Ship Arrestment Procedure in France
by Sébastien Lootgieter
Sébastien Lootgieter is an Avocat at Villeneau Rohart Simon in Paris. We will be working closely with the firm regarding Shipping law issues. http://www.villeneau.com/
Ship Arrestment
The applicable rules :
The arrest of vessel, called “saisie conservatoire” is governed by two sets of rules: • Domestics rules found in the Law n° 67-05 of 3rd January 1967 and the Decree n°67-967 of 27th October 1967, • International rules found in the international convention for the unification for certain rules relating to the arrest of seagoing ships signed in Brussels on 10th May 1952 (the “Arrest convention”) and ratified by France.
On what basis a vessel may be arrested?
Regarding that issue the International and domestic rules have distinctive characteristics.
Under the Arrest convention a ship may only be arrested for a maritime claim as per the list provided for by article 1(1). This list is constructed restrictively. However it is not necessary to show that this claim is valid or well-grounded, it is only necessary to show that the alleged claim falls under the article 1(1) list.
Under the Domestic regulation, a vessel may be arrested for any claim, maritime or not. However it is necessary to show that the claim is apparently grounded.
Therefore, when a creditor wants to arrest a vessel it is important to know whether the domestic or the international rules will apply. Three possibilities may arise;
The creditor wants to arrest a French vessel.
If the creditor is domiciled in France, then the domestic rules should apply. If the creditor is domiciled abroad the Arrest convention should apply.
The creditor wants to arrest a vessel flying the flag of contracting state.
The Arrest convention will apply.
The creditor wants to arrest a vessel flying the flag of a non-contracting state.
Following the provision of article 8 of the Arrest Convention, the vessel may be arrested for a maritime claim or any other claim for which French law permits the arrest.
Which vessel could be arrested ?
Both under the domestic the Arrest convention it is possible to arrest the vessel in respect of which the claim arose or any other vessel belonging to the same owner.
Is it possible to pierce the corporate veil?
It is possible for the creditor of a company X to arrest the vessel of the company Z if the claimant may prove that the owner is a fictitious company. However the standard of proof remains high.
The procedure to arrest a vessel?
An ex-parte application is made by the creditor before the President of the Commercial court of the port where the arrest should be made. Upon that hearing an order is given allowing the arrest or rejecting the application. The arrest order is served to the master of the vessel by a bailiff. A vessel may be arrested in a few hours.
What should the creditor do after the arrest?
The creditor will have to start proceedings in respect of his claim before the arbitrators or the court having jurisdiction on the merits. Such action should be brought one month, otherwise the arrest will became void.
What could do the owners to obtain the release of their vessel?
Challenge the arrest order.
Owners could start an action before the judge of urgent matters. Such hearing is held on a very short notice. His decision could be appealed before the Court of appeal and further before the Cour de cassation (on a point of law only).
Owners could also set up a security for the amount of the claim for which the arrest was granted. Such security could be a P&I or a Club guarantee. It is also possible to make a deposit of the amount claimed in the hand of the clerk of the court.
Finally, it is also possible to demand from the court to authorize the vessel to perform one voyage but this rule is rarely applied.
