Med base in arrest push

THE government of Gibraltar has adapted Gibraltar’s laws to maximize recovery for those banks which direct fleets to be arrested and sold in Gibraltar. Whereas, in the past, the government has recovered a fee of one per cent of the sale proceeds, as indeed have the court’s brokers, these fees have now been reduced.

A fee of one per cent will now apply for the first £15m paid in the case of a single ship or cargo, thereafter dropping to 0.75 per cent. These changes are even more favourable for fleet sales where fees payable will be calculated according to a sliding scale ranging from 0.8 per cent (or the above formula, whichever is the lower) to 0.6 per cent. Therefore, the greater the fleet sale price, the lower the fee payable.

The impetus behind Gibraltar’s development as an arresting port is its growing international recognition as a quick and efficient jurisdiction strategically located at the entrance to the Mediterranean. Claimants are, on average, required to wait little more than a few weeks before they are paid, compared to long delays in nearby ports. In addition, Gibraltar’s experienced admiralty marshal, Katie Dawson, ensures that all arrests run as smoothly as possible.

Another factor which makes Gibraltar attractive as an arrest port is the ability to speed up the sale of an arrested ship by applying for court- approved private sale. Such applications are usually made by the mortgage bank and, if successful, the admiralty marshal will give clean title to the proposed purchaser. The court’s main concern in such applications is for the sale price to be appropriate, and it is customary for the applicant to produce two ‘desktop’ valuations from reputable brokers in support of the application. The main benefits of this procedure are (a) the speed of sale procedure, ensuring reduced expenses of arrest and maximum recovery and (b) the fact that the broker’s commission is not payable, again ensuring maximum recovery.

Even if there is no specified buyer and the usual auction process is followed, the admiralty marshal permits surveyors to be instructed immediately after arrest, rather than 14 days after the arrest when the owners must confirm whether or not they intend to contest the proceedings. This gains time and represents a considerable saving for the banks.

JE Hyde & Co, the marshal’s broker, has also improved its marketing of court sales in Gibraltar by posting information listing court auctions on their website (www.jehyde.co.uk).