Unlawful Seizure of a Vessel: Clarity on Guarantees

Unlawful Ship Arrest? The Hague Court of Appeal Clears Up Ambiguity Regarding Guarantees

As a shipowner, charterer, cargo interest holder, or maritime service provider, you may unexpectedly face a ship arrest. Our attorneys in the maritime practice group provide intensive assistance to parties in the port and trade sectors in these matters. On July 14, 2026, the Court of Appeal in The Hague issued a ruling of significant importance to the maritime practice regarding ship arrests and their release following the posting of security.

An International Maritime Law Puzzle

The case involved a Panama-registered vessel owned by a Hong Kong-based shipping company that, in January 2022, received a fuel delivery in China. The fuel had been ordered by a charterer from the Marshall Islands from a British supplier whose terms and conditions specified that U.S. law would apply. A classic maritime law puzzle. The charterer became insolvent in the course of 2022 without having paid the English supplier anything. In September 2024, that supplier attached the vessel in Rotterdam to recover the claim arising from the unpaid deliveries to the charterer.

The two key questions in this case were

The two most important questions were:

• Was that claim against the vessel enforceable through an attachment in the Netherlands?
• And can that question be brought before the court in summary proceedings even if the attachment has been lifted in exchange for a guarantee to limit damages?

Attachment of a Foreign Seagoing Vessel

With regard to the first question: an attachment in the Netherlands of a foreign seagoing vessel is possible only if such an attachment is permissible under both the law of the flag state and the law applicable to the contract. In the preliminary relief proceedings, it had to be assumed that the former was Panamanian law and the latter was U.S. law. Under Panamanian substantive law, the claim against the charterer was barred by the statute of limitations. However, under Panamanian private international law (IPR), the question of whether the claim was barred by the statute of limitations had to be answered based on the law applicable to the claim, i.e., U.S. law. It had to be assumed that the claim was not time-barred under that law. However, it was disputed whether recourse against the vessel was possible under that law. The judge in the preliminary relief proceedings found the matter too complicated and refused to order the return of the guarantee.

Court of Appeal: No Renvoi and the Attachment Was Unlawful

The Court of Appeal ruled that the Dutch rule requiring that attachment be possible under both flag law and contract law falls under the no-renvoi regime: where Panamanian law applies, only Panamanian substantive law applies, and not Panamanian conflict-of-laws rules (which would lead to the application of U.S. law). Since the claim was barred by the statute of limitations under Panamanian law, the ship could no longer be seized in the Netherlands. As a matter of surplus, the Court of Appeal noted that it had not been established under U.S. law either that recourse was possible. The seizure was therefore unlawful.

Interim Proceedings for Restitution Remain Possible After Posting a Guarantee

Regarding the second question: the court of appeals has reached the thoroughly reasoned conclusion that it must be possible to post a bond to limit the damage caused by the attachment and subsequently bring a motion for preliminary relief to determine whether (it is plausible that) the attachment was unlawful, particularly if the text of the Rotterdam Bond Form was used to lift the attachment. That text includes a reservation regarding the right to reclaim the guarantee. The demands of practical application mean that it would be undesirable for issues to no longer be able to be addressed in summary proceedings once a guarantee has been provided. Other courts had occasionally adopted that approach; the Court of Appeal has now put an end to it. In this case, the party that imposed the attachment was required to return the guarantee within two days, subject to a penalty of €50,000 per day, up to a maximum of €1 million.

Implications for Practice

With the guidance provided by the court, practice can resume for the time being; ambiguities created by conflicting rulings have now been resolved. A guarantee may be provided with the proviso that its revocation will be sought in summary proceedings.
No appeal to the Supreme Court will be filed.

Questions about ship arrests or guarantees? Contact Yur Advocaten.

Are you dealing with a (impending or already imposed) ship arrest, the provision of a guarantee, or another maritime law dispute? Feel free to contact one of our attorneys in the Maritime, Port & Trade practice group. We’d be happy to help you find a solution.