Arrest of ships in Greece, by Thanos Theologidis
Theologidis, Lascaratos, Mitrakos, Myrillos Law Offices
tlmm@otenet.gr
4, Skouze Street (4th Floor)
185 36 Piraeus, Greece
Tel: + 30 210 4294010
Fax: + 30 210 4294025
This note attempts to provide basic information about the provisional seizure of vessels in light of Greek law and practice. This information being necessarily quite general, cannot supersede legal advise.
1.- General
The Greek legal system provides basically for two types of seizure of the assets of a debtor, serving two different purposes, i.e. the provisional seizure, aiming to secure/safeguard a claim (saisie-conservatoire) and the executory seizure, being one of the initial stages of the procedure for the enforcement of a title, leading to the public sale of the seized assets (saisie-execution).
2. - Provisional Seizure
The provisional seizure of the assets of a debtor is listed among the measures provided for by Greek Law as remedies available to any creditor aiming to protect his claim or claims against the debtor. As a general rule, all kinds of assets, including vessels, are subject to such seizure.
For the purposes of the present note the provisional seizure of vessels shall be hereafter referred to as “arrest”.
As regards vessels, Greece has ratified the International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships (10.05.1952) which was implemented in Greece by Legislative Decree 4570/1966(the “Convention”).
3.- Legal Regime
Arrest of ships is subject to the regime of the Convention where the latter is applicable i.e. to vessels flying the flag of another contracting State calling at a Greek port and for maritime claims only as the latter are defined by the Convention, otherwise, the general provisions of domestic law shall apply.- In both cases the procedure to follow is identical.
4.- Procedure
An arrest may be ordered by Court judgement only, issued following summary proceedings initiated by the filing of the Claimants’ Petition with a competent Court consisting of a single Judge. In circumstances of urgency, ex parte proceedings may be conducted.
Jurisdiction: Competent to decide on an arrest Petition are, concurrently, the Courts having jurisdiction over the Respondents’ domicile/seat, the port of Registry of the vessel and the port where the vessel called. Likewise competent is the Court in which the action on the merits is pending and in any event the Court which is the nearest to the place where the arrest shall be effected. The Court of Piraeus (Maritime Section) has jurisdiction to decide on any arrest within the major Athens/Piraeus area.
Jurisdiction of the above Courts to decide on arrests is not affected by the jurisdiction any other Court or arbitrators may have for the action on the merits.
Requirements: An arrest judgment may be given provided that Petitioners would be able to show to the satisfaction of the Court, a prima facie founded and valid claim against the vessels’ owners and the occurrence of a situation of urgency or of imminent danger justifying the necessity for granting the requested arrest.
Nature of claims: Arrest can be sought for claims of any type and nature, be it conditional or subject to time terms, but where the Convention applies, an arrest cannot be ordered for claims other than maritime as defined in Art. 1.1 of the Convention.
Petitioners: Any party alleging to have a claim against the owners of a specific vessel may apply for her arrest as Petitioner.
Respondents: Actions in rem against the vessel only are not provided for by Greek law. Therefore, the Petition should be filed anyway against her registered owners, even in case the main liability for the claim lies on third parties such as the vessel’s operators and possibly other parties having control over the vessel.
Petition: The identity of both Petitioner and Respondents, a full description of the specific vessel, factual allegations sufficient to comply with the aforestated requirements and a request for the vessel’s arrest for a specific amount should be set out into the Petition. The amount is usually that of the claim, plus about 30% thereof for future interest and costs.
Interim Restraining Order: As a matter of standard practice the Petition would also contain a request for an Interim Order for the temporary prohibition of the vessel’s sailing and/or (for a Greek flag vessel) of any change to her legal status, valid until the hearing date and subject to extension, on Petitioner’s request, until the issuance of the judgment on the arrest Petition. Such request is examined by the Judge on duty upon the filing of the Petition, following notification to Respondents or to their local representatives. Provided that the above requirements are prima facie met, such Interim Order will be given in accordance with either or both above requests.
Hearing: The Petition will be heard at a date which will be set by the Court upon its filing. Care of Petitioners, the Respondents should be notified accordingly and summoned to appear at the hearing. The hearing is conducted orally and the parties may file Submissions along with supporting documents, translated into Greek and examine witnesses.
Judgment: On conclusion of the hearing, the Court in principle would reserve its judgment which will be normally issued in the next two weeks. In the meantime the vessel will remain temporarily arrested by virtue of the Interim Order above.
Enforcement: An Interim Order or an arrest Judgment become effective as from their notification, by way of service of an official copy thereof upon Respondents as well as upon the competent Port Authorities for entry into the appropriate Books kept by them. The main effect of the enforcement is the prevention of the vessel’s sailing. Furthermore and to the extent Greek law would apply, any disposal of the arrested vessel is forbidden and if effected in breach of such prohibition, will be nul and void towards the arrestor and for the amount for which the arrest was ordered; disposal is likewise nul and void towards third parties as well, if effected after the entry of the arrest Order or Judgment into the Arrest Book of the Port of the ship’s Registry.
As regards Greek flag vessels their arrest can be sought and ordered even if they are not physically present within the jurisdiction of the Court with which the Petition is filed. The respective arrest judgment, being served as aforementioned, will cause the legal prohibition of any disposal of the vessel; the vessel’s physical arrest may be then effected at any time within the jurisdiction of any Greek Court by virtue of the same judgment.
Furthermore and insofar as Greek law is applicable, in case the ownership of the vessel has been transferred by the original debtor, arrest of the same vessel may be sought and possibly ordered against her new owner.
Provisional Validity: An arrest effected as aforestated is provisionally valid i.e. until a final judgment on the merits is issued against the arrestor or a like judgment, issued in the arrestor’s favour, has been enforced.
5.- Action on the Merits
Unless an action on the merits of the claim has been already brought, the arresting party should bring such action in the competent Court within such time as ordered by the Court, otherwise within 30 days from the service of the arrest judgment on Respondents, failing which the arrest is lifted ipso jure.
Jurisdiction of a Greek Court to decide on the subject merits is not created by the arrest itself. However and unless otherwise provided for by international conventions ratified by Greece, the presence of a vessel within the jurisdiction of a Greek Court, not competent in principle to decide on the merits, would create jurisdiction of this Court to so decide (forum rei sitae), for as long as the vessel is still within its jurisdiction. The jurisdiction so founded may, however, be affected by certain jurisdiction clauses or arbitration agreements.
6.- Counter Security
The Court has the power to order Petitioners to provide counter security by way of Bank guarantee; however in practice such counter security is rarely ordered, although frequently demanded by Respondents.
7.- Release from Arrest
Release would be obtained at any time provided that Respondents have deposited with the Court a guarantee of a First Class Bank in Greece in favour of the arresting party and for such amount as fixed by the Court. Guarantee in any other form such as P&I letters of undertaking is not accepted; however if the parties agreed to such other form they may cause the vessel’s release following the procedure for the vacation of the arrest judgment.
Vacation of the arrest judgment by virtue of a Court Order would entail the release from the arrest. Such vacation is mandatory when a final judgment on the merits has been issued against the arrestor or a like judgment, issued in the arrestor’s favour, has been enforced. Vacation will be likewise ordered if an agreement for the settlement of the claim has been reached, as well as when 30 days from the termination of the proceedings on the merits have lapsed. Furthermore, vacation may be also sought and ordered when a change in the circumstances, justifying such vacation, has intervened.
8.- Wrongful Arrest
Following substantive proceedings against an arresting party, the latter may be held liable for damages resulting from an arrest or a guarantee lodged, only if Claimants would be able to prove to the satisfaction of the Court that the arresting party knew, or by gross negligence ignored, that its claim secured as above, did not exist. Furthermore such liability is conditional to a final and irrevocable judgment whereby the action of the arresting party on the merits of its claim is dismissed for it being unfounded.- In view of such requirements it is not an easy task for Claimants to succeed in his action for damages caused by a wrongful arrest.
9.- Costs
Court and related costs are in the region of Euro 150-200 including Bailiff’s charges for the required notifications.
The respective lawyer’s charges depend much on the urgency factor, the complexity of the issues involved, the work done and the time spent in initiating and conducting the arrest proceedings.
Also an arresting party may be summoned by the Port Authorities to appoint watchman (custodians) on board the arrested vessel, in which case this party would have to bear the respective costs which are quite substantial.