The seizure of a vessel is a privileged tool for maritime creditors. Far from being monolithic, there are two distinct procedures: precautionary attachment and enforcement attachment. Although these two mechanisms are both aimed at immobilising a vessel, their rationale, conditions and effects are radically different.
I. Distinct legal bases
Texts applicable to each type of seizure
The arrest of ships has a dual legal basis. It is governed both by domestic law (articles L. 5114-22 et seq. of the French Transport Code) and by the Brussels Convention of 10 May 1952 for the Unification of Certain Rules concerning the Attachment of Sea-going Ships.
Seizure and execution, on the other hand, is regulated exclusively by domestic law. It is based on articles L. 5114-23 to L. 5114-29 and R. 5114-20 to R. 5114-46 of the Transport Code, supplemented by the Code of Civil Enforcement Procedures.
International vs. national origin
Precautionary attachment benefits from a harmonised international framework. This international dimension facilitates its application beyond national borders. The 1952 Brussels Convention, which has been widely ratified, ensures legal predictability for those involved in maritime transport.
There is no specific international convention on seizure and execution. Only the Convention of 10 April 1926 on the Immunities of State-owned Vessels deals in part with it.
Different purposes
Attachment is a temporary measure. It aims to temporarily immobilise the vessel to enable the creditor to obtain security or payment of its claim, without transfer of ownership.
The purpose of seizure and execution is definitive. It results in the forced sale of the vessel at public auction and the transfer of ownership to the successful bidder. It enables the pledge to be realised and the price to be distributed among the creditors.
II. Conditions of use
Enforceable title vs. simple alleged claim
The fundamental requirement differs between these two procedures. Attachment requires a writ of execution evidencing a liquid and due claim. This document may be a final judgment, a notarial deed or an enforceable arbitration award.
For protective seizure, a simple claim "appearing to be founded in principle" is sufficient under French law (article L. 5114-22 of the Transport Code). If the Brussels Convention applies, the allegation of a "maritime claim" listed in Article 1 is sufficient, without the need to prove its existence.
The Court of Cassation confirmed this approach in a judgment of 13 September 2023 (Com. 13 Sept. 2023, no. 20-21.546), ruling that "the mere allegation by the distrainor of the existence, for his benefit, of one of the maritime claims [...] is sufficient to justify his right to seize the vessel".
Different probationary requirements
For precautionary attachment, the creditor simply has to demonstrate the appearance of a claim. Under the Brussels Convention, it is sufficient to allege the existence of a maritime claim. In domestic law, the evidentiary standard remains low: the claim must appear to be founded in principle.
For seizure in execution, the creditor must provide proof of an enforceable title. The claim must exist on the date of the seizure and be certain, liquid and due. There is still some debate as to whether it is possible to bring an enforcement action on the basis of a simple interim payment order.
Jurisdiction
Disputes relating to protective attachment fall within the jurisdiction of the enforcement judge or the president of the commercial court when the claim falls within its jurisdiction and the application is made before any legal proceedings.
The enforcement judge has exclusive jurisdiction over the seizure of assets. This single jurisdiction is intended to simplify the procedure and ensure greater legal predictability.
III. Separate procedures
Prior formalities
Attachment may be carried out by simple authorisation of the competent judge, without prior notification to the debtor. The surprise effect is crucial to its effectiveness.
Seizure for execution requires more extensive formalities beforehand. It begins with notification of the writ of execution to the debtor, followed by a summons to pay containing various mandatory details. A period of 24 hours must elapse between the summons and the seizure report.
The role of the various parties involved
In precautionary seizure, the bailiff proceeds with the seizure following judicial authorisation. The port authorities play an essential role in preventing the vessel's departure.
In seizure and execution, more people are involved. The bailiff draws up the seizure report and appoints a guardian. The enforcement judge organises the public sale and sets the upset price. The mortgage registrar issues a statement of registrations. The lawyer presents the bids.
Time limits applicable
The time limits differ considerably. In the case of protective seizures, the creditor must bring an action on the merits within one month of the seizure, failing which the claim lapses under French law. The Brussels Convention does not provide for such a time limit.
For seizure and execution, the summons to pay expires after ten days. A period of fifteen days must elapse between the sale being legally advertised and the date of the sale. The successful bidder must pay the price within twenty-four hours of the auction.
IV. Different legal effects
Fixed assets vs. transfer of ownership
The only consequence of a precautionary attachment is that the vessel is detained in port. The debtor remains the owner and theoretically retains the use of the vessel, but cannot move it without judicial authorisation.
Attachment results in the transfer of ownership of the vessel to the successful bidder as a result of the auction judgement. This transfer is final and removes all liens and mortgages on the vessel.
Duration and consequences
The protective attachment has a limited duration. It is terminated either by voluntary or judicial release, or by obtaining a guarantee, or by the limitation period of the substantive action (one year or six months depending on the type of claim).
Attachment leads to definitive consequences: forced sale of the vessel, dismissal of the captain (article L. 5114-26 of the French Transport Code), and termination of current contracts relating to the operation of the vessel.
Impact on the rights of third parties
The rights of third parties are only marginally affected in a protective attachment. Mortgagees retain their rights. Contracts of affreightment and engagement survive.
In seizure and execution, the auction purges liens and mortgages. It puts an end to the captain's contract of employment and, according to some, to charter contracts, although the custom is to complete the voyage in progress.
V. Release and guarantees
Release conditions for each procedure
In the case of sequestration, release may be obtained by providing sufficient security. It may also be ordered in the event of a serious dispute over the existence of the claim.
In the case of seizure for execution, the only way to avoid an auction is to pay the debt in full. Once the judgment of sale has been issued, the debt can no longer be released.
Acceptable types of guarantee
Various guarantees are accepted as part of the protective attachment: bank guarantee, letter of intent issued by a P&I club, deposit of a sum of money. Case law even allows the seized vessel to be replaced by another of the shipowner's vessels.
In the case of execution, only payment of the claim discharges the debt. No alternative security is provided, except to enable the vessel to make a specific voyage during the proceedings.
Power of the judge in both cases
The judge has extensive powers. In the case of precautionary arrest, he may authorise the vessel to sail again for one or more voyages, subject to adequate security.
In the case of execution, the judge sets the terms of the sale, the upset price and draws up the specifications. He may also postpone the date of the sale if economic conditions are not favourable. He will rule on any disputes and draw up a statement of the distribution of the price among the creditors.
VI. Practice and use
Frequency of use
Attachment is much more widely used in practice. It is a quick and effective means of exerting pressure to obtain payment or a guarantee.
Seizure for execution remains rare. It mainly concerns debtors in a state of proven insolvency. Professor Rodière noted as long ago as 1980 that "protective seizures are as frequent and even commonplace as enforcement is rare".
Creditor strategies
Creditors generally prefer protective attachment as a negotiating tool. Its provisional nature allows immediate pressure to be exerted while leaving the way open for an amicable settlement.
Seizure is used as a last resort, when all hope of amicable collection has been lost. It is the final stage in the debt recovery strategy.
Advantages and disadvantages of each procedure
Attachment has the advantage of being quick and simple. Its cost is limited and it acts as a significant deterrent. Its major disadvantage lies in its provisional nature and the need to initiate proceedings on the merits.
Seizure and execution offers the advantage of definitively realising the creditor's pledge. However, it has a number of disadvantages: it is a long and costly procedure, there is a risk of recovering an illiquid asset, and the sale price may not cover the entire debt.
The two attachment procedures are complementary tools at the service of maritime creditors. Their judicious use depends on the particular circumstances of each case, in particular the solvency of the debtor and the nature of the claim.
Sources
- Transport Code, articles L. 5114-21 to L. 5114-29 and R. 5114-20 to R. 5114-46
- Brussels Convention of 10 May 1952 for the Unification of Certain Rules Relating to the Precautionary Arrest of Seagoing Ships
- Court of Cassation, Commercial Division, 13 September 2023, no. 20-21.546
- Court of Cassation, Commercial Division, 13 January 1998, No. 95-15.497
- Court of Cassation, Commercial Division, 4 March 2014, no. 13-10.092
- "Droit maritime" by René Rodière, Dalloz edition 1980
- Jurisclasseur Transport, Fascicule 1128, "Seizure of the vessel".
- Jurisclasseur Transport, Fascicule 1135, "Forced sale of ships - Seizure and execution".
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