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Arresting for security for a maritime claim in England? Court confirms there’s no need to post counter-security

Freezing injunctions – what is needed to show risk of dissipation| BDM Blog | BDM Law

The Court, in Natwest Markets plc v. Stallion Eight Shipping & Co S.A. [2018] EWHC 2033 (The “Alkyon”), recently re-considered the longstanding principle under English law that those with a maritime claim need not post counter-security for an arrest.

The facts of the case are not of any particular interest. There was a dispute under a loan agreement that was secured by a first preferred mortgage over the ship. The bank claimed that they were under secured for the value of the ship and owners refused to make up the shortfall. The bank issued a notice of default and later arrested the vessel. Shipowners made an application to have their ship released from arrest if Natwest, the mortgagee bank, did not put up counter-security for the damages that they would suffer while the vessel remained under arrest.

The Court refused to order that the bank put up counter-security, as this would go against the well-established principle under English law that a claimant with a maritime claim need not put up counter-security for an arrest, they can issue a warrant of arrest by right. The fact that a claim that is the basis of an arrest may not succeed further down the line, is not sufficient to prove wrongful arrest and qualify for damages.

While there is nothing new that comes from this case, it reinforces that England and Wales is an arrest friendly jurisdiction for a claimant. We at BDM have handled numerous arrests both in England and further afield and are well placed to give fast and practical legal advice should the need arise. Those interested in arresting a ship in England should have a look at our previous guide which can be found here.

Those interested in the full judgment can find it here: https://www.bailii.org/ew/cases/EWHC/Admlty/2018/2033.html

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