Gibraltar Ship Arrests – Ian Watts Gibraltar Lawyer

Ian Watts – providing legal services in Gibraltar since 2002

Introduction to Gibraltar’s Admiralty Jurisdiction

The law and practice of ship arrests in Gibraltar is very similar to that of the jurisdiction of England & Wales, as well as other common law territories. In terms of international ship arrest law, the International Convention on the Arrest of Sea-Going Ships (Brussels, May 10, 1952) applies in Gibraltar, whereas the 1999 Arrest Convention does not.

The Gibraltar Law Courts do not possess a dedicated Admiralty Court as seen in for example, Australia, Hong Kong and Malaysia. Instead, the Gibraltar Court system possesses an ‘Admiralty Jurisdiction’ with an experienced judiciary which is equipped with the support staff of suitably qualified personnel which includes an Admiralty Marshal (and his deputy). The Admiralty Marshal is on call at all hours in case of emergency.

The Colonial Courts of Admiralty Act 1890 and the Admiralty Jurisdiction (Gibraltar) Order 1987, govern the jurisdiction and powers of the Supreme Court of Gibraltar in Admiralty Law matters. In essence, there exists uniformity of jurisdiction and powers between the Admiralty Jurisdiction in Gibraltar and that found in the English Courts.

In terms of the practice and procedure governing Admiralty affairs, the Supreme Court of Gibraltar follows Part 61 of the English Civil Procedure Rules 1998 relating to specialist Admiralty proceedings.

Gibraltar Ship Arrest – A Relatively Speedy Process

Liability to arrest arises if the ship is within the jurisdiction and no caveat (or “caution”) has been lodged against the ship’s arrest. Once the target vessel is in legal reach of the Gibraltar Admiralty Jurisdiction, the arrest is a relatively straightforward process and can be effected very quickly, even within hours, provided all the necessary Court documentation and information is in order.

In Gibraltar, providing ‘counter-security’ for an arrest is not necessary as in other jurisdictions. However, an undertaking to meet the expenses of the Admiralty Marshal in serving the arrest warrant will be necessary. A deposit in respect of the costs of maintenance of the vessel whilst under arrest may also have to be paid, but in practice, these can be added to the Admiralty Claim, with a view to recovery at a later stage.

Gibraltar Claims in Rem & In Personam

In Gibraltar, the Admiralty Jurisdiction may be invoked in rem or in personam. Actions in rem are claims against the vessel itself (irrespective of ownership), whereas actions in personam are like ordinary claims in the civil or commercial court. Claims in rem are to all intents and purposes a practical commercial procedure to secure the rights of the arresting party.

Types of Maritime Claims that can be brought in Gibraltar

The Senior Courts Act 1981, s.20(2), which Gibraltar adopts in its Admiralty Jurisdiction (and which gives effect to the relevant provisions of the 1952 Arrest Convention) lists 18 types of maritime claims which come within the admiralty jurisdiction of the Supreme Court of Gibraltar and which can be used to arrest a vessel. These grounds mirror the grounds of maritime claims that can be brought in the English Admiralty Court & Commercial Court– they include the following claims (the following is a non-exhaustive list) – those relating to: the possession or ownership of a ship; a mortgage of or a charge on a ship; damage done to or received by a ship; death or personal injury sustained in consequence of any defect in a ship or in her apparel or equipment; the carriage of goods in a ship or to the use or hire of a ship; towage; crews wages; pilotage; a general average act; and bottomry.

The concept of “sister ship” & “associated ship” arrests in Gibraltar

The execution of “sister ship” arrests are possible in Gibraltar but with the modern day advent of “special purpose vehicles” in the ship-owning world, the usefulness of such arrests have been rendered largely academic. The concept of “associated ship” arrests is not one that is recognised in Gibraltar as in often seen in the very well-known ship arrest jurisdiction of South Africa where the law allows the arresting party to pierce the corporate veil.

Gibraltar Freezing Order

Apart from an arrest of a ship in the admiralty in rem jurisdiction, a Freezing Order to restrain a vessel leaving Gibraltar’s territorial waters may be possible in an appropriate in personam claim in order to preserve the vessel as an asset in which to execute an eventual judgment. However, obtaining a Freezing Order is a far more expensive process in that the applicant will have to provide the usual “cross-undertaking” as to damages, whereas an arrest in rem in Gibraltar does not require counter-security to be lodged. Moreover, the Freezing Order is ultimately a discretionary remedy; an in rem arrest follows as of right.

Release of a ship under arrest

A ship-owner may obtain the consent of the arresting party to try to secure the release of a vessel under arrest in Gibraltar upon the owner providing security for the sum of money sought to be enforced against the vessel. Although security for release may comprise several forms, in many instances, the speedy option of a guarantee or letter of undertaking (LoU) provided by the defendants P & I Club is acceptable in Gibraltar. The acceptance of an LoU in this context adds to the benefits of Gibraltar as a ship arrest jurisdiction.

Judicial Sale of a ship under arrest

An application to the Court can be made at any stage (even pendente lite) by any party to the in rem claim under which the ship is arrested, for an Order for its sale. The Application Notice filed in Court will however need to be served on all interested parties. If a sale is ordered, the Admiralty Marshal will have the vessel appraised by an independent valuer – the sale of the vessel advertised thereafter, and the vessel will be sold by way of sealed bids auction basis. Where appropriate, the Admiralty Marshal can seek the directions of the Court on matters regarding the sale of the vessel.

Payments out of the proceeds of sale of the ship will be made only to judgment creditors and (a) in accordance with the determination of priorities; or (b) as the Court so orders.

Gibraltar as a ship arrest jurisdiction

The Strait of Gibraltar is one of the main shipping lanes in the world, with maritime traffic continuously plying through this narrow waterway, en route to the Atlantic Ocean or into the Mediterranean Sea, in furtherance of either maritime commerce or in pursuit of pure pleasure.

Gibraltar’s maritime location combined with its solid admiralty laws and procedure which are based on English Law principles and practice as above-described (such as speed of arrest, no need to provide counter-security and the acceptance of the LoU), makes Gibraltar an advantageous and “arrest-friendly” jurisdiction and certainly a jurisdictional ‘player in mind’ in the international ship arrest context.

It is always prudent to consult a lawyer practising in the potential jurisdiction where a ship is to be arrested. It is important to carefully consider the underlying cause of action for the arrest, and to ensure that proper and effective timely steps are to be taken.

Further Information

For further information on Admiralty Law in Gibraltar, please contact Ian Watts, Barrister-at-Law & Acting Solicitor.