SWEDEN Law and Practice Contributed by: Michele Fara, Ninos Aho, Paula Bäckdén and Anders Leissner, Advokatfirman Vinge KB
5.8 Other Ways of Obtaining Attachment Orders There are different types of attachment orders in Swedish law that can be used to obtain security, depending on the nature and stage of the claim, the type of property involved and the risk of dissipation or loss of the assets. Apart from ship arrests and pro - visional attachment under Chapter 15 of the Swedish Code of Judicial Procedure (1942:470), if the claimant has a binding decision against the debtor, security can be obtained by attachment ( utmätning ) under the A vessel subject to arrest shall be prevented from departing. However, pursuant to Chapter 4 of the Swedish Maritime Code (1994:1009), the owner or any interested party in possession of the vessel may apply to the court for permission to use the vessel against bail, or as security. This can be granted in two cases: if the vessel is arrested because of a maritime claim related to disputes as to the ownership of the vessel, or to disputes between co-owners of a vessel as to the ownership or possession of the vessel – or the operation of or earnings from the vessel. Swedish Enforcement Code (1981:774). 5.9 Releasing an Arrested Vessel To release the arrest, the owner or a stakeholder can provide security that satisfies the claimant’s demand. The Enforcement Code (1981:774) does not specify what forms of security are valid, but it states that a pledge, a guarantee ( borgen ) or a business mortgage ( företagshypotek ) will suffice. The court decides if the security is adequate, unless the other party agrees to it. Bank guarantees and P&I letters of undertaking are usually seen as a form of guarantee and are thus valid. 5.10 Procedure for the Judicial Sale of Arrested Ships According to the Enforcement Code (1981:774), once an enforcement title has been granted, usually a judg - ment regarding the merits of the claim, and following a granted application of attachment ( utmätning ), an arrested vessel, provided it is registered, can be sold at public auction. An arrested vessel is, as a general rule, sold at auction by the Enforcement Authority. However, the Enforcement Code allows the Enforce - ment Authority to instruct auctioneers to sell prop - erty. Such instructions may also be given to lawyers or
other suitable persons. The sale should normally take place within four months of the attachment. The auction shall be announced well in advance, and in an appropriate manner. The announcement shall contain information about the meeting regarding distribution of the purchase price. Holders of claims shall be urged to report their rights to the enforcement authority no later than at the time of the auction. Notification of the sale shall be sent to the applicant and the owner, as well as to known creditors who have a maritime mortgage, mortgage rights or right of retention, no later than 30 days before the auction. If such a creditor becomes known later, it shall be notified immediately. Claims are listed in accordance with the priority pre - scribed by statute. Interest and other ancillary obliga - tions are listed before the principal sum of the claim unless the creditor requests otherwise. The adminis - tration expenses are included immediately prior to the enforcement claim. A decision to grant an arrest will be enforced by the Enforcement Authority or by an instructed person. The Enforcement Authority informs the vessel’s Master about the arrest order, and the vessel’s certificates and nationality documents will normally be taken into custody. A seal will also be fixed to the rudder. Breaching the arrest of the vessel is sanctioned by fines or imprisonment of up to one year. The party who requested the arrest might be required to cover the costs of maintaining the arrest in advance, such as harbour fees or similar costs. Sweden is not a signatory to the Convention on the International Effects of Judicial Sales of Ships. 5.11 Insolvency Laws Applied by Maritime Courts The Company Reorganisation Act (2022:964) is part of Swedish insolvency law and regulates how companies can be reconstructed in order to overcome financial difficulties. A company can apply for reconstruction if it has a viable business model that can survive the financial problems that the reconstruction is meant to solve. The goal of the reconstruction is to help
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