Fayard A/S (Fayard) was a Danish ship repair yard. SDK Shipping A/S (SDK) was a Danish logistics, shipping, and agency company. Karpowership Americas Co Ltd (Karpowership) was part of a larger Turkish group that was engaged, among other things, in converting ships into floating power stations.

On 11 June 2020, Karpowership bought the ships Ali Bey and Ersen Bey, with the purpose of converting them into floating power stations. Karpowership appointed SDK as its port agent, and requested a quotation in respect of a series of forthcoming shipyard works on the two ships. After the parties had negotiated a price, the works were performed by Fayard from 4-14 July 2020. On 11 July 2020, Fayard issued an invoice to Karpowership of DKK 1.5 million for each ship, or DKK 3 million in total. Since Karpowership was of the opinion that the invoices were excessive, it refused to accept and pay the invoices until it received correct invoices stipulating the actual work done on the vessels.

On 14 July 2020, the Ali Bey was arrested by the Bailiff’'s Court in Kolding at the request of SDK and Fayard for a claim of DKK 3 million arising from works performed on the Ali Bey and the Ersen Bey. On 16 July 2020, the Bailiff’s Court in Kolding determined the maritime claim for arrest at DKK 3.5 million, reduced the arrest claim against the Ali Bey to DKK 1.5 million, and approved the arrest of the Ersen Bey for DKK 1.5 million plus costs. It was decided that the arrest could be averted by providing security of DKK 3.5 million in total. The Bailiff’s Court found that it was doubtful whether the Ali Bey represented an adequate value to cover the plaintiffs' claims. The Bailiff's Court emphasised that the assessment should be based on the proceeds that could be obtained by a foreclosure auction (judicial sale), as well as information about the ship's sales price and history. On this basis, the Bailiff's Court found that there was good cause for making the arrest: see s 93(5) of the Merchant Shipping Act, corresponding to art 3.3 of the Arrest Convention 1952.

SDK and Fayard initiated legal proceedings against Karpowership for DKK 2,737,313.78 for works performed on the two ships, claiming that the arrest made by the Bailiff's Court was lawfully effected and enforced.

Held: Judgment for SDK and Fayard. The arrest of the Ali Bey was lawfully effected and enforced.

During the proceedings, the legality of the arrest of the Ali Bey was not disputed. However, the parties disagreed on the lawfulness of the arrest of the Ersen Bey on 16 July 2020, and the calculation of SDK and Fayard's claim for payment for work performed on the two ships prior to the arrests. These were therefore the main questions before the Maritime and Commercial High Court.

The Merchant Shipping Act, s 93(5), which corresponds to the Arrest Convention 1952, art 3.3, provides that a ship shall not be arrested, nor shall bail or other security be given, more than once in any one or more of the jurisdictions of any of the Contracting States in respect of the same maritime claim by the same claimant. However, this does not apply if the claimant can satisfy the Court, or another appropriate judicial authority, that the bail or other security has been finally released before the subsequent arrest, or that there is other good cause for maintaining the arrest.

After an overall assessment, the Court finds that on 16 July 2020 there was good cause for arresting the Ersen Bey, even though the ship was previously arrested for the same claim. In that regard, the Court attaches particular importance to the fact that the assessment to be made on the basis of the situation at the time of the arrest must be based on an estimate of the price which may be obtained by a foreclosure auction, and that the most accurate price in that regard under current market conditions must be based on a sale involving towing to and scrapping in Türkiye, but with the significant modification that the buyer at a forced auction must also be expected to attribute a profit to itself. The Court finds that on 16 July 2020 there was insufficient security, and thus grounds for arresting the Ersen Bey.