Law & Society

Indonesia, as an archipelagic state, had ratified the International Convention on Maritime Liens and Mortgages 1993. As a continuance, it also ratifies the International Convention on Arrest of Ships 1999 (“Arrest of Ships Convention”). The purposes of such ratifications are to harmonize and to converge Indonesian Shipping Laws with the other Asian countries’ laws. Such harmonization will also automatically encourage creditors in providing fund for ship procurement. The ratification of the two international instruments brings a consequences that there shall be national legislation which conform those conventions. Indonesia subsequently enacted the Law Number 17 of 2008 regarding Maritime (“Indonesian Maritime Law”). This law serves as harmonization of the two international conventions as well as a gate to the new era of Maritime Law in Indonesia. This paper will focuses itself on the arrest of ship in Indonesia. This paper will be divided into 3 (three) parts. Part I will concentrate on Indonesian Maritime Law, specifically on provisions governing the arrest of ship. This part will also describe the requirements and mechanisms set forth in Indonesian Maritime Law to arrest ship/s. Part II will give the reader general overview of the Arrest of Ships Convention. An overview is deemed important to predict future regulation concerning arrest of ship in practice. This is since the Indonesian Government has not yet issued any enforcement regulation of Indonesian Maritime Law. Part III contains conclusion and recommendation that can be derived from previous parts. II. The Arrest of Ship on Indonesian Maritime Law Indonesian Maritime Law provides that arrest of ship shall be conducted through Court-mechanism. Such mechanism is conducted without filing a lawsuit against the owner of ship. Accordingly, based on Article 222 of Indonesian Maritime Law, Port master can only arrests ship based on written Court order. Such order can be issued based on 2 (two) reasons: a. The ship is connected with criminal matter; or b. The ship is connected with civil matter. In the event that the ship is connected with civil matter, a Court order is made based on a claim known as Maritime Claim. Such claim is conducted without file a lawsuit against the ship. The law also specifically mentions several conditions in which a Maritime Claim may arise. Maritime Claim is defined as a claim arising out of one or more of the following: (a) loss or damage caused by the operation of the ship; (b) loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship; (c) salvage operations or any salvage agreement, including, if applicable, special compensation relating to salvage operations in respect of a ship which by itself or its cargo threatened damage to the environment; (d) damage or threat of damage caused by the ship to the environment, coastline or related interests; measures taken to prevent, minimize, or remove such damage; compensation for such damage; costs of reasonable measures of reinstatement of the environment actually undertaken or to be undertaken; loss incurred or likely to be incurred by third parties in connection with such damage; and damage, costs, or loss of a similar nature to those identified in this subparagraph (d); (e) costs or expenses relating to the raising, removal, recovery, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship, and costs or expenses relating to the preservation of an abandoned ship and maintenance of its crew; (f) any agreement relating to the use or hire of the ship, whether contained in a charter party or otherwise; (g) any agreement relating to the carriage of goods or passengers on board the ship, whether contained in a charter party or otherwise; (h) loss of or damage to or in connection with goods (including luggage) carried on board the ship; (i) general average; (j) towage; (k) pilotage; (l) goods, materials, provisions, bunkers, equipment (including containers) supplied or services rendered to the ship for its operation, management, preservation or maintenance; (m) construction, reconstruction, repair, converting or equipping of the ship; (n) port, canal, dock, harbour and other waterway dues and charges; (o) wages and other sums due to the master, officers and other members of the ship's complement in respect of their employment on the ship, including costs of repatriation and social insurance contributions payable on their behalf; (p) disbursements incurred on behalf of the ship or its owners; (q) insurance premiums (including mutual insurance calls) in respect of the ship, payable by or on behalf of the ship owner or demise charterer; (r) any commissions, brokerages or agency fees payable in respect of the ship by or on behalf of the ship owner or demise charterer; (s) any dispute as to ownership or possession of the ship; (t) any dispute between co-owners of the ship as to the employment or earnings of the ship; (u) a mortgage or a "hypothèque" or a charge of the same nature on the ship; (v) any dispute arising out of a contract for the sale of the ship. In relation with these conditions, Indonesian Maritime Law provides that further mechanism regarding arrest of ship will be further regulated by a Minister Regulation. Unfortunately, until the present time, such regulation has not been issued by relevant authorities. As a form of compliance, the regulation will be made in accordance with the Arrest of Ships Convention. Therefore, it is necessary to conduct an overview towards the stated Convention. III. General Overview on Arrest of Ships Convention The Convention defines arrest as any detention or restriction on removal of a ship by order of a Court to secure a Maritime Claim. However, this does not include the seizure of a ship in execution or satisfaction of a judgment or other enforceable instrument. A ship may only be arrested in respect of a Maritime Claim. This means that there exists no other claim against the ship. A ship may be arrested or released from arrest only under the authority of a Court of State in which the arrest is effected. Arrest may be conducted for the purpose of obtaining security. In this vein, Arrest of Ships Convention provides flexibilities. Arrest can be made regardless the existence of a jurisdiction clause or arbitration clause in any relevant contract. The arrest can also be made even if such arrest is to be adjudicated in a State other than the State where the arrest is effected, or is to be arbitrated, or is to be adjudicated subject to the law of another State. Release from Arrest When it comes to the question of how a ship which is arrested can be released, Arrest of Ships Convention expressly provided that a ship shall be released when sufficient security has been provided in a satisfactory form. Nevertheless, this may not be applied in cases of dispute regarding ownership or possession of the ship and dispute between co-owners of the ship as to the employment or earnings of the ship. In these cases, the Court may permit the person in possession of the ship to continue trading the ship, upon such person providing sufficient security, or may otherwise deal with the operation of the ship during the period of the arrest. Satisfactory form means that there shall be an agreement or settlement proposal agreed by both parties. In the absence of such agreement, the Court has authority to determine the nature and the amount of satisfactory form. Nonetheless, such nature and amount shall not exceed the value of the arrested ship. Once the person responsible for the ship has provided sufficient security in satisfactory form, such person may at any time apply to the Court to have that security reduced, modified, or cancelled. Right of Re-arrest and Multiple Arrest Basically, a ship cannot be arrested subsequent to sufficient security given by the person responsible to secure same Maritime Claim. Nonetheless, this is not applicable in several situations. First, the nature or amount of security is inadequate; or second, the person who has already provided the security is not, or is unlikely to be, able to fulfill its obligations; or third, the arrested ship or the security provided was released upon the consent of the Claimant (person who raise Maritime Claim) acting on reasonable grounds; or because the Claimant cannot, by taking reasonable steps, prevent the release. Protection of Owners and Demise Charterers of the Arrested Ships To arrest a ship, one shall be careful in examining the grounds. This is since the Arrest of Ships Convention provides obligation for Claimant, who (1) has been conducting wrongful or unjustified arrest; or (2) excessive security actually have been demanded or provided, to provide security for any loss or damage arisen as a result of the arrest. The amount of such security shall be imposed and determined by the Court who issues the arrest. The Court also empowered to determine the amount of compensation for the loss or damage arisen from the above two conditions. IV. Conclusion Indonesian Maritime Law provides an easier process in arresting ship/s. The law also gives advantages for the Claimant who has suffered loss caused by the ship. The arrest of ship is now can be conducted without submitting lawsuit against the person responsible. This regime makes the process of arrest more efficient and effective. Efficient since the process of arrest will take less time comparing to file a lawsuit. Effective means that the arrest may be used to compel person responsible for the ship to pay or to provide security in order to secure its debt. This is conducted without waiting final and binding decision from the Court. To this end, Indonesian Government should have issued enforcement regulation concerning arrest of ship. This is to avoid uncertainty as well as to create clarity for all Courts in Indonesia. Court in Indonesia, currently, still applying old regime in which a Claimant shall submit a lawsuit before a ship could be arrested.