The Arrest of Vessels Act B.E.2534

In Thailand, the matter of arrest and release of ship is governed by the Arrest of Vessels Act B.E.2534 which came into force in February 1992. Before the implementation of this Act, there was no specific law governing the matter of the arrest and release of a ship and, as a result, foreign ships that caused damage to a Thai citizen or a person domiciled in Thailand could not be arrested. This was considered unfair as Thai flag vessels can be arrested in other jurisdictions when they cause damage to foreigners.

The government of His Excellency Prime Minister Anan Panyarachun realized this problem and, with the support of some of the leading shipping lines in Thailand, the Thai National Legislative Assembly passed the Arrest of Vessels Act in 1991.

Although Thailand is not a signatory or party to the International Convention Relating to the Arrest of Seagoing Ships signed in Brussels in 1952, some principles of the Arrest of Vessels Act are similar to those in this Convention.

Claim in Respect of a Vessel
Whether a creditor has the right to arrest a vessel is of crucial importance. The arresting creditor or the applicant is entitled to apply for the arrest of a vessel as security for a claim in respect of a vessel only. The definition of 'a claim in respect of a vessel' is defined as a right to claim arising from:

damage to life, body or property belonging to anyone caused by either a vessel or the operation of a vessel.
assistance in maritime salvage.
a contract of employment, hire, hire-purchase or borrowing of a vessel, loading service or the like.
a contract concerning the carriage of goods by sea subject to the issuance of a bill of lading.
general average.
loss or damage to property carried on board.
towing services, irrespective of the method employed.
provision of any material or thing for use in a vessel, operation or maintenance of vessel.
shipbuilding, repair or provision of furnishing of a vessel, or shipyard fees.
port charges or port service fees.
hire charges for loading and unloading cargo.
master's or crew's wages.
vessel expenses which the master, charterer, ship's agent or shipper pay in the place of the vessel's owner,
or person in possession of the vesse.
dispute over vessel ownership.
disputes between co-owners over the possession or the use of or income derived from a vesse.
vessel mortage.

The Arrested Vessel
According to the provisions of the said act, the applicant shall be entitled to arrest not only a vessel in dispute which belongs to the debtor, but also her sister ships and other ships which are in possession of the debtor. There are, therefore, two kinds of vessel that can be arrested:-

1) Any vessel belonging to the debtor. In this case the vessel which the creditor seeks to arrest does not have to be the vessel that is directly involved with the claim. Any vessel belonging to the debtor can be arrested.
2) A vessel in the possession of the debtor. In this case the vessel in the debtor's possession does not necessarily have to belong to the debtor but such vessel must be directly involved with the claim and is in the possession of the debtor both at the time when the claim arises and when the arrest application is filed.

An exception, however, is where the claim in respect of the vessel involves the issue of ownership and is instituted by co-owner(s) of the vessel concerning the possession of, use of or income derived from a vessel, or vessel mortgage. In this case, no vessel other than the vessel directly involved in the dispute can be arrested.

The Arresting Creditor
The arresting creditor is entitled to apply for the arrest prior to instituting court action. However, the Arrest of Vessels Act is designed to protect creditors domiciled in Thailand, and as such specifically excludes creditors not domiciled in Thailand from applying to arrest a vessel in Thai jurisdiction.

In case of a debtor domiciled in Thailand, the arresting creditor is required to post security in every case, except where the court is satisfied that the other assets of the debtor are not sufficient to pay for the claim. In case of a debtor whose domicile is not in Thailand, it is at the discretion of the court to determine whether the creditor should post security. The amount of security is at the Court's discretion. This security is for any damages which may be incurred by the debtor as a result of a wrongful arrest. From our experience, security in the form of cash or a Bank Guarantee is acceptable to the Court.

The above is only a short description, for an in depth analysis pleasecontact us:
The information is prepared in cooperation with Pramuanchai Law Office.

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