The “Arrested” Boat: When your vessel gets its day in Court

Ever wondered what happens when a boat gets into legal hot water? No, it’s not handcuffs and blue lights - but in Australian maritime law, a vessel can be “arrested” and held by the court!

Suppose you have sold your boat to a buyer, handed it over, but the buyer hasn’t paid in full, or perhaps a repairer or marina is refusing to release your vessel due to an alleged debt. If negotiations fail, you can commence an “action in rem” under the Admiralty Act 1988 (Cth) (the “Act”), naming the boat itself as the defendant.

“You’re Nicked!” - What does it mean to arrest a ship?

Under the Act, a ship arrest is a legal mechanism through which the court takes custody of a vessel to secure a maritime claim. It’s the court’s way of saying, “You’re not going anywhere until this is resolved.”

The process is governed by the Act and the Admiralty Rules, which provide for proceedings in rem - against the vessel itself - rather than solely in personam, against the owner.

How does a ship get arrested?

Step 1: File an Action in Rem

Under section 14 of the Act, you start by commencing an action in rem in the Federal Court or a state Supreme Court with admiralty jurisdiction. This means you’re suing the ship itself, not just its owner - yes, the boat is the defendant!

Step 2: Identify Your Maritime Claim

The Act lists a smorgasbord of claims that can justify arrest and section 4 is your treasure map which lists claims including unpaid marina/storage fees, crew wages, damage, salvage, towage, repairs or equipping of a ship and more. If your claim fits the bill, you’re in business and you can ask the court to arrest the vessel (see sections 15–19 of the Act).

Step 3: Apply for an Arrest Warrant

With your claim in hand, you apply for an arrest warrant. The application is usually ex parte (without notice to the owner), and must be supported by an affidavit setting out the particulars of your maritime claim and the facts that entitle you to bring an action in rem under the Act (see Admiralty Rules, r.39(3); Form 13)). However, the applicant does not need to convince the Court of the strengths of its claim for the arrest warrant to be issued.

Step 4: The Admiralty Marshal Makes the Arrest

If the court is satisfied, it issues a warrant for the boat’s arrest. The Admiralty Marshal (think: sheriff of the sea) serves the warrant by affixing it to the vessel - often on the wheelhouse or mast for maximum effect. The ship is now officially in the court’s grip and can’t leave port without the court’s permission.

How Fast Can You Arrest a Ship?

With the paperwork in order, arrests can happen quite quickly, sometimes within 24 - 48 hours. The Federal Court can issue an arrest warrant for a vessel anywhere in Australian waters, and the Marshal will coordinate with local authorities to serve it.

However, when applying for a ship arrest in Australia, you must consider the requirement to provide security in the context of potential liability if the arrest is later deemed wrongful. While the Act does not mandate the applicant to post security upfront, courts may order compensation to the ship owner if the arrest is found to be unjustified (e.g., due to incomplete disclosure in the affidavit or lack of a valid maritime claim). This risk incentivises applicants to ensure their claim is well-founded and their affidavit rigorously details the factual and legal basis for arrest, including full disclosure of adverse information.

So, before you drop anchor on someone else’s vessel, weigh the tactical win of a swift arrest against the potential storm of a wrongful arrest claim. Most applicants will also aim to secure a bank guarantee or letter of undertaking from the shipowner or its insurers to resolve things quickly - because nothing says “let’s settle” like a vessel stuck in port and a judge with a sharp eye for overreach.

Caught at the dock - What happens next?

Once arrested, the ship stays put until either:

• the dispute is resolved,

• the owner provides security (bank guarantee or cash bond to the value of the claim), or

• the court orders the ship’s sale to pay the debt.

Every day under arrest racks up more costs - so owners are motivated to act fast!

Can You Stop a Ship Arrest?

Absolutely! Here’s how:

1. Caveat Against Arrest - The legal “Beware of Dog” Sign!

Under Part II of the Admiralty Rules, a shipowner (or anyone with an interest in the vessel) can file a Caveat Against Arrest with the court. This is like slapping a “hands off!” notice on the court’s radar. Once lodged, the caveat forces the claimant to notify you before arresting the ship, giving you time to negotiate or challenge the arrest. But there’s a catch:

• Act Fast: File the caveat before the arrest warrant is issued. If you’re too late, the ship’s already in custody.

• Costs Risk: If you file a caveat frivolously, you might be ordered to pay the claimant’s legal costs.

Case in point! A Sydney marina owner tried to arrest a yacht over disputed fees, but the owner had already filed a caveat. The court required the marina to notify the owner, who then paid a security bond to avoid arrest. Crisis averted - no drama, just smart paperwork.

2. Challenge the Arrest

If the ship is already arrested, you can apply to the court to set aside the arrest or reduce any security demands. Common grounds include:

• “Not a Maritime Claim”: Argue the debt (e.g., a personal loan to the owner) doesn’t fall under the Admiralty Act’s scope.

• Procedural Flaws: Spot errors in the arrest process, for example, like a defective affidavit, missed deadlines, or failure to disclose key facts.

• Excessive Security: Contest unreasonable security amounts. Courts demand “reasonable” bonds, not blank cheques.

3. Nuclear Option! - Sue for wrongful arrest

If the arrest was unjustified, you can sue the claimant for damages under section 34 of the Act. Courts award compensation for losses including:

• Lost charter revenue during detention.

• Reputation harm (e.g., a cruise ship labelled “arrested” in the media).

• Legal and maintenance costs.

4. Pro Tips for Owners -  Don’t Just Stand There!

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• Move Quickly: Time is money - every day under arrest costs thousands in fees.

• Lawyer Up: Admiralty law is a niche beast. Get a specialist to dissect the claimant’s affidavit for weaknesses.

• Negotiate Security: Offer a bank guarantee or payment plan to free the ship fast.

• Document Everything: Keep records of payments, emails, and threats - they’ll be gold in court.

Fun Fact! The ship is the Defendant

In these cases, the ship itself is the defendant (no, it doesn’t get a lawyer, but the owner will need one!). Jurisdiction is

established by the ship’s physical presence in Australian waters.

Why does this matter for Marinas and Boatyards?

If you’re owed money for storage, repairs, or services, arresting the vessel under the Act can be the quickest way to get paid - or at least to get the owner’s attention. It’s serious leverage, and Australian courts are known for acting swiftly and efficiently in these cases.

The Bottom Line

In the world of Australian maritime law, a boat can be “arrested” faster than you can say “all aboard!” Whether you’re a marina chasing unpaid fees or a shipowner facing a claim, the Admiralty Act 1988 gives the court power to take the helm - literally.

Under the Act, the court has the power to take control of the vessel, freeze the status quo, and resolve the dispute. Think of it as putting the boat in a legal "time-out" - it stays put until everyone’s had their say and the storm has passed.

Need to recover your vessel - or stop one from slipping away? We know the ropes. Our team at Blackbay Lawyers can offer you expert legal advice and practical support to help you navigate every stage of the process.

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ABOUT THE AUTHOR

Gosia Klus is a Special Counsel in our Corporate and Commercial team. Gosia specialises in providing legal guidance and representation to businesses and individuals involved in various commercial transactions and disputes with a focus on contract and corporate law, commercial litigation, mergers and acquisitions, intellectual property, construction law and other related areas. Gosia advises across a range of corporate law matters in a variety of industries including maritime, construction, renewable energy, and franchising.