Shipping 2026

UK Law and Practice Contributed by: Quentin Bargate and Elliot Bishop, Bargate Murray

5.9 Releasing an Arrested Vessel An arrested vessel can be released by (i) providing security acceptable to the court (commonly by pay - ing money into court, or providing bail), (ii) providing alternative security agreed with the claimant (often a P&I club LOU), and/or (iii) successfully applying to set aside the arrest (for example, where the statutory basis is not made out). In practice, P&I club LOUs are routinely accepted in appropriate cases by agreement and, where neces - sary, can be embodied in a court order. Foreign bank guarantees can also be acceptable, but the court will scrutinise form, issuer creditworthiness and enforce - ability; issues such as governing law, jurisdiction and demand mechanics often determine whether a par - ticular guarantee is suitable. 5.10 Procedure for the Judicial Sale of Arrested Ships Judicial sale in the Admiralty Court is typically ordered where (i) the claimant has obtained judgment, (ii) the vessel is a wasting asset or the costs of maintain - ing it are disproportionate, or (iii) the parties’ consent. The court orders appraisement and sale by the Admi - ralty Marshal, who conducts the sale (traditionally by sealed bids/tender, though the procedure can be adapted). Private sale is not the default, but the court may approve an alternative sale process where this is demonstrably in the best interests of the parties and creditors. From arrest to sale, the vessel is in the custody of the Admiralty Marshal; the arresting party will ordinarily be required to fund the Marshal’s expenses and cus - todianship initially, with those expenses enjoying high priority and being reimbursed out of sale proceeds. The distribution of proceeds follows established pri - orities: Marshal’s expenses and costs of sale first, then (broadly) maritime liens (such as salvage and seamen’s wages) and certain possessory liens, fol - lowed by registered mortgages (ranked by order of registration) and then other statutory in rem claims, subject to case-specific issues.

5.11 Insolvency Laws Applied by Maritime Courts The UK does not have a direct equivalent to US Chap - ter 11, but it has a sophisticated corporate rescue framework, including administration, company vol - untary arrangements and restructuring plans under the Companies Act 2006 (Part 26A). These regimes can provide moratorium-like protection and facilitate restructuring. Where an owner is subject to US Chapter 11 or other foreign insolvency proceedings, English courts may recognise and grant relief in support under the Cross- Border Insolvency Regulations 2006 (implementing the UNCITRAL Model Law), including stays of pro - ceedings and relief affecting enforcement. According - ly, while the Admiralty Court has jurisdiction to arrest and sell a vessel, in practice the court will consider recognition/stay issues and the balance of interests; arrest may be stayed or security arrangements adjust - ed where appropriate. 5.12 Damages in the Event of Wrongful Arrest of a Vessel Damages for wrongful arrest are available in England and Wales only on a high threshold: the claimant must generally show that the arresting party acted in bad faith (malice) or with gross negligence in obtaining the arrest. If that threshold is not met, the usual remedy is costs rather than damages. The court will consider the claimant’s conduct and the reasonableness of the steps taken to investigate own - ership and the legal basis for arrest. Prompt applica - tions to set aside an arrest may be made where juris - dictional or statutory requirements are not satisfied. 6. Passenger Claims 6.1 Laws and Conventions Applicable to the Resolution of Passenger Claims Passenger claims in the UK are governed by a com - bination of domestic law and the Athens Convention regime as given effect through retained Regulation (EC) No 392/2009 and implementing domestic regu - lations, including the Merchant Shipping (Carriage of Passengers by Sea) Regulations 2012.

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