Insurance Law EstoniaDr Olavi-Jüri Luik, attorney at law
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Ship arrest in Estonia: a guide for insurers and P&I clubs

By Dr Olavi-Jüri Luik, attorney at law (WIDEN)

Contents

For a cargo, hull, property or liability insurer pursuing a subrogated maritime claim, or for a P&I club defending one, arrest is often the only effective way to obtain security against a foreign shipowner. Estonia is a party to the International Convention on Arrest of Ships, 1999, which it acceded to on 11 May 2001; the Convention entered into force internationally on 14 September 2011.1 This short guide summarises the Estonian rules.

Both registered and unregistered ships are arrested for maritime claims under the Law of Property on Ships Act (laeva asjaõigusseadus, LAÕS) and the international convention on the arrest of ships. A ship may be arrested to secure a maritime claim only on the conditions laid down in that convention; the interim measures provisions of the Code of Civil Procedure (tsiviilkohtumenetluse seadustik, TsMS) apply, subject to the special rules of LAÕS.2 Arrest is one of the measures by which a court secures a claim; a judicial mortgage on a ship is another.3

2. Maritime claims

LAÕS lists 21 categories of maritime claims. They include claims arising from loss of or damage to property caused by the operation of the ship, loss of life or personal injury in direct connection with the operation of the ship, salvage, damage or threat of damage to the environment, wreck removal, contracts for the use or hire of the ship and for the carriage of goods or passengers, loss of or damage to goods, general average, towage and pilotage, supplies and services, construction and repair, port dues, crew wages, insurance premiums (including mutual calls) payable by or on behalf of the owner or demise charterer, disputes over ownership or possession, mortgages and sale contracts.4 Damage to a subsea cable or pipeline caused by the operation of a ship falls within the first category.

3. Which ships can be arrested

A ship may be arrested if the person who owned it when the claim arose is liable and owns it at the time of arrest; if the demise charterer at that time is liable and is the demise charterer or owner at the time of arrest; if the claim is based on a mortgage or similar charge on the ship; if it relates to ownership or possession; or if it is against the owner or operator and secured by a maritime lien. Any other ship owned by the liable person may be arrested if that person was, when the claim arose, the owner, or the demise, time or voyage charterer of the ship in respect of which the claim arose (except for ownership and possession claims). Re-arrest for the same claim is allowed only in limited cases, for example where the security provided is inadequate.5 The arrest does not extend to the cargo or the freight.6

4. Procedure and timing

  • Forum. A claim based on a maritime claim may also be brought where the defendant's ship is located or at its home port.7
  • Before the main action. The court may secure a claim before the action is filed. The applicant must explain why the action is not filed at once, and the court sets a deadline of no more than one month for filing; otherwise the measure is cancelled.7
  • Registered ships. Arrest of a ship entered in the ship register is recorded in the register; a ship entered in the register is not arrested for a principal claim below EUR 640 where less burdensome measures are possible.3

5. Release and security

The court releases the ship on the provision of sufficient security in a satisfactory form, except where the ship was arrested for disputes over ownership or possession or between co-owners over its use; in those cases the court may instead allow the ship to continue trading. If the parties do not agree on the amount and form of security, the court determines them, not exceeding the value of the arrested ship. A request to release the ship or to substitute security is not an acknowledgment of liability, a waiver of the benefit of limitation or a waiver of any defence.5 For P&I clubs this means that club letters of undertaking are negotiated against the ship's value and, where relevant, the limitation amount.

6. Interaction with limitation of liability

A shipowner sued in Estonia may raise limitation of liability as a defence without constituting a fund; the court may then order the release of arrested property against security in the amount of the limit.8 Whether limitation can be broken is discussed in the guide on subsea infrastructure and shipowner liability.

References

  1. International Convention on Arrest of Ships, 1999, status of participants (United Nations Treaty Collection, chapter XII-8). https://treaties.un.org/doc/Publication/MTDSG/Volume%20II/Chapter%20XII/XII-8.en.xml. ↩

  2. Law of Property on Ships Act (laeva asjaõigusseadus, LAÕS) § 1 lg 4, § 78² lg 1. RT I, 17.04.2025, 30 (in force 01.05.2025). https://www.riigiteataja.ee/akt/LA%C3%95S. ↩

  3. Code of Civil Procedure (tsiviilkohtumenetluse seadustik, TsMS) § 378 lg 1 points 1–2, § 389 lg 1–2 and 4. RT I, 20.06.2026, 21 (in force 30.06.2026). https://www.riigiteataja.ee/akt/TsMS. ↩↩

  4. LAÕS § 78¹ (n 2). ↩

  5. LAÕS § 78² lg 2–5, § 78³ lg 1–3 (n 2). ↩↩

  6. LAÕS § 84 (n 2). ↩

  7. TsMS § 95 lg 1, § 382 lg 1–2 (n 3). ↩↩

  8. Merchant Shipping Act (kaubandusliku meresõidu seadus, KMS) § 115¹ lg 1–3. RT I, 17.03.2023, 47 (in force 27.03.2023). https://www.riigiteataja.ee/akt/117032023047. ↩

Topics: Marine and cargo (CMR)