Arresting ships the Greek way

GREECE not only has a large maritime fleet. It is also home to one of the world’s biggest shipping centres - Piraeus.

Greece is also an attractive jurisdiction when it comes to ship arrest. The procedures, especially for the purpose of securing a claim, are both simple and efficient. The ratification by Greece in 1996 of the International Convention for the Integration of Rules on the Conservative Seizure of Seagoing Vessels created an effective method of satisfying claims of substantial maritime law in accordance with the practice followed by many countries.

The court’s jurisdiction to order interim measures is grounded on the fact that the vessel’s physical presence (berthed or in anchorage) falls within the area of its responsibility. Upon the arrival of the vessel, any claimant, native or foreign, can file an application for arrest (counter-security is not needed) with the One Member Court of First Instance, which in most cases is usually the competent court. One exception is when there is pending litigation for the merits of a claim between the same litigants before another court, i.e., the Multi Member Court or the Court of Appeal, and the latter court’s jurisdiction also applies.

If the claim amounts to less than Drs 2,000,000, the relevant application should be addressed to the Court of the Justice of the Peace of the place where the vessel has called.

It is not necessary for the claim to involve Greece, as long as the court’s jurisdiction to order interim measures is grounded. The court will accept competence even if the claim is subject to a foreign jurisdiction or an arbitration clause, or if the relevant proceedings have already been initiated within Greece or elsewhere.

Articles 682-738 of the Greek Code of Civil Procedure are mainly applicable for the arrest of ships in Greece. Under these provisions, after the filing of the aforesaid application with the One Member Court, which incidentally can be done after office hours and at weekends, the secretary of the court must notify the judge on duty to decide on the request for the issuance of a provisional order prohibiting the vessel’s departure until the hearing of the filed application. The vessel’s representatives must also be notified in order to express their arguments on the application.

After fixing the date of hearing for the application, the judge decides on the request for the issuance of a provisional order prohibiting the vessel’s departure. A small oral hearing takes place and the judge usually accepts the arguments and grants a provisional order after examining the application, together with the supporting documents, and after being convinced that, on a probability basis, the petitioner’s alleged claim needs security due to defendants’ insolvency.

The order should be submitted to the relevant port authorities so that the vessel’s documents are kept up-to-date.

The provisional order can be revoked upon the lodging of a bank guarantee equal to the amount of the claim. The provisional order remains in effect until the fixed hearing date, with the condition that the application will be heard. If the hearing is adjourned, the claimant is obliged to request from the court the maintenance of the provisional order. Otherwise the vessel is liberated without providing any security.

A date for the hearing of the application is usually fixed after twenty days of its filing, depending on the workload of the courts. It is necessary for the filed application to be served on the defendants (service on their representatives at the vessel’s port of call is legally permitted). Otherwise, the hearing cannot take place. The hearing before the court is oral. Witness statements are heard, and written pleadings, together with other supporting documents, are submitted a few days after.

Two significant law requirements of the procedure - the existence of the claim and the defendant’s insolvency, i.e., that there is the danger of petitioner’s claim not being satisfied until the issuance of an enforceable judgement on the merits of the claim - are examined on a probability basis. The claimant has the burden of proof, and the use of all the means of evidence is acceptable.

The law does not provide any remedies against initial interim measures (the provisional order) or against a decision ordering the vessel’s conservative arrest. Only an application for revocation of the order or judgement, subject to the existence of new evidence which could justify such a request, is granted to the defendants.

If the vessel’s conservative arrest is ordered, the defendant can replace it with a bank guarantee for an amount defined by the court. If the issued judgement, which orders the arrest, is served on the defendant, the claimant must file a lawsuit on the merits of the claim within thirty days of the service of judgement. The latter is not required if litigation is already in progress.

In conclusion, a claimant can easily seek security for its claim in Greece, especially when the Greek courts rarely consider an arrest as unlawful and a counter-claim for damages is avoided.