Abstract
In today’s globalised world, maritime transport plays a dominant role in serving and developing international trade. More than 90 % of the globally traded goods are carried by sea, which makes the ship a highly essential asset without which modern global commerce would not have been conceivable. Merchant ships, ranging from container ships and tankers to bulk carriers and passenger vessels, are becoming increasingly sophisticated in order to meet the demands of the fast-paced world economy. Considering that ships are the most efficient and cost-friendly mode of transport, there is no doubt that shipping is essential for the world’s economic and social development.
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Notes
- 1.
M. Stopford, Maritime Economics [London, 2009] 89–90. See also M. Stopford, “How shipping has changed the world and the social impact of shipping”, 7 September 2010, available at www.clarksons.net -> archive -> research (last visited at 08/08/2013.)
- 2.
M. Stopford, Maritime Economics [London, 2009] 93–133.
- 3.
A key indicator of the freight rates is the Baltic Index, which fell to its record low during the crisis. For more information see www.balticexchange.com.
- 4.
This can occur when, for example, one of the creditors ignores the existing restructuring agreement and arrests the vessel, causing significant losses that are not calculated into the restructuring process.
- 5.
For a treatise on all aspects of the arrest of ships, including a survey of the laws on arrest in various jurisdictions, see F. Berlingieri, Berlingieri on Arrest of Ships [London, 2011].
- 6.
The practice of combining the two methods, also known as the court-approved private sale, will be further explored in the comparative chapter.
- 7.
Creditors having maritime claims might want to protect their position and arrest the ship, making a private sale not possible.
- 8.
This can be a guarantee or a letter of undertaking from a P&I club, bank or other insurance company. A breach of such undertaking is a ground to take legal action for breach of contract.
- 9.
However, in order to be able to direct a ship to a certain jurisdiction, cooperation of at least the master of the ship is necessary, which is usually achieved by advance payment of expected crew claims. Waiting until the ship calls at a port of a favorable jurisdiction might cost too much time, unless the ship is trading in that area.
- 10.
Certain aspects of the judicial sales of ships will also be discussed in regards to states such as Gibraltar, Malta, Germany and Singapore.
- 11.
Germany is, in particular, strong on the ship-financing side.
- 12.
Malta stands for a popular ship registry and judicial sale jurisdiction.
- 13.
For more about the implications of non-recognition: see infra Chapter 6.
- 14.
If the ship is not encumbered with other debts and if the borrower is cooperative, the bank usually has the power under its mortgage contract to sell the vessel by private treaty to a buyer of its choice. In some jurisdictions, claimants can request the court, prior to the order for sale of an arrested ship, for its permission to sell the ship privately under its supervision. Although this method is rather uncommon, this type of sale can indeed succeed in having the ship released free of encumbrances. See on this point The APJ Shalin [1991] 2 Lloyd’s Rep. 62.
- 15.
For example, under Belgian law, the government is allowed to sell a ship if the ship that has caused damage to the relevant Belgian authority has been abandoned. See Wet 11 April 1998 houdende de goedkeuring en uitvoering van diverse internationale akten inzake de zeevaart, B.S., 6 oktober 1989, art. 12–18.
- 16.
This is in line with the International Convention for the Unification of Certain Rules relating to the Immunity of State-owned Vessels, signed at Brussels, 10 April 1926, 176 LNTS 1937, p 199 (hereinafter 1926 Immunity Convention) and its additional Protocol, signed at Brussels, 24 May 1934, 176 LNTS 1937, p 215. (hereinafter 1934 Immunity Protocol) This Convention and its Protocol do not allow the seizure, arrest, detention and commencement of any proceedings in rem against state-owned non-commercially operated ships.
- 17.
For a complete overview and comparison of the (conservatory) arrest procedure, see: F. Berlingieri, Berlingieri on Arrest of Ships [London, 2011].
- 18.
A mortgagee usually has a broader right on the ship than a holder of a hypothec: not only can the mortgagee judicially sell the ship, he can also enforce his right by exercising actual control over the ship and receive its earnings and exercise the rights of possession. A hypothec holder can only enforce his rights by means of a judicial sale; see H. Beale, M. Bridge (et al.), The law of security and title-based financing [Oxford, 2012] para 18.37.
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Bleyen, L. (2016). Chapter 1 Introduction. In: Judicial Sales of Ships. Hamburg Studies on Maritime Affairs, vol 36. Springer, Cham. https://doi.org/10.1007/978-3-319-24376-4_1
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