An Overview of Ship Arrest Practice in Thailand
The main purpose of the Arrest of Ships Act is to provide protection to creditors domiciled in Thailand, regardless of the citizenship of the creditor. This is because Thailand’s trade mostly uses foreign ships / foreign owned ships. Filing claims in the Thai Courts against ship owners or ship operators may not be worthwhile to the claimant since foreign debtor may not have any assets in Thailand. Therefore, arresting the debtor’s ship, especially a foreign debtor’s ship, is a way of security debt repayment or compensation of a claim. The Arrest of Ships Act allows a domestic claimant (including living in Thailand) to apply for Court order to arrest the ship of a debtor or a ship possessed by the debtor, as a security for the claim.
The Arrest of Ships Act does not provide a definition of “domicile.” The Civil and Commercial Code defines domicile as the place where a person has his principal residence. For a juristic person, the domicile is the place where it has its principal office or establishment, or which has been selected as a special domicile in its regulations,articles or by laws.Having an agent in Thailand is not considered the same as having a domicile in Thailand.
Object of the Arrest
Ships arrested under said the Arrest of Ships Act must be sea-going vessels for carriage of goods or passengers internationally (not locally).
Any ship of the debtor or ship in the possession of the debtor can generally be arrested. Except, when the claim relates to the ownership of the ship or a mortgage over the ship. In that case, the creditor cannot apply for a Court order to arrest other ships of the debtor or ships in the possession of debtor.
Types of Maritime Claims
Creditors who appying for a Court order to arrest a ship msut have a maritime claim, and such claim must fall within section 3 of the Arrest of Ships Act as follows:
- Loss of life or personal injury caused by any ship or which occurs in connection with the operation of any ship;
- Salvage;
- Agreement relating to the use, hire, hire-purchase or loan of any ship, provision of transport service, or any other similar agreement;
- Agreement relating to the carriage of goods on a ship under bill of lading;
- General average act where the ship owners, the carriers and the owners of such goods as carried in a ship are bound to compensate the owners of a particular property for the loss or damage caused to such property in consequence of an intentional act which is necessarily and reasonably done for the common safety of the ship and goods carried therein;
- Loss or damage to properties carried in any ship;
- Towage;
- Pilotage;
- Goods or materials or whatsoever supplied to a ship for its operation or maintenance;
- Construction, repair or equipment of any ship or dock charges and dues;
- Port facilities or port charges or dues;
- Stevedoring charges;
- Wages of ship masters or personnel;
- Master’s disbursements;
- Disputes as to the ownership of a ship;
- Disputes between co-owner of a ship as to its possession, employment of earnings;
- Mortgage of a ship.
Arrest Proceedings
A petition to arrest a sea-going ship must be filed (ex parte) to the Central Intellectual Property and International Trade Court (“IP & IT Court”). It will be a unilateral request, and the Judge will proceed with an ex parte inquiry on an urgent basis, normally on the submission date. If the Court is satisfied by evidence provided by the claimant that the maritime claim has merit, the Court will order the ship arrested. If the claimant petitions to arrest a ship that has not entered Thailand, yet,, he must satisfy the Court that said ship will be entering Thailand.
When ordering an arrest of a ship, , Court will order the claimant to post a security prior to the arrest if the debtor has no domicile in the country.
If the debtor resides in Thailand, the Court will order the creditor to post a security prior to ordering the arrest, unless the creditor has satisfactorily prove that other properties of the debtor are insufficient to pay the claim.
Before the Legal Execution officer proceeds with the arrest of a ship, the claimant arrest also pay an execution fee at the rate of one and one-half per cent of the total claim, but at the maximum of Baht 100,000.
Release of the ship
If the debtor deposits funds in the same amount as prescribed in the Court order, the Court will order the ship released immediately. A bank guarantee can be submitted as the deposits but the Court does not accept a Letter of Undertaking from P&I Club.
If the claimant does not file a complaint within 30 days after the arrest warrant is issued, the arrest warrant will expire and the debtor may request areturn of the security.
