Ships Arrest in Algeria, by Mohammed Mankour Neffous
Neffous Shipping & Consulting
28 Boulevard Ahmed Ben Aderezak
DZ-31000 Oran, Algeria
Tel: +213 41 50 47 45
Fax: +213 41 50 41 14
nscalgeria@algeriecom.com
1- Introduction
The ship constitutes a security for the creditors claims who always face the danger of being unable to recover their debt from an impecunious and/or unscrupulous debtor. In order to avoid that the ship escapes, she will be arrested, that means placed under judicial detention pending judgment. The Algerian Maritime Code (hereafter called CMA) in its article 150 (1) defines the arrest as an immobilization of a vessel in order to secure a maritime claim.
In this article, we will examine the civilian saisie conservatoire, as practiced in Algeria, its conditions, the proceedings, the release of the ship from arrest, the liability of the arrestor, and the forced sale, (a chapter added by the last modification of the CMA).
2-Source of law
The general rules on arrest are found in the CMA, section V which incorporates the provisions of the 1952 Brussels Arrest Convention; however, chapter IV of the Code de Procedures Civiles (hereafter called CPC) is a source of law too, to fill in the gaps of the Convention.
3-Applicable international conventions
Algeria has ratified the 1952 Convention which was published in the Official Journal on 18 August 1964
4-Jurisdiction of courts or other authority
The competent authority to order the arrest (saisie conservatoire) of the vessel is the President of the tribunal of commerce in the port where the arrest is effected
(1): Art.150 : Au sens de la presente convention, la saisie conservatoire signifie l immobilisation d un navire pour garantir une créance maritime
5-Types of claims for which arrest can be requested
In Algeria, there are two regimes:
First: if the vessel is flying the flag of a contracting State the vessel may be arrested in Algeria only in respect of the maritime claims set out in Article 1(1) of the 1952 Brussel Convention
Second: if the vessel is flying the flag of non-contracting State then that vessel may be arrested either in respect of maritime claims defined by the CMA in article 151(2): maritime claims means any claims arising out of a contract or an event in connection with the operation or management of the ship, any loss or damage caused by the ship due to her management, or of claims of a non maritime nature.
Algerian law provides a clear definition of maritime claim and, therefore, we are in front of an open list, which can include further claims of maritime nature like for instance: insurance premiums. This regime also applies to an arrest on a national level.
6-Other preconditions to an arrestNo other preconditions must be complied with.
7-Evidence required to support an arrest applicationThe mere allegation by the claimant is sufficient to arrest a vessel in both regimes.
8-Sister ships
Arrest may be made of a sister ship. CMA , article 154 (3) stipulates: a claimant may arrest either the particular ship in respect of which the maritime claim arose, or any other ship which is owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship, even though the ship arrested be ready to sail.
A sister ship may be defined here as a vessel owned by the same defendant who also owns the vessel to which the claims relates.
Algerian courts, however, do not, and are not expected to, pierce the corporate veil.
(2) : Art.151 : La créance maritime s’entend de une allégation d´un droit ou d´une créance résultant d’un contrat ou ayant pour cause un évènement lié à la navigation ou à l’exploitation d’un navire ainsi que les dommages causés par un navire ou dus à son exploitation
(3) : tout demandeur peut saisir soit le navire auquel la créance se rapporte, soit tout autre navire appartenant à celui qui était, au moment où la créance maritime, propriétaire du navire auquel cette créance se rapporte, alors même que le navire est prêt à faire voile
9-Demised and Time chartered vessels
A vessel can be arrested for a maritime claim against a demise or time charterer. The claimant may arrest such a vessel or any other vessel in the ownership of the charterer but not other vessel in the ownership of the registered owner.
In Algeria, the action in rem is unknown but there is something that it looks like it when the claim is secured by a maritime lien: the droit de suite which enables the claimant to follow the vessel into the hand of a bona fide purchaser
However, the claim against a demise or time charterer cannot be enforced through the forced sale of the ship.
10- Representation by counsel and power of attorney
A Claimant may be represented by local counsel or by an agent. A power of attorney is not required for a counsel, but an agent representing a claimant must submit to the court a power of attorney evidencing his appointment and specifying his powers and duties.
11-Court hearing
In order to obtain the arrest, the claimant represented by his counsel must submit an application (requête) to a judge see above 3 - which indicates:
The name and address of the claimant;
The name of the vessel, her description and port of registry;
The Name and address of her owners and/or managers;
Particulars of the claim;
The quantum of the claim;
The date of arrival of the vessel in the relevant Algerian port.
The application must be supported by copies of the relevant supporting documents. The application is dealt with by the judge in an ex parte hearing, during which he may raise questions. Thereafter, he will make an order grating or refusing the application.
12- The release of the ship against security
Article 156 stipulates that the court in the jurisdiction of which the ship has been arrested shall permit the release of the ship upon sufficient security being furnished. Algerian maritime law does not specify the type of security required and the quantum. Only a cash deposit and/or a bank guarantee are accepted in order to obtain the release. Letters of undertaking of P&I Club are generally refused. Legally speaking, and pursuant to CPC, article 646, letters of undertaking issued by a P&I Club would be acceptable only in the case where the Club has its seat of incorporation in Algeria, which is never the case.
Indeed, the maritime specialists in Algeria and mainly the Club’s correspondents are endeavouring to persuade the insurance companies to accept such a guarantee mainly if it is provided by a first class Club.
Regarding the quantum, and furthermore what does it is meant by sufficient security, professor Emmanuel du Pontavice has clarified that sufficient guarantee means a value of the claim, if that one is higher than the limitation of liability (article 98 CMA) (4), or the amount of the fund or if the 1957 Limitation Convention shall not apply (article 94 CMA) (5): the value of the vessel, or if the claim is based upon a mortgage: the value of the vessel and accessories determined in article 62 CMA(6)
(4) : Lorsque l’ensemble des créances résultant d’un même évènement dépasse les limites de la responsabilité telles qu’elles sont déterminées, le montant global des réparations correspondant à ces limites, peut être constitué par les soins du propriétaire ou de toute autre personne à lui substituée, en un fonds de limitation unique.
Le fonds ainsi constitué est affecté exclusivement au règlement des créances auxquelles la limitation de responsabilité est opposable.
(5) : La limitation de responsabilité du propriétaire d’un navire n’est pas opposable :
a) Aux créances du chef d’assistance, de sauvetage ou de contribution en avarie commune ; ainsi qu’aux créances de l’état ou de toute autre organisme qui aurait, aux lieu et place du propriétaire, renfloué, enlevé, détruit ou rendu inoffensif un navire coulé, naufragé, échoué ou abandonné y compris tout ce qui se trouve ou s´est trouvé bord.
b) Aux créances de membres de l’équipage résultant du contrat d’engagement.
c) Aux créances de toute autre personne employée au service du navire en vertu d’un contrat de travail.
(6) : Sont subrogées au navire et à ses accessoires :
a) Les indemnités dues au propriétaire à raison des dommages matériels subis par le navire hypothêqué ;
b) Les indemnités dues au propriétaire pour contribution aux avaries communes subies par le navire hypothêqué ;
c) Les indemnités dues au propriétaire du navire hypothêqué pour l’assistance prêtés ou le sauvetage effectué depuis l’inscription de l’hypothêque, dans la mesure où elles représentent la perte ou l’avarie du navire hypothêqué.
d) Les indemnités d’assurance sur le corps du navire
13-Release in case of constitution of the limitation fund
Once the the limitation fund is constituted, the arresting party will obtain the release of the ship pursuant to article 156 CMA.
Algeria is a party to the International Convention relating on limitation of the liability of owners of sea-going ships 1957, but till now, no implementation decree has been enacted regarding the constitution and the distribution of the fund of limitation.
On the other hand, Algeria has not ratified the 1979 Protocol to the 1957 Limitation Convention that has replaced the Poincaré franc with the SDR; therefore, nobody is able to determine the equivalence of the Poincaré franc in Algerian currency (dinars), not even the Bank of Algeria. Indeed, many problems can arise in the constitution of the fund pending the ratification of the Convention of 1976 on Limitation of Liability for Maritime Claim.
14- Time limit to commence proceeding on the merits
Pursuant to article 350 CPC, proceeding on the merits must be brought within 15 days from the day the order of arrest has been issued; failing this the arrest will be lifted.
15- Jurisdiction on the merits
Article 7-1 of the 1952 Convention grants jurisdiction on the merits of the case to the courts of the country in which the arrest is made if the domestic law of the country gives jurisdiction to such courts.
The competence of the Forum Arresti predominates in several countries, in particular in Algeria; article 8 CPC stipulates that the court of the place of arrest is competent to authorize arrest and other subsequent proceedings. Algerian courts have also jurisdiction on the merits of any claims for which a vessel has been arrested.
16- Appeal by defendant
The defendant has the right to lodge an appeal against an order of arrest and the judge decides at a hearing inter partes on the application to release a vessel from arrest, but an appeal against an order of arrest does not by itself suspend the operation of the order.
17- Forced sales
The rule of the forced sale of a ship are set out in article 160 CMA. Under Algerian law, the proceedings for the forced sale are as follows:
� In case of non payment of the indebtedness after 21 days following the order to pay. Writ of summons is served to the shipowner to appear before the court in the port where the seizure is going to be made. If the shipowner is not domiciled within the competent court, the writ is served to the master or a local agent within three days.
� The seizure is notified to the shipowner or the master by a bailiff and also to the port authority and the appropriate consulate.
� The seizure is registered :
A/ in case of vessels flying the Algerian flag in the vessel registry;
B/ in case of foreign registered vessels on a special registry on which the modalities will be defined by an application decree.
� Any transfer of ownership or mortgage made after such registration of the vessel is not valid
� Afterwards, the court fixes the price of and the conditions of the sale.
The claimant who has obtained an enforceable judgement can apply to the court for the commencement of a forced sale procedure after 21 days following the order of payment.
Once a sale is completed, the funds can be distributed among the creditors. The ranking of claims according to Algerian law (7)is as follows:
1- a/claims for salvage, wreck removal and contribution in general average;(8)
b/Court costs;
c/ costs of custody;
d/ costs incurred in order to preserve the vessel;
2- wages and other sums due to the master, officers and other members of the vessel’s complement in respect of their employment on the vessel;
(7): Algeria is a party to the 1926 Brussels Convention on Maritime Liens and Mortgages but the general provisions of the CMA are taken from the 1967 Brussels Convention.
(8): Art. 77 CMA: , Toutefois, les privilèges maritimes garantissant les indemnités d’assistance ou de sauvetage, les frais de relêvement des épaves et les contributions aux avaries communes ainsi que les frais de justice et les frais de gardiennage et conservation du navire ont la priorité sur tous les autres privilêges maritimes grevant le navire au moment ou les opérations donnant naissance a ces privilèges ont été accomplies
3- port, canal and other waterway dues and pilotage dues;
4- claims against the owner in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the vessel;
5- claims against the owner, based on tort and not capable of being based on contract, in respect of loss of or damage to property occurring, whether on land or on water, in direct connection with the operation of the vessel;
6- claims of a ship repairer or a shipbuilder, for the repair or for the building of the vessel effected during such possession.
7- Registered mortgages;
8- disbursements incurred on behalf of the ship or its owners;
9- Contractual Claims in respect of loss and damage of cargo and luggage.
10- Claims of unsecured creditors.
18-Liability of the claimant
The CMA, article 158 stipulates that the claimant is liable in case of unjustified arrest, for instance: if the claim fails on the merits. Any loss including lost profit would normally be covered because the claimant is liable for damage caused by an unjustified arrest irrespective of fault and the shipowner has not to prove the mala fides of the claimant.
19-Ship arrested attempting to escape
If a ship under arrest attempts to escape, the Coast Guard has the authority to pursue her beyond the territorial waters provided the chase commenced in Algerian water. The master is punishable by fine from DZD 200.000 to DZD 600.000 i.e. (approximatively : (Eur 2800 to Eur 8400)
20-Conclusions
Algeria has no writ in rem, its maritime proceedings are clear, it provides maritime creditors with pre-judgment security against the main asset on which they rely, the ship. But under no circumstances, the arrest is a mean of oppression because the claimant can be held liable in case of an unjustified arrest, which can easily involve his liability.
A proper construction of Algerian Maritime Law permits to establish that the interests of both parties are safguareded.
Mohammed Mankour NEFFOUS post-graduated in Maritime Law from the university of Aix-en-provence, and has also a diploma in a comparative law from the university of Copenhagen. He is a director of Neffous Shipping & Consulting, a shipping company having in house maritime lawyer which is established in Oran (Algeria). The writer expresses his gratitude to Mr Francesco Berlingieri, for his valuable comments and suggestions.