Resently we examined the legal status of a floating dock in the Polish Martime Code and we assumed that – under some conditions – it can be considered a sea vessel.
One of it is that, the dock should be registered in the ship registry (maintained by the Maritime Chamber) but only upon the owner’s request.
But because such registration is not mandatory, it should be at least registered with the Maritime Office.
Only then we can say that the dock can be treated as a sea vessel.
Can the floating dock be used to secure debt repayment?
Let’s consider whether it’s possible to use a floating dock in any way to secure debt repayment. It may be really crucial especially during an ongoing judicial process, which can last for years in the current Polish context.
Any party or participant in a judicial proceeding can request security, but they must demonstrate:
- legitimate interest in obtaining security.
A legitimate interest exists when the lack of security would make it impossible or significantly impede the enforcement of a judgment or the achievement of the proceeding’s goal in another way.
Interestingly, the Polish law does not require the actual proof of the claim and the legitimate interest. It is sufficient to make them probable.
Establishing a legitimate interest involves demonstrating through persuasive arguments that the lack of security would make it impossible or significantly impede the enforcement of the judgment or the achievement of the proceeding’s goal.
So, if you are a creditor, you must:
- describe the basis for claiming the debt (e.g., you entered into a contract for ship repairs, completed the work, issued an invoice, and the shipowner did not pay you); attach documents to the application confirming the described situation (e.g., a repair contract, protocols, invoices, payment requests).
- convince the court that the lack of security might hinder future enforcement proceedings; you must convince the court, for instance, that the debtor is divesting assets, not paying its employees, or is at risk of bankruptcy; such claims should be substantiated (e.g., through online publications).
Methods of securing monetary claims
Let’s assume that you persuaded the court that you need the security, the question that still remains is: what instrument should you use? It is on your side to indicate it in you initial motion.
You have these options:
- seizure of movable property, wages, claims from bank accounts, or other property rights,
- imposing a judical mortgage on real estate,
- Imposing a ban on the sale or encumbrance of real estate without a land registry or when the land registry has been lost or destroyed,
- imposing a maritime mortgage on a ship or ship under construction,
- imposing a ban on the sale of cooperative ownership rights to a flat,
- appointing a forced administrator over the debtor’s business or agricultural enterprise or a facility belonging to the business or its part.
As you can see there are various ways of securing your claim. Unfortunately, among these methods, there’s no direct mention of a floating dock or any related action.
Establishing a maritime mortgage on the dock
Can you secure your claim by imposing a maritime mortgage on the floating dock? Yes, but two conditions must be met:
- assumption that the dock is considered a vessel according to maritime law, which may raise doubts,
- dock must be registered in the ship registry maintained by the Maritime Chamber.
If the dock is not registered in the ship registry, this option will not be available.
In such a case, you would need to choose a different method to secure your debt repayment, such as i.e. seizing the debtor’s bank account or claims from third parties.
For a shipyard engaged in repairs, you may have the option of specifying the shipowner who is having their ship repaired and seizing the debt owed to the shipyard as compensation for the repair work.
Can the floating dock be secured at all?
As you can see, if the dock is not registered in the ship registry, it’s challenging. The only method of securing it judicially would be through a maritime mortgage.
However, this does not preclude extrajudicial security. A dock registered only with the Maritime Office could be encumbered with a pledge or a registered pledge.
But this requires cooperation between the creditor and the debtor and an agreement between them. Which is likely possible when there are no disputes or within the same corporate group.