By Andrii Mashchenko
MBLS Law Firm
Tel: +38 (066) 265 0645
Ship arrest in Ukraine: Relevant Procedure in Brief for Practical Usage
Ship arrest in Ukraine is applicable with relevant court ruling issued by the commercial or district (rayon) court.
An interested party (a creditor) has a right to file a plea on arrest of the vessel with the appropriate court. The court procedure of such a plea consideration is governed by procedural Law of Ukraine. The legal grounds and some special rules for the arrest of seagoing vessel is specified in the 1952 Arrest Convention participated by Ukraine and applied by the court along with national procedural Law.
According to foregoing legislative acts, cases of seizure of a vessel carried out to secure a maritime claim shall be considered by a court competent on the territory at the location of the seaport of Ukraine in which the vessel is located or to which it is headed, or the port of registration of the vessel.
So, there are two particular conditions for submission of the plea on arrest of the vessel in Ukraine. First, there must be a maritime claim. The comprehensive list of legal grounds which are considered as a Maritime Claims is stipulated in the above-mentioned Brussels International Convention Relating to the Arrest of Sea-Going Ships, 1952. According to Art.1 of which, “Maritime Claim” means a claim arising out of: damage caused by any ship either in collision or otherwise; loss of life or personal injury caused by any ship or occurring in connection with the operation of any ship; salvage; agreement relating to the use or hire of any ship whether by charterparty or otherwise; etc.
It’ s important that in pursuance to item (2) of the Convention “Arrest” means the detention of a ship by judicial process to secure a maritime claim, but does not include the seizure of a ship in execution or satisfaction of a judgment. However, there is a different special procedure prescribed by Ukrainian legislation which allows arrest of the vessel in course of forcible execution of the court decision issued on the merits of the case.
Second, the vessel should be at Ukrainian port or it should be headed to it, or the port of registration of the vessel must be in Ukraine.
In case both debtor and a creditor are legal entities, the plea shall be considered by the commercial court. If either creditor or debtor is a physical body – the application on arrest should be submitted to appropriate district (rayon) court.
An application on arrest of a seagoing vessel shall be considered by the court no later than in two days from the date of its submission. The court ruling on arrest may be appealed, but the appeal does not suspend its execution.
The court in particular cases may require the person who filed the application to secure the claim, to provide compensation for damages of the defendant, which may be caused by the arrest (counter-security).
Counter-security is usually provided by depositing funds in the court’s deposit account in the amount determined by the court. If the plaintiff for good reasons is not able to pay the appropriate amount, the counter-security may also be made by: the provision of a bank guarantee, surety or other financial security for the amount determined by the court and from a person agreed by the court, whose financial capacity the court has no doubts; taking other actions determined by the court to eliminate potential damages and other risks of the defendant related to securing the claim.
The amount of counter-security shall be determined by the court taking into account the circumstances of the case. Counter-security must be commensurate with the court’s enforcement measures and the amount of damages that the defendant may incur in connection with the vessel arrest.
The court decision on arrest of the vessel is an executive document and shall be immediately enforceable from the date of its ruling, regardless of its appeal.
A copy of the court ruling shall be sent by the court for immediate execution to all persons affected by the measures of securing the claim and identified by the court, as well as to the relevant State and other bodies for taking appropriate measures. After handing over a copy of the decision to seize the vessel, the captain of the seaport where the vessel is located, the branch of the Seaports Administration of Ukraine in the seaport where the vessel is located, the relevant bodies of the State Border Guard Service of Ukraine and customs authorities are obliged to take measures to prevent the seized vessel’s leaving the port.
In the case of filing an application on arrest of seagoing vessel, the applicant must file a claim on merits within thirty days from the date of the decision on arrest. The arrest ruling, issued by the court are canceled by the court in the case of failure of the applicant to file a relevant statement of claim within thirty days. It is canceled also in cases of return of the statement of claim or a court refusal to initiate proceedings in the case on merits of the claim.
In case of closing the proceedings of consideration of the claim on merits or leaving the claim without consideration on grounds other than some especially specified in the procedural Laws of Ukraine or in case of a court decision (arbitration court, international commercial arbitration) on full or partial refusal to satisfy the claim, the defendant or another person whose rights or interests protected by law have been violated as a result of arrest of the vessel to secure the claim, has the right to compensation for damages caused by securing the claim, at the expense of the person on whose application such measures of securing the claim were taken.
So, please take the foregoing description of the vessels’ arrest into account while planning such an action in Ukraine. We’d recommend you to contact local colleagues and ask them for assistance. They’ll have regard to all details of the matter and peculiarities of the local environment and legislation which will allow you to avoid sad mistakes, loss of time, and in the worst case, an opportunity.