Ship arrest to secure maritime claims under international conventions and vietnameses law

HO CHI MINH CITY UNIVERSITY OF LAW FACULTY OF INTERNATIONAL LAW -*** - NGUYEN THI KIM Y STUDENT ID: 1853801014228 SHIP ARREST TO SECURE MARITIME CLAIMS UNDER INTERNATIONAL CONVENTIONS AND VIETNAMESES LAW BACHELOR THESIS School year: 2018 – 2022 Supervisor: LL.M Vo Hung Dat Ho Chi Minh City – Year 2022 HO CHI MINH CITY UNIVERSITY OF LAW FACULTY OF INTERNATIONAL LAW -*** NGUYEN THI KIM Y STUDENT ID: 1853801014228 SHIP ARREST TO SECURE MARITIME CLAIMS UNDER INTERNATIONAL CONVENTIONS AND VIETNAMESE LAW BACHELOR THESIS School year: 2018 - 2022 Supervisor: LLM Vo Hung Dat Ho Chi Minh City – Year: 2022 DECLARATION I declare that this thesis is the result of my research, which is implemented under the supervision of LL.M Vo Hung Dat, ensures honesty, and complies with rules and regarding quotation, the note of references Therefore, I hereby take full responsibility for this declaration I am also deeply indebted to my family, my friends, my supervisor and Ho Chi Minh University of Law for all their assistance and support for me throughout the production of this research TABLE OF CONTENTS LIST OF ABBREVIATIONS INTRODUCTION CHAPTER I GENERAL THEORY 1.1 Definitions 1.1.1 Definition of ship arrest 1.1.2 Characteristics of ship arrest to secure martime claims 1.1.3 “Detention of ship” and “Seizure of ship” 1.2 Maritime liens and maritime claims 10 1.3 Action in rem and action in personam 12 1.4 Development of regulations on ship arrest 16 1.4.1 International conventions 16 1.4.2 In Vietnam 19 Conclusion of Chapter I 21 CHAPTER II REGULATIONS ON SHIP ARREST TO SECURE MARITIME CLAIMS 22 2.1 The notion of “Ship” 22 2.2 Classification of Maritime Claims 23 2.2.1 New maritime claims 23 2.2.2 Other maritime claims 25 2.3 Conditions of Ship Arrest 29 2.3.1 Arrest of ship direclty raising maritime claims 29 2.3.2 Arrest of Sister Ship 35 2.4 Procedure of Ship Arrest 37 2.4.1 Jurisdiction of Ship Arrest 37 2.4.2 Procedure of Ship Arrest 38 2.4.3 Release from arrest 43 2.5 Right of Rearrest and Multiple Arrest 46 2.6 Recommendations on regulations on ship arrest to secure maritime claims in Vietnam 48 2.6.1 Examining Vietnamese regulations on ship arrest 48 2.6.2 Accession to conventions on ship arrest 49 Conclusion of Chapter II 52 CONCLUSION 53 LIST OF ABBREVIATIONS BRUSSELS CONVENTION 1952 International Convention Relating To The Arrest Of Sea – Going Ships 1952 MLM 1993 International Convention On Maritime Liens And Mortgages 1993 GENEVA CONVENTION 1999 International Convention On Arrest Of Ships 1999 ORDINANCE 2008 Ordinance No.05/2008/Pl-Ubtvqh12 On Procedures For The Arrest Of Seagoing Ships DECREE 57 Decree No.57/2010/Nđ-Cp On Detailing And Guiding The Implementation Of The Ordinance On Procedures For The Arrest Of Seagoing Ships MC 2015 Maritime Code 2015 CPC 2015 Civil Procedure Code 2015 INTRODUCTION The neccessity of research With the strategy of development of marine economy, shipping in Vietnam is increasingly expanding1 This leads to exciting maritime activities in our country’s seaports as well as the expansion of Vietnamese ships to the world In addition to the positive aspects, recently, the number of Vietnamese ships detained at abroad seaports as well as foreign ships detained at Vietnamese seaports have increased rapidly The arrest of ships can result from many reasons, one of the main reasons being a maritime trade dispute And it is sure that the value of maritime trade disputes is significant value Currently, arrest of ships is regulated in Chapter VI of MC 2015, the Ordinance 2008 and relevant documents In addition, the arrest of ships is also regulated in international conventions such as Brussels Convention 1952 and Geneva Convention 1999 This topic will focus on studying issues related to the procedures for arresting ships according to the provisions of both international conventions, at the same time, combine with researching on Vietnamese regulations governing on ship arrest to secure maritime claims Moreover, this topic also guides many practices in arrest of ships, thereby bringing out inadequacies in current legal regulations From this point, the topic will compare and find solutions to improve the law of Vietnam to contribute to protect domestic maritime enterprises and promote international shipping integration Key words: ship arrest, maritime claims, Brussels Convention 1952, Geneva Convention 1999, Maritime Code 2015, the Ordinance 2008 The purpose of research The first goal of this research is to analyze and make comparisons between Brussels Convention 1952 and Geneva Convention 1999 Besides, the assessment of Vinamarine, “Hàng hóa biển Quảng Ninh tăng hai số”, https://www.vinamarine.gov.vn/vi/tin- tuc/hang-hoa-qua-cang-bien-quang-ninh-nam-2020-tang-hai-con-so (access on 29/3/2022) Vietnamese law on ship arrest is carried out based on the previous comparison, national legal regulations, and judicial practice to explore advances as well as shortcomings of existing Vietnamese legal regulations Afterwards, the research venturous not only offer solutions to contribute to legal grounds on ship arrest in Viet Nam in line with standards of international conventions but also makes comments on accession in international conventions on ship arrest The second goal is to present the procedure of ship arrest in Vietnam The thesis is considered as an important source for subjects interested in maritime field as well as relevant issues of ship arrest to consult when conducting the ship arrest procedure or researching relevant legal issues The object and limitation of research In the term of the main object of the researching, the thesis focuses on regulations on ship arrest under Brussels Convention 1952, Geneva Convention 1999 and Vietnamese legal documents Besides, the thesis also researches practical issues of ship arrest in some countries to clarify posibility application regulations of ship arrest in fact In the term of the limitation of the researching, the author concentrates on studying main issues including claims raising the right of ship arrest, conditions of ship arrest, the procedure of ship arrest and the matter in respect of right of rearrest and multiple arrest The methodology of research Generally, the thesis is carried out based on the basis method being dialectical materialism Besides, the author conducts to combine variety methods during researching as follows: In chapter I, the author applies synthetic method to obtain collective information of general theory to establish the backgound for further analysis in chapter II Besides, the author combines analytical method with comparative method to clarify definitions which easily leads to misunderstand such as arrest and detention, maritime liens and maritime claims, action in rem and action in personam Similar to chapter I, chapter II is conducted based on three most common methods such as systhetic method, analytical method and comparative method The purpose of chapter II is to clarify similarities as well as differences among both conventions and Vietnamese legal system and try to explain reasons leading to those differences To achive this goal, systhetic method is used to collect information in many documents; then, analytical method is applied to analyze collective information; lastly, the author uses comparative method to explore features of ship arrest in different legal documents and shortcomings in Vietnamese regulations On this ground, the author strongly gives opinion to develop legal frame on ship arrest in Viet Nam The literature review of research Up to the present time, the issue of arrest of ship has been studied in many intensively articles in Viet Nam, as follows: - Nguyen Thi Kim Quy (2005), “Bắt giữ tàu biển hàng hải quốc tế vấn đề hoàn thiện pháp luật Việt Nam”, Master Thesis, Hanoi Law Univerity: The thesis focuses on analyzing regulations on ship arrest specified in Maritime Code 2005 and international conventions Besides, the thesis examines practice of ship arrest in Ho Chi Minh in the period from 1994 to 1997 - Vo Hung Dat (2018), “Bắt giữ tàu biển nhằm đảm bảo giải khiếu nại hàng hải theo Công ước Geneva 1999 pháp luật Việt Nam”, Master Thesis, Ho Chi Minh University of Law: This research focuses on regulations on ship arrest (except the issues in respect of wrongful arrest, rearrest and multiple arrests) specified Geneva Convention 1999 and make a comparison with Vietnam Meanwhile, the research finds shortcomings of Vietnamese laws and presents recommendations to develop the law and accede to the convention on ship arrest - Le Phuong Dung (2015), “Công ước quốc tế năm 1999 bắt giữ tàu biển việc gia nhập Việt Nam”, Master Thesis, Hanoi Law University: The thesis researches issues of ship arrest under Geneva Convention 1999 and the experience of foreign countries as state parties of this convention Afterwards, the thesis examines Vietnamese regulations on the previous research and develops some recommendations for Vietnam to accede to Geneva Convention 1999 Besides, other researches also analyzes ship arrest as follows: Nguyen Tien Vinh (2015), “Một số vấn đề pháp lý việc Việt Nam gia nhập Công ước quốc tế bắt giữ tàu biển năm 1999”, Science of Procuracy, Hanoi Procuracy University, Vol 04 (08), page – 8; Phan Thi Ngoc Ha (2010), “Một số vấn đề lý luận thực tiễn bắt giữ tàu biển theo pháp luật Việt Nam hướng hoàn thiện”, graduate thesis, Ho Chi Minh University of Law; In foreign countries, there are many international researches on arrest of ships to ensure settlement of maritime claims as follows: - Stanley Onyebuchi Okoli (2010), “Arrest of Ships: Impact of the Law on Maritime Claimants”, Master thesis, Lund University: The thesis researches historical development of admiralty jurisdiction and action in rem in England, the law of ship in accordance with Brussels Convention 1952 and Geneva Convention 1999 as well as issues in respect of maritime claims, liens and mortgages under the 1926 Liens and Morgages Convention and the 1993 Liens and Morgages Convention - Nadiya Isikova (2012), “The Ship Arrest Conventions of 1952 and 1999: international and Ukrainian perspectives”, Dissertations, World Maritime University: The primary goal of this dissertation is to investigate regulations on ship arrest through a comparison of both Brussels Convention 1952 and Geneva Convention 1999 In the meanwhile, the dissertation will examine Ukrainian law by focusing on national laws as well as judicial practice Other studies examine ship arrest in the following ways: Md.Rizwanul Islam (2007), “The Arrest of Ship Conventions 1952 and 1999: Disappointment for Maritime Claimants”; Hill Dickinson (2003), “Arrest regimes: Comparing English law, and the position under the Arrest Convention 1952 and the Arrest Convention 1999”; The structure of researching 2.6 Recommendations on regulations on ship arrest to secure maritime claims in Vietnam 2.6.1 Examining Vietnamese regulations on ship arrest Up to now, Vietnam has not ratified any international conventions on ship arrest, even Brussels Convention 1952 or Geneva Convention 1999 but already established a legal framework for ship arrest As analyzed in Section 2.1 to 2.5, regulations on arrest of ships still have many shortcomings So, it is necessary to explore new solutions in line with the trend of the world in maritime field as follows: To begin with, maritime claims result in the right of ship arrest Although the list of specified claims is quite exhaustive, some claims which need detailing In particular, claims relating to insurance should be limited to insurances relating to the arrested ship Meanwhile, claims in respect of salvage should be expanded to contain claims relating to salvage operations rather than salvage wages because the salvage process may cause other situations such as property damages, pollution incidents, and others in connection with the salvage of vessels Second is the condition for ship arrest, which is not owned by the defendant As analyzed above, for this case, Geneva Convention 1999 further provides additional condition that arrest is only permitted if national law where the ship is arrested, there must exist a possibility of enforcement against the ship by judicial or forced sale to simultaneously protect interests of the opposing parties But Vietnamese law has not set this limit yet Accordingly, when the time period of ship arrest expires, the ship shall be allowed to leave the port if there is no request for continuing the arrest Despite the Court’s permission to continue the arrest, the ship is unable to enforce because there is no provision to permit enforcement on property not owned by the defendant It becomes a disadvantage for the claimant or in other words, it shall be meaningless if the arrest does not put enough pressure to settle the maritime claim However, coming up with a solution to this problem is not easy Because if the legislator accepts the whole content of this condition, it will lead 48 contrary to the provisions of the basic principles of the law on enforcement According to LLM Vo Hung Dat, in Ho Chi Minh University of Law, suggested a solution that can harmonize with Vietnamese law that arrest of ship not under the ownership of the defendant should be limited to cases where the claimant has a maritime lien.145 This solution is appropriate because maritime lien is a special right specified in MC 2015 as well as in MLM 1993, which allows that a maritime lien can lead to arrest as well as force sale On the other hand, this solution does not conflict with the provisions of international conventions, namely the Geneva Convention 1999 Third is the right to arrest multiple ships Article 140 (2) of MC 2015 mentioned the right of arrest of multiple ships, but it is still unclear when many ships are allowed to arrest at the same time Therefore, Vietnamese law must clarify this provision in order to implement it uniformly In the spirit of the Geneva Convention 1999, arrest of multiple ships may be permitted if the value of the arrested ship is less than or equal to the value of the claim or the security is not enough to settle the claim at the time of the request for the arrest of multiple ships In conclusion, Vietnamese regulations on the arrest of ships have initially been completed and are gradually moving towards international standards This success is thanks to efforts in studying maritime practice, and consulting and applying international regulations on the arrest of ships 2.6.2 Accession to conventions on ship arrest Currently, Vietnam is going through a period of rejuvenation and upgrading of its fleet Vietnam shipping companies are also developing their strategies to move toward the international market On the other hand, the fleet structure is not balanced in accordance with the international trend of freight containerization because 145 Vo Hung Dat, Bắt giữ tàu biển nhằm đảm bảo giải khiếu nại hàng hải theo Công ước Geneva 1999 pháp luật Việt Nam, Ho Chi Minh University of Law, 2018, p.80 49 Vietnam’s container fleet has only 38 ships, accounting for a small proportion (3.7%) in the fleet structure which means that the majority of foreign ships serving import and export activities are operating strongly in Vietnam.146 Therefore, it is inevitable that the number of maritime claims arising arrest of ships tends to increase in Vietnam As a result, the number of arrested in Vietnam is increasing Therefore, it is very necessary to complete a legal frame on the arrest of ship and handling of arrested ships as well as related issues according to the trend of maritime development in the world to protect the legitimate rights and interests of shipping enterprises Geneva Convention 1999 was drafted after Brussels Convention 1952 but it contains more progressive provisions in line with the trend of maritime development Especially, the convention is considered to balance the interests of shipowners and claimants Therefore, if Vietnam accepts accession and ratification of Geneva Convention 1999, it shall supplement more basis to protect the interests of Vietnamese ships when being arrested in foreign countries, especially in state parties because current regulations only regulate the activities of arrest of ships carried out in Vietnam In addition, maritime law is not similar in different jurisdictions It is sure that studying different laws of various countries not only wastes money and time of Vietnamese maritime enterprises, but also prevents them from protecting legal rights when their ship is arrested abroad Therefore, accession to the convention shall create a ground for the competent authorities of Vietnam to be more proactive in dealing with maritime claimants, especially in state parties Moreover, Vietnamese legal frame of ship arrest is similar to Geneva Convention 1999, which encourages accession to become easier Another priority is that the estimated import work does not require any costs 147 For those reasons, it is emphasized that participation in Geneva Convention 1999 is a suitable solution for implementing ship arrest to secure 146 Vinamarine, “Đội tàu biển Việt Nam thay đổi sau gần thập kỷ”, https://vinamarine.gov.vn/vi/tintuc/doi-tau-bien-viet-nam-thay-doi-nao-sau-gan-mot-thap-kyv (access on 23/6/2022) 147 Vo Hung Dat, Bắt giữ tàu biển nhằm đảm bảo giải khiếu nại hàng hải theo Công ước Geneva 1999 pháp luật Việt Nam, Ho Chi Minh University of Law, 2018, p.84 50 maritime claims more effectively Vietnamese ship owners operating in foreign countries have inherited an explicit legal regime to comply and protect their interests However, accession to a convention cannot be completed in the short - term Vietnam needs to go through a process of careful assessment of the advantages and disadvantages of joining Geneva Convention 1999 To accelerate this process, Vietnam needs to conduct several strategies to get compatible with international standards, as follows: Firstly, improving resources in adjudicating and settling maritime disputes over arrest of ships with foreign elements With the current development of the maritime field, maritime disputes becomes more complicated For example, in practice of handling cases on applying for the arrest of sister ships, each judge with unsimilar background of general commercial or civil law could have different perspective on this issue 148 For that reason, it requires experts who are knowledgeable in maritime operations as well as domestic and international maritime law To achieve this goal, it is important to promote professional training for officers at court through the organization of seminars, the compilation of specialized books from organizations, educational institutions specialized in maritime field That helps ensuring the rigor and unified of the law as well as protecting the rights and interests of Vietnamese citizens, legal entities and foreign business Secondly, promoting the relationship among judicial authorities, judgment enforcement agencies and the state management agencies Because arrest of ships may appear foreign elements in the case of foreign ships being arrested in Vietnam or Vietnamese ships arrested in foreign countries Consequently, it is necessary to coordinate with consular offices in transferring or submitting documents to involved parties in abroad Moreover, courts, procuracies, judgment enforcement agencies, and 148 Chambers and Partner, “Shipping 2022”, https://practiceguides.chambers.com/practiceguides/comparison/653/8202/13076-13084-13089-1309513108-13110-13117-13119-13124 (access on 18/5/2022) 51 Ministry of Transport need to supporting together in drafting and interpreting the law on ship arrest uniformly Finally, shipping companies are thoroughly informed about the regulations on ship arrest so that they clearly understand their rights and obligations, thereby protecting their legitimate interests in the event of disputes Conclusion of Chapter II Chapter II primarily studies and compares regulations related to ship arrest procedures specified in two international conventions and Vietnamese legal documents, particularly MC 2015 and the Ordinance 2008 In that approach, advances developed in the new convention are investigated At the same time, it is clear that, despite the similarities between Vietnam’s regulations and those of international conventions, numerous differences remain, such as notably issues related to a list of claims, enforcement against arrested ships or the right of multiple arrests To contributing to delopment of Vietnamese law according to the development trend of the maritime field in the world, the author has suggested some constructively proposals for supplement of regulations on ship arrest as well as accession to Geneva Convention 1999 based on research and professionals’ views 52 CONCLUSION With the natural features of the sea and the government’s strategies for maritime development, many sea lanes were formed to serve navigation in Vietnam 149 This raises the necessity to study the legal framework for ship arrest because arrest of ships is a complex issue containing many important contents 150 Based on analyzing the general theoretical issues in chapter I and current legal provisions on ship arrest to secure maritime claims as well as studying these regulations as stipulated in international treaties in chapter 2, the author has discovered the highlighted clauses in the new convention 1999, which attempt to proffer some useful solutions to balance interests of both the claimant and defendant When compared to provisions of international treaties, some regulations on the arrest of Vietnam ships reveals unclear Therefore, to integrate into the general trend of the world as well as promote the development of maritime in particular and Vietnam’s economy in general, the research would like to give recommendations as follows: First, solutions contribute to the development of Vietnamese law Thereby, some claims in the closed list need to be more specific, typically those relating to salvage and insurances Not only that, Vietnam law needs to tighten conditions for arresting ships in cases the arrested ship is not owned by the defendant and open the right of multiple arrests to ensure the effectiveness when arresting ships in practice Second, accession to Geneva Convention 1999 A transparent legal framework for Vietnamese ships operating abroad and vice versa will encourage the development of fleets This is a solution to make the arrest of ships more effective 149 Sonduong Shipchanco, “Vai trò ngành hàng hải chiến lược phát triển kinh tế biển”, https://sonduongshipchanco.com/vai-tro-cua-nganh-hang-hai-trong-chien-luoc-phat-trien-kinh-te-bien/ (access on 21/6/2022) 150 Nguyen Thi Kim Quy, Bắt giữ tàu biển hàng hải quốc tế vấn đề hoàn thiện pháp luật Việt Nam, Hanoi Law Univerity, 2005, p132 53 Besides, for accession to be carried out as soon as possible, it is 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Corporation Bao Long Insurance Corporation BIDV Insurance Corporation 10 Agriculture Bank Insurance Joint – Stock Corporation 11 Phu Hung Assurance Corporation 12 Military Insurance Company 13 Hung Vuong Assurance Corporation 14 Vietnam National Aviation Insurance JSC 15 Vietinbank Insurance Company Limited 16 Saigon – Hanoi Insurance Corporation 17 Bao Viet Tokio Marine Insurance Company Limited 18 United Insurance Company of Vietnam 19 Samsung Vina Insurance Company Limited 20 QBE Insurance (Vietnam) Company Limited 21 AIG General Insurance (Vietnam) Company Limited 22 ACE Insurance Company 23 General Insurance Company Groupama Vietnam 24 MSIG Insurance Company Limited 25 Cathay Insurance Company Limited 26 Fubon Insurance Vietnam Company Limited 27 Liberty Insurance Vietnam 28 XuanThanh Insurance Joint Stock Corporation