The Claims Review - Issue 3

Arrest of ships

The Club provides a comprehensive debt collection service, which has resulted in the collection of more than USD 5 million in the past two years.  In order to accomplish recoveries it is often necessary to arrest ships on behalf of Members.  (One or two ships have been arrested in each month).  Before an arrest is effected we ask the Member to confirm the existence of the debt by replying to a communication on the following lines:

An arrest to obtain security for your debt is being prepared.  Prior to arranging arrest the Club must seek your confirmation that the debt is owed to you by the owners and is now due and not subject to any known, or suspected, set-off or counterclaim.  The arrest will be in the name of your company and you will appreciate that the Club is totally relying on the information you have provided and is unable to accept any liability for any damages that would become payable should the arrest be declared wrongful.

Members have expressed concern on receipt of this letter that the Club expects them to know whether there is a right to arrest in the particular jurisdiction.  We would like to reassure Members that we are only asking for confirmation that the debt is owed and there is no counterclaim or set-off.  If a ship were to be arrested and for instance it subsequently emerged that the debt had already been paid to the Member, then the Member would face responsibility for wrongful arrest.  Whether there is a right to arrest in any jurisdiction for a particular debt is a question on which the local lawyers will advise, and the club would not hold the Member liable for wrongful arrest if the information provided by him is accurate.

Claims Review 3