CHILE Law and Practice Contributed by: Ricardo Rozas, Max Morgan and Stefano Perretta, JJR Abogados
5.7 Sister-Ship Arrest As pointed out in 5.3 Liability in Personam for Own- ers or Demise Charterers , a lien on a ship granted by a privileged credit can be exercised not only against the actual ship to which the privileged credit relates, but also on a ship in the same ownership or a ship in the same administration or operated by the same person. 5.8 Other Ways of Obtaining Attachment Orders An arrest requested by invoking a credit other than privileged ones – namely, a credit not covered under Articles 844, 845 and 846 of the Code of Commerce (see 5.1 Ship Arrests ) – is subject to the general rules set forth by the Code of Civil Procedure regarding pre-judicial and precautionary measures. That said, in Chilean practice it is unusual to petition an arrest in accordance with the general rules of the Code of Civil Procedure. 5.9 Releasing an Arrested Vessel As regards security for lifting an arrest, the amount of security is usually established by the court based on the petition of the arresting party. The amount cannot exceed the value of the arrested vessel and can be reviewed subsequently through incidental proceed - ings. Regarding the form of security, there are no spe - cific rules, and this will depend on the court’s resolu - tion; however, the security most usually requested and granted is a bank guarantee issued by order of the court. As soon as the security is provided, the court shall lift the vessel arrest without delay. For a long time, protection and indemnity insurance (P&I) club letters of undertaking were accepted only if agreed by the arrest petitioner, mainly owing to the fact that Chilean courts were not accustomed to them. However, in a case of an arrest following a pollution incident, the court hearing the arrest accepted a letter of undertaking with no prior approval from the arrest petitioner. 5.10 Procedure for the Judicial Sale of Arrested Ships In accordance with the Code of Commerce, the judi - cial sale of a vessel, whether voluntary or forced, must observe the rules and formalities set forth by the Code
of Civil Procedure for the judicial sale of real estate. The procedure may take between a couple of months and one or two years depending on the debtor’s behaviour during the proceedings. Court costs are usually minor but other costs might be incurred, such as those relating to the administration of the attached property (incumbent on a depositary who has to ren - der account for their administration before the perti - nent court). 5.11 Insolvency Laws Applied by Maritime Courts In Chile, there is no scheme of insolvency laws analo - gous to Chapter 11 of the United States Bankruptcy Code. 5.12 Damages in the Event of Wrongful Arrest of a Vessel Under Chilean law, the arresting party must attach antecedents that constitute presumption of the right being claimed. If the court considers that the sup - porting documents are not sufficient or the petitioner states they are not yet available to them, the court may require that countersecurity be provided for the potential damage that may be caused if, subsequent - ly, it is found that the petition lacked basis. In addition, when an arrest has been decreed a pre- judicial precautionary measure (ie, a measure to secure the outcome of a subsequent substantive action), the petitioner is obliged to file its complaint request - ing that the decreed arrest remain in force within a period that, in principle, is ten days but that may be extended for up to a total of 30 days, provided there is a sound basis for doing so. Non-fulfilment of this obligation will result in cancellation of the arrest and liability for the damage that may have been caused, on the irrefutable presumption that the grounds for the arrest were fraudulent. In addition, if the arrest was wrongful, fraudulent or lacked basis, the defendant may claim damages in separate ordinary proceedings subject to the general rules set forth by the Code of Civil Procedure.
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