This was an application for revision of the decision of the Croatian Commercial Court in Zagreb of 1 October 1991, Pz 2415 / 91-2, which confirmed the first-instance decision of the District Commercial Court in Rijeka of 2 July 1991, RI-61 / 91-2, not to allow the arrest of the ship C.

Held: The application for revision is accepted, the challenged decisions are overturned, and the case is returned to the first instance (the Commercial Court in Rijeka) for retrial.

The Courts below rejected the claimant's application to order the interim measure of ship arrest, citing arts 877.2, 877.3, and 981 of the Maritime and Internal Trade Act (the Act), because ship arrest may be effected only if the creditor's claim is referred to in arts 877.2 and 877.3 of the Act, and the creditor's claim in this case did not constitute such a claim.

The State Attorney's Office pointed out that the insurance premium (owed by the defendant to the claimant) is not a so-called privileged claim under art 877 of the Act, but also referred to the rule on concluding and executing international agreements, and the fact that there is no diplomatic reciprocity between the Republic of Liberia (under whose flag the relevant ship sailed), because that State has not signed the Arrest Convention 1952 (Official Gazette, No 12/67). This Convention, in fact, contains rules on the possibility of arresting ships for claims that are not privileged if there is no reciprocity between the contracting States (those which have accepted the Convention).

According to the Ministry of Justice, Liberia is not a party to this Convention. Article 8 of the Convention provides that a ship which does not sail under the flag of one of the contracting States (here Liberia) may be temporarily detained in the territory of any contracting State (here Croatia), in connection with a maritime claim referred to in art 1 of the Convention, and any other claim for which the law of a contracting State provides for temporary detention.

From the above provisions of the Convention, which the lower Courts did not take into account when making the challenged decisions, it follows that the first instance Court should decide on the arrest application, and assess the fulfilment of the preconditions for determining a temporary measure to secure the claimant's monetary claim.