ISRAEL Law and Practice Contributed by: Joseph Sprinzak and Rahel Rimon, J.SPRINZAK
In accordance with rules of procedure and Supreme Court precedent, particularly CA 168/93 and ALA 201/93 Fullwood Marinated Inc v Lofobunker Co SA (The Arctic Hunter), claimants in admiralty proceedings seeking the arrest of a vessel will not be required to put up any security for the arrest, except in excep - tional case. According to the aforementioned case, an exceptional circumstance might be if the application for a warrant of arrest is based on documents the veracity of which is doubt - ful. Nonetheless, the court will take into account the property rights of the ship-owner, if appro - priate, in accordance with Section 3 of Basic Law: Human Dignity and Liberty and the need to balance these fundamental rights against the claimant’s right to an ex parte order of arrest, and where necessary do so by ordering counter- security in favour of the ship-owner. 4.6 Arresting Bunkers and Freight According to Section 10 of the Vice Admiralty Rules 1883, a writ in rem may be served upon cargo, freight or other property if the cargo or other property is on board a ship. Conceivably, an issue of title would arise in the event of an attempt to arrest unpaid bunkers. 4.7 Sister-Ship Arrest Israel does not recognise the right of a plaintiff to arrest a vessel that is not directly connected with the cause of action; ie, claims against sister ships or associated vessels (although any such vessels may be attached within the framework of in personam proceedings in the civil courts) as previously described. This was confirmed in the AF 6731-02-17 M/V Huriye Ana (2017), where the Admiralty Court held that it had no jurisdiction to order a “sister- ship arrest”.
Nonetheless, within the context of a civil suit against the ship-owner as opposed to admiralty proceedings, and subject to strong evidence, the court could order the “corporate veil” to be lifted and consequently the attachment of sister ships or vessels owned by affiliated companies; it should be noted that attachment orders in civil proceedings are comparable to arrest orders, except in so far as concerns collateral security. 4.8 Other Ways of Obtaining Attachment Orders In contrast to the in rem proceedings described in 4.5 Arresting a Vessel , a vessel or other asset may be attached in ordinary civil proceedings. In such cases, claimants are required to provide a Letter of Undertaking (LOU) on their own behalf, as well as a third-party LOU to reimburse the defendant, should the temporary application be set aside and/or the claim be dismissed on the merits, causing the defendant to incur a loss. The court may exempt the claimant from pro - viding a third-party LOU if it deems it just and proper to do so. 4.9 Releasing an Arrested Vessel An owner or interested party may produce a P&I Club LOU as acceptable security in lieu of arrest. Similarly, an Israeli bank guarantee is acceptable security, as is the deposit of the claimed amount in the court treasury. 4.10 Procedure for the Judicial Sale of Arrested Ships Once a vessel has been arrested in accordance with the rules and judgment has been entered in rem against the vessel and/or ship-owner, the court, usually at the request of the claimant, will examine whether the ship-owner is able to pay the sum awarded. In the event that it concludes that they are incapable of paying this sum, the court will order the sale of the vessel.
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