Article 22 No application may be made for the arrest of a ship on account of maritime claims other than the ones specified in Article 21 of this Law, except for the enforcement of a judgment, an arbitration award or other legal documents.

Article 23 The maritime court may arrest the ship concerned in any of the following circumstances:

(1) the ship-owner is liable for the maritime claim and is the owner of the ship at the time of arrest;

(2) the bareboat charterer of the ship is liable for the maritime claim and is the bareboat charterer or owner of the ship at the time of arrest;

(3) a maritime claim that gives rise to ship mortgage or to rights of a similar nature;

(4) a maritime claim related to ownership or possession of a ship; and

(5) a maritime claim that gives rise to maritime lien.

The maritime court may arrest other ships owned, at the time of arrest, by the ship-owner, bareboat charterer, time charterer or voyage charterer who is liable for the maritime claim, except for claims related to ownership or possession of a ship.

No ships engaged in military or governmental services may be subject to arrest.

Article 24 No maritime claimant may, on account of the same maritime claim, apply for arrest of a ship which was once arrested, except in any of the following circumstances:

(1) the person against whom the claim is made fails to provide sufficient security;

(2) it is likely that the surety cannot perform the obligations under the security in full or in part; or

(3) the maritime claimant agrees, on reasonable grounds, to release the arrested ship or to return the security provided; or the maritime claimant cannot, by reasonable means, stop the release of the arrested ship or the return of the security provided.

Article 25 A maritime claimant who wishes to apply for arrest of the ship concerned but cannot promptly ascertain the name of the person against whom the claim is made may still apply for its arrest.

Article 26 While the maritime court issues an order for arresting of a ship, it may send a notice to relevant departments for assistance in execution of the order. In the notice shall be stated the scope and specific tasks of the assistance in execution of the order, and the relevant departments have the obligation to assist in the execution. When the maritime court deems it necessary, it may directly send officers to go aboard for purposes of supervision.

Article 27 After ordering to preserve a ship, the maritime court may, with the consent of the maritime claimant, allow continued operation of the ship by means of restraining disposition or mortgaging of the ship.

Article 28 The time limit for ship arrest in preservation of a maritime claim is 30 days.

Where a maritime claimant brings an action or applies for arbitration within the 30 days, or where a maritime claimant applies for arrest of a ship in the process of a legal action or arbitration, arrest of the ship is not subject to the time limit prescribed in the preceding paragraph.

Article 29 Where on the expiry of the time limit for ship arrest, a person against whom a claim is made fails to provide security and it is not appropriate to keep the ship under arrest, the maritime claimant, having brought an action or applied for arbitration, may apply to the maritime court ordering the ship arrest for auction of the ship.

Article 30 The maritime court shall, after receipt of an application for auction of a ship, examine the application and make an order to allow or disallow the auction.

Any party who is dissatisfied with such an order may, within 5 days after receipt thereof, apply for review not more than once. The maritime court shall, within 5 days after receipt of the application therefor, give the result of the review. During the period of review, execution of the order shall be suspended.

Article 31 Where a maritime claimant, having applied for auction of a ship, applies for termination of the auction, the maritime court shall make an order to approve or disapprove the application. If the maritime court makes an order to terminate the auction of the ship, the expenses incurred in preparation for auction of the ship shall be borne by the maritime claimant.

Article 32 The maritime court which orders auction of a ship shall issue an announcement in newspapers or other news media. In the case of auction of a foreign ship, such announcement shall be issued in the newspapers or other news media of overseas distribution.

Such announcement shall contain:

(1) name and nationality of the ship for auction;

(2) reasons and grounds for auction of the ship;

(3) composition of the ship auction committee;

(4) time and venue of the ship auction;

(5) time and venue for display of the ship for auction;

(6) formalities to be completed for taking part in bidding;

(7) particulars necessary for registration of debts; and

(8) other matters which need to be announced.

The period of announcement for ship auction shall be not less than 30 days.

Article 33 The maritime court shall, 30 days before an auction of a ship, issue a notice to the ship registrar of the state of registry of the ship for auction and to the maritime lien holder, mortgagee and ship-owner already known.

Such notice shall contain the name of the ship for auction, time and venue of the ship auction, reasons and grounds for the ship auction, registration of debts, etc.

Such notice shall be despatched in written form or by other appropriate means where the receipt thereof can be confirmed.

Article 34 A ship auction shall be conducted by a ship auction committee. A ship auction committee shall consist of three or five persons, including the person of the maritime court in charge of execution designated by the court, the auctioneer and ship surveyor invited by the maritime court.

The ship auction committee shall arrange the assessment and evaluation of the ship; arrange and preside over the auction; sign auction confirmation with the bidder; and complete ship delivery formalities.

The ship auction committee is responsible to and under the supervision of the maritime court.

Article 35 Bidders shall register with the ship auction committee within the prescribed time limit. At the time of registration, certificates of identification of the person who registers with the committee, the legal representative of the enterprise or the leading official of other organization, and the power of attorney of the authorized proxy shall be submitted for examination and a certain amount of bidding deposit shall be paid.

Article 36 The ship auction committee shall, before auction of a ship, display the ship for auction and make the ship available for inspection and provide information about the ship.

Article 37 A buyer, having signed the auction confirmation, shall pay forthwith not less than 20% of the purchase price, and the balance shall be paid within seven days after the date of the purchase, unless the ship auction committee has agreed otherwise with the buyer.

Article 38 When a buyer has paid the purchase price in full, the ship-owner shall, within the designated time limit, deliver to the buyer the ship as is at the berthing place. The ship auction committee shall arrange and supervise the delivery of the ship and sign the letter of confirmation of delivery and acceptance with the buyer after delivery of the ship.

After delivery of the ship, the maritime court shall issue an order to release the ship.

Article 39 When a ship is delivered, the maritime court shall issue an announcement in newspapers or other news media stating that the ship has been sold by auction and delivered to the buyer.

Article 40 A buyer, having taken delivery of the ship, shall by virtue of the auction confirmation and other relevant documents, complete the formalities of registration with the ship registrar in respect of ownership of the ship. The former ship-owner shall cancel the registration with the previous ship registrar in respect of ownership of the ship. Ownership of the ship is transferred notwithstanding that the former ship-owner fails to cancel such registration.

Article 41 An auction is void if there is malicious collusion between the bidders. The bidders who take part in malicious collusion shall be liable for the expenses of the ship auction and make good the relevant losses. The maritime court may impose on the bidders who takes part in malicious collusion a fine of not less than 10% but not more than 30% of the highest bidding.

Article 42 In addition to the provisions of this Section, the relevant provisions of the Auction Law of the People's Republic of China shall apply to auction.

Article 43 Where a ship under arrest is to be auctioned for satisfaction of debts during the process of the procedure for execution, the relevant provisions of this Section may be applied mutatis mutandis.

Section III Attachment and Auction of Cargo Carried By Ships

Article 44 A maritime claimant may apply for attachment of the cargo carried by a ship to ensure fulfillment of his maritime claim.

The cargo against which an attachment is applied for shall be that owned by the person against whom the claim is made.

Article 45 The value of the cargo against which an attachment is applied for by a maritime claimant shall be equal to the amount of his claim.

Article 46 The time limit for attachment of the cargo carried by a ship for preservation of a maritime claim is 15 days.

Where within the 15 days a maritime claimant brings an action or applies for arbitration or, in the process of legal action or arbitration, applies for attachment of the cargo carried by a ship, attachment of the cargo carried by the ship is not subject to the time limit prescribed in the preceding paragraph.

Article 47 Where on the expiry of the time limit for cargo attachment, the person against whom a claim is made fails to provide security and it is not appropriate to keep the cargo under attachment, the maritime claimant, having brought an action or applied for arbitration, may apply to the maritime court ordering the attachment of the cargo carried by the ship for auction of the cargo.

Where the cargo cannot be preserved or is difficult to preserve, or the expenses for its preservation are likely to exceed its value, a maritime claimant may apply for an earlier auction.

Article 48 The maritime court shall, after receipt of an application for auction of the cargo carried by a ship, examine the application and, within 7 days, make an order to allow or disallow the auction.

Any party who is dissatisfied with such an order may, within five days after receipt thereof, apply for review not more than once. The maritime court shall, within five days after receipt of the application therefor, give the result of the review. During the period of review, execution of the order shall be suspended.

Article 49 Auction of the cargo carried by a ship shall be conducted by an auction committee composed of the person of the maritime court in charge of execution designated by the court and the auctioneer invited by the maritime court, or conducted by an organization entrusted by the maritime court.

Where there are no provisions in this Section to govern certain auction of the cargo carried by a ship, the provisions of Section 2 of this Chapter regarding auction of ships may be applied mutatis mutandis

Article 50 Where a maritime claimant applies for preservation of a maritime claim in respect of a ship's bunkers and provisions related to the claim, the provisions of this Section shall apply.