An importer of oils contended that the ship’s owner is responsible for the damage caused due to a malfunction in the loading of the cargo, which caused the ship to transport only part of the cargo and therefore it is entitled to arrest the ship until the debt is paid. However, the bills of lading that arrived in Israel were not under its name, but with the name of the oil supplier who undertook to transport the cargo.
The Court held that the importer has no right to arrest the ship. Israeli law enables the arrest of a ship in Israel in order to recover from it or the funds deposited for its release, if a cause can be shown against the owner of the ship, its crew, its captain or whoever is authorized to obligate the ship and this to avoid the need to pursue and locate the owners of the ship. After the arrest of the ship, the lawsuit against the ship can be discussed, and if it is accepted, the sale of the ship can be ordered and the debt paid from the sale proceeds. However, the law establishes a limited list of gounds for which a ship can be arrested.. Here, the risk of damage to the cargo was not transferred to the importer because the bills of lading stated that the risk of damage to the cargo rests with the supplier. Therefore, the importer does not have the status of a creditor and is therefore not entitled to a arrest the ship.