This was an application to arrest a yacht for a claim of EUR 433,433. Article 341.2 of the Enforcement Act stipulates that the plaintiff must highlight the nature of its maritime claim in its application. The application must state the facts on which the ship arrest is sought and evidence to support those allegations.

The application in this case did not contain everything that was necessary for the Court to act on it. Therefore, the Court, in accordance with art 109 of the Civil Procedure Act, invited the plaintiff to supplement its application within 8 days. The plaintiff did so within the time allocated.

The plaintiff stated that on 23 October 2010, it concluded a sales contract on the basis of which it bought the yacht from the second defendant, Y. On 18 April 2011, the plaintiff concluded a management contract with Y as agent and YD, the second defendant, as executor, in respect of the yacht. On the basis of that contract, the plaintiff as the owner of the yacht handed over the yacht to Y in order to provide charter services. The contract stipulated that the plaintiff as the owner was entitled to the net income from the charter realised during the season, less expenses.

On the basis of the contract, YD took over management of the yacht and undertook to hand over to the owner the documents on the registration of the ship in the ship register of the Republic of Croatia, and in addition to deliver the contracted services to charter guests. On 9 June 2011, YD registered the ownership of the yacht in its own name. The plaintiff was not informed about this.

A director of Y and YD made a statement before a notary public in which he confirmed that the plaintiff was the actual owner of the yacht.

The management contract operated for a certain period of time, but broke down in 2014 when YD stopped paying the net charter income. The plaintiff stated that it believed that there was a risk that the defendants would prevent or significantly complicate the collection of its claim by alienating, concealing, or otherwise disposing of the yacht. In addition, the determination of a temporary measure would cause only minor damage to the defendants because the yacht was not their property, so in any event the plaintiff as the owner would have the right to claim the yacht for personal purposes in accordance with the management agreement. The plaintiff further argued that the yacht had been illegally registered in the name of a non-owner, which was fraudulently effected by the non-owner. As the registered owner of the yacht, the first defendant could cause irreparable damage, take the yacht beyond the reach of the Croatian judiciary, sell it or alienate it, change the place of registration and the flag under which it sailed, and take a series of actions that would prevent collection. Also, the defendants could damage, neglect, overexploit, or do other damage to the yacht.

Held: Application dismissed.

It is prescribed by art 951 of the Maritime Code that the Court may, before starting or during a civil, enforcement or administrative proceeding, in order to secure the plaintiff's financial claim, on the plaintiff's application, determine any measure that achieves the purpose of security, and in particular the prohibition of alienation or other disposal of the ship, custody of the ship and detention pf the ship, under the conditions specified by the Enforcement Act, if the provisions of the Maritime Code do not specify otherwise.

Article 954.1 of the Maritime Code stipulates that, if the arrest of a ship is requested for the purpose of realizing a claim from art 953.1 of the Maritime Code, a ship may be arrested that is, at the time of the arrest application, owned by the personal debtor, ie the person who, according to the provisions of the relevant material law, is responsible for the claim for which the ship arrest is requested, and is at the time the claim arose the owner, operator, or charterer of the ship to which the claim is related.

Article 344 of the Civil Code stipulates that a temporary measure to secure a monetary claim can be determined if the plaintiff provides probable evidence that the claim exists and there is a danger that without such a measure the defendant will prevent or significantly complicate the collection of the claim by alienating, concealing, or disposing of the property in another way. The plaintiff does not have to prove danger if it proves that the proposed measure would cause the opponent of the insurance to suffer only minor damage. It is considered that danger exists if the claim has to be realised abroad.

On the facts, the plaintiff, as the owner of the yacht, entered into a management contract with the first defendant YD, as well as the second defendant, Y. In the management contract, the plaintiff undertook to hand over the yacht for management to the second defendant Y exclusively for the purpose of providing charter services. From the provision of the contract which defines the subject of the contract, and from the description of the obligations of Y and YD, it can be concluded that the use of the yacht by providing charter services to third parties was contracted to Y. These facts point to the conclusion that the plaintiff's claim did not arise against YD, but rather that Y is liable to pay the plaintiff's claim.

The contract does not contain a provision according to which it could be concluded that YD is liable to pay the net income from the charter. Rather, it can be concluded that YD's obligation was technical participation in the implementation of the charter in relation to third parties, as well as performing some other tasks for the plaintiff.

On the basis of the above, it should be concluded that the plaintiff did not make the existence of a maritime claim against the first defendant YD probable, so the claim should be rejected for that reason alone.

Further, the plaintiff has not established any danger that the proposed measures will be prevented or made significantly more difficult by the opponent of the insurance collection of claims by alienating, concealing or otherwise disposing of their property. The first defendent is a commercial company registered in the Republic of Croatia. Ultimately, this means that the plaintiff would not pursue a claim against the first defendant before a foreign court, but before a court of the Republic of Croatia. Furthermore, the plaintiff considered that it does not have to prove the danger in art 344.2 of the Civil Code, because the proposed measure would only cause minor damage to the defendants. However, such a thing cannot be concluded from the content of the application, considering that according to the plaintiff, the yacht is being exploited economically.