Wrongful arrest of ships

Abstract

This thesis endeavours to analyse the concept of wrongful arrest of ships under Maltese law and those provisions relating to liability and damages for such arrests. Ship arrest is an attractive and exceptional tool available to creditors seeking to obtain satisfaction for their claims. However, the very characteristics and features of ship arrest, which are conducive to its attractive nature, are precisely what expose this institution to vulnerability in the face of potential abuse by creditors. The law plays a crucial role in striking a balance between creditors’ entitlement to arrest their debtor’s vessel whilst simultaneously preventing illegitimate or careless creditors from taking advantage of this right and pursuing wrongful arrests. Although the Code of Organization and Civil Procedure provides certain preventive and protective mechanisms in the context of wrongful arrests, unfortunately they have proven ineffective and many a time shipowners have been left without a remedy. The imposition of the penalty contemplated in the law, for pursuing a wrongful arrest, is at the discretion of the court after having been satisfied that one of the, limited, circumstances envisaged therein exists. If the court is not satisfied as to the existence thereof it will not impose the penalty and will also refrain from awarding compensation since, as the law stands, compensation can only be granted where a penalty has been imposed. Therefore, the prevailing situation grants claimants the possibility of arresting a ship without ascertaining whether the relevant legal requisites have been satisfied and moreover, without having to answer for the consequences of their actions. Reform is essential in order to bring claimants and shipowners on an equal footing at law and provide shipowners with the protection they deserve. Thus, the ultimate scope of this study is to provide recommendations as to how this issue surrounding liability and damages for wrongful arrests may be remedied.