ABSTRACT
The Special Maritime Procedure Law (SMPL) and the Interpretation of the SMPL of the PRC Supreme People's Court (SPC) provide for the rules on maritime security. The claimant and the defendant should sign the security agreement to set out the terms and conditions of the mortgage or pledge. Even after the security has been put up, the party who provides the security can still apply to the court for the reduction, alteration or cancellation of such security if the party has good reasons to do so. The security can be by cash, letter of guarantee, mortgage or pledge. In ship arrest, the claimant must put up the counter security to the court regardless of whether or not the party has commenced legal proceedings for the underlying claim when it applies for the arrest of the ship. The claimant's liability for wrongful requirement of a security is associated with the wrongful application of the compulsory measure against the property.
