the detention of ships in Hong Kong
JANUARY PRESENTATION
Around 40 members and guests were treated to an interesting and informative presentation by Simon Baker of lawyers Clyde & Co. His title, "An Arresting Problem – The Detention of Ships in Hong Kong" gave a clue that this was not to be the dry legal discourse which some may have expected, but a lively and entertaining presentation which mixed facts and law with a wealth of colourful anecdote and humourous asides.
Simon arrived with a suitcase full of electronic wizardry, so his talk was supported by a full Powerpoint presentation.
Simon began his talk with the reasons for arresting vessels i.e. to found jurisdiction and to obtain security, and explained how sister ships may also be arrested if certain conditions are met. He also pointed out that the in rem writ must be issued before the ship in question in sold, since the writ will not be enforceable otherwise. Similarly, the sale of a vessel by the Court eliminates all debts on that vessel, including maritime liens.
In Hong Kong, the Supreme Court Ordinance sets out a list of claims for which a vessel may be arrested, although new international guidelines may soon expand this list if the revised Arrest Convention is ratified.
Simon explained the importance of timing an arrest, and mentioned the difficulties created by people who arrest a ship late on a Friday afternoon. The difficulties in providing security are multiplied as banks and P+I offices start to close, and it can be a tense few hours for the lawyers involved. In Hong Kong, the Bailiff of the Supreme Court has a most obliging staff who have been known to work late into the night to enable security to be provided and an arrest lifted, but few administrations will cooperate so graciously.
When a ship is demise chartered, most claims are pursued against the demise charterer rather than the shipowner, but claims cannot normally be pursued against a time charterer or voyage charterer.
Simon emphasised many useful practical points, including the benefit of obtaining security as early as possible (more chance of a successful recovery) and the need for urgency in the case of a one-ship company (to obtain security before the vessel is sold or lost).
If an arrested vessel does not provide security, she may be sold by the court and the proceeds distributed amongst the claimants, according to a rank of priorities. Here it is important to know where a particular claim will be ranked since court costs and Bailiff’s expenses have priority, then the crew have a high ranking for any unpaid wages, and salvors have strong claims. This is especially important if the sale proceeds are less than the amounts claimed, since anyone with a lower ranking may receive nothing.
Many ships enter and leave Hong Kong in a matter of hours, so an arrest here must often be planned in advance, and documents must be ready even before the ship reaches the pilot station. Simon gave a detailed breakdown of the documents which are required, and used this to demonstrate why we need lawyers to assist us. Having seen the list, it was hard to counter his argument!
Although we have an excellent legal system in Hong Kong, the presentation was liberally sprinkled with examples of countries where things are less easily accomplished. In a remote outpost in the Mediterranean, Simon was confronted with a cathedral-like courtroom where chickens and goats wandered in from the street and old ladies sat knitting in the body of the court, gossiping unceasingly as the lawyers argued their cases. After lengthy debate, in which Simon and various passers-by were invited to contribute, the cases was decided!
At the end of his talk Simon invited questions, and a very lively session ensued which clearly indicated that the audience had found it both stimulating and enjoyable. Our Chairman’s short speech of thanks was followed by an enthusiastic round of applause for an excellent presentation.
Captain Alan Lloynd MNI