Ship arrest in Bulgaria by EuroBalkanConsult Ltd.
EuroBalkanConsult Ltd.
12W, Stefan Karadja Str., floor 5, ap. 15, 1000 Sofia
Bulgaria
Tel: 00359.2.9811761
Fax: 00359.2.9817028
Email: antonov@eurobalkanconsult.com
Web: www.eurobalkanconsult.com
Remark: This brief attempts to provide only basic information about the ship arrest according to Bulgarian Law. This information is quite general and may not supersede legal advice.
I. ARREST CONVENTIONS AND LAWS APPLICABLE:
1.Bulgaria is not a member of the Brussels Convention 1952 relating to the Arrest of Sea-Going Ships.
2. Bulgaria signed and ratified International Convention on Arrest of Ships 1999.
3. The provisions of Bulgarian Merchant Shipping Code and Civil Procedure Code deals with arrest of vessel and/or cargo.
4. The cargo also might be subject to arrest under Bulgarian Law.
II GROUNDS FOR ARREST:
1. According to Article 365 of Bulgarian Merchant Shipping Code the arrest of a vessel might be allowed for Claims originating from:
Accidents;
Collisions;
Assistance or other services rendered;
Performance of the carriage contract;
2. In addition, according to Article 364 of Bulgarian Merchant Shipping Code the Executive Director of the Maritime Administration Executive Agency is entitled to detain vessels due to outstanding customs, harbour and other dues, and for fees, charges and fines requested by executive or judiciary authorities. In such cases the detention will continue until removal of the grounds.
Such detention may also be ordered upon request of a foreign Maritime Administration.
The vessel subject to arrest might be of any type: cargo, passenger, yachts etc…
III. ARREST PROCEDURE – STEP ONE:
Application before Executive Agency Maritime Administration
1. The arrest procedure is simple and starts with an application before Executive Agency Maritime Administration at the Ministry of Transport filed by the Arrestor or lawyer.
2. Power of Attorney duly executed with Apostille is required.
3. The application must be in Bulgarian language and supported by evidences as to the claim.
4. All documents have to be translated in Bulgarian language.
5. If the Executive Agency Maritime Administration finds the application in order it should issue a Detain Order, arresting the ship for 72 hours.
6. The arrest of the vessel shall be lifted upon expiry of 72 hours unless within that period the District Court at the vessel’s location reconfirms the detention.
IV. ARREST PROCEDURE – STEP TWO:
Continuation of Arrest by District Court
1. Within 72 hours counting from issuing of Detain Order by Executive Agency
Maritime Administration the Arrestor has to obtain confirmation for continuing the arrest from the District Court.
2. As the arrest is a security measure, the court is not going in deep to investigate the merits of the case. But the court must be satisfied that the claim most probably exists.
3. According to the provisions Bulgarian Civil Procedure Code, security of the claim shall be admitted where without it, the enforcement of the judgment would be rendered impossible or substantially more difficult and if the claim is well supported by written evidence or if a guarantee at the size determined by the court is presented.
4. Mostly the courts decide the application without a hearing.
5. The District Court may:
grant the arrest without requesting counter – security;
grant the arrest but under condition the Arrestor to provide for counter-security at the amount specified by the court;
reject the application and lift the arrest.
6. The District Court decision is subject to appeal.
V. DOCUMENTATION:
The Arrestor has to present in original (or notary attested copies) all kind of documents.
Documents needed for arrest with Executive Agency – Maritime Administration:
1. Written statement by the arrestor, showing the grounds of the request, subject to arrest
details of the vessel subject to arrest; vessel’s present position, flag, registration;
2. Documents supporting the Claim:
Contracts for supply or Request for supply; Invoices; Confirmation Receipts; Reminders for payment, Charter- Parties, Bill(s) of Lading etc..;
3. Document proving payment of State fees in favour of Executive Agency Maritime Administration;
4. Document(s) proving identity and present status of the Arrestor. (Goodstanding Certificate or similar document as per Arrestors’ domestic laws).
5. Document(s) showing the representing powers of the person authorized to sign for and bind the Arrestor’s Company.
6. Power of Attorney – signed before Notary Public and with Apostille.
Same documents required for application before a District Court.
It should be taken in to account that when the documents are presented not in required form the court may consider such documents as not presented.
VI.COUNTER – SECURITY:
1. According to Bulgarian Laws it is exclusively court decision whether or not counter-security shall be required. The court decision should be taken on the basis of the documents presented.
2. The counter-security should safeguard the ship-owners’ claim for compensation and therefore the amount of such guarantee is not related to the creditor’s claim but to the damage the ship owners may suffer by detention of the ship.
3. The actual amount is in the sole discretion of the judge and sometimes experts might be appointed.
4. Therefore, it is strongly suggested the Arrestors to present as much as possible relevant documentation in order to satisfy the court that the claim is really existing and in attempt to avoid counter-security.
VII. TIME BARS:
In the event the court allows the arrest, the court shall set a deadline for the Arrestor to file his main action on the merits. If that deadlines elapses without the main action being filed, the arrest will be lifted. Such deadline is in the discretion of the judge but, as practise shows, will be between one and three months.
VIII. RELEASE FROM ARREST:
The Owners/Managers of the arrested ship have two options in their defence:
1. To demand release of the ship, upon presentation of payment in cash of the amount of the Claim in favour of the court or upon presentation of acceptable Bank Guarantee.
2. To appeal the District Court decision before Court of Appeal.
3. There is no established practice as to whether P&I Club letters are accepted.
IX. LIABILITY FOR WRONGFUL ARREST
The Arrestor bears the risk of wrongful arrest.
X. COSTS:
1. Per today State Fees for obtaining arrest payable in favour of executive Agency Maritime Administration are EUR 1000.
2. The court costs to arrest the ship and to lift the arrest afterwards can be estimated at approx. EUR 100.
3. Lawyer fees are based on an hourly rate, or on a lump sum fee agreed with the client. The respective lawyer’s charges depend on the urgency factor, the complexity of the issues, the work done and the time spent in initiating and conducting the arrest proceedings.
For particular advice please, contact: Georgi Filaretov at Agency EuroBalkanConsult Ltd., (Tel:00359.2.9811761/00359.888.137018) or see our website at www.eurobalkanconsult.com
Dated: 25 March 2008