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From the Brig

arrested a vessel in a “hostile” country, so usual order of priorities, if the lender has for signs of financial distress - a change in

that they can move the vessel to a country acted in a way that the court might payment behaviour, press reports of

that will allow them a more efficient sale consider prejudicial to the interests of vessels being arrested by others or of
process.
other creditors. For example, a lender financial restructuring would certainly put

who supports an insolvent ship owner you on notice of possible trouble. If you What is clear from what has been
customer until the vessels can be are aware that a bank may be likely to said already is that once a lender elects to

positioned in a location convenient to the intervene then act fast, and seek specialist foreclose on its loan and assert its rights
lender might forego its priority over advice.
against the vessels, the interests of other

unpaid suppliers who supplied the vessel creditors are in most cases severely When faced with a customer whose
during that period.
prejudiced. A supplier faced with a vessel vessels are under arrest by the bank you

arrested by a bank in a county favourable Quite obviously, it is better to avoid should seek advice, to ensure you
to the bank (the most popular being exposing oneself to situations where a understand your options and have

Holland, Gibraltar, England, Singapore, lender brings an end to an owner’s realistic expectations of what can be

Hong Kong, Netherlands Antilles) should operation. This is of course easier said achieved. There is little point embarking
think very carefully before spending than done, but steps can be taken to on your own legal proceedings, if this will

money on their own legal proceedings. minimise risks. The single most important only increase your losses in the form of
This may often be spending good money, thing is not to delay in collecting payment. lawyer’s fees without a result.

after bad.
The longer a debt remains due, the As always, the best advice is to know
greater the chance of a lender intervening. If it is possible for a supplier to arrest your customer as well as possible, keep

Building strong personal relationships with in a place unfavourable to a bank, then credit under tight control and don’t be
the ship owner may mean that you will be this may be a way of achieving a afraid to insist on payment on time. Be

“tipped off” when a lender is considering settlement with the bank. There might ready to act quickly, if adverse
enforcement action. Watching carefully
be cases where it is possible to upset the
information is received by you.

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2014 Issue 60 The SHIP Supplier 25