SWEDEN Law and Practice Contributed by: Michele Fara, Ninos Aho, Paula Bäckdén and Anders Leissner, Advokatfirman Vinge KB
To release the arrest, the owner or a stakeholder can provide security that satisfies the claimant’s demand. The Enforcement Code (1981:774) does not specify what forms of security are valid, but it states that a pledge, a guarantee ( borgen ) or a business mortgage ( företagshypotek ) will do. The court decides if the security is adequate, unless the other party agrees to it. Bank guar - antees and P&I letters of undertaking are usually seen as a form of guarantee and are thus valid. 4.10 Procedure for the Judicial Sale of Arrested Ships According to the Enforcement Code (1981:774), once an enforcement title has been granted, usu - ally a judgment regarding the merits of the claim, and following a granted application of attach - ment ( utmätning ), an arrested vessel, provided it is registered, can be sold at public auction. An arrested vessel is, as a general rule, sold at auction by the Enforcement Authority. However, the Enforcement Code allows the Enforcement Authority to instruct auctioneers to sell proper - ty. Such instructions may also be given to law - yers or other suitable persons. The sale should normally take place within four months of the attachment. The auction shall be announced well in advance and in an appropriate manner. The announce - ment shall contain information about the meet - ing regarding distribution of the purchase price. Holders of claims shall be urged to report their rights to the enforcement authority no later than at the time of the auction. Notification of the sale shall be sent to the appli - cant and the owner, as well as to known credi - tors who have a maritime mortgage, mortgage rights or right of retention, no later than 30 days before the auction. If such a creditor becomes known later, it shall be notified immediately.
Claims are listed in accordance with the priority prescribed by statute. Interest and other ancillary obligations are listed before the principal sum of the claim unless the creditor requests otherwise. The administration expenses are included imme - diately prior to the enforcement claim. A decision to grant an arrest will be enforced by the Enforcement Authority or by an instructed person. The Enforcement Authority informs the vessel’s Master about the arrest order, and the vessel’s certificates and nationality documents will normally be taken into custody. A seal will also be fixed to the rudder. Breaching the arrest of the vessel is sanctioned by fines or imprison - ment of up to one year. The party who requested the arrest might be required to cover the costs of maintaining the arrest in advance, such as har - bour fees or similar costs. Sweden is not a signatory to the Convention on the International Effects of Judicial Sales of Ships. 4.11 Insolvency Laws Applied by Maritime Courts The Company Reorganisation Act (2022:964) is part of Swedish insolvency law and regulates how companies can be reconstructed in order to overcome financial difficulties. A company can apply for reconstruction if it has a viable business model that can survive the financial problems that the reconstruction is meant to solve. The goal of the reconstruction is to help the company overcome its economic troubles and become profitable and stable. Chapter 2 of the Company Reorganisation Act sets out that while the corporate restructuring is in progress, as a main rule, enforcement or other execution according to the Enforcement Code (1981:774) may not take place against the
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