Ship Arrest in the Netherlands
Written by:
Hein Kernkamp
Legal Framework
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 serveral 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.
The petition may be filed prior to the vessel entering the port. The petition must contain the following information:
- a brief description opf 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.
Supporting evidence
An important requirement is that the claim is supported by documents. No full proof of the claim is needed, but a well presented case with available supporting evidence increases the probability of obtaining and maintaining an ex parte arrest award.
Ex parte petition
A ship arrest petition is an ex parte request to the Court. Usually no oral hearing takes place and 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 conditions for 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. The arrest order is then served upon the Master of the vessel by the Bailiff, thus effecting the arrest. 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.
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 Arrect 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 another form of guarantee that fully meets the criteria under Dutch law.
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.
Further 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 us either by phone or by e-mail.
More information?
Hein Kernkamp will gladly help you further.
