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arkhangelsk
arkhangelsk
October 26, 2012 10:15 am

My thoughts are … what happened to all the rights warships are supposed to have? Is it really OK to impound something that’s almost a piece of national territory?

Simon257
Simon257
October 26, 2012 10:51 am

On one hand, I would have thought, that it would be an act of war, trying to seize another nations warship? On the other hand, VERY FUNNY INDEED!!!

I would love to be a fly on the war in Ms Kercher’s office.

wf
wf
October 26, 2012 11:40 am

Well, if the senors have the cheek to turn up off Stanley in the future, we could always bolster the islands defences with a few maritime lawyers :-)

I’m still laughing..

ewaste
ewaste
October 26, 2012 4:23 pm

I think it’s hilarious but is there not a lesson to be learned here for all nations. A lesson that having military assets tied up with commercial agreements financial, maintenance or otherwise is not exactly a brilliant idea. Especially if it’s to do with foreign companies as there is no easy route for reclaiming an asset if there are any problems.

Not surprising though if anyone follows Argentina internally there is a history of the Government not paying bills either on time, as agreed or even at all.

WiseApe
October 26, 2012 4:32 pm

Oh dear. Perhaps we could organise a collection. I have a popcorn bucket full of copper coins from my travels. Some of them may still be legal tender.

TrT
TrT
October 26, 2012 8:26 pm

Archangel
Rights?
Might is right.

If Argentina wants its ships back, its free to sail in to port, shoot the defenders into submission and tow its impounded ships home for repair.

Personaly, I’d say the lesson to be learned is not to have lone ships scattered about the world where they can be attacked.

Mike
Mike
October 27, 2012 11:11 am

“Personaly, I’d say the lesson to be learned is not to have lone ships scattered about the world where they can be attacked.”

And, just with overfly and basing rights, its important to have good diplomacy with the ports you need to use. Something people forget.

Didn’t HMS Endurance once have a spell in an Argentine dry-dock for repairs?

TrT
TrT
October 27, 2012 8:18 pm

It did, insurance company insisted it went to the nearest dry dock for repair (broken drive shaft I think?), and the workers promptly locked it in and went on strike.

Craig
Craig
October 27, 2012 9:02 pm

“Personaly, I’d say the lesson to be learned is not to have lone ships scattered about the world where they can be attacked.”

I’d disagree – the lesson to be learned is to not default on government bonds in the first place. Otherwise your state assets become fair game in any honest jurisdiction. Argentina chose to use issue bonds under US law to attract investors who didn’t trust Argentine law – they can’t complain when US courts enforce the contracts.

At the end of the day a warship is little different to a presidential aircraft, works of art, central bank reserves or payments for natural gas – all assets that can be siezed by creditors overseas compared to more immovable assets in the domestic economy.

Armed Forces do not exist in economic vacuums – and sometimes “good diplomacy” simply won’t cut it when you are the party in the wrong.

Anixtu
Anixtu
October 27, 2012 9:24 pm

TrT,

“insurance company insisted”

HMG does not insure her warships or auxiliaries. HM Treasury foots the repair bills.

TrT
TrT
October 28, 2012 8:12 pm

Anixtu
HMT may foot the repair bills, but unless (in this case) Det Norske Veritas says “This ship wont piss lubricants, fuel oil, sewage and anti freeze into your waters” our warships and auxiliaries would have a very short list of friendly ports it could visit.

Might also struggle with getting merchant sea men to sail them

Military sea men too now that a court has ruled the MoD does have a duty of care to soldiers.

Anixtu
Anixtu
October 28, 2012 9:30 pm

DNV is a classification society, not an insurer.

Warships and auxiliaries are immune from Port State Control. The Port State need never know whether they are classified or whether they hold a valid or conditioned Certificate of Class.

tsz52
tsz52
October 29, 2012 1:09 am

A bit of good old-fashioned schadenfreude aside, I’m having some really big problems with all of this.

When naval ships get called ‘pieces of sovereign turf’, is this legally not the case?

Assuming that this guy could get some court, government and military to to act as his goon squad, what are the legal differences between seizing a country’s navy’s: ship; embassy; overseas base; presidential palace in the centre of the country’s own capital, with the land that it’s stood on?

Is there any precedent for a civvy company/private individual being able to seize a country’s active (not being built) warships, especially in peacetime?

[Hypothetically, for now, though it’s obviously a thin end of the wedge…] If this weakened the country militarily such that Something Dreadful (that the military was there to deter) Happened (involving being on the receiving end of absolutely predictable crimes against humanity, just for good measure), then could the country counter-claim? Is the court complicit in facilitating absolutely predictable crimes against humanity?

Or a billion other scenarios: the ship is also a SAR/disaster relief asset, a shit ton of people die, who otherwise wouldn’t have, because the ship was seized by some bloke (via a court).

How does having major weapons on board warships affect all this? Suppose the next Espora to be swiped is by a country (their port, their court, but on behalf of this guy) that’s on France’s shitlist, that they may end up fighting at some point, thus France doesn’t want them to ever have any ability to examine the Exocet closely; and this was in the cast iron legal contract signed by the relevant parties in Argentina and France.

Just all of the million and one practicalities and contractual obligations that go with major weapon systems… a sailing ship with four saluting guns is one thing, but an actual warship?

So we sell an ASW Type 26 model GCS (carbon copy of ours) to a country whose economy then tanks, who then defaults to some company somewhere. On a port visit to China, or Argentina, the ship gets impounded by the order of China’s/Argentina’s court, on behalf of the owed company. Our export customer can’t/won’t pay a bean, and washes its hands of the ship (doesn’t even leave a man behind to watch the ship), packed full of sensitive (to us) info in a potential enemy’s (or commercial competitor’s) port for the duration. Now what?

Observer
Observer
October 29, 2012 4:08 am

I do agree with tsz that it does set a bad precedent, some state level assets should remain out of civilian hands. It’d be terrible (though terribly amusing) if someone “confiscated” an American carrier on a port call due to national debt, and even more terrible if it deployed with nuclear weaponry though such deployments are getting rarer as we step back from Cold War deployments.

Bad enough that NML is playing confiscatory tactics, it’s simply childish. Investments can go either way, and wanting only gains and never losses is a childlike mindset, worse when they BUY lossing investments and use it as a club against others.

Craig, no one “plans” a default, its something you get when things screw up, both internally and externally. I can just hear Greece and Portugal going “Wee!! Let’s default!!”… obviously not something that is desirable or planned as an endpoint.

If it does end up in a shooting match between shipcrew and repo personnel, I’m afraid I’d have to take Argentina’s side on this one.

Anixtu
Anixtu
October 29, 2012 7:53 am

tsz52,

“When naval ships get called ‘pieces of sovereign turf’, is this legally not the case?”

Argentina supposedly waived sovereign immunity as part of the loan deal. This is a reasonable consequence.

“packed full of sensitive (to us) info in a potential enemy’s (or commercial competitor’s) port for the duration. Now what?”

We should have been more careful who we sell sensitive weapons systems to. It’s a risk we chose to take. No different in outcome to those systems being captured in a war or compromised by a spy or defector.

Craig
Craig
October 30, 2012 3:54 am

tsz52,

“Assuming that this guy could get some court, government and military to to act as his goon squad, what are the legal differences between seizing a country’s navy’s: ship; embassy; overseas base; presidential palace in the centre of the country’s own capital, with the land that it’s stood on?” None really – simply that moveable assets, especially ones in foreign jurisdictions, are much easier to sieze.

Historically, protecting British bondholders was one reason a British gunboat might turn up off your coast. Our invasion of Egypt in 1882 was partly motivated by protecting bondholders. Likewise we supported France invading Mexico in 1863 and blockaded Venezuela in 1902-03.

“Is there any precedent for a civvy company/private individual being able to seize a country’s active (not being built) warships, especially in peacetime?” Probably not if only because there have been relatively few sovereign defaults in recent times in countries with a Navy that actually leaves port.

As for hypotheticals – siezure of “critical” assets happens all the time for defaulting on debt payment at individual, corporate and municipal levels (again relatively few sovereign defaults of note). Ultimately it is little different to blaming a court for giving you a driving ban after you’ve been caught drink-driving. The responsibility is ultimately yours.

Observer,
I doubt the “keep certain state level assets out of civilian hands” is actually that much of an issue. In cases like this, the asset is usually impounded until the defaulting sovereign pays up. If they refuse, the asset may be sold to another State or, more likely, sent for scrap. But crucially, you have the siezing court involved. Likewise the governments of the siezing state and of the state where the “vulture fund” is based will take a very close interest in proceedings. Ultimately vulture funds want money, not a warship.

I never said anyone plans a “default” (although some may). But the point remains the same, if you take on debt, you have to be prepared to service the conditions of the debt – if the only way you can issue debt is by waiving sovereign immunity, well that is the risk you take.

Bonds are not just another investment – they’re contracts, subject to enforcement by either party. No state is above the law (quite a few states can only issue debt by submitting US or English courts because nobody trusts their own judicial system to protect them). Funds like these specialise in distressed assets – they buy the bonds when no-one else is prepared to buy them and attempt to recover payment by enforcing the contract, which is always risky: courts may rule against you, there may be no siezable assets within reach, etc etc. Get it right and you get a big payday; get it wrong and you have large losses in legal costs.