Shipowners continue to face difficult times and weak freight markets in many trades, prompting concern in the maritime industry about a surge in the number of banks foreclosing on overdue mortgage deals. For Gibraltar though, this means good business.
The Rock is widely regarded as a leading jurisdiction for admiralty arrests, mainly because its UK-based legal system can handle cases swiftly and efficiently.
Resolving ship arrests quickly helps to protect the asset – in this case a ship – and get it back to work.
While a reputation as an arrest port is not something many would wish to flaunt, there is also a general recognition that arrests are a fact of life in the maritime industry. Lawyers say that resolving the legalities swiftly and with minimum fuss protects the equity in a vessel and enable a speedy return to business or, in the case of older ships, to the scrap beaches of Turkey and Asia.
When the global economic downturn kicked in during 2009, the number of arrests here rose sharply, only to ease off again last year.
Banks in Europe were generally showing patience with loss-making shipowner clients during periods of low rates, agreeing to interest-only payments and other moratoriums to help them through the trough in the shipping cycle.
Increasingly however, banks are getting tough with some owners, encouraged in part because they can obtain healthy prices in the second hand market when seized ships are auctioned. ICAP Shipping sale and purchase broker Nigel Hollyer, who is the broker for the Admiralty Marshall here, estimated that 14 ships had been arrested or repossessed in 2011, compared to around 14-15 for all of 2009 and 2010.
“I can’t recall seeing so many ships being reported as arrested for quite a long time,” Mr Hollyer told B2B.
“Really the last batch that was of mass arrests was back in the 1998-2002 period.”
“Arrests are on the increase but I’ve not really seen anything terribly sexy, such as the high capital ships. It’s mostly smaller, older ships.”
Bunkering and designation
Recent changes to the EU nature designation of a large swathe of Gibraltar waters are unlikely to impact on plans to open up the east side anchorage to bunkering activity.
Allowing refuelling in this area is seen by the industry as a crucial step to bolster Gibraltar’s position at a time of increased competition from nearby rival ports. Gibraltar remains the busiest port for this business in the western Mediterranean but is constrained by the limited number of anchorage slots in the Bay of Gibraltar. The biggest cap on suppliers here is physical space. By allowing refuelling on the east side, the port will radically increase the number of ships that suppliers can handle.
The new nature designation strengthens environmental protection and requires government agencies to coordinate their activities in order to guarantee a holistic approach to the site’s management. The protected zone stretches from the Bay of Gibraltar, around Europa Point to the East Side and includes an area currently used as an anchorage for merchant ships. The plan to open up the east side is still undergoing an environmental impact assessment, which will take into account new designations that, in practice, raise the level of environmental protection in these waters.
Port Minister Joe Holliday told reporters recently that the new designations did not preclude commercial activity.
“It just sets a higher standard and whatever we do will have to be within the context of this new scenario,” he said.
In any event, only a small area of the zone where bunkering could take place is within the protected site.
Environmental campaigners are concerned, however.
The Gibraltar Ornithological and Natural History Society, which was closely involved in the process of preparing the scientific studies needed to raise the EU designation of the waters, made public its concern last month in the clearest of terms.
The group questioned whether the refuelling of ships was compatible with the new designation and urged the Gibraltar Government to rethink its plans.
It said a detailed impact assessment was needed in order to evaluate the risk to the site’s ecology.
“Only after these requirements have been met can a decision be taken as to whether or not an activity – commercial or otherwise – can be allowed to occur within the protected area,” GONHS said.