BELGIUM Law and Practice Contributed by: André Kegels, Kegels Advocaten
5.7 Sister-Ship Arrest Ships are “sisters” if they belong to the same physical or legal person and can be arrested if someone has a maritime claim against that person. The same beneficial ownership of ships does not make them sister ships in the legal meaning and such beneficial ownership does not, on its own, allow an arrest. In “alter ego” situations (the arrest of the assets of one for claims against another), it is necessary either to pierce the corporate veil, to prove collusion or to establish fraud. Belgian case law has arrived at such findings by applying standards that are similar to the “alter ego” relationship findings in US case law. 5.8 Other Ways of Obtaining Attachment Orders Apart from ship arrests, all other assets of the debtor can be arrested/attached, including movable assets (bunkers), freight, bank accounts, etc. For the conditions necessary to be allowed to proceed with such an arrest or attachment, see 5.6 Arresting Bunkers and Freight . 5.9 Releasing an Arrested Vessel Once arrested, the vessel can only be released by agreement between the parties or by court order. A court order for release usually means that the case was brought in court again, all parties to the conflict were heard and the judge ordered the release. Arrest proceedings do not initiate the case on the mer - its itself. Separate proceedings in Belgium or else - where must be initiated to that effect. The security must be issued by a first-class bank within the jurisdiction for the arrestor to be obliged to release the vessel from arrest or by a payment in court (via the State’s depository institution). Parties may agree on an alternative. Any such alternative can - not be imposed on the arrestor. The security is to guarantee the in personam claim. If that person is not the owner, the claim against that
other person is to be secured. If the claim is against the charterer, the security is to guarantee that claim. 5.10 Procedure for the Judicial Sale of Arrested Ships The procedure for the public sale of a vessel is a two or three-step judicial process: • arrest of the vessel; • first public auction with provisional adjudication; and • second public auction if there is a higher bid within 15 days of the provisional adjudication (recent statutory changes have resulted in some doubt as to whether a second public auction is still a pos - sibility). Alternatively, after an arrest, a public sale can be organised by an online sales process, with only one auction running over a predetermined period. In some circumstances, the court can allow a sale without this public process. The court that has ordered the public sale can be approached for the purpose of allowing a direct sale without going through the lengthy process of the public sale. If the rights of the totality of the known creditors, the debtor and the ship-owner are reasonably protected, the court may allow such a sale. The sales price must, at minimum, be equal to the market value of the vessel as estab - lished by an independent surveyor. The result is still a court-ordered forced sale of the vessel. Further, if the loan agreement entitles the lender to take possession of the ship, specific proceedings can result in the public sale being avoided. As regards maintenance and costs, as long as the vessel has not changed ownership the costs remain, in principle, for the account of the previous owner. The arrestor or any other party who has an interest could ask the court (or the acting court bailiff) to for - mally recognise the costs of caretaking. Those costs would then be privileged out of the proceeds of any subsequent sale.
88 CHAMBERS.COM
Powered by FlippingBook