How to destroy Maritime Heritage

With pain in my heart I took these pictures today of the Grethe Witting, the once beautiful tall ship that I sailed in spring 2008 to Romania.

A couple of weeks after we arrived a money lender with whom I had a loan contract for 5 years started a procedure in the Romanian court to arrest the ship and sell it. Only after the court published the irrevocable decision, the file was served to me. After 2 years the Supreme Court in Bucharest ruled that the Constanta Court decision had to be declared as inadmissible.

Grethe Witting safe and sound moored in Mangalia Spring 2009

In the meantime while the ship was taken from me, the new owner, whom in fact was the money lender, was not able to register the ship on his name because the Dutch register does not accept the Romanian decision as to their opinion, a Dutch Court decision is needed to transfer the property. The Romanian Court took the ship but did not insure it and after a while, for reasons that are still unclarified, the ship had trouble with water infiltration. The Capitanie and the City hall assisted the alleged new owner with pumping several times but everyone stopped doing something after a while and on the 1st of October 2009 the ship sank. Only a few weeks ago the ship was lifted but sank again now half on the rocks and with the poop totally under water. Meanwhile the ship is still officially registered in The Dutch Register.

We are now waiting for the decision of the Supreme Court in writing and will then start procedures in Romania, The Netherlands as well as the European Courts. We want the ship to be returned to us by the Romanian Authorities and claim the all damages in order to restorate the almost 100 years old Tall Ship.

The European Regulation 44/2001 was not implemented in more than one way and this means a serious breach of law. Also the Rights to Property as well as the Right to a Defense (laywer) were not respected.

Hopefully our efforts will pay off by 2014, the 100 year aniversary of the ship.

THE GRETHE WITTING WILL SAIL AGAIN!

Photo: Exactly one year ago the Grethe Witting sank under suspicious circumstances

Video Gallery

High Waves                  Black Sea                       Mooring                          Biscay

Black Sea: Click HERE to see the Grethe Witting a couple of weeks before the money lender started his lawsuit against the owner claiming that the ship was a wreck.

Biscay: Click HERE to see how we sailed the Grethe Witting over the Biscay less than 2 month before.

Mooring: Click HERE to see the Romanian Crew mooring the Grethe Witting at Marina Mangalia in July 2008

High Waves: Click HERE to see how we sailed the Grethe Witting April 2008 from Holland to Romania. We have been in Lisbon, Gibraltar, Bejaja (Algiers), Malta, Greek Islands and Istanbul. Captain: Jaap, Navigator: Markus

To be continued!

Grethe Witting Floating Again

After almost a year under water, the Tall Ship Grethe Witting is up again. Completely destroyed and much of its inventory allegedly missing, the ship will need an expensive restoration in order to be able to sail again.

The main engine, the 350 HP Scania Turbo,  just had a total revision in August 2008 while other improvements were carried out in order to make her fit again for sailing. The aim was to bring her under Romanian flag as the Flag document expires in 2010.

But unfortunately it did not come that far as the ship sank on the 1st of October 2009 under unclear conditions. An underwater inspection by Hunter Company, some months ago, did not show any problems to the structure of the ship and the conclusion seems to be valid that the ship sank out of neglecting and ignorance.

The situation around the ownership still remains unclear. According to the Dutch Law the owner is still the original owner Markus Vrieling but he was not longer allowed to take care of his ship as a result of a court order issued in November 2008.  Due to a legal action of the Dutch moneylender Jacobs, whom has a 5 years contract with the shipowner, the ship arrested and later auctioned on the 11th of June 2009 while the ship was bought by Jacobs himself. However the bailiff stated in May 2010 that the ship actually never came in his possession as he did not pay. The owner on the hand, was ordered to leave the ship by the authorities when moneylender Jacobs actually took over the administration following a court decision on the 12th of June 2009 – that was confirmed again in November 2009 by that same court after the ship has sunk – in which the Court declares that the ship has been sold to Jacobs. It now seems that Jacobs lifted the ship as he was ordered by the Capitanie (we were told) to take care of the sunken vessel.

The Romanian Authorities allegedly do not what to do either with the case; on one hand they have this Court order that states that the ship is sold, but on the other hand none of the legal actions were ever registered in the country of registration, The Netherlands, which makes all the actions void.

In the end it all will come back to one thing: “Were the ship arrest and the following auction in Romania of the Dutch ship legal, yes or no?” If not, then the next question is: who is going to pay for all the damages and more important: who will, and what will it take to make the Grethe Witting sail again?

Next episode will be the 14th of September when the Supreme Court in Bucharest scheduled the next court session in the case the Grethe Witting. The main question is if the Court in Constanta had jurisdiction in this case, involving a Dutch registered vessel with a Dutch registered mortgage contract between two Dutch citizens. The owner was never called in Court because he was never served. The claimant claimed his money back by directly starting proceedings in the Romanian Court less then 5 weeks after he signed the contract with the owner, but he never informed the owner about this let alone that he requested his money back. It looks as if the moneylender wanted to cash on the ship that had a market value of over 1 million EURO but in the end let it sank on purpose.

Read more about the case that in the end caused the Grethe Witting to sink on this blog.

Update Grethe Witting

The first session at the Supreme Court in Bucharest is posponed until September 14th 2010.  In this trial we contest the, in our view, unlawful sale of the vessel and in fact the entire procedure from the moment our moneylender started the proceedings without even notifying us and as a result are full of mistakes and violations of the rights of an EU citizen and also in conflict with EU regulations. Meanwhile we received lots of support and hints about how we can defend ourselves against what we believe are unlawful decisions.

The ship is still down under and will remain there for the moment as weather will get extremely hot here in Romania and taking her now up would mean that the wood dries far too fast and will cause additional damages to the hull beyond repair. The only solution would be to built a hall in which we can control humidity and keep the ship wet. For the moment that for sure does not belong to the possibilities. Moreover we still are not recognized as official ship owner on Romanian territory while we still are the sole owner according to the Dutch ships register.

TO BE CONTINUED

Grethe Witting sank as a result of neglectance

Mangalia , 6-3-2010

Last week the maritime salvage company Hunter Company from Constanta had been diving to inspect the Grethe Witting, now she lays on the bottom of the harbor in Mangalia. The first outcome of the survey of the hull of the ship did not show any structural damage nor openings in the hull that could have caused the sinking of the ship. Hunter company concluded that the ship probably sank because of small quantities of water steadily entering the ship until a moment in which other openings came under water and speeded up the process of flooding.

Earlier rumours from the people that conficated the ship and their guards that there was a  hard noise after which the ship sank in a matter of seconds hereby have been send to the land of farytales. The recent findings confirm the theory that the ship sank because of neglectance and lack of professional care by her new caretaker.

The Grethe Witting was sequestrated by the finance partner of the ship just a few months after he signed a five years contract with the ship owner. The ship then was sold by auction on the 11th of June and bought by the finance partner. Based of the court decision that teh ship had a new owner, shipowner Markus Vrieling was ordered to leave the ship. From that moment Markus fights in court to regain control of the ship as he claims that the sales was illegal as well as the action of the financer as Markus fullfilled all the obligations towards the financer up to the moment he confiscated the ship. After the incident in Bulgarian waters shipowner Markus took out the main engine and had it given a complete revision. Moreover the ship was in a good shape and the crew was repairing and painting on a permanent bases. In the months before the auction the ship did not even take any water – a wooden ship is alive and always takes some water through the hull, teh ship therefore has several pumpsystem that work independently – and all pumps were functioning well.

Another conclusion of Hunter Company was that according to their opinion the ship is still owned by Markus. After such a long time it seems that finally there is at least one person in Romania that supports what Markus has been claiming all the time: A seagoing Dutch vessel cannot be sequestrated and sold in the way the Romanian court did. Moreover we discovered that the financer in fact started two cases: one at the Maritime Court and one at the Commercial Court in Constanta. The Maritime Court ruled that the claim for sequestration by the financer was dismissed. On the same day the Commercial Court however ruled that the claim was admitted. As a result the ship was eventually sold to the financer. Three month later the Gretjhe Witting sank in the harbor of Mangalia. This is the third time the ship went down. In the 60′s the ship sank after being neglected by her owner and again int he 70′s she sank while she was owned by seascouts.  After a collision the Grethe Wittign was towed back to the harbor. Due to lack of funds she sank  during that winter.

Can the Romanian State be held responsible for the sinking of the Grethe Witting?

The Grethe Witting sank 3 1/2 month after the ship was sold by auction at the Commercial Court in Constanta, Romania.

.

A recent underwater inspection shows that there are no damages to the hull and therefore there is no clear cause identified yet what caused the Grethe Witting to sink other than neglecting.

What happened in the months before and why did nobody take action?

Ship-owner Markus Vrieling had a 5-years finance contract with a Dutch private investor. Just a few months after the contract was signed, the investor started a procedure in the Constanta Commercial Court to confiscate the ship with, as we know now, one single purpose: to get the ship in his own posession.

.

During the procedure ship owner Markus was never invited for a hearing and none of the legal necessary steps were followed. Only after the sequestration was granted, Markus was informed about it, still not in the way required by law as he was not officially served by the Executor about the matter. From that moment, Markus was told that he was not allowed to move the ship and that the private investor had taken over administration of the ship. During the months that followed, Markus stayed on board and took care of the ship. At that time the ship was in good shape and she did not even take in any water; for a wooden ship it is quite normal that it takes water and therefore the ship has several redundant automatic pumping systems in case water needs to be pumped out .

.

While Markus tried to settle the matter with the investor, the demands of the investor remained out of proportion by asking double the amount back that he invested. The investor found out that the value of the almost 100-years old Tall Ship Grethe Witting on the market is likely to be over one million EURO and he probably wanted to capitalize on that. In the end no reasonable agreement could be reached as he did not respond to any proposal from the ship-owners side. The ship was sold by auction on the 11th of June 2009. Markus’ his attempts through lawyers to prevent the sale remained unfruitful as everyone agreed that since the ship is in Romanian waters, the Romanian court can decide what ever she wants.  Protesting against this would not have any effect, so he was told. In the end the ship was sold and even though Markus told the investor that the procedure is illegal, everyone supported the investor. Markus was ordered to leave the ship and the harbor master confirmed that Markus was no longer allowed to be on board of the ship due to the court’s process verbal that the ship had a new owner, the investor. How did it get this far? And why did not anyone intervene? That remains an enigma.

.

European Law not respected in Romania?

Registered ships like the Grethe Witting have special provisions in International law. First based on treaties such as the Brussels Treaty, and later the Lugano treaty, The EU adopted the:

COUNCIL REGULATION (EC) No 1346/2000

of 29 May 2000

on insolvency proceedings

Article 11

Effects on rights subject to registration

The effects of insolvency proceedings on the rights of the

debtor in immoveable property, a ship or an aircraft subject to

registration in a public register shall be determined by the law

of the Member State under the authority of which the register is kept.

.

Isn’t it weird that one has to look up himself the law(s) in order to know the rights? No, you might say, because everyone is held to know the law. Right, that is the short version. But what if the Court does not know the law, the Lawyers do not know what they are doing? Who are you to fight against this total absence of knowledge, at least this is how it looks.

The case is getting more interesting as Markus just found out that there were two case in Court, in two different courts: One in the Maritime Court in Constanta, and one in the Commercial Court in Constanta. On the same day that the Maritime court DISMISSED the case, the Commercial Court admitted the case and started the procedure to sequestrated the ship in preparation of the sale.  In other words: there was at least one Court(Maritime Court) in Romania that knew that it is not possible to sell a ship that is sailing under a foreign flag. Why did the Commercial Court allow the case then? Did they only read part of the law. The EU decided in the same regulation that for commercial transactions any State can rule:

The courts of the Member State within the territory of

which the centre of a debtor’s main interests is situated shall

have jurisdiction to open insolvency proceedings. In the case

of a company or legal person, the place of the registered office

shall be presumed to be the centre of its main interests in the

absence of proof to the contrary.

The Grethe Witting is a professional sea-going sailing charter ship owned by the Dutch company: Black Sea Shipping Company with her main office in Groningen, The Netherlands. If the ship would not have been owned by BSSC, then she could not be a registered ship and therefore  would be a yacht. The condition to be a registered sea-going vessel is that it is a commercial vessel. Although the ship was in Romanian territory, it still is a Dutch vessel owned by a Dutch company and therefore any proceedings should take place in The Netherlands.

.

So the Commercial Court in Constanta thought that they were competent while they were not; they still should have checked where the defendant has his domicile. But they did not. They did not even request the ship’s registration certificate in The Netherlands as it is absent in the files. They probably never ruled in the case of a foreign Sea-going Register ship before. And they should not, that is clear. As a result of the sequestration followed by the sale of the ship (to the plaintiff), the owner -Markus- could not take care of the ship anymore because he is not allowed. When a shipowner has an obligation to take care of his ship and the Authorities prevent him to do that, who is then responsible when something happens to the ship i.e. if it sinks?

.

Another question is: why was the Court so anxious to rule in this case? When two Dutch people, that have a Dutch contract and a Dutch mortgage agreement regarding a Dutch Registered Sea-going vessel, why would one be in between of those two fighting Dutch? I can tell you that I would send them home and fight over there about the ‘bone’. Or does someone want to be the ‘third dog’?

.

The case is much more complicated, as the whole picture become more clear now. SO if you are still interested,read on!

The ship is Dutch jurisdiction, and therefore Dutch Law needs to be applied, right? In Dutch Maritime Law lien does not exist for registered sea going vessels. However, the contract between the ship-owner and the private investor contained a Lien-clause. Therefore the contract was not valid. A Dutch court immediately would have seen this, but the Romanian court apparently did not.

.

But there is more:

.

- The contract was concluded for a period of 5 years.  When the shipowner left The Netherlands over sea with the ship, both parties agreed to the contract and the notary drew up a concept. However the investor was not available for signing and therefore Markus left a power of attorney to the Notary. Half way the journey to Romania, the contract was signed, with one little difference: the investor added a clause that he could get out of the contract any time. However the rest of the contract remained the same, saying that the total sum, including the interest, should be paid after 5 years. These two are “manifestly in contradiction”   The Romanian Court should have seen that as such a contract according to Romanian law is not valid.  Certain decisions add that the court must decline jurisdiction if the contract is “manifestly void or inapplicable”

.

- The claim was set at 300.000 euro plus all the costs. According to the contract however, the maximum claim after 5 years and including all interests and costs could not be higher than 300.000 EURO. Why then did the Court increase the total claim to 330.000 EURO? Problems with translating the Dutch contract?

.

- For the auction a starting price needed to be settled. For this the court accepted a valuation of a total incompetent valuator that took the following ships as reference: a steel ship shoter than the GW of less than 500.000 EURO, an unknown ship from Malaisia and a ship of more than 13 meters shorter. The total amount then was leveled. Moreover the valuator stated that the ship was 90% destroyed and not functional. The valuation was done in September 2008 and the valuator was not ever on board of the ship as teh ship was permanently crewed by the crew of the ship owner. Look here for to look in what bad shape the GW was two months before. The GW was sold to the investor for the sum of 108.000 EURO.

.

Then there is the procedure itself:  Apart from the fact that the defendant not ever was called in court – it turned out that they sent the citation to Markus’ his old apartment –  and never addressed in his own language, also all other mandatory steps in a case like this were not followed:

1. When a Dutch ship is Sequestrated it should be registered immediately in the Dutch ships register, so called lis pendens*.

2. When an Auction is held (if it would have been valid) then it is mandatory to announce it in a National Paper of the Flag State.

3. When a ship is sold, the register should be informed within the legal term, otherwise the sale is not valid.

*Lis pendens is a document filed in the public records of the county where particular real property is registered stating that a pending lawsuit may affect the title to the property. Because nobody wants to buy real estate if its ownership is in dispute, a lis pendens notice effectively ties up the property until the case is resolved.

But nobody listened to all of these complaints and everyone (authorities, bailiff, lawyers) agreed on one thing: the ship is sold to the plaintiff.

• The Court decided that the plaintiff acquired the ship by issuing an official document that showed that the price has been paid and the new owner has possession of the ship
• The executor ordered the ship owner  to leave the ship;
• The plaintiff took possession of the ship;
• The plaintiff put his own guards on the ship to prevent the ship owner to enter the ship;
• The harbor master of the Port Owner, the city of Mangalia,  no longer allowed Markus to go on the ship!

A couple of weeks after the ship was sold, she suddenly made a lot of water and the harbor authorities intervened by assisting the ‘new owner’ with pumping out water. In the following weeks up to not less than 4 times the machine room was totally under water. The ‘new owner’ refused to go to the docks because the costs were too high: 200 EURO per day! Therefore they intended to build a frame that would support the ship on the quay. Nobody of course knew how to make such a frame and although the book of the Grethe Witting: “Die Segelschiffe by Klaus Schrage” contained detailed drawings of the ship, no-one was able to built anything that could support the ship.

Markus offered the ‘new owner’ to solve the problems together with his team as he and his team knew what to do with a wooden vessel, but the help was  refused. Because there was no qualified crew on board of the Grethe Witting and the postponing of taking the ship to the docks, the Grethe Witting must have taken more and more water. With the pumps no longer functional, she finally sank in the night of 31 September and 1st of October 2009 at the quay in the Port of Mangalia.

.

After she ship sank, suddenly the opinion of everyone involved turned around, in the sense that the plaintiff and the authorities now started to say that Markus still is the owner.  Isn’t this really is unbelievable! While Markus had been fighting for almost a year to get it right, now, when it is too late, people start to say that he is still the lawful owner.

.

This case should be a warning for every ship owner who has financial help to finance his ship: When you come a in foreign Port, even when it is in the European Union, your financer can sequester the ship and sell it before you know. It will then take you a long time to proof that the Contracting State (the State that signed the Brussels Treaty) does not have jurisdiction over your (registered) seagoing vessel. When you will have a lawsuit in Romanian Court, it si possible not to know about it, but only after the Court published her irrevocable decision. Moreover you will not receive any documents in your language nor in an official EU language. Moreover you will not receive any competent help as nobody seems to know in Romania what the real impact is of the accession to the European Union on their domestic juridical system. If however you have a yacht then your trouble will be even more. And as we did not receive any support from our embassy, don’t count on it that they will help you.

.

Our biggest question for the moment is: Can the State of Romania be held responsible for what happened with the Grethe Witting as it was a result of their act to sell the ship?

We now continue our fight and we will see that the Grethe Witting will be rescued and sail again, one day.

To be continued!

Click to see the movies

Notes:

Ship arrest in Romania

REGULATION OF THE INTERNATIONAL PRIVATE LAW RELATIONS IN THE INSOLVENCY FIELD

About Maritime Lien

Insolvency Proceedings within the EU

The courts of the Member State within the territory ofwhich the centre of a debtor’s main interests is situated shall

State Responsibility in the case Grethe Witting

After months of being misinformed by Romanian authorities, executors and even lawyers, slowly a clear picture arises: The sinking of the Grethe Witting was a direct result of defaults of the Romanian Commercial Court: she was not competent!

The Commercial Court in Constanta ordered the Grethe Witting to be sold as a result of which the owner had to leave his ship, ordered so by the executor Mr. Grasu and confirmed by the Shipping Authorities.  The ship finally sank because of neglectance, ignorance and nescience of the ‘new owner’. The State of Romania sold the ship by auction to someone that was incompetent to look after the ship. As the State was incompetent to rule in this case, the State is directly liable for the damages of the owner.

It now turns out that the new owner can not be registered in The Netherlands as the administrator of the Dutch Shipping Register only accepts a Dutch court ruling.

The State of Romania (being responsable for  the Commercial Court in Constanta) failed to implement the following EC Regulations:

1. COUNCIL REGULATION (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings: Article 11

2. Council Regulation (EC) No 44/2001 (and preceding C O N V E N T I O NS: Brussels, Lugano, Brussels 1, ) on jurisdiction and the enforcement of judgments  in civil and commercial matters: Article 22 sub 3, section 5, And for our Romanian friends:Regulamentul (CE) nr. 44/2001 al Consiliului : Următoarele instanțe au competență exclusivă, indiferent de domiciliu: ”în ceea ce privește valabilitatea înregistrărilor în registrele publice, instanțele din statul membru pe teritoriul căruia se păstrează registrul;”

Violations of EC law by different organs of the state will engage liability; the state is responsible for acts of public law bodies or others to which the state has delegated the performance of its responsibilities.

(Dillenkoffer and others v. Federal Republic of Germany, Cases C-178-9/94, 188-190/94[1996])

In Brasserie du Pêcheur and Factortame, at paragraphs 50 and 51, British Telecommunications, at paragraphs 39 and 40, and Hedley Lomas, at paragraphs 25 and 26, the Court, having regard to the circumstances of the case, held that individuals who have suffered damage have a right to reparation where three conditions are met: the rule of law infringed must have been intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the State and the damage sustained by the injured parties.

1. The rule of law infringed must have been intended to confer rights on individuals;

a. The shipowner has the right to have proceedings in the competent court; in this case the Dutch Court that has exclusive jurisdiction.

b. The effects of insolvency proceedings on the rights of the debtor in immoveable property, a ship or an aircraft subject to registration in a public register shall be determined by the law of the Member State under the authority of which the register is kept.

2. The breach must be sufficiently serious

a. An almost 100 years Tall Ship Grethe Witting sank in the harbor of Mangalia. The value of the ship at the time of sinking was 925.000 EURO while the rebuilt value amounts up to 3.2 million EURO

3. There must be a direct causal link between the breach of the obligation resting on the State and the damage sustained by the injured parties.

a. The Commercial Court should have implemented the insolvency regulation

b. The Commercial Court should have made enqueries about the procedure in the contracted State of the Netherlands as the ship is a Dutch Registered Seagoing Vessel.

c. The owner of a ship has the obligation to take good care of the ship and do everything to keep her and her crew safe. Now the Romanian Court obstructed the owner to take care f his ship, she shoudl have taking proper measures to assure that the ship is safe

Notes:

- It was known by all parties that the ship needed to go to the docks for the yearly check. Although the ship was dry during the winter of 2008-2009 she still should have gone to the shipyard. The sequestration followed by the illegal sale prevented the owner from going to the shipyard.

- By allowing the creditor to sequestrate the ship and then sell it by auction the State involved herself in the case that entails multiple violations of European Law and therefore the Romanian State can be held fully liable by the lawful owner for the damages to the ship.

- The Dutch court would have ruled that the case is dismissed as the debtor did not violate any of the conditions of the contract he had with his creditor. Moreover the contract contains clauses that are void under Dutch law. The Romanian court cannot know that if she does not apply Dutch Law. If she would have been competent than at least she should have applied Dutch Law as both parties are Dutch, the ship is Dutch and the contract is Dutch with references to Dutch Law.

Historical vessel still under water due to ongoing legal fights

The classic sailing lugger Grethe Witting is still laying on the bottom of Mangalia Harbor due to ongoing legal fights.

But there are some recent developments that might bring some light in the faith of Grethe Witting. First of all the ship sank 6 months ago and therefore the legal term to lifting the ship by the owner has been expired. That means that the owner no longer has the ship in his property and that the Romanian State became the new owner of the ship. This owner according to the Romanian Commercial Court is the plaintiff in a case brought to the court in order to sequestrate the ship and get the ownership by a financer and who had a 5 years contract with the Dutch owner of the vessel.

The real owner was refused access to his ship and 10 months after the sequestration, followed by the illegal sale by auction to the financer, the ship sank under mysterious circumstances as there is no damages to the hull.

We are now entering  a new phase in which the Romanian State became the owner and will face charges of the real owner for compensation. If needed we will go up to European Court of Justice and the if needed the European Court of Human Rights. But we still hope that we can avoid these rigorous steps and that we will reach an agreement with the Romanian Authorities. For that is needed that the Romanian Court admits that they made mistakes by not implementing European Regulations regarding Registers Ships. Then we can agree to a plan with which all parties will be happy: The Romanian public(youth) for having a Sail Training vessel, The Romanian State for having a solution in this International delicate case and the owner that the Historical ship will be reinstalled in its glory.

In fact, all that we really want and why we came with the Grethe Witting to Romania is: setting up Sail Training Romania and sailing with the Sail Training vessel Grethe Witting along the Black Sea Coast.

Meanwhile also the case against the financial partner continues. It is now clear that he took extrajudicial possession of the ship and even maybe have used the Romanian Court for the purpose to get control over the ship while he should have known, as a Dutch citizen, that all matters regarding the seagoing registered vessel as well as all matters related to the ship regarding mortgage rights have an exclusive jurisdiction and that is the court of the country of registration. What is very weird in this context is that the official registration copy of the Dutch Ships register as well as the Dutch Mortgage register never were discussed in the case. The first thing to do I would think is to see the proof of ownership and the proof that the mortgage is (still) valid. The only way to do that is by an enquiry at the Dutch Cadaster who keeps the Dutch Ships register.

The case is now at the ‘Curte de Apel’ in Bucharest but no matter what the outcome is, it will not change the EU regulations and that is very clear: the ship could not have been sold by a Romanian Court in the first place as she does not have jurisdiction over a Dutch Registered Vessel.

We will see what happens when this case will be brought in before the Dutch Court.

10 questions and 10 answers about the fate of the Grethe Witting

Friends keep on asking me about the Grethe Witting, what happended and why it happened. Here are ten questions and ten answers:

1.

Q.Who is the owner of the Grethe Witting?

A: The person on that is registered as owner in the register where the vessel is registered (flagstate, The Netherlands): Markus Vrieling

2.

Q.Why was the ship sold in Romania?

A: The ship was sold by the order of a Dutch private investor who gave a loan to the owner on the 11 of May 2008 when a loan agreement was signed for 5 years with the owner of vessel. The reason exact reason is not known as he never claimed his money back. After he arrested the ship he asked 400.000 EURO while he gave a loan of not more than 200.000 EURO just a few months earlier.

3.

Q. Did you, the owner,  not take care of the ship?

When the ship was handed over to the Executor all systems were running and the ship was not leaking. The main engine just got a total overhaul (revision) while we were painting, repairing and improving the ship to make her ready for the next season at the time the investor already started the proceedings behind our back.

4.

Q. Can a Dutch vessel be sold in Romania?

A. No, not without a Dutch Court order.

5.

Q. Was there a Dutch court order and if not, why did the investor not start proceedings in The Netherlands?

A: No, there was no Dutch Court order. The reason why the case was started in Romanian and not in The Netherlands remains an enigma. However, would the investor have started proceedings in The Netherlands then things would have worked out quite differently. First of all the court would have asked why the investor asks his money back – which by the way he still did not do up to now – in September 2008 while he signed the contract himself in July 2008. Second of all the Dutch court would have noticed that the notary made a big mistake: he added a pledge clause to a seagoing register ship and that is not possible according to Dutch Law. Thirdly the Dutch court would have noticed that the contract contains a conflicting clause. And last but not least, the Court would have invited the debtor for a hearing and that is what never happened in the Romanian Court until the day of today!

6.

Q. Was the sequestration registered in The Netherlands, because that is necessary otherwise the sequestration is not valid.

A: We discovered that none of the legal procedures were followed correctly. Besides that the sequestration was not registered in the register in The Netherlands and it should have according to Dutch Law, none of the proceedings and outcomes were registered nor published in The Netherlands.

7.

Q. Did the Romanian Court have jurisdiction? In other words, was the Romanian Court competent to sell the ship?

A: No, according to the European Regulation No. 44/2001 the Exclusive Jurisdiction has the state in which the register is kept, in other words, in the state were the ship is registered and that is The Netherlands

8.

Q. Did the Romanian Court have jurisdiction to rule over the contract you have with the investor based on which he had the ship arrested and later sold to himself?

A: No, the contract is a mortgage contract. Mortgage contracts on ships are subject of registration and again according to the European Regulation No. 44/2001 the Exclusive Jurisdiction has the state in which the register is kept. It is also very weird that the Romanian Court never requested the ship registration documents from the register in The Netherlands, so the Court could not even know who the owner was at the moment they ruled on the case, whom had mortgage rights because that is also registered in the same register and if the was not already a sequestration of the ship, which also is noted in the Ships Register of the Flag State.

9.

Q. Who is now responsible for the sinking of the Grethe Witting

A: The owner is responsible for the sinking, so officially (“internationally”) that would be me. But not in Romania. In Romania the ship got a new owner (the investor!) who bought the ship for 108.000 EURO (the value of the ship was 925.000 EURO). The sale was confirmed by the court and the money was paid in full. But the new owner cannot register the ship in the flag state because the flag state only accepts a Dutch ruling,

Now the Romanian State created a problem: The ship has two different “owners”
: one owner in Romania who claimed the ship with the Romanian Court order in his hand but whom was not able to register and a different owner according to the flag state of whom his property was taken without a valid procedure. This of course is not possible but true. Technically the ship now is under custody of the State of Romania, so the State has to pay for all the damages that amount up to over 4 million EURO, i.e. de costs of reparation, loss of income and aggravated damages.

10.

Q. Who will lift the ship?

A:  That should be the Romanian State. The alleged new owner according to the Romanian Court order – this Dutch investor – did not lift the ship within 6 month. That means that now the Romanian State became automatically owner and the new owner lost all his rights however he still will have to pay the costs of lifting the ship according to the law. So at this moment the Romanian State should lift the ship. Nevertheless the real owner secured his property with his official protest that he transmitted to both the Romanian Shipping Authority and the Commercial Court in Constanta, the instance that did the default ruling.

Notes:

The owner, Markus Vrieling is now fighting his way through the juridical jungle and is still in Court to protest against the illegal sale of the ship. Meanwhile he prepares a case against the State of Romania to claim back his ship, and compensation for the damages as the result of the default Court ruling. The problem is that no one = including some lawyers – in Romania seems to be aware of the European Regulation that gives the Flag State the Exclusive Jurisdiction over a registered vessel and matters regarding Mortgage on registered vessels. Detail: The same case also was brought before the Romanian Maritime Court and they, wisely, dismissed the case.

NEWS BLITZ: 14th September 2010: Supreme Court Bucharest dismissed the Constanta ruling; READ HERE»

Romanian Court guilty of tax evasion?

In the case of the Grethe Witting, the Romanian Court made many mistakes, eventually leading to the impossible situation that the Grethe Witting has two owners, one in Romania and one in The Netherlands where the ship is registered. The new owner could not register the ship in his name in The Netherlands because the sale was illegal. Pending the protests of the Dutch owner who speaks of a miscarriage of justice, more and more irregularities show up and it really looks like that the Romanian Commercial Court had no idea what she was dealing with.

In the continuing reports about the fate of the Grethe Witting we report about an alleged TAX evasion of the Romanian Court.

0-tax system for seagoing vessels

A seagoing vessel like the Grethe Witting is registered in the Flag State, in this case The Netherlands. Sea going vessel have a special tax regime; they are VAT (TVA) exempt. The EU regulation that determines the taxation of goods and supplies is:

COUNCIL DIRECTIVE 2006/112/EC

of 28 November 2006

on the common system of value added tax

When a boat is sold then VAT should be paid for it, like for any other goods. When a person buys a boat then one of the first things to ask is whether TVA is paid or not. If the TVA is not paid, then TVA is due for the boat that in that case is a ”yacht”. The term yacht is essential because it distinguishes the boat from a registered sea going commercial vessel.  There are some exemptions for the obligation to pay VAT. One of them is Sea Going Commercial Vessels.  But in order to avoid that everyone registers a boat as tax exempt and by that saving TVA (19% for Romania) the new owner has to proof that he will use the ship for commercial purposes. He can do this by an official request when he purchases the ship in which he claims that the ship is used for commercial purposes.

The Grethe Witting was operated as a charter ship owned by Black Sea Shipping Company, a Dutch Enterprise owned by Markus Vrieling. Therefore it was registered as commercial vessel and no TVA was paid.

However, when the Romanian Court sold the Grethe Witting, she sold the ship to a private person that does not have a business in chartering. He also has his domicile according in the information in the Netherlands. Therefore TVA needed to be withheld from the amount the ship was sold for and the TVA then need to be paid . To which State can be a point of discussion. In my point of view to State of The Netherlands as the vessel is a Dutch registered vessel and the buyer choose his domicile in The Netherlands. If however he chooses as domicile Romania, then the TVA should be paid to Romanian State. What is sure is that if a commercial vessel is sold to a private person, that TVA needs to be paid.

Who is responsible for the payment of TVA? The seller and that is this case the Romanian Court who organised the sale by auction on the 11th of June 2009. The Court collected the purchase price and paid the Executor and the plaintiff. The owner was not involved at all in the whole procedure (see other articles). Therefore, if the case mentioned before is like it is described, the Romanian State committed tax evasion at the costs of the State of The Netherlands.

TVA = VAT

COUNCIL DIRECTIVE 2006/112/ECof 28 November 2006