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Judicial Sale of Arrested Ships in Indonesia: Procedures and Priority of Claims
Understanding the judicial sale process of arrested ships and the priority ranking of claims is essential for maritime stakeholders in Indonesia. This article outlines the auction procedures and the order of claims that apply when a ship is sold judicially.
Procedure for Judicial Sale of Arrested Ships
Sales of arrested ships are generally carried out through auction procedures. The auction of confiscated objects is conducted after a judge’s decision has permanent legal force. The procedure for the sale of arrested ships is as follows:
- Application for Execution: The process begins with applying for execution to the court. Based on this request, the court issues an aanmaning (warning letter).
- Determining the Confiscation for Execution: The court then determines the confiscation of the ship for execution purposes.
- Auction Determination: An auction is scheduled. Auction sales can be carried out based on the court’s authority, especially in the context of a civil case where the ship is used as collateral. If the mortgage deed includes the authority to sell the mortgage object independently without court interference, provided the debtor breaches the contract, the auction can proceed accordingly.
- Direct Sales: This method is based on an agreement between the creditor and debtor to find a buyer offering the highest price.
Priority Ranking of Claims
Pursuant to Article 65(2) and Article 66(4) of the Shipping Law, the priority ranking of claims is as follows:
- Payment of wages.
- Payment of condolences for death or medical expenses for bodily injuries.
- Payment of salvage costs for the ship. Claims for ship salvage costs have priority over other claims if they arise before other claims.
- Port, pilotage, and other shipping lane fees.
- Payment for losses arising from physical loss or damage.
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Anggraeni and Partners, an Indonesian law practice with a worldwide vision, provides comprehensive legal solutions using forward-thinking strategies. We help clients manage legal risk and resolve disputes on admiralty and maritime law, complicated energy and commercial issues, arbitration and litigation, tortious claims handling, and cyber tech law.
S.F. Anggraeni
Managing Partner
Reynalda Basya Ilyas
Senior Associate
Melvin Julian
Middle Associate
