difference.
12. Does your country recognise maritime liens? Under which International Convention, if any?
Lithuania does recognise maritime liens as per the International Convention on Maritime Liens and Mortgages, 1993.
13. What lapse of time is required in order to arrest a ship since the moment the file arrives to your law firm?
It depends on the number of the documents that need to be attached to the arrest application and in what language they are. If many invoices, long Charter-parties, correspondences or other claim documents need to be attached to the application they have to be translated into Lithuanian language and that takes time. It is possible however to attach such documents without their translation into Lithuanian language pleading to the Court an urgency and providing an undertaking to deliver their translation within few days. Therefore an arrest application can be submitted to the Court on the same day when the instruction to apply ship’s arrest is received by our firm. The Courts rarely issues arrest order on the same day on which the arrest application has been registered with the Court. Normally the arrest order is available on the following day. It can take up to three days in some cases. If a ship arrest application is registered with the Court on Friday, the arrest order normally is ready on the following Monday afternoon or on Tuesday. The courts are closed during Saturdays, Sundays and National Holidays. No ship arrest is possible then.
14. Do you need to provide a POA, or any other documents of the claim to the Court?
We require a written legal service agreement that needs to be signed by a Client. Faxed or emailed copy of the legal service agreement is sufficient to present a ship arrest application to the court on behalf of a Client. An original copy of the agreement must be available if requested by the judge. No notarization or legalization is practically required. Basic claim documentation and correspondence evidencing that the debtor failed to pay the claim or provide security in respect of it to be attached to a ship arrest application.
15. What original documents are required, what documents can be filed electronically, what documents require notarisation and/or apostille, and when are they needed?
All documents can be filed electronically for the purpose of ship arrest. Only original legal service agreement should be available if so requested by the judge. A ship arrest application normally should be supported by:
– a copy of legal service agreement between the lawyer and the Client;
– a copy of an extract from the Companies’ Register of the Client’s State, confirming that the Client exists as a legal entity. It must also show the names of the persons who are entitled to bind legally the Client;
– Basic Claim documents that will depend on the type of the claim;
– Copy of an agreement containing the arbitration clause in case that the arrest is for obtaining of security in respect of maritime claim that is to be pursued in an Arbitration or an agreement to litigate in a foreign State Court, or an evidence that such proceedings have been commenced.
16. Will your Courts accept jurisdiction over the substantive claim once a vessel has been arrested?
Yes, the Lithuanian courts will accept jurisdiction over the substantive claim once a vessel has been arrested, subject that there is no agreement between the relevant Parties to litigate in other jurisdiction or in the arbitration.
17. Which period of time will be granted by the Courts in order for the claimants to take legal action on the merits?
According to the Code of Civil Proceedings of Lithuania the Court may allow not more than 14 days from the day of ship arrest to commence legal action on the merits of the claim with the competent court. Normally the courts allow 14 days.
18. Do the Courts of your country acknowledge wrongful arrest?
The court can order the Plaintiff to pay damage for wrongful ship’s arrest in case that:
a) the claim in respect of which the vessel was arrested is lost;
b) In case of misuse of the procedural rights to seek the ship arrest, for example arresting the vessel despite the fact that an adequate security has been provided, submitting to the court knowingly wrong information when seeking a ship arrest etc.
The ship’s interest would have to prove what loss has suffered due to arrest of the ship. This can be not an easy task.
19. Do the Courts of your country acknowledge the piercing and lifting of the corporate veil?
There is no relevant practice yet.
20. Is it possible to have a ship sold pendente lite; if so how long does it take?
Not yet, we try to change the position.