Arrest of Ships in Bangladesh: Legal Framework and Procedure

The arrest of ships in Bangladesh is governed by a well-established admiralty regime, primarily under the Bangladesh Admiralty Court Act, 2000 (BACA) and the Bangladesh Admiralty Rules, 1912 (BAR). The Admiralty Court functions as an original jurisdiction of the High Court Division of the Supreme Court of Bangladesh, specifically designated to adjudicate admiralty disputes, including arrest, detention, release, and sale of ships. Over the years, Bangladesh has emerged as one of the most favorable jurisdictions in South Asia for effecting swift and cost-effective ship arrests.

Jurisdiction of the Admiralty Court in Bangladesh

Under Section 3 of the Bangladesh Admiralty Court Act, 2000 (BACA), the High Court Division of the Supreme Court of Bangladesh exercises exclusive admiralty jurisdiction over claims involving maritime liens, maritime claims, and disputes arising from contracts or torts related to ships or naval services. This jurisdiction encompasses both actions in rem, proceedings against the vessel itself, and actions in personam, against the shipowner or other liable parties, thereby offering a comprehensive and flexible mechanism for litigants to enforce claims and preserve maritime assets pending adjudication.

Once a vessel is arrested under the Court’s admiralty jurisdiction, the Court generally proceeds to hear and determine the substantive claim. The basis for this is the legal principle that, in rem jurisdiction, once established through arrest,it  extends to the underlying dispute. However, if the parties have entered into a contractual agreement designating a foreign jurisdiction or arbitration forum, the Court may, at its discretion, stay the substantive proceedings, but will usually maintain the arrest of the vessel to secure the claim until resolution in the agreed forum at Kazi Law Chamber.

This approach ensures that the claimant’s rights are protected through the preservation of security, while also respecting party autonomy and contractual jurisdiction clauses under international legal frameworks. In doing so, the Bangladesh Admiralty Court affirms its role as a reliable and strategic forum for both enforcing maritime claims and securing assets, especially in complex cross-border disputes.

Bangladesh and International Arrest Conventions

It is significant to note that Bangladesh is not a signatory to either the International Convention Relating to the Arrest of Sea-Going Ships, 1952, or the International Convention on the Arrest of Ships, 1999. This means the Bangladeshi Admiralty Court operates exclusively under domestic law, which provides greater flexibility in accepting and enforcing claims, including some that may not qualify under international conventions.

Types of Claims for Which Ship Arrest is Permitted

Under the prevailing admiralty jurisdiction exercised by the High Court Division of the Supreme Court of Bangladesh, a ship may be arrested in an action in rem for a wide variety of maritime claims. The Bangladesh Admiralty Court Act, 2000, provides for an expansive list of claims that empower plaintiffs to seek the arrest of a vessel for securing their interests. These claims mirror traditional admiralty practice and are comprehensive in scope, reinforcing Bangladesh’s standing as a pro-claimant jurisdiction in the realm of maritime disputes.

Below is a breakdown of the recognized categories of claims under which an arrest of a ship may be initiated:

(a) Possession or Ownership Disputes: A claim asserting rights to ownership or possession of a ship, or to recover critical documents of title, such as the registration certificate, log book, or other operational certificates, can justify a ship arrest.

(b) Disputes Among Co-owners: Arrest may be sought where there is a dispute between co-owners regarding the employment, possession, or income generated by the vessel.

(c) Mortgage or Maritime Charges: A claim arising from a mortgage or charge on the ship or a share therein entitles a mortgagee to seek arrest to secure or enforce the financial charge.

(d) Damage Done by the Ship: Where a ship has caused physical damage, whether to another vessel, dock, cargo, or other property, a claim can be brought against the offending ship.

(e) Damage Sustained by the Ship: Similarly, claims for damage received by the ship, for instance, due to port negligence or third-party interference, may be enforced via arrest.

(f) Personal Injury and Loss of Life: Claims involving loss of life or personal injury due to defects in the ship, or negligent acts or omissions by the owner, charterer, crew, or other agents acting in the course of navigation, loading, discharge, or passenger operations, can give rise to a cause for arrest.

(g) Cargo Damage or Loss: Arrest lies for claims involving damage to or loss of goods carried aboard the vessel.

(h) Contractual Disputes: This includes disputes arising under charterparties, bills of lading, or any agreement related to the carriage of goods or the hire of a vessel.

(i) Salvage Claims: Claims for salvage services rendered to the ship, its cargo, or persons on board, whether rendered on the high seas or within territorial waters, may justify the arrest of the ship.

(j) Towage: A ship may be arrested to enforce claims for towage services, regardless of whether the service involved a ship or aircraft.

(k) Pilotage: Claims for pilotage charges, which may be statutory or contractual, can be enforced through ship arrest.

(l) Supply of Goods and Bunkers: A claim arising from the provisioning of goods, bunkers, or other materials essential to the operation or maintenance of the ship.

(m) Repairs and Dock Charges: This includes claims for construction, repair, or equipment, as well as dock dues, port charges, and related services.

(n) Wages and Crew Entitlements: A master or crew member may bring a claim for unpaid wages, compensation, or other sums due under the Merchant Shipping Ordinance, 1983, including associated entitlements such as gratuities or recoverable property.

(o) Disbursements and Agent Claims: Claims arising from disbursements made on behalf of the ship, whether by the master, charterer, shipper, or agent, fall within the jurisdiction of the court for ship arrest.

(p) General Average Contributions: A party claiming contribution for a general average act, where voluntary sacrifice is made for the common safety of the vessel and cargo, may arrest the ship to secure recovery.

(q) Bottomry and Respondentia: Traditional maritime loans secured against the vessel (bottomry) or its cargo (respondentia) also provide grounds for an arrest action.

(r) Seizure and Forfeiture: A claim for forfeiture or condemnation of ship or cargo, or for restoration thereof after seizure, may lead to arrest. This includes proceedings for rights of admiralty, or any relief provided under the Merchant Shipping Ordinance.

Procedure for Initiating a Ship Arrest Application

To initiate proceedings for the arrest of a vessel in Bangladesh, the claimant must first institute an admiralty suit in the High Court Division under the Bangladesh Admiralty Court Act, 2000. The filing of the plaint requires a court fee of BDT 1,00,000.00, which is standard for most admiralty claims. However, in suits for crew wages, a significantly reduced court fee of BDT 100.00 applies, reflecting the court's special consideration for seafarers’ entitlements.

The plaint, along with relevant supporting documents, is filed at the court’s admiralty section. A separate application for the arrest of the vessel is then submitted, supported by an affidavit from the plaintiff or authorized representative. Typically, this application is listed in the Daily Cause List on the next working day. However, in matters requiring urgent intervention, the court may take up the matter immediately by including it in a supplementary cause list and proceeding to hear the case on the same day.

If the court finds a prima facie case in support of the arrest, it admits the suit, issues a summons, and the case proceeds under the Bangladesh Code of Civil Procedure, with modifications specific to admiralty litigation. In cases where no caveat against arrest has been filed by the defendant, the court may issue an ex parte arrest order if it is prima facie satisfied that the arrest is necessary to secure the claim or preserve the subject matter of the dispute.

In situations where a caveat against arrest exists, the defendant is given a time-bound opportunity to appear and contest the arrest application. However, the court retains discretion to issue an arrest order if circumstances justify such action to protect the rights of the claimant.

Documentation Requirements: Originals, Electronic Filing, and Notarisation

At the time of instituting the suit and submitting the arrest petition, the following must be furnished:

• All documents supporting the claim, including invoices, contracts, bills of lading, and correspondence between the parties.
• These may initially be filed in scanned or electronic format, especially during the admission stage.
• Original documents must be produced at the trial stage, particularly where execution or authenticity is contested.
• Any foreign documents must be notarized and, where applicable, apostilled or attested to ensure admissibility.

This dual-stage approach balances procedural urgency with evidentiary rigour, allowing ship arrest proceedings to be initiated swiftly without compromising the integrity of the trial process.

Requirement of Power of Attorney and Supporting Documents

To initiate proceedings, a Power of Attorney (POA) executed by the plaintiff is mandatory. The POA must be:

• Notarized and attested by the Bangladesh High Commission in the plaintiff’s home jurisdiction.
• Authenticated by the Ministry of Foreign Affairs in Bangladesh.
• Duly stamped, in accordance with the Stamp Act.

However, the Court allows temporary reliance on a scanned copy of the POA, provided that the original is submitted later in the proceedings, post-authentication. This procedural flexibility facilitates urgent filings such as ship arrest petitions, especially when time is of the essence.

Service and Execution of Arrest Order

Once the Admiralty Court issues an order of arrest, it is served upon the defendant through the Marshal of the Admiralty Court, who acts upon receipt of the requisite Marshal’s fees and charges. The Marshal, in cooperation with port authorities, physically boards the vessel and serves the warrant of arrest, thereby placing the ship under legal detention. During this time, the vessel is barred from sailing or engaging in operations until a court order permits its release. The Admiralty Court’s jurisdiction also extends to the arrest of cargo on board or any other property belonging to the defendant, reinforcing its authority to secure claims through a broad range of maritime assets.

The arrest remains in effect until the claim is finally adjudicated or the vessel is released upon the furnishing of adequate security. To secure such release, the defendant may deposit a bank guarantee issued by a scheduled bank in Bangladesh or make a cash deposit into the court’s registry. Notably, the Bangladesh Admiralty Court does not accept a Letter of Undertaking (LOU) or Letter of Indemnity (LOI) from P&I Clubs, a stance that diverges from many other jurisdictions. This strict requirement underscores the court’s commitment to ensuring genuine financial security in favour of the claimant and mitigating the risk of unenforceable undertakings.

Release from Arrest

A ship may be released from arrest by the court upon the deposit of the claimed amount in court or the furnishing of a local bank guarantee. Notably, a Letter of Undertaking (LOU) or Letter of Indemnity (LOI) issued by a P&I Club is not accepted in Bangladesh. The insistence on a local bank guarantee reinforces the enforceability of claims and protects the claimant’s interest.

Defendants also have the right to apply for a reduction of the amount of security. If allowed, they must furnish a revised bank guarantee in the adjusted amount. These applications, however, generally take one to two weeks to be heard. Therefore, in cases involving commercial urgency, such applications are not recommended, especially when time is of the essence.

Upon acceptance of the security, the court issues a release order, which is also served on the vessel by the Marshal after payment of applicable service fees.

Adjudication and Enforcement

Following the full trial of the admiralty suit, the court may enforce its judgment through either the judicial sale of the vessel under the Bangladesh Admiralty Rules, 1912, or by ordering the release of any security previously deposited with the court, either in part or in full, depending on the awarded amount. If the suit is dismissed, the arrest order is vacated, and the vessel or security is promptly released.

Any party aggrieved by the judgment may file an appeal before the Appellate Division of the Supreme Court of Bangladesh, provided the appeal is lodged within thirty (30) days from the date of the adjudication. This appellate mechanism ensures judicial oversight while preserving finality and integrity in maritime dispute resolution.

Judicial Sale and Distribution of Proceeds

If a vessel remains under arrest and the defendant fails to secure its release by depositing appropriate security, the claimant may apply for a judicial sale of the vessel pendente lite. Upon such application, the Admiralty Court may order the sale of the ship through public auction, with the Marshal of the Court tasked with executing the sale. The proceeds from the sale are retained by the Marshal pending final adjudication of the suit. If the court decrees in favour of the claimant, the sale proceeds are disbursed to satisfy the awarded claim.

In cases involving multiple claimants, where the proceeds of sale are insufficient to satisfy all claims in full, the court applies the English Law of Priorities to determine the order of payment. This ensures an equitable distribution based on the nature and ranking of maritime claims, including maritime liens, crew wages, salvage, and mortgages, among others.

Alternative Avenues for Ship Arrest

In addition to arrest through a suit in rem, Bangladesh law provides several other avenues for securing a ship’s detention:

1. Execution of Decree: A ship may be arrested in execution of a judgment or decree passed by the High Court Division or a foreign court against the shipowner, provided the foreign judgment is recognized in Bangladesh.
2. Attachment Before Judgment: A ship can be attached before judgment in a suit in personam where there is reasonable apprehension that the ship might leave jurisdiction or otherwise frustrate a possible decree.
3. Beached Vessels: Even if a vessel has been beached for scrap, it may still be subject to attachment in rem if the cause of action existed before the vessel lost its navigability.
4. Merchant Shipping Ordinance (MSO), 1983: Under the MSO 1983, the Principal Officer, Mercantile Marine Department, is empowered to detain unseaworthy ships. Additionally, the High Court Division may detain a foreign vessel for damage caused globally to the Government of Bangladesh or a Bangladeshi citizen. The Principal Officer or the Collector of Customs may even detain a ship before a formal application is made to the High Court.
5. Chittagong Port Regulations: Under the Regulations for Working of Chittagong Port (Cargo and Container), 2001, the Chittagong Port Authority is authorized to detain a vessel until the damages caused or the cost of removing navigational hazards is paid or secured through an appropriate guarantee.

Wrongful Arrest and Judicial Response

The concept of wrongful arrest is not formally acknowledged in Bangladesh for the purpose of ordering counter-terrorism. However, the Court retains discretion to vacate an arrest order if it is proven that the arrest was wrongfully obtained.

In the event that the Court finds a claim or defence to be false or vexatious, it may, under Section 35A of the Code of Civil Procedure, award compensatory costs to the objecting party. The amount of such compensation may be up to BDT 20,000, which, while nominal, reflects the Court’s intention to discourage frivolous or malicious claims.

Counter-Security Requirements for Arrest

In Bangladesh, the Admiralty Court does not require the furnishing of counter-security at the time of ordering the arrest of a ship. This policy stands in contrast to many jurisdictions that mandate security for potential damages arising from wrongful arrest.

However, Section 148A of the Code of Civil Procedure, 1908, provides a safeguard for defendants. Where the plaintiff resides outside Bangladesh and possesses no sufficient immovable property in the country, the Court, either suo motu or upon application by the defendant, may order the plaintiff to furnish security for the payment of all costs incurred or likely to be incurred in the proceeding. This ensures that defendants are not unduly prejudiced by foreign claimants who may be judgment-proof in Bangladesh.

Piercing or Lifting the Corporate Veil

The Admiralty Court in Bangladesh acknowledges the principle of piercing and lifting the corporate veil, albeit cautiously. To justify an arrest under this principle, the claimant must demonstrate that the creation of separate legal entities by the shipowner was a deliberate attempt to evade legal liabilities.

The Court exercises this power sparingly and will not disregard corporate personality where subsidiaries or affiliated entities are established in the ordinary course of business. The burden lies squarely on the claimant to provide concrete evidence of fraud, collusion, or a sham corporate structure designed to frustrate creditors or the judicial process.

Remarks

While Bangladesh offers a highly effective and claimant-friendly jurisdiction for ship arrest, marked by quick procedures, low costs, and the absence of a counter-security requirement, it is important to acknowledge that this framework heavily favours the interests of claimants, often to the detriment of shipowners and defendants. The rejection of P&I Club Letters of Undertaking and the lack of a statutory mechanism for compensating wrongful arrest may expose vessel interests to disproportionate risk, particularly where claims are later found unmeritorious. Moreover, the country’s non-ratification of key international instruments such as the 1952 and 1999 Arrest Conventions results in a lack of harmonisation with global maritime practice, potentially deterring foreign shipowners from routing their vessels through Bangladeshi ports. A more balanced approach, incorporating international norms, providing clearer standards for wrongful arrest, and allowing alternative forms of security, would align Bangladesh's admiralty regime with modern best practices while still preserving its robust enforcement mechanisms.