As time passes by, ships and vessels are used more often and thus, they are gaining lots of importance. Under the Maltese Court of Organization and Civil Procedure (COCP), there is the warrant of arrest of ships and vessels that can be both a precautionary warrant and also an executive warrant.
This arrest is a 2007 novelty and a precautionary warrant of arrest may be issued against a sea going vessel whose length exceed 10 meters to secure a claim whether in rem or in personam and thus, it can be against the owner or the ship. The claim has to exceed seven thousand euro (€ 7,000). Also, a vessel can be arrested not merely within Maltese waters but even out of territorial waters.
The effect of the arrest is that the ship or vessel is seized in the hands of debtor and from that moment, the debtor is informed that it is seized under court authority and that therefore if the debtor were to transfer or sell such vessel, there would be a violation of the court order. Therefore, the vessel is attached and the attachment order is directed normally to the Malta Maritime Authority, which Authority has the power to shift it in the territorial waters but cannot decide to give clearance for the vessel to leave. Indeed, it has been the practice to include also the controller of customs not to give clearance for it to leave.
The party deciding to issue this warrant is responsible for all costs from the moment it is issued and the authority in whose hands the vessel is seized is referred to as the official consignee. There is a penalty of eleven thousand six hundred euro (€ 11, 600) in case of breaching the warrant. However, it is possible, as in the case of other precautionary warrants, to request the court to impose on the party issuing the warrant, a guarantee for expenses and damages as the case may be.
An interested party, principally the creditor, may even order the sale of the ship pendente lite if it is shown that the debtor is insolvent and unlikely to continue trading. There is also a new provision imposing liability of a penalty of one hundred and sixteen thousand euro (€116,000) in the case a ship is removed from jurisdiction in violation of court order. Any person found in knowingly possession of this breach is jointly and several liable with the owner or charterer.
The writ for the precautionary warrant has to be filed within twenty (20) days which will lead to the final outcome of the decision taken. It is not an easy decision to arrest or not to arrest a ship because if you arrest you have the burden to keep it here and if you do not arrest, you will lose the asset. For this reason, Sultana Legal will advise its clients to act in accordance to the case.
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