ISRAEL Law and Practice Contributed by: Joseph Sprinzak and Rahel Rimon, J.SPRINZAK
of subcontractor suppliers to realise a maritime lien would probably lead to the situation whereby the ves - sel would be required to pay a number of entities for the same supplies, contrary to the vessel’s expecta - tion that it would have to pay one supplier the agreed consideration for these supplies. 5.5 Arresting a Vessel A claimant seeking to arrest a vessel will usually file an ex parte application supported by an affidavit and supplement it with a claim in rem before the court, asking for the arrest of the vessel as security for their claim. The grounds for arrest must satisfy the provi - sions of the Admiralty Courts Acts. Once the court is persuaded that there is a cause of action and that the damage caused to the applicant by not granting the warrant of arrest would be greater than the damage caused to the defendant by the grant of the order, it will issue a warrant of arrest, which will be valid for six months. To become effective, the warrant of arrest is served on the Master, the Port Authority and the Bor - der Police. Usually, service is effected by electronic means. A ship-owner anticipating this process may file a caveat against arrest, undertaking to provide security in lieu of arrest. There is a court fee, equal to 2.5% of the amount being sought, for filing the claim. Of this, 1.25% is payable upon filing the claim in rem or the application for arrest, whichever is earlier, and 1.25% is payable seven days before the first evidentiary hearing. In accordance with rules of procedure and Supreme Court precedent, particularly CA 168/93 and ALA 201/93 Fullwood Marinated Inc v Lofobunker Co SA (The Arctic Hunter) , claimants in admiralty proceed - ings seeking the arrest of a vessel will not be required to put up any security for the arrest, except in excep - tional case. According to the aforementioned case, an exceptional circumstance might be if the application for a warrant of arrest is based on documents the veracity of which is doubtful. Nonetheless, the court will take into account the property rights of the ship- owner, if appropriate, in accordance with Section 3 of Basic Law: Human Dignity and Liberty and the need to balance these fundamental rights against the claim - ant’s right to an ex parte order of arrest, and where
necessary do so by ordering counter-security in favour of the ship-owner. 5.6 Arresting Bunkers and Freight According to Section 10 of the Vice Admiralty Rules 1883, a writ in rem may be served upon cargo, freight or other property if the cargo or other property is on board a ship. Conceivably, an issue of title would arise in the event of an attempt to arrest unpaid bunkers. 5.7 Sister-Ship Arrest Israel does not recognise the right of a plaintiff to arrest a vessel that is not directly connected with the cause of action – ie, claims against sister-ships or associated vessels (although any such vessels may be attached within the framework of in personam pro - ceedings in the civil courts) as previously described. This was confirmed in the AF 6731-02-17 M/V Huriye Ana (2017), where the Admiralty Court held that it had no jurisdiction to order a “sister-ship arrest”. Nonetheless, within the context of a civil suit against the ship-owner as opposed to admiralty proceedings, and subject to strong evidence, the court could order the “corporate veil” to be lifted, and consequently the attachment of sister ships or vessels owned by affili - ated companies; it should be noted that attachment orders in civil proceedings are comparable to arrest orders, except insofar as concerns collateral security. 5.8 Other Ways of Obtaining Attachment Orders In contrast to the in rem proceedings described in 5.5 Arresting a Vessel , a vessel or other asset may be attached in ordinary civil proceedings. In such cases, claimants are required to provide a letter of under - taking (LOU) on their own behalf, as well as a third- party LOU to reimburse the defendant, should the temporary application be set aside and/or the claim be dismissed on the merits, causing the defendant to incur a loss. The court may exempt the claimant from providing a third-party LOU if it deems it just and proper to do so. 5.9 Releasing an Arrested Vessel An owner or interested party may produce a P&I club LOU as acceptable security in lieu of arrest. Similarly, an Israeli bank guarantee is acceptable security, as is
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