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Maritime Liens and Vessel Arrest in Indonesia: Legal Requirements and Procedures
In the maritime industry, understanding the legal framework surrounding maritime liens and vessel arrest is crucial for shipowners, operators, and other stakeholders. Indonesia, with its extensive maritime activities, has specific laws and regulations governing these areas. This article explores the recognition of maritime liens, the requirements for vessel registration, and the conditions under which a vessel can be arrested in Indonesia.
Recognition of Maritime Liens
Maritime liens or maritime privileges recognized in Indonesia allow a ship to be used as collateral for a debt in the form of a mortgage or pledge, provided that the ship has been registered in the Indonesian ship list. To register a ship, the following qualifications must be met:
- The ship must have a gross tonnage size of at least GT 7 (seven Gross Tonnage).
- The ship must be owned by Indonesian citizens or legal entities established under Indonesian law and domiciled in Indonesia.
- The ship must be owned by Indonesian legal entities which are joint ventures majority-owned by Indonesian citizens.
Foreign ships can also be registered, provided they have a certificate of removal from the flag country of origin. Thus, the right to charge a mortgage on a ship depends on its successful registration in the Indonesian ship register.
For ships with a gross tonnage of less than seven, the ship can be used as an object of collateral based on the pledge law in force in Indonesia.
Liability for Vessel Arrest
Under Indonesian law, specifically Article 223 paragraph (1) points q and r of the Shipping Law, the owner or demise charterer of the vessel is liable in personam for purchasing insurance premiums, commissions, fees, intermediaries, or brokerage or agency services related to the vessel. Debts incurred by a charterer can also lead to the vessel’s arrest. A vessel may be arrested if it serves as collateral for a debt or if it is the object of a court-ordered confiscation.
Sister Ship or Associated Ship Arrests
The current Indonesian Shipping Law does not address the arrest of sister ships or associated ships.
Counter-Security for Arrests
The concept of counter-security is not recognized in the Shipping Law. Vessel arrests are revoked once civil or criminal case proceedings are resolved. However, vessels confiscated due to criminal proceedings may be forfeited for the state’s interest by court order.
Release of the Vessel
Indonesian law does not specify the security required for the release of a vessel, such as a Club Letter of Undertaking (LOU). Vessel arrest is revoked once civil or criminal case proceedings are concluded, unless the court orders the vessel’s forfeiture for state interests.
Conclusion
Navigating the legal requirements and procedures for maritime liens and vessel arrest in Indonesia requires a thorough understanding of the applicable laws. While Indonesia provides a framework for registering ships and recognizing maritime liens, certain aspects, such as the arrest of sister ships and the use of counter-security, remain underdeveloped. Stakeholders must stay informed about these regulations to effectively manage their maritime operations and protect their interests.
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Anggraeni and Partners, an Indonesian law practice with a worldwide vision, provides comprehensive legal solutions using forward-thinking strategies. We help clients manage legal risk and resolve disputes on admiralty and maritime law, complicated energy and commercial issues, arbitration and litigation, tortious claims handling, and cyber tech law.
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Reynalda Basya Ilyas
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