Despite the current security problems, the Libyan government, through its efforts to rebuild the New Libya, has positioned the nation at the forefront of a widely anticipated economic boom across all sectors. Prior to the revolution of 2011, Libya’s exports reached $30 billions USD, and its imports exceeded $6 Billion USD. With new liberal economic views and the willingness to compensate for 42 years of stagnation under the Gaddafi regime, Libya’s economy is projected to be among the fastest-growingin the world. (Arrest of Ships in Accordance with Libyan Law)
Libya is largely dependent on imports, consisting mainly of industrial and food commodities. Libya’s biggest trading partner is the European Union, and Italy leads with 30% of Libyan imports. The significance of the Libya/EU trade link across the Mediterranean is undisputed, as Libya’s seaports are strengthening their connections with southern European ports. This will continue to play an increasingly important role in the future. Libyan foreign trade is carried out through seven major commercial seaports, seven petroleum seaports, and one steel industry seaport. This significant number will serve as the basis for trade links across the Mediterranean once security and stability dominate the Libyan political scene.
The seaports are reasonably equipped; nevertheless, in the near future, the Libyan government will be investing in improving the efficiency and productivity of its seaports. The government is presently considering involving foreign investors to develop and operate the Libyan seaports through a public-private partnership (PPP).
As the efficiency of these seaports improves, the frequency of ships berthing at Libyan ports is expected to increase. It is a commercial fact that the majority of ships calling at the Libyan ports are neither registered in Libya nor owned by Libyan entities. With the expected increase in tonnage and containers handled by Libyan seaports, legal problems between foreign shipowners and shippers are expected to increase before the Libyan courts. These disputes will mainly concern the arrest of ships inLibyan seaports. Parties involved in shipping disputes shall use the Libyan courts as a venue to force a settlement without resorting to litigation.
The Libyan Law and the Arrest of Ships
Libya is not a signatory to the International Convention relating to the Arrest of Seagoing Ships of 1952; however, a ship in Libyan territorial waters could be arrested as property owned by a debtor.
In general, the Libyan law grants the Libyan courts original jurisdiction to hear a case brought against a non-Libyan. Article 3(2) of the Civil and Commercial Procedures Law gives Libyan courts the power to hear and decide cases involving property located in Libya. Since international law and Libyan law consider the waters surrounding Libya as part of that country’s territory, a vessel located in Libya’s territorial waters will be subject to the original jurisdiction of the Libyan courts.
Another applicable rule to arrest a ship is to commence proceedings to secure a claim. According to Article 516 (1) of the Civil and Commercial Procedures Law, a claim may be filed in a Libyan court against a property located in Libya, even if the owner is a non-resident of Libya. Regarding a ship arrest, a ship located within Libya’s territorial waters will be subject to arrest regardless of the owner’s non-residency.
Here, we must draw a distinction between an arrest order obtained in the enforcement of priority rights conferred by a maritime lien and a prejudgment attachment or prejudgment writ of attachment, as it is known in the United States of America. Prejudgment attachment under Libyan law is a provisional remedy to preserve the status quo until the court issues a final judgment. It is mainly the temporary seizure of the ship.
The plaintiff (creditor) has to commence the action in the court that has jurisdiction over the ship. The plaintiff must submit evidence of the debt owed by the debtor, in this case, the ship owner. The court orders the seizure or attachment of the ship specifically described in the writ by issuing a notice of attachment, which will be served to the ship’s master in order to commence the attachment. The ship will be seized and maintained in the custody of a designated official (guardian). The guardian is usually appointed by the court or the ship’s master/crew member to ensure that the ship remains in custody until a final judgment is issued.
Usually, a good legal team will be able to resolve a ship’s seizure in Libya by arranging the provision of a guarantee and/or letters of undertaking to the creditor to release the ship. As is usually the case, further details, such as litigation or the sale of the ship by the court, are unnecessary for this discussion and should be discussed with a debtor’s lawyer if the need arises.
This article was first published in Libya Business News, August 2014, and republished in the Marasi News January 2015 issue.