Ships release from the arrest
According to the Civil Procedural Code of Ukraine a court or a judge can take measures for the security of a claim upon the motion of a person participating in the matter.
Security of a claim is allowed on any litigation stage if non-acceptance of measures for the security can cause a difficulty or impossibility in the future execution of the courts decision. The motion about the security of a claim must be considered by a judge or a court handling the case at the day of filing the motion and without notification of the defendant and other persons, participating in the matter. As a rule, the claims which were filed against foreign shipowners are to be secured by the court in the form of the ship arrest. And, as a result, a question about the means of the securitys substitution arises.
Ukrainian procedural legislation does not provide such a form of the claims security as the bank guarantee or a Letter of Undertaking from a P&I Club. Furthermore, a court or a judge can accept a substitution of the one type of the claims security by the other only taking into account explanations of the claimant, what means that the claimant has an opportunity to press the defendant (to compel the latter to pay the indebtedness without a trial on the merits in a court) by avoiding the acceptance of a bank guarantee or the Letter of Undertaking from a P&I Club. Unfortunately, such order of things assumed a character of common practice in Ukraine when the necessity to substitute the means of the security arises.
The Merchant Shipping Code of Ukraine (MSCU) provides that the arrested ship can be released from the arrest in case providing of the security in the acceptable form and adequate on the amount. In case of the disagreement of parties on a form and amount of the claims security the court determines the form and the amount of the security by itself. This provision contradicts to the above-mentioned provisions of the Civil Procedural Code of Ukraine. In connection with the fact that in case of a conflict of laws, regulating one relation, the procedural law prevails over the material one, which MSCU is, the question of substitution of the claims security can be allowed only with the plaintiffs consent.
There is the only one way to secure a claim without the plaintiffs consent and, thereby, to release the ship from the arrest – to transfer the claim amount into the deposit account of the court. In order to do this the defendant files an appropriate petition to the court which formally considers it in the presence of all parties and passes a decision. While exercising of this type of the claims security the shipowner can face some technical problems. At first, local courts, as a rule, do not have the accounts in foreign currencies, what leads to losing the time on the conversion of currency and paying a considerable commission for this operation. Secondly, foreign shipowners feel uncertain in the subsequent timely return of the funds which were put into the deposit account of a court in the case the decision is brought in favour of the shipowner.
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