CYPRUS Law and Practice Contributed by: Kyriacos Scordis and Sofi Mylona, SCORDIS PAPAPETROU & Co LLC
international maritime conventions or local laws (eg, the Merchant Shipping (Port State Control) Laws of 2011 and 2015). 4.9 Releasing an Arrested Vessel Pursuant to the Cyprus Admiralty Jurisdiction Order of 1893, the court may, by order and upon a written application, direct the release of the arrested vessel upon such terms relating to security as it deems fit. Therefore, the owner or interested party has to apply to the court for the release of the arrested vessel. The form of security usually requested by the court is a bank guarantee issued by a licensed financial institution in Cyprus. Unless the arresting party consents, it is unlikely that the court will accept a club Letter of Indemnity (LOI) or a foreign bank’s guarantee. 4.10 Procedure for the Judicial Sale of Arrested Ships Pursuant to Rule 74 of the Cyprus Admiralty Jurisdiction Order of 1893, the Supreme Court can appoint the Admiralty Marshal of the Court or any other person to appraise the arrested ves - sel or to sell that vessel, either with or without appraisement, either before judgment (pendente lite) or after final judgment, on the application of any party and by its order. The sale may be ordered to be by public auction (the sale proce - dure adopted in most cases) or by private treaty. The latter is typically allowed when it serves the best interests of all interested parties and is a more favourable outcome than a public auction, for example in cases where a higher price can be achieved through private negotiations compared to a public auction. The sale is advertised in the local press and in appropriate shipping publications. The proceeds from the sale of a ship are paid into the court
and, upon an application by any judgment credi - tor, will be distributed to all judgment creditors who claimed a share of the proceeds, in order of priority. Whenever an arrest order is issued by the Supreme Court, the arrested vessel is placed under the safe custody and supervision of the Admiralty Marshal and/or the Deputy Admiralty Marshal(s), who are appointed pursuant to Rule 5 of the Cyprus Admiralty Jurisdiction Order of 1893 (in practice, the Court appoints the Admi - ralty Marshal in almost all cases). The Admiral - ty Marshal acts as the custodian/bailee of the arrested vessel, with the duty to ensure that the property and crew of the vessel are safe and in good condition or health at all times (and to comply with the relevant orders issued by the Court in the course of the legal proceedings from which the arrest order originates). The ordinary order of priority of claims is as fol - lows: • Marshal expenses in connection with the arrest, custody and sale; • recoverable legal costs of the arresting party (up to and including the arrest) and the party who obtained the order for the appraisement and judicial sale; • possessory liens; • maritime liens; • claims of the Republic of Cyprus for fees, dues and tonnage taxes, in the case of a Cyprus-flag vessel; • claims under registered mortgages; • claims under foreign or unregistered mort - gages; • administrative fines imposed by the compe - tent authorities of Cyprus; and • other maritime claims.
160 CHAMBERS.COM
Powered by FlippingBook