ARTICLE
5 September 2024

Maritime Law Divides Mexico And Luxembourg: A Luxembourg Vessel Detained By Mexico.

BS
Bonn & Schmitt

Contributor

Bonn & Schmitt is one of the leading independent Luxembourg full-service law firms with an extensive local and international practice. The firm is a trusted legal partner of leading international business and financial institutions, industrial corporations, international organizations, as well as, national and foreign public entities and organizations. We also advise the Luxembourg Sate, Luxembourg local authorities, as well as Luxembourg regulatory bodies. Bonn & Schmitt's lawyers are registered with the Luxembourg Bar and many are members of several legal associations, including the International Bar Association, the Union Internationale des Avocats and the International Fiscal Association.
On the 3rd June of 2024, in a press release of the International Tribunal for the Law of the Sea* (hereinafter "ITLOS"), the international maritime community discovered that the Grand Duchy of Luxembourg...
Worldwide Transport

On the 3rd June of 2024, in a press release of the International Tribunal for the Law of the Sea* (hereinafter "ITLOS"), the international maritime community discovered that the Grand Duchy of Luxembourg had just instituted proceedings before the said Court against Mexico in a dispute regarding the detention by the Mexican authorities of the "Zheng He", a Luxembourg-flagged vessel, in the internal waters of the Tampico Seaport.

It all started when the "Zheng He" left the port of Freeport in the Bahamas and made a stopover in the port of Tampico, Mexico, where she was allowed to berth for crew rotation, bunkering and provisioning, and finally preventive maintenance.

During this stopover, and resulting of a series of unusual events, the Mexican authorities ordered all a sudden the forced detention of the vessel, and the transfer of ownership of the "Zheng He" to the State of Mexico.

Once the stupor has passed, a new turnaround occurred on March 22, 2024. On that day, the Tampico District Court overturned all the afore mentioned proceedings. Therefore, this overturn should have resulted in the release of the vessel by Mexican authorities . However, the vessel was not released. Hence, the "Zheng He" is still held under arrest in the port of Tampico, for 8 months now.

Consequently, Luxembourg, the flag State, instituted a first proceeding before the ITLOS, asking for the release of the vessel. In a second time, the Luxembourg instituted another proceeding, seeking provisional measures in this dispute, notably to protect its sailors on board, and more broadly its interests. The ITLOS held two public hearings, on the 11th and 12th July of 2024, to examine the request for prescription of provisional measures in the case of «Zheng He» (LUXEMBOURG v. MEXICO).

However, until the ITLOS renders a decision, whether it is on the prescription of provisional measures or on the detention of the vessel, this last remains immobilized.

  • Can we talk in this case of a ship arrest ** by the Mexican authorities?
  • Are forced detention and ship arrest the same procedure in maritime law?
  • Or are we dealing with two different concepts?

In both cases, whether we are talking about forced detention or ship arrest, the result is the same: the ship is no longer free to move and is forbidden to leave the mooring to which she is located, awaiting for further information from the State, or judicial authorities of the State, responsible for her detention.

Financial consequences for the ship owner, the ship operator, and the ship charterer of such vessel economic activity's shutdown are considerable.

But despite this one thing in common for the vessel and the crew, forced detention and ship arrest are still separate procedures. They come under different circumstances and are tools used to achieve different goals.

In the case of a classic seizure (ship arrest), which in maritime law can be implemented in two notable ways (the conservatory seizure or the writ of execution against a ship), the arrest of a ship is only permitted in respect of claims, upon a judicial request. This claim, which enshrines the principle that the right to be paid is an elementary right, must meet various requirements depending on national laws. In particular, it must be deemed as a "maritime claim" under the 1952 Brussels Convention***, of which the Grand Duchy of Luxembourg is a member state. A claim, which makes possible the arrest of a ship, should therefore cover all claims that have a maritime lien or a maritime nature, with a broad scope of coverage. From environmental claims, wreck removal, insurance, brokerage, as well as disputes arising out of a contract for the sale of the ship; to salvage, provisions, bunkers, equipment (including containers) supplied or services rendered to the ship for its operation, management, preservation or maintenance.

It is therefore mandatory, in order to arrest a sea vessel, that a claim had arisen and was brought to court. However, in the event of a ship arrest, the Montego Bay Convention**** states that, when reasonable bond or other security has been provided by the arrested vessel, the ship and her crew shall be promptly released.

A ship arrest is thus a pre-trial tool with the purpose of obtaining security for the enforcement of, usually a maritime claim, but every time a claim. However, in the event that the sole precautionary seizure would not suffice, the arrest and the writ of execution against a ship can be implemented, with a paramount consequence: the sale of the ship in court in order to pay off the creditors.

Unlike ship arrests, a forced detention is, on the other hand, a police measure of the coastal State, enforcing the sovereignty of the latter on its waters. A forced detention is a direct reaction to an alleged violation of the State exclusive economic zone existing regulation, or a direct reaction to a threat a vessel constitutes to the safety of navigation, or to public order at sea and in ports. Hence, the state authorities demand the ship arrest without going through the courts.

It is thus a public policy measure generally authorized by national and international texts in response to, for instance, infringements of customs legislation, fisheries regulation, or to protect the port public domain, the marine environment, the coastline, or more generally navigation.

We consequently understand that, on one side we operate in the framework of the execution of contractual relationships between various maritime actors, mostly commercial ones, while on the other side we are in the presence of state prerogatives, such as the use of force and constraint allowed by the sovereignty of States.

In the case of the «Zheng He» (LUXEMBOURG v. MEXICO), is it now possible to determine whether Mexico is claiming the ship arrest of the Luxembourg vessel or its forced detention?

In the absence of a Mexican position at the time of writing this article, it does not seem possible to affirm nor to predict the arguments of the Mexican authorities. Do they consider that the «Zheng He» threatened Mexican public order during its stopover in Mexican waters? In which case Mexico will be expected to demonstrate how the Luxembourg vessel was a risk to safety and security. Or to demonstrate how the «Zheng He» was in violation of Mexican regulation.

In case the forced detention would not be the legal ground used by the State of Mexico, the latter shall have to invoke claims that ignited the seizure of the ship, and justify the refusal of the Mexican State to release her despite Luxembourg offers to pay a deposit or other financial guarantee.

Will the Grand-Duchy of Luxembourg, a «landlocked state»***** , succeed in upholding its rights against Mexico, a state with a coastline overlooking both the Pacific Ocean, the Atlantic Ocean, and the Caribbean Sea? The ITLOS will rule.

* Independent judicial body established by the 1982 United Nations Convention on the Law of the Sea, located in Hamburg, Germany;
** Ship conservatory seizure ;
*** International Convention relating to the arrest of seagoing ships. Signed at Brussels, on 10 May 1952;
**** United Nations Convention on the Law of the Sea, Montego Bay, 10 December 1982;
***** As described in Art 124 of the United Nations Convention on the Law of the Sea (UNCLOS)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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