Spain has more than 14,000 kilometres of coastline and more than 46 ports of general interest, which means that it is a country that manages a good number of ship arrest procedures. In addition, the passage from the Mediterranean Sea to the Atlantic Ocean through the Strait of Gibraltar also means that Spain has a strategic position in navigation and, therefore, the opportunity to deal with ship arrest procedures.
Since its entry into force on 14 September 2011, Spanish courts have directly applied the 1999 Geneva Convention on the arrest of ships, which together with the Act 14/2014 on Maritime Navigation complete the legal regime applicable in Spain to the arrest of vessels.
As we have already mentioned, due to the characteristics of our country, Spanish courts have had the opportunity to consider the 1999 Convention on numerous occasions, but there was not an interpretation of Article 5 of the 1999 Geneva Convention by the Spanish Courts, which in fact was one of the major changes from the legal regime set out by 1952 Brussels Convention.
Article 5 of the 1999 Geneva Convention declares:
Right of rearrest and multiple arrest:
- Where in any State a ship has already been arrested and released or security in respect of that ship has already been provided to secure a maritime claim, that ship shall not thereafter be rearrested or arrested in respect of the same maritime claim unless:
(a) the nature or amount of the security in respect of that ship already provided in respect of the same claim is inadequate, on condition that the aggregate amount of security may not exceed the value of the ship; or
(b) the person who has already provided the security is not, or is
unlikely to be, able to fulfil some or all of that person’s obligations; or
(c) the ship arrested or the security previously provided was released either:
(i) upon the application or with the consent of the claimant acting on reasonable grounds, or
(ii) because the claimant could not by taking reasonable steps prevent the release.
- Any other ship which would otherwise be subject to arrest in respect of the same maritime claim shall not be arrested unless:
(a) the nature or amount of the security already provided in respect of the same claim is inadequate; or
(b) the provisions of paragraph 1 (b) or (c) of this article are applicable.
- «Release» for the purpose of this article shall not include any unlawful release or escape from arrest.
Therefore, the 1999 Geneva Convention offers a numerus clausus catalogue permitting the re-arrest and/or the multiple arrest in those cases when security obtained is inadequate. As said, the Spanish courts have not had the opportunity to interpret Article 5 of the 1999 Geneva Convention and, therefore, to create the criteria for the re-arrest and multiple arrests.
With occasion of an arrest of a vessel flying Moroccan flag decreed by the Commercial Court of Cádiz upon the application of her Owners, said Commercial Court has the opportunity to analyse said article 5. As the background, Owners and Charterers entered into a BIMCO Standard Bareboat Charter (“Barecon 2001”) which was not fulfilled by Charterers. Said claim is to be considered a “Maritime Claim” pursuant to article 1.1. of the 1999 Geneva Convention and particularly it was considered listed in article 1.1. (f) (“any agreement relating to the use or hire of the ship, whether contained in a charter party or otherwise”)
Initially, Owners of the vessel under the Bareboat Charter asked the arrest of the Moroccan vessel before the Courts of Morocco and the Commercial Court of Tangier issued a “Detention Order” over the vessel. After, Charterers asked to the Commercial Court of Tangier a permission to sail to Spain for repairs which was granted conditioned to the return of the Moroccan vessel to Tangier within a 45-day period from the date of the Order authorising her departure. It is to be mentioned that no guarantee was provided by Charterers to the Court of Tangier in spite the vessel was leaving out of Moroccan jurisdiction and that “detention proceedings” were still in course (actually the mentioned “Detention Order” was under appeal upon Owners’ petition).
However, once said period elapsed, the vessel did not return to Tangier, staying at the Port of Algeciras in Cádiz. Taking into account that Owners of the vessel under the Bareboat Charter were running the risk of seeing how the security of their claim disappeared, they decided to arrest in Spain the vessel owned by them. Falling the claim within the scope of article 1.1. of the 1999 Geneva Convention, arrest of the vessel was decreed by the Commercial Court of Cádiz upon the petition of said Owners under the Bareboat Charter.
However, Charterers objected to this measure and filed an opposition to the Arrest Order, claiming damages for wrongful arrest, based on -among others arguments- article 5 of the 1999 Geneva Convention. Reasons expressed by Charterers were that the «detention» measure agreed or ordered by the Moroccan court was an “arrest order” for the purposes of the 1999 Convention, which precludes the arrest of the vessel in Spain.
Decision issued by the Commercial Court of Cádiz (“Auto”) goes on to analyse Article 5 of the Geneva Convention, which it describes as more flexible than the provisions for re-arrest in the 1952 Brussels Convention. Commercial Court starts from the premise that re-arrest should be considered as an idea similar to res judicata: it requires that there be identity of the vessel, the same maritime claim and the same claimant, even if it is requested in different States Parties.
Then, Commercial Court goes through the two interim measures obtained on the vessel, stating that the Moroccan court’s decision cannot be considered as an arrest order as defined in Article 1(2) of the 1999 Geneva Convention since the vessel was in navigation, lacking the «immobilisation» required by the Convention. In addition, it also finds that the vessel was sailing without having provided any bond or security, which would lead to the conclusion that the creditor has no security to enforce the decision on the merits to be rendered in Singapore.
Commercial Court of Cádiz, as arresting Court, rejected the opposition to the arrest and maintain said preventive measure over the vessel.
Charterers appealed against this decision of the Commercial Court. This gives the Appellate Court the opportunity to re-examine Article 5 of the 1999 Geneva Convention.
Appellate Court of Cádiz gives article 5 of the 1999 Geneva Convention a clear interpretation based on the general idea that the arrest should be a proper security for claimants seeing guaranteed the enforcement of the decision on the merits (in this case, arbitration in Singapore was in course). More significantly, it is expressed that a vessel can be arrested more than once if the security obtained is inadequate in nature or amount, subject to the totality of security obtained by the arrest of that vessel not exceeding her value. Thus, said Courts rejected that the measure adopted in Tangier was a “proper arrest” withing the scope of the 1999 Geneva Convention whilst it was just a simple “order for the detention of the vessel” which has not prevented the vessel sailing to Spain without any guarantee provided by debtor in lieu of the vessel.
Therefore, considering that Owners’ interests was not duly protected by an arrest order, Appellate Court of Cádiz agreed to uphold the arrest and the opposition was dismissed rejected again Charterers’ arguments.
Both Courts clarified when a right to re-arrest is permissible. Essentially, this will arise if the security provided by the original arrest turns out to be inadequate or if it appears that the guarantor is unlikely to fulfil his obligations, or if a vessel has been released in circumstances outside the claimants’ control. In addition, it has been declared that pursuant to said article 5 of the 1999 Geneva Convention it is now permissible to effect multiple arrests, i.e., of two or more ships under the same ownership, in respect of the same maritime claim.
More certainty as to the application of 1999 Geneva Convention in Spain has been achieved with these decisions.