Ship arrest

International conventions

Which international convention regarding the arrest of ships is in force in your jurisdiction?

Mexico is not a party to the International Convention Relating to the Arrest of Sea-Going Ships 1952 or the International Convention on the Arrest of Ships 1999.

Ship arrests are regulated under the Navigation Law (articles 268 to 274).

Claims

In respect of what claims can a vessel be arrested? In what circumstances may associated ships be arrested? Can a bareboat (demise) chartered vessel be arrested for a claim against the bareboat charterer? Can a time-chartered vessel be arrested for a claim against a time-charterer?

Ship arrest is available for the following claims (article 269 of the Navigation Law):

  • loss or damage caused as a result of the use of the ship;
  • loss of life or personal injury caused by direct operation of a ship;
  • salvage;
  • environmental;
  • wreck removal, refloating and recovery of a ship, including costs of maintenance of crew;
  • charter parties, including bareboat charters and time-charters;
  • contracts of transport of goods and passengers, bills of lading;
  • loss and damage to cargo and luggage;
  • general average;
  • towage;
  • pilotage;
  • goods, materials, supplies, bunker, equipment, containers supplied to the ship or services supplied to the ship;
  • construction and repair;
  • fees for the use of ports, canals, docks and other facilities or navigation channels;
  • wages of masters, officers, or crew;
  • master’s disbursements, including disbursements made by shippers, charterers or agent on behalf of a ship or its owner;
  • insurance premiums;
  • ship agent fees;
  • disputes of ownership and possession of a ship;
  • disputes between co-owners of any ship as to the ownership, possession, employment or earnings of that ship;
  • mortgages and pledges; and
  • purchase and sale of ships.

The arrest measure must have a direct claim over the ship or its cargo, despite the owner, charterer or affiliate company. In other words, the claim, subject matter of the arrest, must be directly related to the ship or cargo. For this reason, associated ships may not be arrested.

Maritime liens

Does your country recognise the concept of maritime liens and, if so, what claims give rise to maritime liens?

Mexico recognises the concept of maritime liens or privileges (articles 91, 92, 95 and 98 of the Navigation Law).

The following claims give rise to maritime liens:

  • wages and other debts owed to the vessel’s crew, including repatriation costs and health and housing contributions;
  • indemnities derived from death or injuries resulting from the exploitation of the vessel;
  • rewards for rescue or salvage of the vessel;
  • credits for the usage of port premises, maritime signage, navigation lanes and navigation;
  • indemnities derived from damage caused by pollution resulting from the spill of hydrocarbons, radioactive substances, toxic, explosive or other hazardous materials of nuclear fuel or radio­active products or waste;
  • indemnities derived from civil liability resulting from loss or material damage caused by the exploitation of the vessel, different from loss or damage caused by carriage, containers and personal property of the passengers on board the vessel;
  • maritime privileges derived from the most recent voyage shall be preferred to those derived from previous voyages;
  • construction and repair claims, which are extinguished when the vessel is delivered; and
  • liens over cargo for claims deriving from carriage, offload and storage, wreck, salvage and general average.

The statute of limitations for maritime liens or privileges is one year from when these may be claimed.

Wrongful arrest

What is the test for wrongful arrest?

A claim for wrongful arrest will generally be sustained when bad faith or gross negligence is demonstrated in court. A plaintiff that arrests a ship may ultimately fail to sustain its principal claim, thus the ship arrest will be released and the court will award damages to the defendant (arrestee). The test for wrongful arrest will be reviewed by the court in the final judgment.

Bunker suppliers

Can a bunker supplier arrest a vessel in connection with a claim for the price of bunkers supplied to that vessel pursuant to a contract with the charterer, rather than with the owner, of that vessel?

Yes. Under Mexican law, a bunker supplier may arrest a vessel in connection with a claim for the price of bunkers supplied to that vessel pursuant to a contract with the charterer, rather than with the owner, of that vessel (article 269 XII of the Navigation Law). A bunker supplier will have a credit right against the contracting party of the bunker service, either the shipowner or charterer.

Security

Will the arresting party have to provide security and in what form and amount?

The plaintiff will be required to post a bond to guarantee damages to a defendant if the defendant can prove that the arrest was wrongful (eg, it was made in bad faith without any rights to arrest the ship). The amount of the bond is set at the discretion of the court. Later, the defendant will have the opportunity to post a counter-bond once the arrest has been carried out in order to have the ship released. Note that all procedures before the arrest is ordered and carried out are ex parte and the defendant is not party to such procedures. A defendant’s rights against a wrongful arrest are guaranteed by the bond placed by the plaintiff.

Letters of undertaking from P&I clubs may also be available, subject to the fact that such issuers are recognised and approved by the Maritime Authority.

How is the amount of security the court will order the arrested party to provide calculated and can this amount be reviewed subsequently? In what form must the security be provided? Can the amount of security exceed the value of the ship?

The claim amount and value of the vessel will be considered by the judge to determine the amount of the bond. Generally, however, the amount of the bond should correlate with the amount of the potential damage that the defendant may suffer if the arrest is wrongful.

The amount of the security may range at the court’s discretion but will not exceed the total value of the ship.

Formalities

What formalities are required for the appointment of a lawyer to make the arrest application? Must a power of attorney or other documents be provided to the court? If so, what formalities must be followed with regard to these documents?

Mexican law is very formalistic, especially referring to representation and submission of evidence. Representation is in the form of a power of attorney. Foreign plaintiffs must comply with certain formalities when granting powers of attorney to be exercised in Mexico, such as specific legal language formulae, translation into Spanish, notarisation in the country of origin, apostille or legalisation (depending on the state) and further formalisation of the power of attorney document with a Mexican notary public.

Mexico is a party to the Apostille Convention. In addition, legalisation of documents through a Mexican embassy may be undertaken.

All legal proceedings must be in writing and all documents and evidence must be submitted as original or certified true copies by a Mexican notary public. Under Mexican law all documents should be filed in Spanish or be accompanied by a Spanish translation made by a Mexican court-approved translator (a sworn public translator). Further formalities may be required when reviewing documents on a case-by-case basis.

As mentioned above, Mexican law is very formalistic, especially with regard to civil or commercial rules of procedure. When filing the arrest application all the required formalities must be satisfied. It is not possible to set the arrest procedure in motion and then complete the formalities at a later stage. The risk of doing so is to have the court dismiss the claim. No electronic filings are permitted under Mexican law.

On average, five business days are required to prepare an arrest application.

Ship maintenance

Who is responsible for the maintenance of the vessel while under arrest?

Once the arrest is granted, the court will communicate with the Ministry of Marine, the SCT and the chief of port to request their assistance in securing the ship. The arrest will be evidenced by a court document describing the condition and specifics of the arrest, including the location where the ship will stay and the person who will have custody of the ship. The plaintiff will have the right to appoint a person to take custody of the ship.

A depositary will be appointed by the plaintiff. Generally the depositary will be the shipowner or ship operator (defendant), who will have strict duties of care.

Proceedings on the merits

Must the arresting party pursue the claim on its merits in the courts of your country or is it possible to arrest simply to obtain security and then pursue proceedings on the merits elsewhere?

Ship arrest may be requested to the Mexican court before or after litigation is commenced on the merits of the principal claim. Litigation proceedings of the principal claims may occur in Mexico or abroad.

Injunctions and other forms of attachment

Apart from ship arrest, are there other forms of attachment order or injunctions available to obtain security?

Yes. The rules of procedure in civil or commercial disputes provide other forms of interim measures and injunctions to obtain security (article 1168 of the Code of Commerce), such as attachment of assets when there is justified reasons to believe that the assets to secure or guaranty payment will be hidden, fraudulently transferred, damaged or that may be insufficient to guaranty a claim. These interim measures will be granted if the plaintiff can prove to the court the test of urgency, need and of having the right to request such measure.

In addition, executive proceedings, which are special proceedings that allow a plaintiff to seize assets of the defendant at the commencement of litigation (immediately after filing a claim) may be available when the documents that are the subject matter of the claim are invested with legal formalities of executive legal actions, such as a final judgment (res judicata), promissory note or an acknowledgement of debt agreement duly formalised with a Mexican notary public.

Delivery up and preservation orders

Are orders for delivery up or preservation of evidence or property available?

Yes. Under the Federal Code of Civil Procedure (articles 379 to 399) orders for delivery up or preservation of evidence or property are available. These interim measures will be granted if the plaintiff can prove to the court the test of urgency, need and of having the right to request such measure.

Bunker arrest and attachment

Is it possible to arrest bunkers in your jurisdiction or to obtain an attachment order or injunction in respect of bunkers?

Yes. Arrest, attachment order or injunction in respect of bunkers are available.