Repayment of bail submitted for the setting of a ship’s arrest

Maritime Law

CONSTANTA COURT OF APPEAL / Civil Decision no. 2/MF/18.02.2010 (unpublished).

The arrested ship was forcedly sold at the request of a pursuer creditor. In view of arresting the ship, a bail was submitted by another creditor, the substantive file pending before a foreign court, file non-finalized on the date of the ship’s forced sale.

The creditor that arrested the ship submitted an application for the repayment of the bail, given the forced sale of the ship. The court on the merits (Constanta Tribunal, Minutes no. 54/MF/02.10.2009 – unpublished) dismissed the application, considering that, as long as the merits of the claims between the parties were not settled by the competent foreign court and the debtor owner of the ship did not submit a comfort letter, the measure of the arrest not being thus raised or abolished, the conditions of art. 723 index 1 (3) of the Code of Civil Procedure for bail repayment were not met.

Constanta Court of Appeal admitted the appeal, considering that the arrest set upon the ship was followed by a final arrest with execution that operated within the enforcement procedure of the arrested ship, the ship being forcedly sold, the provisions of art. 690 of the Commercial Code on the settlement of creditors’ privileges on ships being applicable in this case. The court judiciously considered that the arrest for which bail was paid, now required to be repaid, has become obsolete, which means it is ineffective for the future, depriving it of any effect due to the occurrence of cases subsequent to its establishment.

Also, the court of appeal held that, upon the irrevocable settlement of the merits of the case, payment of any possible compensation can no longer be claimed by the defendant as arising from the arrest, the latter being replaced by a final executing arrest.

The solution of the court of appeal is correct, maintaining a bail submitted for the arrest of a ship being something unconceivable, given that the ship was enforced at the request of another creditor, the subject matter of the arrest vanishing (the ship owned by the debtor), as well as the reason of maintaining that bail, by way of consequence.

However, in our opinion the solution of the first instance may have practical value, even essential in certain conditions, given that the plaintiff creditor that requested the measure of the arrest loses the substantive trial taking place before a foreign court and the defendant asks for damages arising from an abusive conduct of the plaintiff, damages requested for the period between the establishment date of the arrest and the date of the enforcement by another plaintiff. Under these circumstances, the solution of the first instance may appear as justified, the bail having the role to compensate the defendant affected by an abusive conduct of the plaintiff, in this case for the period mentioned above.