A number of factors have contributed to Gibraltar’s success, most notably certainty of law, ease of procedure and a large volume of shipping traffic. Gibraltar also offers low port charges for arrested vessels. In some other ports, dues can mount up very rapidly eating into the sum realised by a ship's sale.. Gibraltar’s legal system is based on the common law and statute law of England.
Similarly, the information, documents and undertaking required to arrest a ship in Gibraltar mirror those in use in England. The Gibraltar Supreme Court has a track record of hearing cases quickly and uncontested ones are dealt with in a matter of weeks. As with the English courts, it passes clean title to vessels sold by the Admiralty Marshal.
It should be noted at the outset that only claims which give rise to an action in rem will permit a claimant to arrest a ship.
Claims giving rights to an action in rem
(a) any claim to the possession or ownership of a ship or the ownership of any share therein.
(b) any question arising between the co-owners of a ship as to the possession, employment or earning of that ship.
(c) any claim in respect of a mortgage of or charge on a ship or any share therein.
(e) any claim for damage done by a ship. (maritime lien)
(f) any claim for loss of life or personal injury in respect of a defect in a ship, neglect or default in navigation, management of the ship, loading, carriage or discharge of goods, embarkation, carriage or disembarkation of passengers,
(g) any claim for loss or for damage to goods carried in a ship.
(h) any claim arising out of an agreement relating to the carriage of goods in a ship or the use or hire of a ship.
(i) any claim in the nature of salvage (including aircraft). (maritime lien)
(j) any claim in the nature of towage in respect of a ship or an aircraft.
(k) any claim in the nature of pilotage in respect of a ship or an aircraft.
(l) any claim in respect of goods or materials supplied to a ship for her operation or maintenance.
(m) any claim in respect of the construction, repair or equipment of a ship or dock charges or dues.
(n) any claim by the master or a member of the crew of a ship for wages. (maritime lien)
(o) any claim by a master, shipper, or charterer or agent in respect of disbursements made on account of a ship.
(p) any claim arising out of an act which is or is claimed to be a general average act.
(q) any claim arising out of bottomry. (maritime lien)
(r) any claim for the forfeiture or condemnation of a ship or of goods which are being or have been carried, or have been attempted to be carried in a ship, or for the restoration of a ship or any such goods after seizure or for droits of admiralty.”
Once it is established that a claim form in rem can be issued, the ship will be arrested if the Court Registry is satisfied that the Affidavit to lead warrant complies with the statutory and procedural requirements. Thus provided full instructions with the supporting documents are received enabling the solicitor to prepare short particulars of the claim on claim form together with an Affidavit in support, an arrest may be carried out within hours of receiving instructions. The Admiralty Marshal or her substitute will be on call 24 hours a day, 365 days a year, and therefore in urgent cases a ship may be arrested at any time. In this respect and compared to other jurisdictions in the Mediterranean Sea, Gibraltar clearly has the advantage.
Likewise should the claim in respect of which the arrest has been carried out be satisfied, an arrest may be lifted almost immediately and it is frequent for a claimant to be satisfied by the provision of a letter of undertaking from the ship’s P and I Club or a guarantee from a first class bank. However, if no form of security is provided the arresting party would apply by a motion for judgement in default or otherwise and also for an order for appraisement and sale of the ship. An order for sale pendente lite (i.e. before judgement) is possible and can be made when the security is deteriorating for one reason or another.
A motion for judgement in default will usually be heard shortly after the period for acknowledging service is up and after delivery of a statement of claim and the filing of an Affidavit verifying the claim. However, if the Defendant appears to contest the claim the case will proceed to trial in the normal manner. If judgement is given for the claimant, it is normal for the vessel to be ordered to be appraised and sold.
It is possible for such a sale to be by way of public auction or by way of private treaty. Public auction sales are by sealed bids and normally take about 4 weeks from the date the order is made. Private treaty sales can be done in less than a week. However in order to seek a sale by way of private treaty one must have a buyer willing to pay at least market value for the vessel having regard to the fact that the vessel is under arrest in Gibraltar. This is done by obtaining two valuations from reputable London brokers and securing an offer to buy the vessel on an as is where is basis in an amount over and above those valuations.
When a vessel is sold by private treaty, the sale is not advertised although the money would have to be paid into Court for a period typically of 60 – 90 days in order to allow other creditors the chance to claim against the proceeds of sale of the vessel.
As can be seen from the above, Gibraltar is one of the premier arrest jurisdictions in the world as a result of its geographical location and use of English admiralty law and practice. In addition, not only can vessels be arrested in Gibraltar, but also, in certain cases, cargo and/or freight.
Whilst Gibraltar boasts a large number of law firms, there are very few which have a specialist Admiralty Department. Of these, ISOLAS have more years experience than any other firm.
When instructed to carry out an arrest, we advise our Clients as to exactly what documentation will need to be provided in support of the application to arrest and will guide the Client towards the necessary steps necessary to protect their claim, leading up to, if necessary, an eventual sale of the vessel. Credit to our experience and expertise in Admiralty matters is the fact that we are continuously involved in the great majority of shipping disputes in Gibraltar as well as receiving instructions from many of the major London shipping law firms.