Arresting the estate: A calibrated test for ship arrest after cross‐border insolvency

Abstract

When a shipping group enters insolvency, two bodies of law collide. Cross‐border insolvency law, built on the recognition machinery of the UNCITRAL Model Law, asks the courts of every affected jurisdiction to cooperate with a single main proceeding. Maritime law treats the vessel as an object of local jurisdiction that may be arrested wherever it calls. This article argues that the conflict should not be resolved by subordinating arrest to insolvency, or insolvency to arrest, but by a functional inquiry that distinguishes security‐preserving arrest from priority‐creating arrest. It proposes a six‐factor calibrated test for courts faced with a maritime arrest after the commencement or recognition of a foreign insolvency proceeding and applies that test to a Hanjin‐type collapse. The test gives presumptive——though rebuttable——weight to the nature of the claim and the timing of the arrest, isolates seafarers' wage claims as a distinct category in which both maritime‐lien priority and the social‐protection regime of the Maritime Labour Convention 2006 bear on the analysis, and treats ‘adequate protection’ not as a fixed moment but as the management of a depreciating, income‐earning asset over the life of the proceeding. The test is shown to be expressible in civil‐law as well as common‐law categories, and its limits——the breadth of some domestic arrest powers——are tested against German and South African material.