JAPAN Law and Practice Contributed by: Jumpei Osada, Masaaki Sasaki, Takuto Kobayashi and Hiroshi Ideyama, TMI Associates
Possibility of the Arrest by Physical Supplier If the bunker supplier is an actual supplier and not a contractual supplier, it is unlikely to be granted the right to arrest the vessel, since the claimant does not have a contractual claim against the ship-owners, demise charterers or time charterers of the vessel. Issue of Conflict of Laws It should be noted that Japanese courts may also require that (i) the governing law of the bunker supply contract, and/or (ii) the law of the country where the bunker is supplied or the flag state of the vessel, rec - ognise and grant any such arrest, which is up to the interpretation of each court over the issue of conflict of laws. 5.5 Arresting a Vessel In order to file an application for the arrest of a vessel, an original power of attorney and corporate certifi - cates are required as a formality. Documents which prove the claimant’s claims/liens and their supporting affidavit may also be required. All the documents must be attached with Japanese translations, but, gener - ally, notarisation and apostille are not required. 5.6 Arresting Bunkers and Freight Arresting Bunkers Under Japanese law, it is extremely difficult or almost impossible to arrest a remaining bunker on board. This is due to the interpretation of the requirements of the Civil Execution Act and the difficulties lying in the practical process of arrest of a bunker which is in the tank of the vessel. Arresting Freight The right to arrest the freight on board the vessel may not be granted under Japanese law; however, claims for losses or damages of the freight may be covered by the lien which arises from the scheme of limitation of liability for marine claims. 5.7 Sister-Ship Arrest It is not possible to arrest a sister-vessel with a mari - time lien. Conversely, such an order may be granted by a provisional attachment. However, the thresholds are high in terms of the requirement that the registered owner of the sister-ship must be liable in personam, and, after arresting the vessel, the claimant must com -
mence normal litigation procedures to obtain title of debt against the aforementioned registered owner. 5.8 Other Ways of Obtaining Attachment Orders In general, there is no other practical measure to arrest the ship, other than as mentioned in 5.1 Ship Arrests and 5.2 Maritime Liens , but this may still depend on the factual background. 5.9 Releasing an Arrested Vessel In the Case of Arrest by Maritime Lien or Mortgage If a vessel is arrested by enforcement of a maritime lien or mortgage, then cash, bank guarantees, insur - ance bonds or a P&I club’s Letter of Indemnity (LOI) are accepted as security to release the vessel. In the Case of Arrest by Provisional Attachment Order If a vessel is arrested by a provisional attachment order, the courts will normally accept only cash as a security to release the vessel. 5.10 Procedure for the Judicial Sale of Arrested Ships Procedure for the Judicial Sale Arrest of a vessel as an enforcement of lien or mort - gage is a part of the judicial auction procedure. If the arrested vessel is not released with sufficient security, the court will proceed to the sale of the vessel, by: • deciding on the end of the period in which a per - son who has a claim may apply for distribution of proceeds; • evaluating the vessel; • holding a judicial auction; If a vessel is arrested under a provisional attachment order, a judicial sale procedure will not be held until the arresting party obtains title of the debt in the normal litigation procedures in the court. In the Japanese jurisdiction, once a vessel is arrested by the court in the legal proceedings, a private sale is not allowed. • deciding on the sale of the vessel; and • distributing the proceeds to claimants.
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