THE jurisdiction of Dutch courts following a ship arrest will be substantially extended owing to a recent decision by the Dutch Court of Appeal, according to Rotterdam-based law firm AKD.
In the case of the HSH Nordbank vs Hero Shipping the court ruled that the 1952 Arrest Convention applies to all vessels, irrespective of flag and owner.
The court also set a new precedent by agreeing that a bank was not required to provide security for its claim because it had sufficient financial clout, reports Lloyd's Loading List.
Partner with the shipping and offshore team at AKD in Rotterdam, Carel van Lynden, was quoted as saying: "This is a good decision for mortgage banks."
"This case was for the repayment of a loan, secured by a mortgage."
"The courts decided that jurisdiction by Dutch courts is created simply by the arrest by the mortgage bank, regardless of the flag and nationality of the owner."
"It gives banks quick access to the very favourable auction system in The Netherlands."
The applicability of the Arrest Convention and its ability to create jurisdiction varies across different countries. Where it does not automatically create jurisdiction it may offer protection to owners of ships from, or vessels flying flags, of nations not contracting to the convention. This ruling in the Netherlands lifts such protection.
Said Mr Van Lynden: "This is also a remarkable decision because for the first time a claimant has not had to provide security in a case involving owners registered in an EU country."
Source : HKSG.