The maritime world has its own rules. When a ship is immobilised by a preventive seizure, an entire economic equilibrium is turned upside down. Downtime is expensive. The shipowner loses money. The goods do not arrive at their destination.
Release then becomes a crucial issue for the shipowner. It represents the regained freedom of his ship.
I. Principle of release
Definition and legal basis
Release is the act that puts an end to the detention of a seized vessel. It allows the vessel to sail again.
It has its legal basis in the French Transport Code (article L. 5114-21) and the Brussels Convention of 10 May 1952. Article 5 of the Brussels Convention states: "The Court or any other competent Judicial Authority [...] shall authorise the release of the seizure when a sufficient bond or security has been furnished".
Different types of release
There are several types of release:
- Release against guarantee (most common)
- Pure and simple release (rare, in cases of manifest irregularity)
- Conditional release (for one or more journeys)
Competent authority
It is the enforcement judge who has jurisdiction to order the release. This is the same judge who authorised the seizure. As the Court of Cassation specified in a ruling of 4 March 2014, the judge has "discretionary powers to grant the release".
II. Release against guarantee
Acceptable types of guarantee
The guarantee must offer the creditor security equivalent to that provided by the seizure of the vessel. Judges accept various forms of security.
Bank guarantees
A bank guarantee is the benchmark guarantee. It has the advantage of being issued by a solid financial institution. The judge will check certain points:
- Irrevocability of the commitment
- Absence of conditions precedent
- Sufficient validity period
Letters of commitment from P&I Clubs
Specific to the maritime world, P&I Clubs (Protection and Indemnity) are associations of shipowners who offer insurance cover. Their Letter of Undertaking (LOU) is generally accepted as a guarantee.
A ruling by the Aix-en-Provence Court of Appeal on 6 February 2020 confirmed this practice, stating that "the letter of undertaking issued by a P&I Club that is known to be solvent constitutes sufficient security".
Logging
The deposit of a sum of money in the hands of a third party (lawyer, CARPA, Caisse des Dépôts) also constitutes a solid guarantee. It has the advantage of simplicity but ties up funds.
III. Valuation of the guarantee
Assessment criteria
The amount of the guarantee must be "sufficient" according to the terms of the Brussels Convention. In practice, this generally corresponds to the amount of the claim asserted, plus foreseeable interest and costs.
In its ruling of 13 September 2023, the Court of Cassation specified that the guarantee could include not only wages as such, but also "damages and interest linked to the early and unfair termination of the employment contract, a balance of paid holidays and a precariousness bonus".
The judge's power
The judge has broad discretion to set the amount of the guarantee. He may limit the claim to an amount that he considers reasonable.
The Court of Cassation's ruling of 8 March 2017 clearly established that "the judge does not have to assess the debtor's dispute relating to the amount of the alleged claim" in order to set the guarantee.
Possible disputes
The shipowner may contest the amount of the guarantee if he considers it excessive. This challenge may relate to :
- Overvaluation of the claim
- Inclusion of non-maritime receivables
- Excessive interest charges
Case law
Case law has gradually refined the criteria for assessing the guarantee. A ruling by the Pau Court of Appeal on 17 December 1985 established that the guarantee must be assessed "according to the size of the distrainor's claims" and not simply on the basis of the shipowner's "obvious solvency".
IV. Release without guarantee
Irregularity of the seizure
In some cases, release may be ordered without security. This happens when the seizure is manifestly irregular.
Lack of title
The absence of a writ of execution, where one is required (in the case of seizure for execution), constitutes grounds for release without security.
No maritime claim
In the case of seizures under the Brussels Convention, the absence of a maritime claim leads to release without security. The courts check whether the claim invoked falls within the categories listed in Article 1 of the Convention.
On 5 February 2013, the Marseille Commercial Court ordered a release without security because the claim asserted by a travel agency did not constitute a maritime claim.
Vessel not subject to seizure
Some vessels cannot be seized:
- State vessels assigned to a public service
- Warships
- Some vessels are the only working tool
In a ruling dated 2 May 1989, the Court of Cassation confirmed that it was impossible to seize a fishing vessel that constituted the necessary work tool for the artisan fisherman's professional activity.
V. Release procedure
Initiating the request
The application for release is generally initiated by the shipowner or his representative. It may also be requested by any person with an interest in seeing the vessel released (charterer, shipper, etc.).
Form of request
The application takes the form of a writ of summons before the enforcement judge. It must contain :
- The identity of the parties
- Description of the vessel seized
- The references of the seizure order
- Reasons for release
- The guarantee offer, if applicable
Controversial debate
Unlike the seizure procedure, which is non-adversarial, the release procedure gives rise to a debate between the parties. The creditor may object to the release or contest the amount of security offered.
Avenues of appeal
The release order may be appealed within 15 days. This appeal does not have suspensive effect, which means that the vessel can return to sea as soon as the first instance decision has been taken.
VI. Consequences of release
Release of the vessel
Release allows the vessel to leave the port immediately. The port authorities are informed and can no longer oppose the ship's departure.
Fate of the guarantee
The guarantee remains in place until the outcome of the dispute on the merits. If the creditor wins the case, he will be able to pay out of the guarantee. If not, the guarantee will be returned to the shipowner.
Follow-up to the procedure
Discharge does not put an end to the substantive dispute. The creditor must bring an action on the merits within one month of the seizure, failing which the seizure lapses.
Potential liability of the distrainor
If the seizure proves to be unjustified, the seizing party may be held liable. The shipowner may claim damages for the loss suffered as a result of the undue detention of his vessel.
In a ruling handed down on 8 November 2011, the Douai Court of Appeal ruled that a seizure carried out without prior verification of the shipowner's identity was improper.
The release is therefore a pivotal moment in the protective attachment procedure. It allows a balance to be struck between the creditor's interests and the need to avoid unnecessarily immobilising such an important economic tool as a ship. Guarantees play an essential role here, by replacing the physical immobilisation of the vessel with an equivalent financial security.
Sources
- Transport Code, articles L. 5114-21 and L. 5114-22
- Brussels Convention of 10 May 1952 for the Unification of Certain Rules Relating to the Precautionary Arrest of Ships
- Court of Cassation, Commercial Division, 4 March 2014, no. 13-10.092
- Court of Cassation, Commercial Division, 8 March 2017, no. 15-21.571
- Court of Cassation, Commercial Division, 13 September 2023, no. 20-21.546
- Aix-en-Provence Court of Appeal, 6 February 2020, no. 18/18966
- Pau Court of Appeal, 17 December 1985
- Marseille Commercial Court, 5 February 2013
- Court of Cassation, Commercial Division, 2 May 1989
- Douai Court of Appeal, 8 November 2011, no. 10/00318
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