Most crew know that yachts can be arrested if there is salary outstanding, but few know how to go about this, and what exactly is involved.
Unpaid salaries create what is known as a ‘lien’ on the yacht. This is essentially an enforceable right that adheres to the yacht itself, and stays there irrespective of changes of name or ownership. A lien is not a right to sell, although a claim based on it could lead to a judicial sale if unsatisfied by the owner. It’s this lien that an arrest seeks to uphold.
This is why arrest is not, as some see it, some sort of punishment. It’s just a way of detaining the yacht in order to force the owner to settle, or, if the claim is disputed, to provide financial security, which could be in the form of a cash deposit or bank guarantee. Then the yacht is free to leave.
Nevertheless, arresting a yacht is a dramatic and effective method for recovering debts.
Arrests are governed by the law of the jurisdiction in which the yacht is situated at the time. The yacht’s flag and the nationality of the individual or company seeking redress usually make no difference. Having a yacht arrested is not always as easy as some people think. It varies by country and usually needs the assistance of a local lawyer.
One particular obstacle is the requirement in some countries to put up some form of financial security – just in case you’re wrong and the yacht misses a lucrative charter, for example. Some countries do not have a sufficient throughput of maritime cases and their judges (who can be surprisingly young in certain parts of the world) can make fairly irrational decisions.
Port State Control is rarely involved, except for reporting any illegal vessel movements once the yacht has been detained. Yachts are rarely physically chained to the dock: in law, yachts are ships and a lock would be hardly likely to stop an oil tanker! Instead, a notice is usually given to the captain instructing him not to move from that berth, or to move to and remain at another berth, or just to stay within the port limits. If the captain attempts to leave he or she will be in contempt of court and criminally liable.
If the employer is prepared to put up a fight, arresting is not an end in itself, no matter how satisfying. Following the trial, if no security was given and if the claimant succeeds but remains unpaid, the yacht can be sold by judicial sale. The proceeds are then distributed to the claimants, according to the order of priorities established by law. Crew wages are normally given a high priority.
The Maritime Labour Convention, 2006, which is on target to become effective from 2011, will make sure that if there any complaints about the non-payment of wages, then crewmembers will be able to take up the matter directly with someone from Port State Control. This may make it possible to seek arrest without the intervention of local lawyers.
Benjamin Maltby is a lawyer with Palma-based consultants MatrixLloyd, providing impartial guidance on all aspects of yacht employment. He began his career as a lawyer with an International Group P&I Club, before practicing with the leading Mediterranean marine and offshore law firm. Contact him at info@matrixlloyd.com.