JTJB Network Legal Update March 2017

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Three things to know about ship arrest in Germany

As most jurisdictions, German admiralty law assists those who have a claim against ship owners by granting claimants the entitlement to arrest a ship that enters its jurisdiction.

However, there is the (mis-)conception of the market,
that ship arrest in German ports is “difficult”.

In a nutshell, the reasons why the arrest of vessels in German ports is considered difficult are:

  • the need to show “special urgency”,
  • the requirement of counter-security,
    and
  • a strict liability for wrongful arrest

1. Is there a need to show “special urgency”?

Before a major reform in 2013, the applicant had to demonstrate a “special urgency” for the arrest of a
vessel (periculum in mora), i.e. the impossibility of enforcement in a foreign country or a matter of
urgency. This threshold was very high and arrests were rarely granted.

New maritime trade legislation, aimed at modernising
and simplifying German maritime law, entered into force
April 2013, by an exception on the Civil Procedure Code allowing vessels to be arrested without the applicant having to provide a further reason for the arrest beside the prima facie claim against the owner of the vessel.

2. The requirement of counter-security

Before an arrest order can be enforced by the court’s bailiff, the applicant has normally to set up a security by way of bank guarantee of a national German bank. The order and the actual amount of the counter-security are at the discretion of the judge. It is possible due to the statutory waiver to show a “special urgency”, that the need for counter-security will be reduced
to a certain extent.

The counter-security mirrors the strict liability for wrongful arrest and serves to protect the interest of both the ship-owner (damages suffered while or because the vessel is detained) and the German State (public liability whenever the arrest was granted to easily and without a security sufficient to cover the ship-owner’s damages).

3. Liability for Wrongful Arrest

German law imposes a liability for wrongful arrest, which is triggered if the arrest order was unjustified from the beginning, e.g. when successfully challenged by the ship-owner, when the ship-owner wins in the main proceedings
or if the arrest is subsequently lifted by the court because of failure to commence main proceedings.

The liability is strict, i.e. arises irrespectively of fault on the part of the applicant. However, the ship-owner still has to prove the cause and quantum of damages.

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This update is for general information only and is it not intended to constitute legal advice. JTJB has
made all reasonable efforts to ensure the information provided is accurate at the time of publication.

EndemannSchmidt_sm_brajeEndemannSchmidt_sm_ferri-1 Contributed by:

Eva-Maria Braje
O f C o u n s e l

Bar-certified Transportation and
Forwarding Law Specialist
 

Diana Ferri, LL.M.
(King’s College London)

Lawyer

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