Ship Arrest - Key Takeaways for Shipowners

#Casestudy : Ship arrests in Singapore are common as it is one of the favorable jurisdictions with a well-defined legal system to deal with admiralty cases and a key maritime port with a high volume of ships’ mobility in the port for the bunkers & and supplies. Therefore, high risk of a ship being arrested. This entails a substantial consequence for the involved interests.

In this context, a claim arose out of the charter party which, being an agreement relating to the use or hire of a ship, entitled the charterer to obtain the warrant of arrest against the ship, when in Singapore port limits. Despite earlier threats from the Charters, the ship escaped from being arrested the first time but not the second time, unfortunately.

Key takeaways for the Owners:

1.???? The originating claim against the ship is a discreet action of the arresting party. There is always a threat for the vessel to be arrested if she is within the Singapore port limits. If the Owner has sufficient notice of the imminent arrest, it may choose to leave port limits before the arrest can be executed.

2.???? ?If the Owners are slightly aware of the arresting party’s surprise, they can approach their #P&IClub or the local #correspondent, to carry out a #Writ search in #SingaporeCourt against the vessel for the last 1 year and 4- 6 hours before the vessel’s arrival to Singapore port limits.

3.???? Once the Writ is filed against the ship, immediate legal representation is required to establish contact with the arresting party’s lawyers.

4.???? Release orders for the vessel could only be issued by the Court unless a well-negotiated security amount is provided by the Owners to cover the amount of the claim.

5.???? The Security amount should not exceed the value of the ship.

6.???? The Security is by way of a bank guarantee (#BG) or an acceptable P&I Club’s letter of undertaking (#LOU). Due to the time constraints, LOU of the listed correspondents of the P&I Clubs with quantum is the most optimum remedy to get the release orders to set the ship sail, especially after usual business hours or over the weekends.

Had a wonderful chance to recapitulate the study notes regarding the ship arrest in Singapore during the round table discussion at The Maritime Legal Clinic, co-hosted by #SSA partners with #SCMA, addressed by the kind lawyers from #JLex LLC/#Joseph Tan & #Helmsman/#MaureenPoh. A very good initiative and a heartfelt thanks to #SCMA & #SSA.