Trade through the sea way was not a concept of the modern era. Our ancestors used power of waves in very effective manner to transport goods used in trade. Roots of maritime trade are very old, and commenced when trade started through sea along with convenience and prosperity. Ever since it began, such maritime trades have been a cause of disputes. In maritime trade, disputes are common, and often the affected parties wonder what kind of remedy is available in comparison of cost and time of litigation involved.
Earlier all such disputes were tried under the common law. Then it was felt that for speedy disposal of the such matters, a special forum was required, which came to be known as the Admiralty Court. Indeed the cost of litigation under maritime law is very high, and if after getting order in its favor if no assets are available to dispute, then the aggrieved party’s suffering doubled. Further most of vessels are under charge due to debt taken against them.
To overcome this problem, leaders of the industries and lawmakers across the world gathered and agreed to protect the interest of the litigant by agreeing the rules to arrest maritime assets. With the passage of time, the law changed as the requirements of the trade demanded. Finally in 1999, a breakthrough convention was held to secure the assets of the future.
The 1952 Arrest Convention adopted the common law approach of having a closed list of claims. Article 1 of the 1952 Arrest Convention sets out the limited list of claims for which ships can be arrested. Article 3 permits the arrest of sister ships. In the event of wrongful arrest, it is possible to claim damages pursuant to the 1952 Arrest Convention, although this is a difficult claim to establish because it requires evidence of bad faith on the part of the arresting party which (not least because of the closed list) is rarely the case.
The 1952 Arrest Convention is a success, having been widely adopted, with over 70 ratifications and accessions. Although the 1952 Arrest Convention has proved to be very popular.
The 1999 Arrest Convention contains some notable changes to the 1952 Arrest Convention. Firstly, the list of claims for which arrest is possible has been significantly expanded. Under the 1952 Convention there are 17 categories of claim which can give rise to a right of arrest. Under the 1999 Convention there are 22 categories, with bottomry having been removed and 6 new heads of arrest having been added. Whilst the list in the 1952 Convention is closed, the list in the 1999 Convention contains one category (Article 1(d) – environmental damage) which is somewhat open-ended. In view of the difficulties inherent in defining all possible forms of environmental damage and related costs, this subparagraph lists examples of the type of damage which it envisages and concludes with the open words “…and damage, costs, or loss of a similar nature…”.
Under the Arrest Convention, the claim can be filed in rem i.e. against the property which is involved in wrong. Before arresting vessels, the claimant has to ensure that there must be valid maritime claim as defined in the Article 1 of the Arrest Conventions 1999 otherwise the claimant can be liable for the damages arising out of wrongful arrest.
Unlike conventional law, the claimant doesn’t have to ensure that such vessel is belongs to the defendant, to avoid risk of wrongful arrest; it has to prove just that it was acting in a bonafide manner.
The Article 1 of 1999 Convention, thoroughly mentions the various aspects through which a “Maritime Claim” could arise, including but not limited to:
As per Article 2, a ship may be arrested for the purpose of obtaining security notwithstanding that, by virtue of a jurisdiction clause or arbitration clause in any relevant contract, or otherwise, the maritime claim in respect of which the arrest is effected is to be adjudicated in a State other than the State where the arrest is effected, or is to be arbitrated, or is to be adjudicated subject to the law of another State. Such arrest may only be made under the authority of court or of the appropriate authority.
The Courts of the State in which an arrest has been effected or security provided to obtain the release of the ship shall have jurisdiction to determine the case upon its merits, unless the parties validly agree or have validly agreed to submit the dispute to a Court of another State which accepts jurisdiction, or to arbitration.
Arrest of Vessel is an effective way to protect the interest of the aggrieved party but it is like a double edge sword and has to be used carefully. Before effecting any arrest, it is advisable to conduct thorough research about the ownership of the vessel which is going to be arrested. Arrest of ship is not only good to secure claim but it also give opportunities to the litigants to weigh theirs pros and cons and settle the dispute amicably.
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