The Warrant of Arrest of Sea Vessels, a precautionary act to implement the Arrest Conventions into Maltese Courts jurisdiction

When it comes to the application of the Arrest Conventions, it is important to take note that Malta is not a signatory to any of them.  However, that does not mean that the arrest of vessels is not regulated, in fact, the legal framework is found in Articles 742B-742D of the Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta (hereinafter referred to as the “COCP”).

This therefore begs the question, if none of these Conventions are part of the Maltese legislation, what are the grounds on which a vessel can be arrested? The abovementioned articles contain all maritime claims recognized under the Conventions. This means that a creditor may seek to arrest a ship by an action in rem or in personam.  A precautionary warrant of arrest may be issued against any sea-going vessel having a length exceeding 10 meters in order to secure a claim that has not yet been decided and the executive warrant of arrest is to be issued to enforce a judgment already obtained and favourable to creditors.

The COCP, through the warrant of arrest, secures the rights of the creditors in respect of a debt or claim whether in personam or in rem, since such debt or claim can be frustrated by the departure of the said vessel. It is important to mention that no other warrant can be issued against a vessel unless it is a warrant of arrest for the purpose of the physical detention of the ship within the jurisdictional limits of the Maltese courts in security of a maritime claim.

When it comes to the effect of the warrant of arrest, it is nothing more than for the seizure or impediment of departure of the vessel from the debtor and also to attach the same in the hands of the authority where the vessel is, and also to order that the said authority shall not release such vessel or allow the debtor to divest himself in any way from the same in whole or in part or to give or surrender to any person any rights on the same. [1] In the case of Malta, Transport Malta is deemed by law to be the authority with the power and control to have a ship arrested as soon as it enters Maltese territorial waters.[2]

It is in this respect that one must mention two cases by which the vessel has been found not to be in Maltese territorial waters and thus became the subject to wrongful arrest of a ship. In one of these cases the Maltese Court, on May 20^th 2015, issued a warrant of arrest against the M/V “Blue Rose”. It is important to mention that in Malta the precautionary warrant of arrest is sued out by an application to be filed in the prescribed form, which includes the Court Decree giving necessary orders, under pain of nullity clearly stating the particulars enabling the identification of the ship, name of the Authority under whose power or control the ship may be and the place where the ship is to be found, which in this case should be in Maltese territorial waters.

In the case of the M/V “Blue Rose” the arresting party filed a sworn application which stated that the vessel was within Maltese territorial waters.  The sworn application went on to state that the claim could be prejudiced with the departure of the vessel. The warrant was served on Transport Malta who, knowing full-well that Maltese Courts do not have jurisdiction and cannot grant warrants of arrest outside their 12 nautical miles of territorial sea, immediately brought this to the Judge’s attention by means of a note filed before the Court.  The judge revoked “contrario imperio” the warrant of arrest declaring the warrant of arrest null and the arrest of the vessel illegal.

Something similar happened was said to have occurred in the case of the MV “Madara” in 2014.  Often referred to as the vessel that absconded from an arrest, it is argued that the difference of this arrest was that a warrant was never served to begin with.[3]

So what happens once the arrest has been done? The Court may order the vessel to be shifted from a port or harbor to any other anchorage within territorial waters on application of Transport Malta, if the following are satisfied: 1. the cargo, length or draft of the ship; and 2. other circumstances concerning safety, pollution, navigation or port operations. In these cases it is advisable that the vessel should leave the port without delay. The Court may also rescind a warrant of arrest and order the ship to leave Malta and its territorial waters without delay for the same reasons.

As part of this process, the Court may order the sale of an arrested ship pendent lite if it appears to the Courts, upon the application of a creditor that the debtor is insolvent, or unlikely to continue trading and maintaining the asset. Notwithstanding the issue and execution of a precautionary warrant of arrest a ship is removed from the jurisdiction of the Court in breach of the warrant of arrest, the owner, bareboat charterer or other person being in possession of the vessel shall be jointly and severally liable to a penalty of 116,470 Euro in favour of the party applying for the warrant.[4]

Last but not least, vessels may also be arrested in Malta pursuant to the provisions of Article 31 of Council Regulation (EC) No. 44/2001[5], dealing with protective measures, in cases where the courts of another Member State have jurisdiction as to the substance of the matter. Therefore, in Malta for a ship to be arrested it is always by virtue of the warrant of arrest.

[1] Article 856.1 COCP

[2] Article 857.3 COCP

[3] http://www.mmla.org.mt/wrongful-arrest-of-ships-2/

[4] Article 865.1 COCP

The above article was originally published in issue 20 of ShipArrested.com’s The Arrest News.