Shipping 2025

ISRAEL Law and Practice Contributed by: Joseph Sprinzak and Rahel Rimon, J.SPRINZAK

the owners were not personally liable to pay the agent. Equally, in AF 22358-02-14 M/V Captain Harry (2016), a supplier’s claim was dismissed due to a lack of owner’s liability; nonetheless, the Admiralty Court noted that there were different types of maritime liens and that, for example, the maritime lien for salvage existed, even if the owners were not liable for the circumstances leading to the salvage event. On appeal, the Supreme Court held that the claim for unpaid bunkers could not be heard on the merits due to the principle of res judicata (CA 7138/16 M/V It should be noted that bunker supplies are regarded as necessaries both under Section 41(8) of the Shipping (Vessels) Law – 1961 and under Section 5 of the Admiralty Court Act 1861, and accordingly a bunker supplier may arrest the vessel in the event of breach of contract to pay for the bunkers. Nonetheless, according to the judgment handed down in CF 45897-02-12 OW Bunker Malta Ltd v M/V Emmanuel Toma - sos (referred to in 4.3 Liability in Personam for Owners or Demise Charterers ), the lien, and consequently the right of arrest, is limited to the party that directly entered into the supply agree - ment with the vessel and does not follow into the hands of subcontractors who supplied the fuel. The rationale behind the distinction between the supplier of the goods and subcontractors is that the supplier has collateral to secure the payment for the goods, namely the vessel itself. Under this construction, the vessel may proceed with its regular voyage, while the supplier need not wait for other collateral, thereby delaying and interfering with the operation of the ves - sel. By comparison, the subcontractor (namely, Captain Harry (2018)). 4.4 Unpaid Bunkers

the physical supplier) does not have a direct arrangement with the vessel and will receive its payment from the party ordering the goods and not the vessel, its owners or crew. The grant of security over the vessel to a subcontractor is not required in order to secure the mobility of the vessel. The court also noted that the recognition of the right of each one in the chain of subcon - tractor suppliers to realise a maritime lien would probably lead to the situation whereby the vessel would be required to pay a number of entities for the same supplies, contrary to the vessel’s expectation that it would have to pay one sup - plier the agreed consideration for these supplies. 4.5 Arresting a Vessel A claimant seeking to arrest a vessel will usu - ally file an ex parte application supported by an affidavit and supplement it with a claim in rem before the court, asking for the arrest of the ves - sel as security for their claim. The grounds for arrest must satisfy the provisions of the Admi - ralty Courts Acts. Once the court is persuaded that there is a cause of action and that the dam - age caused to the applicant by not granting the warrant of arrest would be greater than the dam - age caused to the defendant by the grant of the order, it will issue a warrant of arrest, which will be valid for six months. To become effective, the warrant of arrest is served on the Master, the Port Authority and the Border Police. Usually, service is effected by electronic means. A ship- owner anticipating this process may file a caveat against arrest, undertaking to provide security in lieu of arrest. There is a court fee, equal to 2.5% of the amount being sought, for filing the claim. Of this, 1.25% is payable upon filing the claim in rem or the application for arrest, whichever is earlier, and 1.25% is payable seven days before the first evidentiary hearing.

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