Arrest of vessels in Poland
Mar-Consult Krzysztof Kochanowski, Maritime solicitors Office
15, Wendy Str.
81-963, Gdynia
Poland
Tel. +48 58 661 21 42
Fax. +48 58 621 88 75
email: kris@mar-consult.com
web: www.mar-consult.com
1. SOURCES OF NATIONAL LAW
There are no special provisions in Polish law governing the arrest of vessels. Articles 730-757 of the Code of Civil Procedure, 1964 (the ‘CCP’) make provision for claimants to obtain security for claims and these provisions apply both to vessels and to other property.
2. APPLICABLE INTERNATIONAL CONVENTIONS
In 1936 Poland ratified the 1926 Convention relating to the immunity of state-owned vessels and the 1934 supplementary protocol thereto. The convention was denounced by Poland in March 1952 and subsequently again ratified in July 1976.
Poland ratified the 1952 Brussels Arrest convention. New 1989 Arrest Convention has not been ratified. Poland also ratified the 1926 Brussels Convention on maritime liens and mortgages.
3. COMPETENCE OF COURTS OR OTHER AUTHORITIES
Basically the arrest of vessels in Poland is a matter for the courts. The court which has jurisdiction to issue arrest orders is the court which has jurisdiction to hear the main action is the case. However, vessel may be arrested in Poland even if the main action is subject to jurisdiction of foreign court or subject to Polish or foreign arbitration. At that instance the arresting court is the court for the port where the vessel berths. In practice, vessels are arrested by commercial courts in Gdansk, Gdynia and Szczecin.
4. IMMUNITY OF STATE-OWNED VESSELS
Polish law follows the provisions of the 1926 Brussels Immunity Convention. As provided in articles 1 and 3 of the convention, state-owned vessels are in general subject to the same rules as privately-owned vessels except in the case of warships, patrol vessels, hospital ships, fleet auxiliaries and other state-owned or operated vessels employed exclusively in non-commercial service at the time the cause of action arose. These latter vessels are not liable to seizure, arrest, detention or any other proceedings in rem.
5. TYPES OF CLAIM FOR WHICH AN ARREST MAY BE REQUESTED
Vessels registered outside Poland in jurisdictions which are parties to the 1952 Brussels Arrest Convention (‘’arrest convention vessels’’) may be arrested in Poland only in respect of the kinds of claim set out in article 1 of that Convention. All other vessels, including Polish vessels, may be arrested in respect of any claim which may properly be pursued in a court of law or by arbitration.
6. OTHER SPECIFIC PRECONDITIONS TO AN ARREST
To obtain an arrest order the claimant must usually satisfy the court that he has a prima facie claim and that if he is not granted security he may be unable to enforce such judgment as he may thereafter obtain.
In order to obtain the Security Order, the following pre-conditions must be fulfilled:
a. The Claimant must make his claim likely and probable;
b. The Claimant must also make probable that lack of security might deprive him a chance to satisfy the claim, once finally adjudged. Thus sufficient evidence should be presented to the Court. All documents submitted as an evidence must be translated into Polish language by a sworn translator first and the translations must be presented to the Judge.
b. Power of attorney issued by an actual Creditor (the Plaintiff) for the attorney representing the Claimant. POA should be issued, stamped and signed by an officer of the company duly authorised to issued this kind of deeds. It is recommended that identity of the signor is verified by a Notary Public or any similar person / authority countersigning the PoA document. Besides, lawyer representing the claimant must present a document evidencing that the officer in question has been entitled to sign PoA (an exact from Company’s Register, or respective PoA +Resolutions of the Board of Directors.
7. DEFINITION OF ‘’VESSEL’’
Article 2 §1 of MC defines a ‘‘sea-going vessel’’ as ‘’any floating structure appropriated for or employed in navigation at sea’’.
8. SISTER SHIPS
Polish law permits the arrest of any property belonging to a defendant. If a ‘’non-convention vessel’’ is arrested, it is not necessary to evidence that that vessel was connected in any way with the circumstances in which the claim arose.
If a claimant is applying to arrest an ‘’arrest convention vessel’’ in Poland, then the provisions of that Convention apply. Article 3 of the Convention provides that a claimant may arrest the vessel in respect of which the claim arose or any other vessel which is owned by the person who was, at the time the claim arose, the owner of the former vessel.
9. DEMISECHARTERED OR TIMECHARTERED VESSELS
As a general rule it is permissible under Polish law to arrest only the property of a defendant who is alleged to be personally liable far the claim in question. An exception exists in relation to maritime lien and mortgage claims, where it is permissible to arrest the property of a defendant shipowner who is not personally liable for the claim. Maritime lien claims are defined in article 91 of the Polish Maritime Code That definition is, in turn, based upon article 2 of the 1926 Brussels Convention relating maritime liens and mortgages, which has been ratified by Poland.
Another exception exists in relation to ‘‘arrest convention vessels’’. Article 3 (4) of the 1952 Arrest convention provides that where a claim has arisen against a demise chartered vessel the claimant may arrest either that vessel or any other vessel owned by the demise charterer.
10. FORM OF APPLICATION
The application to the court must be made in writing. There are no special requirements relating to such applications other than that they must comply with the general rules relating to the form of judicial writs. The application must provide the following details: -
a. The name of the court to which the application is made;
b. The names of the claimant and defendant;
c. The name of the vessel to be arrested and register she is registered with;
d. A description of the claim and of the circumstances in which it arose.
e. An amount of security demanded by the claimant
The application should be accompanied by copies of relevant documents evidencing the existence of a claim, ownership of the vessel and junction between the vessel, the claim and the parties involved. The claimant must also specify the amount of security he is seeking. The security may comprise:
a. basic claim
b. interests
c. costs of security procedure borne by the claimant
d. foreseeable legal costs connected with expected litigation
11. Estimated legal cost to be sustained in the arrest procedure:
a/ Court fee – paid at the moment of placing a motion for arrest, amounts to PLN 100,- only (25 Euro)
b/ Bailiff fee – paid after the Creditor obtains the arrest order and appoints the Bailiff, who will enforce the arrest order. Bailiff fee amounts up to 2% of the claim value, but no more then 5.000 PLN (1.200 EURO) in any instance.
c/ Cost of documents’ translation – basic claim documents have to be translated. Translation of one page costs usually equivalent of 8 EUR
12. MUST THE ARRESTING PARTY PROVIDE COUNTER-SECURITY?
Article 739 CPC provides that the court may require counter-security from the claimant. In practice this almost never happens, since the courts do not require counter securities with their own initiative. However the defendant may always demand from the court that the claimant will provide sufficient counter-security after the arrest was effected.
13. REPRESENTATION BY COUNSEL; POWER OF ATTORNEY
No special provisions exist under Polish law regarding representation in arrest cases. General Polish law provides that a claimant may either represent himself or appoint an attorney. For practical reasons this is recommended to appoint a qualified attorney. The attorney is required to produce a formal power of attorney together with a motion for arrest.
14. COURT HEARING
As a rule, arrest orders are issued without an open court hearing.
15. PROVISION OF BAIL BY DEFENDANTS
The Debtor may have the vessel released after placing appropriate security – bank or P&I Club guarantee or a cash deposit placed at the Court bank account. However before the vessel is released by the Court, the Claimant must approve proposed security, declaring whether it is sufficient for him or not.
If a security in a form of a cash payment made to the Court escrow account is provided by the owner (the agent, P&I Club etc.), the vessel is freed automatically. The security thus provided should comprise the basic claim & costs of legal attendance & court/bailiff fees
16. PROCEEDINGS FOR MAINTAINING AN ARREST
An arrest order may be issued before the claimant has commenced proceedings in respect of the main action, or while the main action is in progress, or subsequently, when the judgment or arbitration award is issued.
Article 733 of CCP provides that if an arrest order is issued before the main action has been commenced, the court shall specify the period, not exceeding 14 days, within which that action must be commenced in appropriate court or arbitration. If that requirement is not complied with, the arrest order will automatically lapse. However, in order to have it formally lapsed, the Judge must issue an additional ‘’nullifying order’’ confirming that the arrest order has been nullified due to that reason.
Only ‘’nullifying order’’ issued by a Judge enables the Bailiff to release the vessel, unless the claimant consents in writing for her release.
17. ENFORCEMENT OF THE ORDER OF ARREST
Arrest orders are enforced by a Bailiff as a kind of seizure. The Bailiff takes the vessel into his custody and is required to take such measures as are necessary to keep the vessel safely. The Bailiff should notify the local port authorities and, pursuant to article 1022 CCP, should also notify the registration authorities of vessels registered outside Poland.
In no case however arrest of a vessel (or other security provided in exchange of vessel’s release) shall result in direct satisfaction of creditor’s claim, i.e. before the judgment is issued or an amicable settlement of the parties is agreed and signed.
18. SERVICE OF THE ORDER OF ARREST
Article 740 §1 CCP, provides that an order of arrest shall be delivered in the first place to the claimant who must then deliver it to a competent Bailiff. The Bailiff serves the order upon the vessel as the first step in its executing.
19. TIME ELEMENT
An arrest order should be examined instantly after placing application to the court and payment court fee; in no case later then 7 days after that moment. In practice the arrest motion is examined within 3 – 4 days upon its lodging. Enforcement of an arrest order is carried out right after the claimant presents a Bailiff an original of an arrest order and pays a bailiff’s fee.
20. APPEAL BY THE DEFENDANT
A defendant may lodge an appeal against an order of arrest within seven days after service thereof. Additionally, he may at any time apply for the order to be set aside or modified if circumstances have changed since the order was made or if he has deposited adequate security with the court.
21. CLAIMS FOR DAMAGES BY THE OWNER OF AN ARRESTED VESSEL; WRONGFUL ARREST
If the claimant’s claim fails for any reason, the claimant will be liable to pay damages to the defendant owner of the arrested vessel, irrespective of personal fault. Article 746 (1) of CCP provides that a claimant is liable for damages if:
a. He fails to commence proceedings upon the merits within the period stipulated by the court, or
b. He withdraws his claim on the merits, or
c. The claim on the merits is finally dismissed or discarded by the court.
All claims for damages for wrongful arrest must be notified within twelve months from the date the claim for damages arose.
