Ship arrest in the Netherlands
THE Netherlands is a convenient jurisdiction for ship arrests. In principle, the arrest of a vessel within Dutch jurisdiction can take place for any claim against the shipowner, regardless of whether the claim has a maritime character or is connected with the ship to be arrested. Arrest of a sistership is therefore possible. But some restrictions are created by the following conventions to which the Netherlands is a signatory:
- the 1926 Convention on Immunity of State-owned Vessels;
- the 1952 Brussels Arrest Convention;
- the 1969 Bilateral Treaty between the Netherlands and the USSR
Under specific circumstances it may be possible to arrest a ship for a claim against a debtor who is not also the shipowner, i.e., for claims against the bareboat charterer of the subject ship, cargo claims and claims for keeping the vessel in operation, such as claims for unpaid bunkers, supplies and the like. Dutch courts are not inclined to "pierce the corporate veil", i.e., to allow a ship arrest for a claim against a third party closely linked to the shipowners.
When applying for an arrest, it is not necessary to submit written documents. The court assumes and trusts that the lawyer requesting permission to arrest has seen and examined the supporting documents. But in case the shipowner applies for release in summary proceedings, the claimant must be able to show its claim documentation. Originals are not needed, nor a power of attorney. Documents in language other than English, French or German may have to be translated. Claim documents can be provided through any means of communication.
The procedure starts with submitting an arrest petition to the president of the court in whose jurisdiction the ship is located or is expected to arrive shortly. It can be filed any time of day, even during out-of-office hours or at the weekend, if it can be made clear to the judge that time is of the essence. Leave for arrest can therefore be obtained within a few hours. The petition should contain the full style of the claimant and debtor, the grounds for the arrest and the amount of claim. The court's decision is placed on the arrest petition, which will then be forwarded to a bailiff, who actually enforces the arrest. In practice, an arrest means that the port authorities are informed and will not allow the ship to order a pilot to enable it to leave the port. When granting the arrest, the court determines a time limit within which the arrestor must file its claim in main proceedings before the proper court or arbitrators, whether in the Netherlands or elsewhere. The claim amount for which the arrest is granted is usually increased by thirty per cent to cover interest and costs.
Dutch law does not provide for the obligation to put up counter-security prior to or during the arrest. But the court does have the discretionary power to demand security for eventual damages caused by the arrest in the event that the arrest transpires to be wrongful. In practice, it rarely happens that the arrestor has to put up security.
The arrest may be lifted when the shipowner has offered acceptable alternative security. Dutch courts accept guarantees issued by first class banks in the Netherlands or by authorised P&I clubs. The wording of the guarantee is usually based on the standard Rotterdam Guarantee Form. Alternatively, the shipowner can ask for a court order in summary proceedings for release from arrest. Such proceedings can take place at very short notice, usually within a few days of the arrest. A decision will be rendered a few days later, or even sooner. The court decides whether the claim has sufficient merit to justify maintaining the arrest of the ship. For the shipowner, it is usually an uphill battle to convince the court that the claim is completely unfounded.
Release from arrest is effected by the bailiff. The port authorities will be informed accordingly, and a pilot made available. In practice, release takes place within the hour.
The arrestor is fully liable for damages resulting from a wrongful arrest. Shipowners are, however, legally obliged to limit their damages, i.e., by way of offering alternative security.
The arrest creates jurisdiction, but international conventions to which the Netherlands are affiliated may provide otherwise. Jurisdiction clauses also play a role. The fact that Dutch courts have no jurisdiction in the main proceedings does not stand in the way of an arrest in the Netherlands.
Disbursements such as court and bailiff fees amount to roughly $500. Lawyers' fees are usually based on an hourly rate. Part of these costs can be reclaimed later from the shipowner, in the main proceedings. Excluded from this estimate are the costs of defence in the event that the shipowner initiates summary proceedings for release of the arrest, and the costs for filing the claim in the main proceedings.