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Lighthouse - November, 2015.

Arrested Vessel Escapes Maltese Waters

In today’s day and age there are many advanced tracking methods introduced to monitor the movement of vessels in the territorial waters;  However, despite the same, there have been occasions when arrested vessels manage to flee from their specific jurisdiction, thereby tricking the automated tracking systems. The most recent incident being, MV Madra which escaped the Maltese waters.

Malta imposes penalties on corrupt ship owners who break the law and escape the Maltese waters.  Pursuant to Article 865 of the Code of Organisation and Civil Procedure, when a vessel subject to arrest warrant escapes, a penalty of Euro 116,470 shall be paid by the following parties, namely, the owner, bareboat charterer or the person who is in possession of the vessel during the time of breach. In a recent case “Cassar Fuel Limited vs. MV Madra”, the Maltese Civil court examined the application and interpretation of the said Article.

Facts:

The vessel MV Madra was arrested due to default in payment to M/s. Cassar Fuel Limited and subsequently it absconded.  The Master of the ship along with the crew switched off the vessel’s automatic id system, which was the only security that Cassar Fuel Limited had and escaped the Maltese waters.  Cassar Fuel Limited initiated the proceedings in rem against the vessel for the penalty payment as stipulated in Article 865 of the code.  One of the key issues in question was whether an action could be brought against the vessel or the person(both legal and natural) who fled the vessel from Malta in violation of the court order.

Findings:

Jurisdiction of the Courts was determined on the following factors:

  1. 1.The subject vessel should be in Maltese waters
  2. 2.If the ship owner remits the claim amount as alternative security in court, then it would be an exception to the first rule
  3. 3. If an alternative security has been remitted in the court instead of the vessel, then the ship owner could leave the territorial waters.


However, in this case no such deposit was made by the vessel that jumped arrest.  Further the proceedings under Article 865 would be based on the presumption that the vessel is no more within the territorial waters of Malta, which by itself would defy the requisites for jurisdiction in rem.  Therefore, the court held that the claim for penalties under Article 865 could not be initiated against a vessel in rem.

Decision:

The Maltese court concluded that the proceedings be commenced in personam against the ship owner, the bareboat charterer or any other person in possession of the vessel during the time of breach.  The court concluded that the right to claim the penalty under Article 865 is totally independent from the underlying claim, and as such the proceedings should be commenced in personam against the individual(s) who removed the vessel from the Maltese water.

Conclusion:

After a thorough interpretation of Article 865, the court confirmed that the said Article provides a partial remedy to the Creditors where the vessel escapes the territorial waters.  An arrest warrant could be recognized as a kind of security granted by the courts when it is yet to determine the case based on merits.  However, the court confirmed that, as it is rightly explained in Article 865 of the Code, the right to claim penalty is without prejudice to the creditor’s alternative right to chase behind their claim.

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