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Estonia ratified Ship Arrest Convention

15.03.2001

On March 14, 2001 the Estonian Parliament ratified International Convention on the Arrest of Ships that was adopted at Geneva on March 12, 1999 (hereinafter called "Geneva Convention"). The object of the Geneva Convention is to regulate and unify the provisions of the arrest of ships.

The Geneva Convention defines the term "maritime claim", and provides for that the ship may only be arrested in respect of a maritime claim. The Geneva Convention also regulates the matters of jurisdiction on the arrest of the ship and on the merits of the case.

Since the Geneva Convention has not entered into force yet, Estonian Parliament adopted on March 14, 2001 the amendments to the Estonian internal law - Law of Maritime Property Act and Code of Civil Procedure - in order to implement certain regulations of the Geneva Convention already before the Geneva Convention enters into force.

The amendments to the Law of Maritime Property Act introduce the term of maritime claim (merinõue) in the Estonian internal law. The definition of the maritime claim is similar to the definition in the Geneva Convention. Maritime claim means a claim that arises out of:

1. loss or damage caused by the operation of the ship;

2. loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship;

3. salvage operations or any salvage agreement, including, if applicable, special compensation relating to salvage operations in respect of a ship which by itself or its cargo threatened damage to the environment;

4. damage or threat of damage caused by the ship to the environment, coastline or related interests, as well as:
- costs of measures taken to prevent, minimise, or remove such damage;
- compensation for such damage;

- costs of reasonable measures of reinstatement of the environment actually undertaken or to be undertaken;

- loss incurred or likely to be incurred by third parties in connection with such damage;

- and damage, costs, or loss of a similar nature to those identified above in this clause;

5. costs or expenses relating to the raising, removal, recovery, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship, and costs or expenses relating to the preservation of an abandoned ship and maintenance of its crew;

6. any agreement relating to the use or hire of the ship, whether contained in a charter party or otherwise;

7. any agreement relating to the carriage of goods or passengers on board the ship, whether contained in a charter party or otherwise;

8. loss of or damage to or in connection with goods (including luggage) carried on board the ship;

9. general average;

10. towage, pilotage;

11. goods, materials, provisions, fuel, equipment (including containers) supplied or services rendered to the ship for its operation, management, preservation or maintenance;

12. construction, reconstruction, repair, converting or equipping of the ship;

13. port, canal, dock, harbour and other waterway dues and charges;

14. wages and other sums due to the master, officers and other members of the ship's complement in respect of their employment on the ship, including costs of repatriation and social insurance contributions payable on their behalf;

15. disbursements incurred on behalf of the ship or its owners;

16. insurance premiums (including mutual insurance calls) in respect of the ship, payable by or on behalf of the shipowner or demise charterer;

17. any commissions, brokerages or agency fees payable in respect of the ship by or on behalf of the shipowner or demise charterer;

18. any dispute as to ownership or possession of the ship;

19. any dispute between co-owners of the ship as to the employment of the ship;

20. any encumbrance established in the ship;

21. any dispute arising out of a contract for the sale of the ship.

The amendments to the Law of Maritime Property Act include the principle of the Geneva Convention that a ship may be arrested in respect of (to secure) the maritime claim. The amendments include also certain other regulations concerning the arrest of a ship and the replacement of arrest with another security.

The amendment to the Code of Civil Procedure gives the jurisdiction in respect with the maritime claims to the courts at the location of a ship and to the courts at the location of the home port of a ship. Thus, the amendment enables the plaintiff to bring an action and ask for the arrest in Estonian court if the ship of the person who has caused the maritime claim is located in Estonia.

However, the amendments to the Law of Maritime Property Act and the Code of Civil Procedure do not sufficiently regulate the situations where the arrest of the ship can be applied for in the Estonian court, but the jurisdiction on the merits of the maritime claim has been given by the parties to the court or arbitration outside Estonia. The context of the amendments is based on the assumption that the arrest procedures and the merits of the maritime claim are decided by the same court.

According to the Geneva Convention (art. 7) the courts of the state in which an arrest has been effected or security provided to obtain the release of the ship shall have jurisdiction to determine the case upon its merits, unless the parties validly agree or have validly agreed to submit the dispute to a court of another state which accepts jurisdiction or arbitration. In the latter case, the Geneva Convention provides for the regulations when the arrest is maintained by the court of one country, but the dispute of the maritime claim is settled by the court or arbitration of some other country. The amendments to the Law of Maritime Property Act and the Code of Civil Procedure do not include such regulations, leaving the legal situation in such cases unclear.

As a conclusion, regardless of some insufficiencies in the amendments made to the Law of Maritime Property Act and the Code of Civil Procedure concerning the maritime claim and arrest of ships, the said amendments bring more clarity in the relevant area, and enable the claimants to arrest in Estonia the ship of a foreign debtor and bring an action concerning the maritime claim in the place of location of the debtor's ship.

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