SHIP ARREST
Ukraine ratified the 1952 Brussels Convention on 16 May 2012. The Civil Procedure Code of Ukraine and the Commercial Procedure Code of Ukraine, which regulates ship arrests in maritime claims, were adopted by the national legislative system.
The general practice used for ship arrests has become more stable. Changes to the procedural legislation have sped up the ship arrest procedure.
Parties have the right to apply for the arrest of a vessel at its scheduled port of destination in Ukraine. At the time of applying for registration, the vessel may be outside Ukrainian territory.
An application for arrest in respect of a maritime claim must contain:
• a description of the maritime claim;
• grounds for the need to arrest the ship; and
• evidence to prove that the vessel is registered in Ukraine or stands in the territorial waters of Ukraine or plans to move into the territorial waters of Ukraine.
The arrest of a sister ship is possible in Ukraine. An application for such an arrest is decided within two days of receipt by the court. The court is entitled to request counter-security from the party applying for an arrest to cover the possible loss. The type and amount of the counter-security are defined by the court considering the case. Ukrainian courts recognize bank guarantees as an appropriate form of counter-security.
A defendant is entitled to claim reimbursement of costs and for damages resulting from a wrongful arrest.
Letters of undertaking have not yet been regulated by Ukrainian legislation by special maritime law or code, but this question will be resolved in the near future.
The judicial sale of an arrested vessel may be initiated by:
• the claimant who suffered damage or injury in direct connection with the operation of the vessel;
• the creditor;
• a crew member;
• local port authorities; or
• the salvor.
The judicial sale of the vessel shall be public and accessible. The initiator of the judicial sale must issue a written notice to every party concerned within 30 days. The relevant parties to the judicial sale of a vessel are (1) the registered owner of the vessel, (2) the local authority in the country of registration of the vessel, and (3) all holders of the vessel’s encumbrances issued to the bearer and that have not been issued to bearer.
The written notice shall inform the parties concerned of the time and place of the judicial sale. When it is uncertain whether all concerned parties are known, a public announcement shall be made in the central state newspaper.
Generally, the right to ownership of the vessel arises from the moment of its registration in the State Register of Vessels. According to the procedure for the judicial sale of a vessel, the new owner of a vessel that has been forcibly sold will not be able to register it unless the previous owner has filed an application for removal of the vessel from the State Register. If this has not been done, the new ownership right to the vessel will not officially arise, in contradiction of Part 5, Article 12 of the International Convention on Maritime Liens and Mortgages 1993 (the Maritime Liens and Mortgages Convention), which came into force in Ukraine on 4 January 2003.
Authors:
Evgeniy Sukachev
Senior partner
Irina Dolya
Associate
