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November 02, 2020.

The Commercial Court of Montenegro allows ship arrest for non-monetary claim


In its decision no. I. 60/20 from 16th July 2020, the Commercial Court of Montenegro accepted the application for ship arrest for securing the non-monetary claim - regaining of property title and actual possession of the 42m-long yacht. In the said decision, the Court also prohibited alienation and disposal of the yacht while the arrest is ongoing.

When applying for the ship arrest, the Applicants pointed out that they had already filed a lawsuit against the Opponents, for the purpose of regaining property title and actual possession of the yacht before the High Court of Justice of the British Virgin Islands. They also submitted the judgement of the High Court of Justice of the British Virgin Islands as evidence that the Opponents were already prohibited to sale or otherwise alienate the yacht. The Applicants particularly explained the existence of danger for their claim because there was an obvious intention of the Opponents to sell the yacht, considering that its sale had already been published on a few internet pages.

The Court found that the Applicants made probable the existence of their claim, as well as the danger that, without a certain provisional measure (ship arrest), the Opponents, by alienating the yacht, concealing it, removing it or otherwise, will frustrate or significantly impede the later realization of the Applicants' claim. The Panel of Judges, preceding as a Court of the Second instance, accepted the reasoning of the First instance Court and denied the Complaint of the Opponents, in their decision no. IP 744/20 from 5th October 2020.

Consequently, the decision on ship arrest for the non-monetary claim became final.

In both first and second instance proceeding, the Applicants were represented by the Abaco Ltd and Law Office Milošević Team.

Ship arrest in Montenegro is considered to be a provisional measure for securing maritime claims and it is regulated by rules of national and international law.

Generally speaking, the claims for which the Court may decide to allow ship arrest are aligned with the ones prescribed by Article 1 of the 1952 Arrest Convention, considering that Montenegro is a party to the Convention. However, Montenegro has also made reservation to the Convention according to Article 1, paragraph (1)(o) of the Convention for the disputes concerning the title to or ownership of a ship. That means than in this particular case, the Court had to apply domestic law, i.e. the Law on Maritime and Inland Navigation and the Law on Enforcement and Security, which led to the application of subsidiary rules relating to securing of non-monetary claims.