Ship Arrest Jurisdiction and Practice in Israel, by John Harris
P.O. Box 33199
31331 Haifa, Israel
Tel: 972-4-862 7067
Fax: 972-4-862 5257
Email: jharris@netvision.net.il
1. The Sources of the Court’s Arrest Jurisdiction.
1.1 The Jurisdiction of the Israel Maritime Court (which is situated at Haifa) is conferred by the English Admiralty Courts Acts of 1840 and 1861. These acts were extended to the Dominions and Possessions of the United Kingdom by the Colonial Courts of Admiralty Act 1890 and under the Palestine Admiralty Jurisdiction Order of 1937, to Palestine, then a British mandated Territory.
1.2. When the State of Israel was established in 1948, under the Law
and Administration Ordinance, the Admiralty Court Acts of 1840 and 1861 became part of the domestic legislation of the newly established State.
2. Priorities.
2.1. Section 41 the Shipping Vessels Law 5720 – 1960 establishes the following priorities:
(1) The official expenses of selling a vessel pursuant to a judicial sale,
(2) Port and port related charges and expenses,
(3) The costs of preserving a vessel pending Judicial sale,
(4) Payments due to the master and crew including damages for personal injuries,
(5) Salvage expenses relating to the vessel, its cargo and equipment on board and expenses incurred in saving the lives of the crew and passengers,
(6) Damages for personal injuries to passengers,
(7) Damages resulting from collisions or damage caused by the vessel to port installations and buildings, dry docks, and loss or damage to cargo and to passengers personal effects,
(8) Mortgages (no distinction is drawn between a local or a foreign registered Mortgage),
(9) Necessaries.
2.2 The question of the existence of a Maritime Lien or a Statutory Claim in Rem is determined by the “Lex Causae” and the priorities, being procedural, by the “Lex Fori”.
3. The Application for Arrest.
3.1 The Application for Arrest must be filed together with the Claim in Rem.
The Application must be supported by an Affidavit.
In practice the Affidavit is given by the arresting attorney and copies of all the relevant documents in support of the arrest are attached thereto.
These documents can be supplied by facsimile.
A Power of Attorney is not required.
The Application is made and the Order of Arrest is given, ex parte.
3.2 The court has a discretion to order that the arresting party furnish security.
It will order the furnishing of security if the Court has reservations regarding the arrest allegations and supporting documentation.
If security is ordered, it will be in the region of 30% of the claimed amount. The security has to be furnished either by payment into Court or by the provision of a bank guarantee issued by an Israel bank.
3.3 The arrest procedure is relatively swift and the arrest can be effected with 24 hours of receiving instructions.
If the application is made on a Saturday or Public holiday, this period may be extended as result of the necessity to appear before the roster Judge and obtaining the formal Order of Arrest which is issued by the Marshal of the Admiralty Court.
The Order of Arrest will be normally discharged by the provision of a P&I Club or other acceptable guarantee. In the latter case this would be normally be a local bank guarantee.
3.4 The vessel can apply to set aside the Arrest by contesting the merits of the claim or, on the grounds that the claim does not constitute a maritime lien or a statutory right in Rem under the lex causae or that the Admiralty Court does not have jurisdiction.
In order to avoid delay to the vessel, security can be furnished without
prejudice and subject to the vessels rights to contest the Arrest and to have the security provided cancelled.
Upon serving the Order of Arrest on the vessels command the Port Authority and the Border Police, the Arrest becomes effective.
4. Court Fees and Legal Costs.
4.1 The Court fees payable are 2.5% of the amount claimed in the Claim in Rem of which half is payable at the time filing the claim. No additional Court fee is payable for the Application of Arrest.
4.2 The legal fees for attending to the Arrest excluding VAT (at present 15.5%) and disbursements, are between US$3,000.- and US$ 6,500.-, depending on the complexity and urgency of the matter.
5. General
5.1 As the “Sister Ship Convention” does not apply in Israel, only the “offending” vessel can be arrested.
5.2 Except in circumstances of a judicial sale, a change of ownership will not derogate from a Maritime Lien or Statutory Claim in Rem, arising during previous ownership(s).
5.3 An Israeli Court would not make a distinction between a Maritime Lien or a Statutory Claim in Rem, unless the “lex causae” makes such a distinction.
5.4 The Maritime Lien or Statutory Claim in Rem is valid for a period of one year from the date of the cause of the action, but if the vessel has not called at Israel in this period, the Lien or Claim in Rem is valid for a period of one year after the vessel’s first call but in no event after three years from the date of the cause of action.
5.5 A claim exists for wrongful arrest. Mistake or mere negligence would not ground such a claim. The claiming Plaintiff would have to prove maliciousness or manifest gross negligence.
5.6 The corporate veil can be lifted if the claiming Plaintiff can prove deceit or maliciousness.
John Harris, Advocate
December 2006
M-1-971-102