By Mr. / Usama Soliman

Advocate before Supreme Court
International jurisdiction of the Egyptian Courts: According the Egyptian Civil and    Commercial code, the Egyptian Courts will have jurisdiction over Urgent and Conservatory procedures to be executed in Egypt irrespective of the nationality of the plaintiff or the defendant and even in case the Egyptian Courts are not competent to decide upon the subjective claim.

The applicable law

Ship arrest in Egypt might be applied for under two different legal regimes:

1- The 1952 Brussels’s Convention on unification of certain rules on arrests of sea-going vessels which has been ratified in Egypt.
2- The Egyptian Maritime Commercial  Law No.8/1990, Articles(59-66).

The party pursuing the arrest needs only to establish that his claim is a “Maritime Claim” as enumerated under article 1 of the said Convention, which are similar to the ones provided for under article 60 of the  Egyptian Maritime Commercial  Law No8/1990.

Soliman Advocates
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E-mail:  usoliman@solimanadvocates.com

Procedures and documents
An application must be made before the competent court requesting the arrest of the vessel, showing evidence that the debt is already due and that such debt is a “maritime debt” as outlined above, and that the debt has not yet been paid.  In addition to the
above evidence,  the following documents shall be required:-
a. A notarized and legalized Power of Attorney (“POA”), to be duly legalized by the nearest Egyptian Consulate.
b. All the relevant documents proving the debt together with an Arabic translation of each document by a sworn translator.
c. In case the arrest is intended not on the indebted vessel, but rather on a sister vessel, supporting evidence must be presented before the court  proving that the vessel to be arrested is a sister vessel.
d. Payment of the relevant court dues. The application for arrest as supported by the relevant documents
will be then submitted before the judge, who will award or refuse granting the arrest and either way without giving any reasons for
his decision.

In normal cases, an order of arrest will be awarded or refused within maximum 3 days, and in case granted, it becomes immediately enforceable on the vessel, through court bailiff who would issue minutes of arrest and notifies  the Master that his
vessel is under conservatory arrest.

Normally, in Egyptian ports, a court bailiff would also serve a notice of  arrest upon the Port Authority, to the Port Police , and upon the Marine Inspection Department, thereby  advising them of the arrest order granted by the court and such authorities will ensure that the vessel remains under arrest.Counter Security

Under Egyptian Law, there is no Counter security required from the plaintiff seeking for the arrest, whether the plaintiff is an Egyptian subject or a foreigner.

Arrest of a sister ship

The plaintiff may arrest a sister ship provided that the sister vessel was owned by the same indebted owner at the time when the debt arose.

The plaintiff, however, is often requested by the Egyptian Courts

to prove that both ships are owned by the same entity to obtain an

order for arrest.

If the ship was under a demise charter, the plaintiff may arrest the

same ship operated by the chatterer or any other ship owned by

the same chatterer. However, evidence to that effect must be

presented before the court at the time of the application for arrest.

Release Procedures

The lifting of an arrest placed on a vessel in one of the Egyptian

Ports may be effected, in case on e of the following measures is

undertaken :

First: Presentation of an adequate security in court’s treasury

The arrestee may present an application for lifting the

conservatory arrest placed on the vessel before the competent

judge (the president of the First Instance Court) provided

presentation of an unconditional bank letter of guarantee with no

time restrictions. The guarantee is to be issued by an Egyptian

first class bank covering the value against which the vessel is

arrested. The Judge would issue his decision after  going through

the application and the letter of guarantee. In the case the letter of

guarantee fulfills the necessary requirements, the judge would

issue his decision to deposit the guarantee in the court’s treasury,

pending a decision to be made on the subject of the claim whether

amicably or judicially, and to lift the arrest placed on the vessel. Upon issuance of such a decision to lift the arrest, the arrestor

would obtain the executor form of the  relevant judgment ordering

the lifting of the arrest and delivers it to the court bailiffs to

undertake the necessary formalities for the lifting of the arrest.

The court bailiff would proceed to the Marine Inspection

Department, and issue minutes of lifting the arrest. The latter

department is to notify the remaining competent authorities of the

lifting of the arrest and that there is no objection against the

sailing of the vessel.

We must explain in this respect  that the Courts in Egypt do not

reckon with the P&I Clubs’ letters of undertaking as acceptable

security to lift the arrest.

Second: lifting the arrest without presentation of a bank letter

of guarantee before  court’s treasury

In case the arrest placed on the vessel is an undoubtedly wrongful

arrest whether due to procedural or subjective reasons (as in case

the debt has already been paid), the arrestee may file an Urgent

Case  before the Judge of Execution, thereby seeking that the

arrest placed on the vessel to be considered as null and void. The

judgment rendered by the judge in such a case is promptly

executable by the power of law, without bail and without awaiting

that  a final judgment  be issued by the court of appeal (in case the

arrestor files an appeal against the said judgment). In normal

circumstances, time frame for hearing such cases would be within

30 – 45 days.

Arrestor’s right to complain against the lifting of the arrest in

view of the insufficiency of the guarantee deposited

In case the arrestor considers that the guarantee deposited by the

arrestee pursuant to a court order against the lifting the arrest

placed on the vessel is inadequate security whether in view of its

quantum or its terms in case it contains unacceptable conditions,

he may file an obstruction against enforcement of the court order

allowing the lifting of the arrest. Accordingly, the court order

allowing the lifting of the arrest shall not be enforced pending a

deciding upon the  obstruction action filed. However, in order that such effect to take place, the  obstruction action should be filed

before the court of execution before actually executing the order

for lifting the arrest. Upon filing the  obstruction action, a hearing

would be scheduled as soon as possible before the Jude of

Execution. Upon conclusion of the pleadings, the judge may issue

its judgment either  suspending execution of the order for lifting

the arrest (i.e. the arrest remains enforced on the vessel) or

rejecting the obstruction action and proceeding with the execution

of the order for lifting the arrest and in such a case, the vessel

shall be able to sail.

Responsibility for wrongful arrest

As a general rule, a claimant has the right to resort to courts to

pursue his actions. However, in case it is revealed that the arrest

placed on the vessel is ill-founded as in cases the debt has already

been paid, the court may order the arrestor to pay damages which

cover the actual damage sustained by the vessel’s owners, her

chatterers, operators or managers as well as the loss of profits,

provided that both types of damage are fully supported with

document.

Responsibility for fraudulent arrest

In case it is revealed that the arrest has been placed on the vessel

by virtue of fraudulent or fabricated documents, the arrestee may

pursue criminal proceedings against the arrestor  even in cases

where the arrestee,  towards avoiding delaying the vessel, pays the

value of the claim since such payment will not hinder his right to

pursue criminal proceedings against the arrestor. In such cases,

the arrestee must prove that the documents used in the  arrest are

fraudulent, fabricated or null.Costs of arrest

As the official language before the courts is the Arabic language,

the supporting documents proving the debt must be translated into

Arabic. As concerns the costs for filing the arrest before the court,

these do not exceed USD100.- plus expenses ranging from

USD300.- to USD500.- depending on the port where arrest is

placed against the vessel.

Lawyers Fees will depend on numerous factors including time

spent and complexity of the case. Accordingly fees differ and are

best calculated on case by case basis.

A/The court fee: to issue a writ around us $ 30 and no bailiff s fee

for serving the writ on board .

- No expenses for maintaining the ship under arrest

B/ Normally, the court will not make any order or request security

for the port charges or the crew wages. Such charges will

accumulate against the vessel and the owner will be liable for the

same during the time period of the arrest and the main action

proceedings.

The port authority and the crew may then, in priority to other

creditors under Articles 29 (b) and (c) of the Egyptian Maritime

Code,

C/ Lawyers Fees will depend on numerous factors for example

time spent,   complexity of the case documents to perused and so

on. Estimates can usually be given to lawyers for specific cases.

P.S: This article provides only a general overview and must not be relied

upon as constituting advice in any specific case. Advice should always be

sought before taking any steps in actual proceedings.

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This article provides for a general overview only and must not be relied upon as constituting

advice in any specific case. Advice should always be sought before taking steps in

proceedings- For Further information pls. Contact Mr. U. Soliman