A container ship spent four days alongside in Marseille on the application of a service provider claiming payment of an invoice that had already been settled. Release was ordered, but the shipowner lost its terminal window, its charterer placed the vessel off-hire and two port calls were dropped. The question is no longer whether the arrest was justified; it is who pays.
An easy measure to obtain, a risk borne by the creditor
The threshold for arrest is deliberately low: a claim that appears well founded in principle is enough, with no enforceable title and no prior hearing of the other side. The legislature’s choice has its counterpart. The French Code of Civil Enforcement Procedure provides that, where release has been ordered, the creditor may be ordered to compensate the loss caused by the protective measure (Article L. 512-2). The text does not make such an order conditional on an intent to cause harm; it is for the court to assess the circumstances.
Obtaining release first
The shipowner has two routes, which are often combined. The first is a challenge before the court that authorised the arrest: the claim is not well founded in principle, the ship does not belong to the debtor, the arrest instrument is defective. The second is release against security, which frees the ship without waiting (Article L. 5114-21 of the French Transport Code). Providing security does not amount to an acknowledgement of the claim; the letter should say so expressly in order to preserve the action for damages.
Quantifying the loss caused by detention
The loss suffered by a detained ship is calculated by the day, and each head of loss must be documented:
- loss of freight or hire, established by the charterparty and the off-hire notices;
- additional port costs: port dues, pilotage, towage, mooring, berth charges;
- bunkers and crew expenses incurred during the detention;
- downstream penalties: demurrage, compensation paid to shippers or charterers;
- the cost of the security: bank commission or club charges;
- legal costs.
Heads of loss that are poorly substantiated are disallowed. The logbook, port invoices and correspondence with the charterer are the decisive documents.
The creditor’s side: managing the risk
A creditor that arrests a ship must be able to show that it had serious grounds to believe in its claim and in the link with the ship. A prior formal notice, a statement of account closed at a given date, a check of the registered owner in the flag state register: these steps do not delay the arrest if they are carried out in advance, and they change the court’s assessment if release is ordered.
What the firm checks first
- The apparent basis of the claim on the date of the application.
- The registered owner and the link with the alleged debtor.
- The regularity of the arrest instrument.
- The evidence of loss, head by head.
- The wording of the security provided for release.
For the firm’s services, see Ship arrest and Maritime litigation.
Further reading
- Release of an arrested ship: what to require from the P&I club letter of undertaking
- Arrested ship: the time limit for proceedings on the merits that creditors forget
- Can a yacht be arrested for a debt that has nothing maritime about it?
This analysis is part of the firm’s work in maritime law.
Frequently asked questions
Must the shipowner prove that the arresting creditor acted in bad faith?
The text allows the creditor to be held liable where release has been ordered (Article L. 512-2 of the Code of Civil Enforcement Procedure). The court assesses the circumstances; any carelessness on the part of the arresting creditor weighs in that assessment.
Does providing security prevent a claim for damages?
No, provided the security is given without admission of liability and the action is actually brought.
Which heads of loss are compensated?
Those that are proven: lost freight or hire, port costs, bunkers, penalties and the cost of the security.