Lloyd's Maritime and Commercial Law Quarterly
SHIP ARREST IN SCOTLAND
The context and background
The Act of Union of 1707 expressly preserved the Scottish legal system and its courts. Since 1999 Scotland has had its own Parliament1 with legislative competence in relation to, inter alia, matters which are not reserved to the UK Parliament. Although there are many similarities between Scots and English Admiralty law, they are not the same, and the sources of the law in and the procedures and language applied by the two jurisdictions are different. Scotland’s statutory law and procedure is found in part of the Administration of Justice Act 1956, Part V (“the 1956 Act”)2 (an Act of the UK Parliament which now extends only to Scotland and which the Scottish Parliament has amended) and the relevant Rules of Court.3
The scheme affecting the law of ship arrest in Scotland has now been subjected to a number of reforms that were brought into effect on 1 July 2010. The reforms came in to force by virtue of an unexcitingly named Scottish Statutory Instrument4 which brought into force Part 14 of and Schedule 4 to the Bankruptcy & Diligence Etc (Scotland) Act 2007 (“the 2007 Act”),5 an Act which at first sight may not be one that would be thought to have much application to shipping. The reforms had, however, been the subject of much consideration in a Discussion Paper,6 a Consultation Paper,7 a Report,8 a Consultation Document,9 and finally the consultation on and the passage of the 2007 Act through the Scottish Parliament.
In Scotland, diligence (ie, the method of enforcing an unpaid debt) can be on the dependence (ie, while an action is progressing through the courts but has not yet proceeded to judgment) or in execution (ie, post judgment). Diligence on the dependence is used to give the party bringing the claim (the pursuer) security for a claim for payment of a sum of money. An arrestment classically may attach trading debts or moveable property due to the debtor by a third party, so preserving the funds or property in security for the claim. Recent developments in Scots law, particularly since the coming into force of the Human Rights Act 1998,10 and specifically the requirement for proportionality, have meant that the granting of warrants to arrest on the dependence have become judicial acts rather than administrative acts available as of right as they were in the past.11
The law of ship arrest in Scotland is part of the law of diligence, as Scots law recognises the right on the part of a creditor to obtain security for their claim in a wide class of cases, not simply cases of ship arrest, and so reform to the law of diligence generally impacts on the law relating to ship arrest. The opportunity was taken in the 2007 Act to bring forward
1. Brought into effect and regulated by the Scotland Act 1998, c 46.
2. Administration of Justice Act 1956, 4 & 5 Eliz.2, c 46, Part V (“the 1956 Act”).
3. The Rules of the Court of Session 1994
4. The Bankruptcy and Diligence etc (Scotland) Act 2007 (Commencement No 6 and Savings) Order 2010 (SSI 2010/249)
5. 2007 asp 3.
6. Diligence on the Dependence and Admiralty Arrestments (Scot Law Com DP No 84: December 1989).
7. Arrestment of Ship Securing Claims against Demise Charterers (Scot Law Com CP: March 1990).
8. Diligence on the Dependence and Admiralty Arrestments (Scot Law Com No 164: March 1998).
9. Enforcement of Civil Obligations in Scotland: A Consultation Document (April 2002).
10. 1998, c 42
11. See Karl Construction Limited v. Palisade Properties Plc 2002 SC 270; Advocate General for Scotland v. Taylor 2003 SC 339, and consequent amendments to the Rules of the Court of Session 1994.
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