Arresting Ships in Gibraltar

The main purpose of arresting a ship is to obtain security for an eventual judgement in an admiralty action in rem. In this respect, Gibraltar has long been acknowledged as one of the premier arrest jurisdictions in the world. 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’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 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. 

For further information please contact Christian C Hernandez on +350 200 78363 or at christian.hernandez@isolas.gi