Russian billionaire’s $500m super yacht under arrest
One of the largest super yachts in the world was impounded recently due to outstanding debts with the boat’s builder, amounting to $13.5 million (plus $7.5 million owing to other contractors).
The super yacht was arrested on its maiden voyage in Gibraltar, located near Spain and the Mediterranean. Owner, Andrey Melnichenko, will not be able to claim the yacht until the dispute is settled.
As of the 9 March, Forbes states Mr Melnichenko is worth an estimated $13 billion.
Sailing Yacht A
‘Sailing Yacht A’ is as long as one and a half footy fields (143 metres), and has the capacity to withstand the impact of a bomb. The vessel was designed by Phillipe Starck, a famous French designer known for his cutting edge, futuristic creations.
The yacht also features:
- A helipad.
- Accommodation for 20 guests and 54 crew.
- Underwater viewing pod.
- 100m masts.
- 40 cameras.
What is a vessel arrest?
It seems strange that a boat can be ‘arrested’, but it is certainly a possibility under Maritime Law in Australia, and as this case highlights, around the world too.
An arrest happens when a legally mandated authority boards a vessel and takes physical possession of it. At this point, the authority gains control over the vessel, and the owner loses control. (You could also say the vessel has been ‘impounded’.)
According to the Federal Court of Australia an application for an arrest warrant, and a few other important items of paperwork, must be submitted to a Registrar before an arrest can be made.
Only a Marshal may execute an arrest warrant in Australia, and there are only around 40 people appointed to this role today.
When can a vessel be released?
Most vessels are released by the consent of a Registrar, although in some cases, the Court will require that the boat be sold.
The Registrar may release a ship if he or she is:
…satisfied that an amount equal to (the lesser of) the amount claimed or the value of the ship or property has been paid into court, or that bail bond for a similar amount has been filed in court.
Rule 51(1) of the Admiralty Rules 1988(Cth)
Maintaining an arrested vessel
Under common law, the Marshal must take reasonable care to carry out his or her statutory duties. This includes maintaining the vessel until it is released, or if a Court order states it must be sold.
Insurance contracts between the owner and an insurance provider lapse when a vessel is arrested, so the Marshal must take out new cover for the period the vessel is impounded.
Within 14 days of an arrest, the Marshal is required to submit an insurance declaration form to the office of Insurance Brokers, OAMPS Gault Armstrong Pty Ltd.
For more information on the practicalities of insurance cover during an arrest, please head to this Federal Court information page.
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