Faculty of Law

ADMIRALTY LAW AND PRACTICE 2003-2004 (LLA4021 / LMA4021 / LDA4021 / LSA4021)

ADMIRALTY PROCEDURE

(1) ESSENTIAL READING

A. Statutory material � High Court (Admiralty Jurisdiction) Act (rev. ed. 2001), cap. 123 · Rules of Court, r. 5, Order 701 (Admiralty Proceedings)2 B. Cases You are expected to have read all the cases marked * C. Secondary material C.1. Singapore · Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1543-1615 (RBR collection)3

OR � G.P. Selvam (ed.), Singapore Civil Procedure 2003 (Sweet & Maxwell Asia, 2003), 1028-1063 (RBR collection)

AND � Toh Kian Sing, Admiralty Law & Practice (1998), Chapter 4 (“Procedure leading up to Arrest”) + Chapter 5 (“Procedural Matters arising after Arrest”)(RBR collection)

1 Made pursuant to the Supreme Court of Judicature Act (1999 rev. ed.), cap. 322, s. 80. O. 70 was originally based on the U.K. RSC, O. 75. For the text of O. 75, see Meeson 1st ed. (1993), 482-495 (RBR collection). 2 For the U.K. position today, see The Civil Procedure Rules (CPR): Part 61 – Admiralty Claims, available in full from www.lcd.gov.uk. 3 The text to O. 70 was written by Vivian Ang of Drew & Napier.

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C.2. United Kingdom · Nigel Meeson, Admiralty Jurisdiction and Practice 1st ed. (1993), Chapter 4 (“Procedure in an Admiralty action in rem”) + Appendix I (“Admiralty pleadings”)(RBR collection)4

OR � David Jackson, Enforcement of Maritime Claims 3rd ed. (2000), Chapter 10 (“Enforcement of Maritime Claims by an Action ‘in rem’”)(RBR collection)

(2) FURTHER READING � Halsbury’s Laws of England 4th ed. (2001 Reissue), vol. 1(1) (“Admiralty”), 471-539 � The Right Hon. Lord Justice May (ed.), Civil Procedure 2002 (“The White Book”)(2002), Vol. II, 147-185 � Michael Tsimplis & Nicholas Gaskell, “Admiralty claims and the new CPR Part 61” [2002] Lloyd’s Maritime & Commercial L.Q. 520-527

4 Note that the third edition of Meeson’s book describes the position as it currently is in the U.K. (i.e. as implemented by the CPR Part 61).

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(1) Definitions

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1544-1546

· O. 70, r. 1(2) � “caveat”

→ The 4 stages: issue of the writ, service of the writ, issue of warrant of arrest, service and execution of warrant of arrest. (2) Issue of a writ5

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1546-1551 · Toh Kian Sing, Admiralty Law & Practice (1998), 139-142 2.1. The prescribed form

� Ord. 70, r. 2(1): Form 155 (claims in rem)6 “An action in rem must be begun by writ; and the writ must be in Form 155.” � A writ in rem in the AJ must be filed according to the E-filing system since mid-2002.

· accepted practice to name the offending ship and sister ships in one writ OR the offending ship in one writ and the sister ships in another7

The Bolbina [1994] 1 S.L.R. 554: In this admiralty action in rem the plaintiffs claim to be owners of cargo carried on board the mv Fierbinti from the European port of Constanza to Singapore. The writ was against 19 ships. The title of the action described the defendants as “The owners and other persons interested” in the 19 ships. This description is wrong and not in accordance with the form of admiralty action in rem (Form 155) in the Appendix to the Rules of the Supreme Court 1970 (“the RSC”). Persons against whom no claim is made ought not be described as defendants. “Persons interested in the ship” should form part of the citation and not be described as or included as defendants. A defendant enters an appearance as of right whereas persons interested in the ship must obtain leave to intervene and after obtaining leave appear as interveners. This minor error was not an issue before me and I make this observation so that it can be avoided in future. (per Selvam J.C. at 556)8

5 i.e. a written order or warrant issued in the name of the sovereign (in the U.K.) and by the State in Singapore. 6 For in personam claims, the relevant form is Form 2 and the words “admiralty action in personam” have to be inserted above the space for the number of the writ: O. 70, r. 2(2). 7 i.e. in the case of proceedings under HC(AJ)A, s. 4(4). 8 Subsequently taken on appeal and reported as The Fierbinti [1994] 3 S.L.R. 864 (C.A.) – see previous references – and dismissed.

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· not necessary to name the parties to an action in rem ���� can just say “owners of the ship Benjamin”…etc The Assunta [1902] P. 150:

There is undoubtedly an old practice in the Admiralty Court of great value which enables the owners of a ship or cargo in any Admiralty action to sue as such – a proceeding which would have been regarded by the Courts of Common Law with professional horror; but the Court of Admiralty allowed it for a very good reason, because what they were really dealing with was one ship against another, and so long as you had the names of the vessels you had really all that was material. You could ascertain the names of the owners from the register, or otherwise. The result is that we have an antecedent practice of a very peculiar kind in the Admiralty Court, and I do not think it is too much to say that it is improbable that this rule [of the Supreme Court], in its general terms, was intended to abrogate so old and valuable a practice as that which obtained in the Admiralty Court … Therefore I feel no difficulty in saying that this rule does not apply to abrogate the former practice of the Admiralty Court, of allowing the owners of a ship to sue as such … (per Sir Francis Jeune at 154)

· requirement to state the registration number of the ship, as assigned by the port of registry, in the writ

· cannot conjoin an action in personam and an action in rem in a single writ (a hybrid writ)9

2.2. The claim

� the writ must be indorsed with a statement of claim or a concise statement to that effect: O. 6, r. 2(1)(a)10

Endorsement on writ (O. 6, r. 2) 2. —(1) Before a writ is issued, it must be endorsed — (a) with a statement of claim or, if the statement of claim is not endorsed on the writ, with a concise statement of the nature of the claim made or the relief or remedy required in the action begun thereby; The Tuyuti [1984] 2 Lloyd’s Rep. 51; [1984] Q.B. 838; [1984] 3 W.L.R. 231:

The plaintiffs are described as “The owners of the cargo lately laden on board the ship Tuyuti”. The endorsement of the writ was in these terms:

The plaintiffs’ claim is for damages for breach of contract and/or duty in or about the loading, handling, custody, care and discharge of the plaintiffs’ cargo and the carriage thereof on board the defendants’ ship Tuyuti in the year 1982.

9 See The Nagasaki Spirit (No. 2) [1994] 1 S.L.R. 445, 447 (per Selvam J.C.). Such hybrid writs were expressly disapproved of in a U.K. Practice Direction of 6 March 1979 (see [1979] W.L.R. 426). 10 For the U.K., see CPR 61.3(3). If not served with the claim form the particulars of claim are required to be served by the claimant within 75 days after service of the claim form: CPR 61.3(3)(b).

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There then follows a list of 19 addresses of plaintiffs without any indication as to their identity or as to what cargo was owned by any of them. The recipient of that writ is not told whether the cargo has been lost, damaged or delayed. Nor is he told on what voyage during 1982 some unspecified breach of contract occurred or what cargo was involved. I do not regard the endorsement of the writ as an endorsement which complies with RSC, O. 6, r. 2.11 The relevant part of the rule requires that the writ must be endorsed with a concise statement of the nature of the claim made. On being served with a writ a defendant is entitled to know from the writ itself on whose behalf the writ has been issued and in respect of what claim. There is a practice of long standing in the Admiralty Court which enables the owners of a ship or cargo in an Admiralty action in rem to sue by that description, rather than in their name or names. There are good reasons why this useful practice should be maintained, but if solicitors are to continue to enjoy that benefit they must take the trouble to identify in the writ the incident which has given rise to the claim. The writ in this action could relate to any cargo owned by anyone living or working at any one of 19 addresses and carried in Tuyuti on any voyage in the year 1982. (per Sheen J. at 52-53)

2.3. Period of validity

� Ord. 70, r. 2(4): 12 months, beginning with the date of issue

� Ord. 6, r. 4(2): renewal, in the court’s discretion, for good reason,12 but not usually when a time bar has already accrued13 (Not unique to admiralty proceedings)

Duration and renewal of writ (O. 6, r. 4)

(2) Subject to paragraph (2A), where a writ has not been served on a defendant, the Court may by order extend the validity of the writ from time to time for such period, not exceeding 6 months at any one time, beginning with the day next following that on which it would otherwise expire, as may be specified in the order, if an application for extension is made to the Court before that day or such later day (if any), as the Court may allow. (2A) Where the Court is satisfied on an application under paragraph (2) that, despite the making of reasonable efforts, it may not be possible to serve a writ within 6 months, the Court may, if it thinks fit, extend the validity of the writ for such period, not exceeding 12 months at any one time, as the Court may specify.

The Berny [1979] Q.B. 80; [1977] 2 Lloyd’s Rep. 533; [1978] 2 W.L.R. 387:

In my opinion, when the ground for renewal is, broadly, that it has not been possible to effect service, a plaintiff must, in order to show good and sufficient cause for renewal, establish one or other of three matters as follows: (1) that none of the ships proceeded against in respect of the same claim, whether in one action or more than one action, have been, or will be, present at a place within the jurisdiction during the currency of the writ; alternatively (2) that, if any of the ships have been, or will be, present at a place within the jurisdiction during the currency of the writ, the length or other circumstances of her visit to

11 This is in substantially the same terms as O. 70, r. 6(2) in Singapore. 12 e.g. such as the value of the ship compared with the size of the claim. 13 See Kleinwort Benson v. Barbrak Ltd. (The Myrto)(No. 3) [1987] A.C. 597.

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or stay at such place were not, or will not be, such as to afford reasonable opportunity for effecting service on her and arresting her; alternatively (3) that, if any of the ships have been, or will be, present at a place within the jurisdiction during the currency of the writ, the value of such ship was not or will not be, great enough to provide adequate security for the claim, whereas the value of all or some or one of the other ships proceeded against would be sufficient, or anyhow more nearly sufficient, to do so. (per Brandon J. at 103)

*The Antares V [2002] 1 S.L.R. 443 ► Limitation of 1 year according to H Rules, the parties agreed to extend the time period which was allowed. Plaintiffs were allowed to get renewal for 12 months. Def applied to get it set aside. On appeal, question of fact whether court should exercise of discretion to renew or not. Always a question of achieving justice b/w parties. Applying that to the facts, the P had a good reason for not serving the writ so should be allowed to renew the writ. 2.4. Amendments of writs · changes of ownership/name: O. 20, r. 5(3)-(5) Amendment of writ or pleading with leave (O. 20, r. 5)

5. —(1) Subject to Order 15, Rules 6, 6A, 7 and 8, and this Rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct. (2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so. (3) An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued. (4) An amendment to alter the capacity in which a party sues (whether as plaintiff or as defendant by counterclaim) may be allowed under paragraph (2) if the capacity in which, if the amendment is made, the party will sue is one in which at the date of issue of the writ or the making of the counterclaim, as the case may be, he might have sued. (5) An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.

*The Pacific Wisdom [1998] 3 S.L.R. 705 (C.A.) ► Collision case. The Court suggested that the writ will be amended only in special circumstances. Ct concluded that if they allowed the amendment of the writ, they would be infringing the statutory time bar.

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(3) Service of a writ in rem14

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1561-1563 · Toh Kian Sing, Admiralty Law & Practice (1998), 143-146

3.1. Generally

� Ord. 70, r. 7(1): service on the property against which the property is brought (actual service)15

· if more than one ship and/or sister ship is named in the writ, then the names of the other ships should be deleted

3.2. Deemed service � Ord. 70, r. 7(2) + Ord. 10, r. 1(2)

General provisions (O. 10, r. 1)

1. —(1) Subject to the provisions of any written law and these Rules, a writ must be served personally on each defendant. (2) Where a defendant’s solicitor endorses on the writ a statement that he accepts service of the writ on behalf of that defendant, the writ shall be deemed to have been duly served on that defendant and to have been so served on the date on which the endorsement was made.

*The Fierbinti [1994] 3 S.L.R. 864 (C.A.): → Deemed service does not invoke the AJ of the ship. Only means that now you have a defendant and there are now actions in rem and in personam.

It seems to us that the distinction between service of the writ on the res and deemed service of the writ on the defendant is inevitable in an admiralty action in rem. An action in rem once commenced against the ship is an action against the ship itself and continues as such even though it may also be an action in personam against the owner thereof. If the owner does not enter an appearance and the judgment is obtained, the judgment is enforceable only against the ship and to the extent of the value of the ship. If, however, the owner enters an appearance the action will continue as an action in rem against the ship and an action in personam against the owner, and if judgment is obtained it is enforceable against the ship and also against the owner to the full extent of the judgment: see The Gemma [1899] P. 285 at pp. 291-292; The August 8, [1899] P. 285 at p. 456, and The Kusu Island [1989] 3 M.L.J. 257 at pp. 260-261. It has been held in The Kusu Island that although an action in rem is one against the res, the defendant to the action is the owner of the res and not the res itself: see pp. 261-262. Such a construction of O 70 r 7(1) and (2), which is based on the express wordings thereof, is wholly consistent with the established rule that in order to

14 Remember that this (or arrest) is technically the point in admiralty jurisdiction where the court’s jurisdiction is “invoked” (per the HC(AJ)A, s. 4): see The Fierbinti [1994] 3 S.L.R. 864 (C.A.), 877-878 (per Karthigesu J.A.). 15 There are exceptions where the property is freight or has been sold and the proceeds paid into court: O. 70, r. 7(1)(a)(b).

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invoke the in rem jurisdiction against a res the res in question must be within the jurisdiction. (per LP Thean J.A. at 870)

3.3. Service within the jurisdiction → Cannot serve outside of jurisdiction.

The Freccia del Nord [1989] 1 Lloyd’s Rep. 388:

… I must add that the Court cannot have jurisdiction over a ship which does not come within its jurisdiction. Many a writ in rem has been issued in the hope or expectation that the ship against which the plaintiff has brought his action will come within the jurisdiction. Frequently that hope or expectation has been frustrated or thwarted by a change of orders to the master of the ship. If it were held that this Court is seized of jurisdiction as soon as a writ in rem is issued, the Courts of other Contracting States might be required to decline jurisdiction in favour of this Court by virtue of art. 21, even though this Court could not exercise its jurisdiction because the ship has not been arrested or served with the writ. Indeed the ship might never come within the jurisdiction. (per Sheen J. at 392-393)

· may be (and often is) served at the same time as warrant of arrest 3.4. Service: on any property � O. 70, r. 7(3)-(5) 16 + Form 159 3.5. Service: on a ship

� Ord. 70, r. 10(1)

· on the master?

The Prins Bernhard [1964] P. 117; [1963] 2 Lloyd’s Rep. 236; [1963] 3 W.L.R. 1043:

There is no doubt that the mode of service of this writ was not in accordance with R.S.C., Ord. 9, r. 12, which, as [counsel] pressed upon me, is mandatory. … I have been referred to the case of The Marie Constance (1877) 3 Asp. M.L.C. 505… It appears that the writ was served on the master on board the ship and the warrant of arrest was duly nailed on the mast by a proper officer of the court. Be it noted that the writ was not affixed to the mast. Sir Robert Phillimore, in his short judgment, said (at 506): “It is necessary that the rules should be strictly obeyed, and that has not been done in this case. Under the former practice of this court the warrant of arrest was in its form

16 See The Owners of the Ship or Vessel “Mt Rowan” v. The Owners of the Ship or Vessel “Singapura Timur” [2003] 2 M.L.J. 441 (High Court, Malacca) where a writ was served by a diver appointed by the sheriff by attaching a laminated waterproof plastic copy thereof on the starboard gangway and midship railing of the Singapura Timur while she laid on the seabed. The court held that: “… The maxim qui facit per alium facit per se (he who does an act through another is deemed in law to do it himself) applies here. When the court-appointed diver effected service of this writ, it was in practice done at the instance of the sheriff and so the act of effecting such service is to be attributed to the sheriff who is deemed in law to do it himself, under O 70 rr 7(3) and 10 of the RHC” (per Low Hop Bing J.).

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citatory, and therefore the nailing of it to the mast was a sufficient notice to all the world of the suit. That is no longer the case; the warrant of arrest contains no citation itself, that part of it is supplied by the writ of summons, which therefore is directed to be nailed to the mast in addition to the warrant of arrest. Service on the captain, even on board the ship, is not an alternative allowed by the rules of practice, nor sufficient notice to all parties who may have an interest in the ship; as, for example, mortgagors and others, between whom and the captain there is no privity, either real or implied. I shall not allow judgment to be entered until I am satisfied that the writ of summons has been served in the proper manner, and the proper times have elapsed for appearance and other proceedings subsequent to such service...” This method of service prescribed by R.S.C., Ord. 9, r. 12, for giving notice to all interested parties is a rule of the court. It has been firmly established by many years of usage. It may not be a perfect way of informing all interested parties that an action in rem is laid against the ship; but no other method has yet been suggested or devised. This method is well-known throughout the maritime countries of the world. It is based upon experience for the protection of all interested parties. … [T]he courts must be vigilant towards the rights and interests of third parties who might conceivably be affected by the writ or the consequences of its service. I must do what I can to safeguard the interests of those who have had no proper notice of the existence of this writ, and, after seriously considering [counsel’s] powerful and persuasive argument, I am not disposed to save the service of this writ. The degree of irregularity in the service of the writ in rem was not such that I can feel disposed to overlook it. (per Hewson J. at 130-132)

· O. 2, r. 1: court discretion to cure minor irregularities

Non-compliance with Rules (O. 2, r. 1) 1. —(1) Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these Rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein. (2) Subject to paragraph (3), the Court may, on the ground that there has been such a failure as is mentioned in paragraph (1), and on such terms as to costs or otherwise as it thinks just, set aside either wholly or in part the proceedings in which the failure occurred, any step taken in those proceedings or any document, judgment or order therein or exercise its powers under these Rules to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings generally as it thinks fit. (3) The Court shall not wholly set aside any proceedings or the writ or other originating process by which they were begun on the ground that the proceedings were required by any of these Rules to be begun by an originating process other than the one employed.

3.6. Service: on cargo and freight 3.6.1. WHERE THE CARGO IS ON THE SHIP · O. 70, r. 10(1)

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3.6.2. WHERE THE CARGO HAS BEEN LANDED OR TRANSSHIPPED

· O. 70, r. 10(2) + O. 70, r. 7(1)(a)

3.7. Service: property already sold by the Sheriff

· O. 70, r. 7(1)(b)

The Montrosa [1917] P. 1:

Where the proceeds are in Court they represent the res, the ship itself, and the action can be brought against the proceeds: see … The Optima (1905) 10 Asp. M.L.C. 147. It makes no difference, in my view, that the proceeds were in the custody of the High Court when the action was entered in the City of London Court. The essential circumstance is that they should be in Court, to be held and distributed among all persons legally interested.

It has been held that a county court can arrest a vessel already under arrest in the High Court: see The Rio Lima (1873) L. R. 4 A. & E. 157; although the usual practice is for the process in the county court action to be served on the ship if she is already under arrest in the High Court. I think service on the proceeds was also good service and in accordance with admiralty practice. Moreover, if there had been an irregularity in the service in the county court action, that would have been waived by the unconditional appearance in this Court after the transfer. (per Sir Samuel Evans at 7)

· but not where the res has been privately sold17

3.8. Service: caveat against arrest? · O. 70, r. 7(5) + O. 70, r. 1(2) 3.9. Service: after amendments � O. 70, r. 7(6) 3.10. Effect of actual service

· admiralty jurisdiction is “invoked” and the names of the other ships (where more than one ship is listed) must be deleted18

· O. 10, r. 1(4) + O. 70, r. 2(5): memorandum of service

General provisions (O. 10, r. 1)

(4) Where a writ is duly served on a defendant otherwise than by virtue of paragraph (3), then, subject to Order 11, Rule 3, unless within 8 days after service the plaintiff files a memorandum of service in Form 11 containing the following particulars, that is to say, the day of the week and date on which it was served, where it was served, the person on whom it was served, and, where he is not the defendant, the capacity in which he was served, the plaintiff in the action begun by the writ shall not be entitled to enter final or interlocutory

17 See The Optima (1905) 10 Asp. M.L.C. 147. 18 See the earlier seminar materials on this.

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judgment against that defendant in default of appearance or in default of defence, unless the Court otherwise orders.

(4) Arrest

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1553-1560; 1564-1565 · Toh Kian Sing, Admiralty Law & Practice (1998), 146-169

4.1. Generally · pre-judgment security

The Volant 1 W. Rob. 383 [166 E.R. 616]:

An arrest offers the greatest security for obtaining substantial justice, in furnishing a security for prompt and immediate payment. (per Dr Lushington at 387 [166 E.R. 618])

The Rena K [1979] Q.B. 377; [1978] 1 Lloyd’s Rep. 545; [1978] 3 W.L.R. 431:

My decision [in The Cap Bon [1967] 1 Lloyd’s Rep. 543] was based on two propositions of law, one positive and one negative, which I considered flowed from the nature and form of the provisions in the Administration of Justice Act 1956, by which jurisdiction in rem is conferred on the Admiralty Court. The first and positive proposition is that the purpose of arresting a ship in an action in rem is to provide the plaintiff with security for the payment of any judgment which he may obtain in such action, or of any sum which may become payable to him under a settlement of such action. The second and negative proposition is that it is not the purpose of arresting a ship in an action in rem to provide the plaintiff with security for payment of an award which he may obtain in an arbitration of the same claim as that raised in the action, and the court therefore has no jurisdiction to arrest a ship, or keep her under arrest, for such other purpose. (per Brandon J. at 396)

The Cella (1888) 13 P.D. 82:

Now the jurisdiction given to the Admiralty Division by the Act in question can, as I have said, be exercised by an action in rem, that is to say, upon the production of a proper affidavit, a warrant of arrest is issued and under it the marshal may seize the ship, and the Court will adjudicate upon it. Possession is taken by the marshal in order that the ship may be sold, and that the rights of the plaintiff may be satisfied out of the ship. These rights must exist before the ship is seized, for the Court adjudicates upon the ship on the ground that it had jurisdiction to seize it and realise it for the plaintiff, on account of something which happened before the seizure, which in this case was repairing her. Even without the cases cited for the plaintiff, it would seem to me to be clear that whatever may be the judgment of the Court it must take effect from the time of the writ. The judge is to enforce the writ, and to determine the rights of the parties at the time the writ is served. That is so, as it seems to me, in every action. But in every action we may have bankruptcy and I know not what intervening, so that when judgment is given it cannot be effectually carried out.

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But if the money be in court, or the Court has possession of the res, it can give effect to its judgment as if it had been delivered the moment after it took possession of the res. It is contrary to the principle of these cases and to justice that the rights of the parties should depend not upon any act of theirs but upon the amount of business which the Court has to do. Therefore the judgment in regard to a thing or to money which is in the hands of the Court, must be taken to have been delivered the moment the thing or the money came into the possession of the Court. (per Esher M.R. at 86-87)

From the moment of the arrest the ship is held by the Court to abide the result of the action, and the rights of parties must be determined by the state of things at the time of the institution of the action, and cannot be altered by anything which takes place subsequently. (per Lopes L.J. at 88)

4.2. Procedure: obtaining a warrant of arrest � O. 70, r. 4(1) + Form 156

� application to obtain an arrest warrant is permitted even when the ship is not within territorial waters

Ex parte the Government of the United States of America 1950 (1) S.A. 880 (C):19

Although it is only when both the writ of summons and the warrant of arrest have been properly serviced in terms of the Admiralty procedure that this action in rem can be heard by this Court, I cannot see any logical reason why a warrant of arrest in terms of the Admiralty procedure, which warrant stands valid apparently for one year, should only be issued after the ship has arrived… [A warrant of arrest] can only be served when the ship comes into the Court’s jurisdiction, and in the absence of any sound reason or authority to the contrary, I am prepared to hold that the issue of the warrant of arrest is on the same footing as the issue of the writ of summons, and, therefore, this Court can grant the order sought before the vessel arrives within its jurisdiction. (per Searle J. at 885-886)

4.2.1. WHERE A CAVEAT AGAINST ARREST HAS BEEN FILED � O. 70, r. 4(2)(b) 4.2.2. PARTICULARS � O. 70, r. 4(2)(a) + O. 70, r. 4(3)(6)(7) + Form 157 � Particulars furnished such as satisfaction of the conditions under s4(4) if claim under that...

The Hoe Lee [1969-1971] S.L.R. 286; [1970] 1 M.L.J. 45:

On 25 July 1969 at the instance of the plaintiffs the registrar issued a warrant for the arrest of the vessel Hoe Lee. In support of the application for a warrant of arrest, an affidavit by a partner of the firm of solicitors acting as solicitors for the plaintiffs was filed stating the names and descriptions of the parties at whose instance the warrant was to be issued and that their claims had not been

19 This is a decision of the Cape Provincial Division of what was then the Supreme Court of South Africa. See, generally, John Hare, Shipping Law and Admiralty Jurisdiction in South Africa (1999)(RBR).

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satisfied. The affidavit did not state the nature of their claims. The writ of summons and the warrant were duly served on the same day, i.e. 25 July 1969 and thereupon the vessel was under arrest.

In the present case it is an all-important and essential requirement of the issue of the warrant of arrest that the plaintiffs or their agent has filed an affidavit which states, inter alia, the nature of the plaintiffs’ claim in the action. There has thus been a fundamental failure to comply with the requirements of [O. 70, r. 4(6)] relating to the issue of the warrant of arrest and this fundamental failure makes the warrant of arrest much more than an irregularity and makes it a nullity.

Accordingly, I must make an order setting aside the warrant of arrest … (per Wee Chong Jin C.J. at 288; 291)

· full and frank disclosure required? � Singapore law is that you must give full and frank disclosure. The Rainbow Spring. 4.2.3. ISSUE OF A WARRANT � O. 70, r. 4(5)

4.2.4. VALIDITY PERIOD OF THE WARRANT � O. 70, r. 9(1)

→ 12 months

4.3. Caveat against arrest � O. 70, r. 1(2) + O.70, r. 5 + Form 158 4.3.1. DURATION � O. 70, r. 14 + Form 163 4.3.2. CONSEQUENCES

· O. 70, r. 5(2): caveat does not prevent the arrest of the ship or other property

· O. 70, r. 4(2)(b): requirement for a plaintiff applying for the issue of a warrant of arrest to procure a search of the caveat book

· O. 70, r. 7(5): if such a caveat is found to exist, the writ must be served on the person at whose instance the caveat has been entered

· O. 70, r. 6: if the arrest nevertheless proceeds, notwithstanding the caveat, the plaintiff may have to pay damages to the caveator unless the court is satisfied that he had a good and sufficient reason for arresting

The Crimdon [1900] P. 171: The question is whether the plaintiffs are liable, in the circumstances, to be condemned in costs and damages … for proceeding to arrest the Crimdon after a caveat warrant had been filed by the solicitors for the defendants. Now, the “good and sufficient reason” … which the plaintiffs have to show to my satisfaction, is stated by them to be that they were not bound to accept a solicitor’s undertaking, and were entitled to arrest the ship. I think that that is an erroneous position to take up, having regard to the rules and practice of this

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Court. It seems to me that the position arrived at by these rules is analogous to that of bail being tendered. In the case of bail being tendered names have to be given, and the other party has twenty-four hours to consider whether he will object to the bail or not, and if he objects to the bail he can do so; but I think he objects more or less at his peril, for in the case of The Corner (1863) Br. & L. 161, after objection had been taken and found to be unfounded, the party objecting was held liable in damages. It seems to me that a similar class of considerations comes in in this case. There is an undertaking, and the object of it is to prevent a ship being arrested by providing other adequate security.

If the undertaking is given, it appears to me that the opposite party is to have a reasonable opportunity of seeing whether he ought to accept or not; and if he does not accept and shows to the satisfaction of the Court good and sufficient reason for objecting, then he will not be condemned in the costs and damages.

I think in this case if the plaintiffs had said, “We have not time to act”, or “We are not satisfied on some grounds that there is adequate security”, the point would have been a perfectly good one to take; but neither of those points were raised. (per Gorell Barnes J. at 175-177)

4.4. Service and execution of the warrant of arrest

4.4.1. SERVICE · as for service of the writ (O. 70, r. 9(6)), except for freight (O. 70, r. 9(5)) · usually effected by solicitors or their clerks20 4.4.2. EFFECT OF SERVICE · the ship is detained · O. 70, r. 10(2): where freight or cargo has been landed or transhipped · O. 70, r. 9(7): warrant to be filed with the Sheriff after service 4.4.3. EXECUTION OF THE WARRANT · O. 70, r. 9(2): only by the Sheriff or his officer21 · O. 70, r. 9(3): sheriff’s fees and expenses

4.5. Consequences of arrest

· the property arrested is security for the claim and is forthwith in the custody of the Sheriff

The Arantzazu Mendi [1939] A.C. 256; (1939) 63 Ll. L.R. 89:

The ship arrested does not by the mere fact of arrest pass from the possession of its then possessors to a new possession of the Marshal. His right is not possession but custody. Any interference with his custody will be properly punished as a contempt of the Court which ordered arrest, but, subject to his

20 See s. 65A of the Supreme Court of Judicature Act (1999 rev. ed.), cap. 322. 21 For a description of the process in the U.K., see The Johnny Two [1992] 2 Lloyd’s Rep. 257, 260 (per Sheen J.).

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complete control of the custody, all the possessory rights which previously existed continue to exist, including all the remedies which are based on possession. There may be some doubt even whether the sheriff's officer, who has levied under a fieri facias, is in fact in possession. But his case is quite different, for he acts under a direction of the Court to make of the goods of the defendant so much money: he has the right to sell and therefore to hand over possession to the purchaser. His case therefore need not be discussed here. But a bare arrest appears to me clearly to give custody and not possession. (per Lord Atkin at 266)

· interference with custody of the property under arrest constitutes a contempt of court

4.6. Wrongful arrest 4.6.1. GENERALLY – TORT → Tort of abuse of process, tort of wrongful damage.

The Walter D. Wallet [1893] P. 202:

No precedent, as far as I know, can be found in the books of an action at common law for the malicious arrest of a ship by means of Admiralty process. But it appears to me that the onus lies on those who dispute the right to bring such an action of producing authority against it. As Lord Campbell said in Churchill v. Siggers (1854) 3 E. & B. 929, 937: “To put into force the process of law maliciously and without any reasonable or probable cause is wrongful; and, if thereby another is prejudiced in property or person, there is that conjunction of injury and loss which is the foundation of an action on the case.” But it was further contended before me that, assuming the action at common law to lie, special or actual damage must be alleged and proved. No doubt in an action on the case for commencing or prosecuting an action, civil or criminal, maliciously and without reasonable or probable cause, damage must be shown: Cotterell v. Jones (21 L.J. (C.P.) (N.S.) 2). But when a malicious action terminates in an arrest of a person, that wrongful detention must of necessity cause some damage to the person who loses for the time his complete liberty. In the present case, I think that actual damage there was none. I doubt if, as was urged before me, the ship could have been arrested, when she was, by any proper process, though perhaps an injunction to prevent leaving port until the stipulated policies were given, and the stipulated sums paid, could have been obtained. But she was not detained in port by the arrest, nor was her loading interfered with. Still, the action of the defendants was, I think, clearly, in common law phrase, without reasonable or probable cause; or, in equivalent Admiralty language, the result of crassa negligentia, and in a sufficient sense mala fides, and the plaintiffs’ ship was in fact seized. Therefore, I think the plaintiffs must be supposed to have suffered some damage … (per Sir Francis Jeune at 205-208)

4.6.2. DAMAGES: MALICIOUS ARREST/GROSS NEGLIGENCE → would have to show apart from an action in rem which has been disposed of, mala fides/crassa negligentia and that the action caused you loss.

Xenos v. Aldersley (The Evangelismos) (1858) 12 Moo P.C. 352 [14 E.R. 945]:

Their Lordships think there is no reason for distinguishing this case, or giving damages. Undoubtedly there may be cases in which there, is either mala fides, or that crassa negligentia, which implies malice, which would justify a Court of

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Admiralty giving damages, as in an action brought at Common law damages may be obtained. In the Court of Admiralty the proceedings are, however, more convenient, because in the action in which the main question is disposed of, damages may be awarded. The real question in this case, following the principles laid down with regard to actions of this description, comes to this: is there or is there not, reason to say, that the action was so unwarrantably brought, or brought with so little colour, or so little foundation, that it rather implies malice on the part of the Plaintiff, or that gross negligence which is equivalent to it? Their Lordships are of opinion, that there is nothing whatever to establish the Appellant’s proposition. (per The Right Hon. T. Pemberton Leigh at 359-360; 14 E.R. 948)22

The Maule [1995] 2 H.K.C. 769 (C.A.):

As I see it, it comes to this. If a plaintiff wrongfully arrested a ship which he knew he could not legitimately arrest, then he would be acting in bad faith. And, short of that, if he wrongfully arrested a ship without applying his mind to whether that was a legitimate course: proceeding in that cavalier fashion because he was bent on harming the shipowner or putting pressure on him to accede to a demand, then his conduct could … be described as malicious negligence. And in either case, damages for wrongful arrest would be a proper remedy to grant the shipowner against him. (per Bokhary J.A. at 773)

Centro Latino Americano de Commercio Exterior S.A. v. Owners of the Kommunar (The Kommunar) (No. 3) [1997] 1 Lloyd’s Rep. 22:

Two types of cases are thus envisaged. Firstly, there are cases of mala fides, which must be taken to mean those cases where on the primary evidence the arresting party has no honest belief in his entitlement to arrest the vessel. Secondly, there are those cases in which objectively there is so little basis for the arrest that it may be inferred that the arresting party did not believe in his entitlement to arrest the vessel or acted without any serious regard to whether there were adequate grounds for the arrest of the vessel. It is, as I understand the judgment, in the latter sense that such phrases as “crassa negligentia” and “gross negligence” are used and are described as implying malice or being equivalent to it. (per Colman J. at 30)

4.6.3. SINGAPORE AUTHORITIES The Euroexpress [1988] S.L.R. 67 (C.A.); [1988] 3 M.L.J. 367: → Approved the reasoning in The Evengelismos.

In argument before us, as before the learned judge, a suggestion was advanced by counsel that the appellants might have acted in “bad faith” in arresting the vessel. The basis of the suggestion was that the two bills of lading, on which the appellants’ claim was based, were allegedly fraudulent as they were either issued or negotiated long before the cargo was loaded on board the vessel. No suggestion was, however, made that the appellants, as cargo-owners, were privy to the alleged fraud and on this premise, we are of the view that the

22 Cited with approval by Sir Robert Phillimore in The Margaret Jane (1869) L.R. 2 A. & E. 345, 346. In The Strathnaverd (1875) 1 App. Cas. 58 (P.C.) it was held that damages were not recoverable in respect of a mere error of judgment in arresting the vessel where there was no mala fides.

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suggestion, standing by itself – even if true – can in no way imply any “bad faith” on the part of the appellants in arresting the vessel. It may well be that ultimately the appellants’ claim may fail but that is not the test of whether they had acted in “bad faith”. Claimants are entitled to arrest a vessel or other such property as is permitted to obtain security for the claim. It cannot be argued that the arrest is made in “bad faith” merely because there is good defence to the claim. In our opinion, for an arrest to be in “bad faith”, there must be some element in the arrester’s conduct, for example, where the arrest is in relation to a malicious claim, or is of itself malicious, apart from the proper enforcement of his claim. In our judgment, no such suggestion had or could have been advanced. (per Wee Chong Jin C.J. at 74-75)

*The Kiku Pacific [1999] 2 S.L.R. 595 (C.A.):

► Arrest after letter of undertaking. S/o argued that wrongful arrest, that even though the test was for malice, that malice is always inferred when there is no reasonable or probable cause. Court did not accept that.

We were … of the opinion that the term “reasonable or probable cause”23 is not appropriate in the context of the wrongful arrest of a vessel, as it would cause confusion, and more importantly dilute the threshold required for an action in wrongful arrest to succeed.

In light of [this] …, we were of the view that the test to be proved by the owners was not whether there was reasonable or probably cause in bringing the action or in rejecting the security offered in March 1996. Instead the test is that laid down in … The Evangelismos of mala fides or gross negligence implying malice. (per Karthigesu J.A. at 605)

*The Trade Resolve [1999] 4 S.L.R. 424

► Arrest attempted when ship was outside of Singapore’s territorial waters. Ct found that it amounted to wrongful arrest. Chan Seng Onn JC: Despite being fully aware of conditions of sheriff and that the ship was outside jurisdiction, the solicitors had acted outside of their authority knowingly and so malicious.

*The AA V [2001] 1 S.L.R. 207 ► Judith Prakash J: Action for wrongful arrest succeeded.

*The Rainbow Spring [2003] 3 S.L.R. 362 (CA) ► Weak case. Would not amount to malice or crassa negligentia.

→ Did go on appeal but not on the wrongful arrest point. So look at 2002 3 SLR 117. Appeal was on full and frank disclosure. O 70 r ?.

Further reading

· David Chong, “Wrongful Arrest in Actions in Rem” [1990] 1 Malayan L.J. lxxiii-lxxix24

� Shane Nossal, “Damages for the wrongful arrest of a vessel” [1996] Lloyd’s Maritime & Commercial L.Q. 368-378

23 See The Evmar [1989] S.L.R. 474, 484 (per Chao Hick Tin J.C.). 24 This article is downloadable from LAWNET.

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4.7. Entry of appearance 4.7.1. GENERALLY

The Gemma [1899] P. 286:

Now, apart from authority, it appears to me that when persons, whose ship has been arrested by the marshal of the Admiralty Court, think fit to appear and fight out their liability before the Court, the form of the proceedings in the Admiralty Court show – and it is not disputed that the forms I have referred to are those which have been in use, according to the practice of the Court, from olden times – that the persons so appearing, as the defendants have done in the present case, become parties to the action, and thereby become personally liable to pay whatever in the result may be decreed against them; and the action, though originally commenced in rem, becomes a personal action against the defendants upon appearance. For what purpose does a party appear to an action in rem? There are, as it seems to me, three reasons for the appearance: first, to release the ship, so that it may go on trading for the owner; secondly, to contest the plaintiffs’ allegations that the ship had been in default; and, thirdly, in order to prevent its being sold. (per A.L. Smith L.J. at 291-292)

4.7.2. PROCEDURE · O. 70, r. 2(3) + O. 12 · O. 12, r. 1(3): memorandum of appearance

Mode of entering appearance (O. 12, r. 1)

(3) An appearance is entered by properly completing a memorandum of appearance, as defined by Rule 2, and a copy thereof, and handing them in at the Registry.

· O. 12, r. 4(a): time limit of eight days after service of the writ

Time limited for appearing (O. 12, r. 4)

4. References in these Rules to the time limited for appearing are references –

(a) in the case of a writ served within the jurisdiction, to 8 days after service of the writ or, where that time has been extended by or by virtue of these Rules, to that time as so extended; and (b) in the case of a writ served out of the jurisdiction, to 21 days after service of

the writ as provided for in Order 11, Rule 2, or Order 10, Rule 2 or to such extended time as the Court may otherwise allow.

· O. 12, r. 5: late appearance?

Late appearance (O. 12, r. 5) 5. —(1) A defendant may not enter an appearance in an action after judgment has been entered therein except with the leave of the Court. (2) Except as provided by paragraph (1), nothing in these Rules or any writ or order thereunder shall be construed as precluding a defendant from entering an appearance in an action after the time limited for appearing, but if a defendant

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enters an appearance after that time, he shall not, unless the Court otherwise orders, be entitled to serve a defence or do any other thing later than if he had appeared within that time.

4.7.3. EFFECT OF APPEARANCE BY THE SHIPOWNER → become liable in personam if the claim is not satisfied.

· submission to the jurisdiction of the court and, if judgment is obtained, this can be executed against him personally if it is not fully satisfied from the proceeds of sale or from the security furnished

4.7.4. CHALLENGING A WRIT OR THE JURISDICTION OF THE COURT → if you make application to stay proceedings or to set aside the proceedings, must make appearance. · O. 12, r. 7(1)-(3)

Dispute as to jurisdiction (O. 12, r. 7) 7. —(1) A defendant who wishes to dispute the jurisdiction of the Court in the proceedings by reason of any such irregularity as is mentioned in Rule 6 or on any other ground shall enter an appearance and within the time limited for serving a defence apply to the Court for — (a) an order setting aside the writ or service of the writ on him; (b) an order declaring that the writ has not been duly served on him; (c) the discharge of any order giving leave to serve the writ on him out of the jurisdiction; (d) the discharge of any order extending the validity of the writ for the purpose of service; (e) the protection or release of any property of the defendant seized or threatened with seizure in the proceedings; (f) the discharge of any order made to prevent any dealing with any property of the defendant; (g) a declaration that in the circumstances of the case the Court has no jurisdiction over the defendant in respect of the subject-matter of the claim or the relief or remedy sought in the action; or (h) such other relief as may be appropriate. (2) An application under paragraph (1) must be made by summons which must state the grounds of the application. (3) An application under paragraph (1) must be supported by an affidavit verifying the facts on which the application is based and a copy of the affidavit must be served with the summons.

(5) Provision of security and release from arrest

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1571-1572 · Toh Kian Sing, Admiralty Law & Practice (1998), 169-175

5.1. Introduction

· payment into court

· bail

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· letters of undertaking (from P & I Clubs) – most commonly used, but many disadvantages; for example, not recognized in all jurisdictions.

· bank guarantees

Esso Singapore Pte. Ltd. v. Arcadia Spirit [1988] S.L.R. 244; [1988] 3 M.L.J. 262:

There is admittedly a wrinkle, a very important wrinkle, in this case in that here we are dealing with a proposed letter of guarantee to be furnished by a Club which has no presence or assets here, and which resides in a non-Commonwealth and non-common law jurisdiction. Therefore, theoretically, there could be an enforcement problem. However, it seems to me that to allow that possibility to affect my mind would be to adopt a wholly negative approach. I prefer to proceed upon the assumption that the Japan Club – whose guarantees (as the evidence shows) are acceptable to a number of governments, including our own – that such a club which would stand to lose its international reputation were it to default on a guarantee – would fulfil its obligations with honour. Accordingly, I am inclined to order the release of the vessel in consideration of the provision of a letter of guarantee of the Japan Club in terms to be agreed. (per Grimberg J.C. at 245) · P & I Club letter of undertaking has the advantage of not requiring the shipowner to appear in the action and make himself personally liable25

· the court can intervene where the plaintiff demands terms from the defendant which are oppressive26 or merely to scrutinise the parties’ security arrangements

*The Arktis Fighter [2001] 3 S.L.R. 394

· the amount of security should cover the plaintiff’s “reasonably best arguable case” together with interest and costs27

5.2. Payment into court → Your security is tied up in court. Will have to follow court procedures even if you want to challenge… etc.

· O. 70, r. 24 5.3. Bail 5.3.1. GENERALLY → Disadvantage is that you must submit to jurisdiction of the court and thus be potentially liable in personam.

→ If bail given by a foreign P & I club without any assets in the jurisdiction, then it will not be accepted.

→ Cannot be more than the sum claimed?

“Bail is an Admiralty process by which a res is either protected against arrest or released from arrest by the substitution of a covenant to discharge the obligation of a defendant to pay a sum of money for the corpus of the res. Bail,

25 See The Prinsengracht [1993] 1 Lloyd’s Rep. 41, 51 (per Sheen J.). 26 The Benja Bhum [1994] 1 S.L.R. 88 (C.A.), 91 (per L.P. Thean J.A.). 27 See The Moschanthy [1971] 1 Lloyd’s Rep. 37, 44 (per Brandon J.).

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although not compulsory, is resorted to in practice for it has the double advantage of permitting the res owner to continue to enjoy the benefit and use of his property while at the same time the plaintiff continues to enjoy the benefit of a pre-judgment security, albeit in a different form.”28

� Example of a letter confirming bail:

Prinsengracht With regard to the threatened arrest of the aforementioned vessel, we herewith notify you that a Bail Bond has been provided by the London Steamship Owners Mutual Insurance Association Limited whose registered address is at 52 Leadenhall Street, London EC3A 2BJ. This Bail Bond is provided on behalf of the defendants in the action commenced by yourselves under 1991 Folio No. 826. The Bail Bond was given before Ms Clare Wise of Ince & Co., Knollys House, 11 Bywood Street, London EC3 a solicitor exercising the powers of a Commissioner for Oaths under section 81 of the Solicitors Act 1974.29

5.3.2. PROCEDURE

· O. 70, r. 15 + Form 164

· given after the defendant shipowner has entered appearance and results in submission to in personam jurisdiction

The Prinsengracht [1993] 1 Lloyd’s Rep. 41:

Contractual security may be given without submitting, or agreeing to submit, to the jurisdiction of this Court …, but bail cannot be given without submitting to the jurisdiction … Under the old procedure relating to appearance bail could only be given after appearance (see Williams and Bruce 3rd Edition p. 291) but a defendant who appeared under protest could put in bail (see The City of Mecca (1879) 5 P.D. 8). Under the current procedure a person who desires to prevent the arrest of his property must acknowledge the issue or service of the writ, as the defendants have done. There are no grounds for suggesting that there is any irregularity in the writ. Its issue has been voluntarily acknowledged. Before the arrest, about which complaint is made, the defendants had submitted to the jurisdiction. It would be absurd, and it would bring the law into disrepute, if a defendant could procure a bail bond in which there is a solemn undertaking to satisfy a judgment of the Court and then say to the plaintiff “Of course you cannot obtain a judgment against me because you cannot arrest my ship and I have not submitted to the jurisdiction of the Court”. (per Sheen J. at 45-46)

· action continues in rem and in personam

The Christiansborg (1885) P.D. 141 (C.A.):

What is the effect of giving bail? It seems to me that bail is the equivalent of the res, and that whilst the bail has been given for the thing, it is, if not impossible, highly improper that another action should be allowed to go on against the res in any other place. I cannot but observe that it appears to me that where the

28 D.R. Thomas, Maritime Liens (1980), 287. 29 See The Prinsengracht [1993] 1 Lloyd’s Rep. 41, 44.

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matter in controversy is a ship, the business of which carries it from jurisdiction to jurisdiction, very different considerations may apply to the existence of suits in two jurisdictions to those which apply to ordinary actions in personam. I think, therefore, that when bail has been given, the plaintiff in the foreign action, the first action, has obtained that which is equivalent to the arrest of the res. The same conclusion, it appears to me, may be arrived at in another way. The result of the giving of bail is the release of the ship. Now, what is the meaning of releasing a ship under the circumstances? It appears to me that the meaning of it is, that she is released from all rights and claims against her in respect of the collision, which is the cause for which her owners have been compelled to give the bail. Therefore, without saying it is impossible that a second action should be allowed where such a release has been obtained, I think that the existence of such a release is the most cogent circumstance against allowing the prosecution of a second action. (per Fry L.J. at 155-156) · bail put up by a foreign-based P & I Club, with no assets in the jurisdiction, is unacceptable

The Piya Bhum [1994] 1 S.L.R. 564:

The singular advantage of a bail bond over a letter of undertaking or guarantee is that the plaintiffs who have obtained a judgment or settlement which has been filed in court may proceed to levy execution and need not bring a separate action against the sureties. This is made clear abundantly by the wording of the bail bond: “Execution may issue against us”. Thus the judgment against the owners of the ship is also binding against the bailors even though they are not parties to the action. If this essential character is removed from the bail bond it utterly fails its purpose. A judgment of this court, however, has no extra territorial force in that it cannot be enforced in a foreign country by direct execution. It, therefore, follows that a bail bond by a person without assets within the jurisdiction is worthless from the plaintiffs’ point of view. (per Selvam J.C. at 565-566)

· insolvency of the surety?

Westminster Bank Ltd. v. West of England S.S. Owners Protection & Indemnity Association Ltd. (1933) 46 Ll. L. Rep. 101: It is sufficient for me to say that there is certainly high authority for the view that in proper cases, where there has been a mistake as to the amount for which bail has been asked, or in cases where there are questions of the solvency of the security, the bail question may be reopened and there may be a requirement of further bail and a re-arrest or an arrest if such further bail is not furnished. It is further to be observed that, as far as I know, there is no authority, where the security given is not bail but on the contrary consists of a personal undertaking such as a guarantee, that an arrest cannot follow upon such guarantee where proper reasons for it are shown. (per Roche J. at 105)

· bail even if given for the full amount of the claim is limited by the value of the property against which the action is brought

The Duchesse de Brabant (1857) Swab 264 [166 E.R. 1129]:

The action was commenced, and bail seems to have been given, perhaps without much consideration, for the whole amount of the action, and without, perhaps, taking pains to enquire what was the value of the ship and freight

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proceeded against, or what was the amount of the damage that had actually been done. I decide this case on the common ground that the bail ought, in justice and equity, and according to the practice of this Court, to be considered as bail, not for the amount of damage done, but for the value of the ship and freight proceeded against … (per Dr Lushington at 265-266; 166 E.R. 1129-1130)

5.4. P & I Club Letter(s) of Undertaking → Don’t have to rely on the bank. All the major P & I club have correspondences in the major ports – convenience. Don’t have to put in appearance. No need to follow court procedures.

→ China, Taiwan, Korea, Malaysia, Spain, Sweden do not accept P & I letters of undertaking. � e.g., Gard P & I Club: Rule 88 Payments and undertakings to third parties

1. The Association shall be under no obligation to provide any guarantee,

certificate, bail or other security or undertaking (“security”) for or on behalf of a Member, or to pay the costs of such provisions.

2. The Association may at its discretion provide security or pay the cost of such provision in relation to liabilities within the scope of a Member’s cover, and may recover any costs incurred thereby from the Member.

Galaxy Energy International Ltd. v. Assuranceforeningen Skuld (The Oakwell) [1999] 1 Lloyd’s Rep. 249; [1999] C.L.C. 216:

The advantages for all parties of the time honoured practice of club undertakings are obvious; included are speedy security in a negotiated amount, no need for actual payment of money or provision of a bank guarantee, a negotiated choice of jurisdiction, avoidance of the delay, cost and inconvenience which an arrest inevitably causes, and continuing security for the claimant without risk. One of the primary purposes is to avoid the machinery of the Court being invoked until the time comes (which in a number of cases it never does) that it is necessary for the cargo-claimants to issue proceedings because the claim has not been settled. Further, it is inherent in the claimant's agreement not to invoke the process of the Court that the security should place the claimants in no less favourable a position than if they had begun their action in rem and arrested the ship. Objectively, this was part of the commercial purpose. (per Timothy Walker J. at 253)

C. Itoh & Co. Ltd. v. Companhia de Navegaçao Lloyd Brasileiro & Steamship Mutual Underwriting Association (Bermuda) Ltd. (The Rio Assu) (No. 2) [1999] 1 Lloyd’s Rep. 115 (C.A.):30

In consideration of the owners of and other persons interested in the cargo referred to above (herein together referred to as the “Cargo Owners”) consenting to the release from arrest of (a) the MV “RIO APA” (presently under arrest in Durban) (b) the MV “RIO PURUS” (presently under arrest in Singapore) and (c) the MV “RIO COARI” (presently under arrest in Hong Kong) and/or refraining from taking action resulting in the arrest or re-arrest of any ship, property or assets in the same ownership, associated ownership or management for the purpose of founding jurisdiction and/or obtaining security

30 Noted Menzies [1999] International J. of Shipping Law 246-248.

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in respect of the claims of the cargo owners concerning the cargo mentioned above and of the cargo owners refraining from commencing and/or prosecuting legal or arbitration proceedings in respect of the above claims (otherwise than before the Court referred to below) against COMPANHIA DE NAVEGACAO LLOYDS BRASILEIRO (hereinafter referred to as “Lloyd Brasileiro”), the demise chartered owners of the MV “RIO ASSU” we hereby undertake to pay to you on behalf of the cargo owners on demand such sums as may be adjudged by the English High Court of Justice or on final appeal therefrom or as may be agreed between the parties hereto to be recoverable from Lloyd Brasileiro in respect of the said claims, interest and costs of the cargo owners provided that the total of our liability shall not exceed the sum of two million four hundred thousand U.S. dollars (U.S.$2,400,000) plus interest and costs. Provided that the cargo owners shall be free to take action resulting in the arrest or re-arrest of any ship, property or other asset in the same ownership, associated ownership or management in respect of any claims of the cargo owners concerning the cargoes mentioned above in the event that the “RIO ASSU” fails to discharge its final cargo in Nigata on or before 31st December 1992. And for the consideration aforesaid: (1) We hereby warrant that the MV “RIO ASSU” was not demise chartered at any material time other than to Lloyd Brasileiro. (2) We further undertake that we will, within 14 days of the receipt from you of a request so to do, instruct Solicitors to accept on behalf of Lloyd Brasileiro service at your option of in personam or in rem proceedings brought by the cargo owners in the English High Court of Justice and to file acknowledgement of service thereof. (3) We confirm that Lloyd Brasileiro agree that the above mentioned claims shall be subject to the exclusive jurisdiction of the English High Court of Justice. (4) We confirm that Lloyd Brasileiro have undertaken forthwith to instruct the “RIO ASSU” to proceed without delay with the contractual voyage to the remaining discharge ports and there to discharge its remaining cargo in accordance with the relevant contracts of carriage. (5) We warrant that we have received irrevocable authority from Lloyd Brasileiro to instruct Solicitors as aforesaid and to give this letter of undertaking in these terms. This undertaking shall also be governed by and construed in accordance with English Law and we agree to submit to the exclusive jurisdiction of the English High Court of Justice for the purpose of any process for the enforcement thereof.31

*The Juntha Rajpruek [2003] 2 Lloyd’s Rep. 107 (C.A.)

Further reading

· Steven J. Hazelwood, P & I Clubs: Law and Practice 3rd ed. (2000), Chapter 11 (“Club Letters of Security”)

� K.X. Li, “Acceptability of P & I club letters as security” [2000] International J. of Shipping Law 76-86

31 For other examples of such undertakings, see The Vasso [1984] 1 Lloyd’s Rep. 235, 238; Galaxy Energy International Ltd. v. Assuranceforeningen Skuld (The Oakwell) [1999] 1 Lloyd’s Rep. 249, 252.

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� Simon Poland & Tony Rooth, Gard Handbook on P & I Insurance 4th ed. (1996) 602-605

5.5. Bank guarantees → Disadvantage of having to pay high rates of bank charges.

Sea Melody Enterprises S.A. v. Bulktrans (Europe) Corporation (The Merak S) [2002] 2 Lloyd’s Rep. 287 (S.C.A. of South Africa):

Counsel were agreed that arrested vessels were almost invariably released in South African maritime practice in 1983 on the furnishing of P & I Club letters or bank guarantees. Bail bonds and undertakings to give bail bonds were never encountered in practice although provided for in the rules in operation until the end of November, 1986. Similarly, cash deposits and the giving of guarantees to the Court were also seldom, if ever, encountered. From a practical point of view, guarantees of the kind in question constituted security as effectual as cash deposits and bail bonds, and there was no compelling reason which could have induced Parliament to restrict the ordinary meaning of the word security so as to exclude them. Section 3(8) provides, for example, that “property shall not be arrested and security therefor shall not be given more than once in respect of the same maritime claim by the same claimant”. Bearing in mind the prevailing practice at the time of the passing of the 1983 Act it can hardly be suggested that the intention was to authorize the arrest or re-arrest of a property after a club letter of undertaking or a guarantee had been provided. Nor can it be suggested that the lawgiver would have intended in 1983 to take away the power of the Court to reduce the amount of a guarantee provided instead of bail, especially where with us, as in England, the giving of contractual security was “the almost universal practice”. (per Farlam J.A. at 291)

(6) Caveat against release

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1567-1571 · Toh Kian Sing, Admiralty Law & Practice (1998), 175-179

→ Filed by a prospective plaintiff. To prevent the release of the ship from arrest. As the caveator, you will be served with anything with regards to the ship. Valid for 6 months. 6.1. Procedure

· O. 70, r. 13(1) + Form 162

· must be lodged while the warrant of arrest is still in force32

*Elinoil-Hellenic Petroleum Co. S.A. v. Wee Ramayah [1999] 4 S.L.R. 513:

It is … clear that in law the mere filing of a caveat is not adequate to secure a maritime claim which is not a maritime lien, eg a bunker claim. The caveat is a substitute for a second arrest but not for a writ in rem. This is where WRP have gone wrong. The object of instituting an action in rem was explained by Brightman LJ in Re Aro Co Ltd [1980] Ch 196 at 207-208; [1980] 1 All ER 1067 at 1074 in these terms:

32 See Shanti Kant Jianghan v. The Indera Pertama (No. 2) [1989] 3 M.L.J. 57.

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The usual object of suing in rem is to obtain security. The plaintiff becomes entitled upon the institution of his suit to the arrest and detention of the subject matter in the custody of an officer of the court pending adjudication, and on adjudication in his favour to a sale and satisfaction of his judgment out of the net proceeds thereof, subject to other claims ranking in priority to or pari passu with his own. So stated, the rights of a plaintiff suing in rem have points of similarity with the rights of a legal or equitable mortgagee or chargee; such persons are also entitled in appropriate circumstances to have the subject matter of the charge preserved for their benefit, and if the account is in their favour to have it sold in order to satisfy the debt. The similarity is carried a stage further by the decision in The Monica S [1968] P 741, where it was held that the burden of the statutory right of action in rem in a case under s 3(4) of the Administration of Justice Act 1956 ran with the ship so as to enable the plaintiff to serve the writ on the ship notwithstanding a transfer of ownership since the writ was issued. It must follow from that decision that the plaintiff in rem is entitled to have the ship arrested despite change in ownership, and notwithstanding that the writ has not been served. (per Chao Hick Tin J. at 522)

6.2. Validity period · O. 70, r. 14(1)(2) 6.3. Caveat and release · O. 70, r. 12(4) + Form 161 6.4. Withdrawal of a caveat

· O. 70, r. 14(1) + Form 163

Hong Lee v. Golden Dragon Shipping (Singapore) Pte Ltd. [1975-1977] S.L.R. 149 (C.A.); [1976] 1 M.L.J. 159:

In our view when the respondents undertook to pay the court charges the caveat which the appellants had filed against the release of the ship was in force though the warrant of arrest had been set aside. The respondents on behalf of the owners of the vessel obtained the release of the vessel by the appellants withdrawing their caveat on the undertaking given by the respondents to pay the court charges. In our view the learned district judge was right in holding in the first instance that there was a binding agreement between the appellants and the respondents and giving judgment in favour of the appellants. (per T. Kulasekaram J. at 152)

6.5. Damages � O. 70, r. 13(2)

The Don Ricardo (1880) 5 P.D. 121:

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I am satisfied that I ought in the special circumstances of the case, and bearing in mind the decision of Dr. Lushington in the case of The Corner,33 to condemn the plaintiff in damages for the detention of the Don Ricardo and in the costs occasioned by the entry of the caveat and the objection to the bail. I direct the amount of the damages to be assessed by the registrar. (per Sir Robert Phillimore at 122)

(7) Release

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1567-1570 · Toh Kian Sing, Admiralty Law & Practice (1998), 175-177

→ If there is arbitration clause, then the court’s jurisdiction may be challenged and the court may be prepared to consider release of the ship. But will not do so if the rights of the parties may be affected. 7.1. Procedure � O. 70, r. 12 + Form 160 7.2. Court’s discretion � O. 70, r. 12(4)

The Rena K [1979] 1 Q.B. 377; [1978] 1 Lloyd’s Rep. 545; [1978] 3 W.L.R. 431:

The process by which property, which has been lawfully arrested in an action in rem, can be released at the instance of the party interested in it, is the making by the court of an order for the issue of a release under R.S.C., Ord. 75, r. 13 (4). That rule provides, so far as material: “A release may be issued at the instance of a party interested in the property under arrest if the court so orders, ...” That rule, as I understand it, gives the court a discretion, when an application for an order for the issue of a release is made, whether to make such order or not. The discretion so given is, so far as the terms of the rule go unfettered, but it must, like any other discretion, be exercised judicially. There is nothing in section 1 (1) of the Arbitration Act 1975 which obliges the court, whenever it grants a stay of an action in rem in which security has been obtained, to make an order for the unconditional release of such security. Nor did section 4 (2) of the Arbitration Act 1950, now repealed, impose any such obligation. That being so, I think that it is a matter for the discretion of the court, acting under the rule referred to above, what order it should make with regard to such security, and that the way in which it exercises that discretion must depend on the circumstances of each particular case. (per Brandon J. at 404)

� arbitration clauses

The Bazias 3; The Bazias 4 [1993] Q.B. 673 (C.A.); [1993] 1 Lloyd’s Rep. 101; [1993] 2 W.L.R. 854:

33 (1863) Br. & L. 161 [167 E.R. 324].

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[Counsel] further argues that it is quite simply impossible for the defendants to find liquid resources in time to enable them to put up security. In that connection he relies on paragraph 16 of an affidavit … and on a further affidavit, which we allowed to be put before us, in which he explains in greater detail the financial position of the defendant company. I regret that the difficulties which the defendants say they have in finding the necessary liquid resources, and the inconvenience to the freighters and their passengers, are not grounds which persuade me to depart in this case from making the usual order. (per Lloyd L.J. at 682)

� stays to commence proceedings elsewhere?

The ICL Raja Mahendra [1999] 1 S.L.R. 329:

Generally, when a party invokes a court’s jurisdiction to arrest a vessel it is for the purpose of securing it to satisfy a judgment or award which it may obtain in that jurisdiction. Sometimes, having invoked the jurisdiction the party concerned or the opposing party may, on good grounds, apply to stay the proceedings in favour of commencing or continuing proceedings elsewhere. In such circumstances, the court has the discretion whether to release the arrested vessel, and it follows, also a discretion whether to impose conditions if the vessel is to be released. The purpose of invoking the court's jurisdiction in the first instance and the reason for the application for stay are relevant considerations to the court in the exercise of its discretion to release the arrested vessel. I agree that the court’s jurisdiction to arrest a ship in an action in rem should not be exercised for the purpose of providing security for an award or judgment elsewhere. An exception is where a party applies under s. 6 of the International Arbitration Act. (per Choo Han Teck J.C. at 334)

� power of release to be used in extreme cases?

The Opal 3 [1992] 2 S.L.R. 585:

The inferior power conferred by the rule can never be used to release a ship if the release would defeat the legitimate rights of a litigant for that action would negate the superior rights of the plaintiffs under the Act. A ship will not be released from arrest on the ground that the ship is subject to a mortgage for an amount which will not leave anything for an unsecured creditor … In this case the plaintiffs, by reason of their possessory lien, are placed on a higher pedestal than a mortgagee … The power created by O. 70, r. 12 should be used only in extreme cases: see The Myrto [1977] 2 Lloyd’s Rep. 243 and East Asia Supply Co. Pte Ltd. v. The San 003 [1979] 2 MLJ 8. (per Selvam J.C. at 592)

(8) Re-arrest of a Ship

Reading · Toh Kian Sing, Admiralty Law & Practice (1998), 179-183

→ If a ship is released when sufficient security has been given. Usually won’t allow re-arrest of the ship. Even if the ship has been arrested in another jurisdiction. 8.1. After earlier release The Wild Ranger (1863) Br. & L. 84 [167 E.R. 310]:

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Now bail given for a ship in any action is a substitute for the ship; and whenever bail is given, the ship is wholly released from the cause of action and cannot be arrested again for that cause of action. (per Dr Lushington at 87 [167 E.R. 312])34

The Point Breeze [1928] P. 135; (1928) 30 Ll. L.R. 229

In this case what the plaintiffs have been trying to do is to arrest the ship after they have got bail for their claim and have released the ship, and have got judgment, but before the amount of their claim is ascertained …. If the plaintiffs are right in their contention that they are entitled to arrest this ship, it seems to me that it will open the door to the re-arrest of vessels, or arrest after getting bail, whenever a party thinks that his claim may be more than he originally thought it was. No immunity from arrest will be obtained by giving bail, and the result of that, on the question of maritime liens, might be very serious … The position of people who have ships that have been released on bail – if I were to allow this arrest to stand – might be very unfortunate. (per Bateson J. at 142)

8.2. After earlier release in another jurisdiction The Christiansborg (1885) 10 P.D. 141

I think, therefore, that when bail has been given, the plaintiff in the foreign action, the first action, has obtained that which is equivalent to the arrest of the res. The same conclusion, it appears to me, may be arrived at in another way. The result of the giving of bail is the release of the ship. Now, what is the meaning of releasing a ship under the circumstances? It appears to me that the meaning of it is, that she is released from all rights and claims against her in respect of the collision, which is the cause for which her owners have been compelled to give the bail. Therefore, without saying it is impossible that a second action should be allowed where such a release has been obtained, I think that the existence of such a release is the most cogent circumstance against allowing the prosecution of a second action. That is the view of Sir James Hannen, because he says: “Now what is the meaning of the release? It plainly must mean, everybody would understand it to mean, that the vessel was to go on her course and be useful to her owners, and earn freight, and not merely that she was to sail about in the Dutch waters”. If that be, as I think it is, the true meaning of a release obtained by the giving of bail, it seems to me that the subsequent institution of this suit is against good faith. In my judgment, also, extreme inconvenience would follow if the practice were allowed of instituting proceedings in rem in whatever port the ship might happen to arrive: the result would, or might, be that in the case of a collision a vessel might be arrested afresh in every jurisdiction which she might enter, and that even though bail might have been given in the courts of foreign jurisdiction, so that she would be harassed from port to port by successive actions of the kind which we have now before us, and the plaintiff might be allowed to elect which of the antecedent actions he would prosecute. (per Fry L.J. at 155-156)

34 See too The Kalamazoo 15 Jur. 885, 886 where Dr Lushington said that: “It is perfectly competent to take bail to the full value, but the effect of taking bail is to release the ship in that action altogether. It would be perfectly absurd to contend that you could arrest a ship, take bail to any amount, and afterwards arrest her again for the same cause of action. The bail represents the ship, and when a ship is once released upon bail she is altogether released from that action.”

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The Tjaskemolen (No. 2) [1997] 2 Lloyd’s Rep. 476:

I do not think that the mere fact that a plaintiff has arrested a vessel which has previously been released by order of this Court or another Court of competent jurisdiction will amount to an abuse of the process of the Court. All will depend upon the circumstances. So, for example if a plaintiff were to seek to arrest a vessel in respect of the same claim in one jurisdiction after another it might well be an abuse of process to permit an arrest here on the ground that to do so would be oppressive and vexatious and thus an abuse of the process. I have reached the conclusion that it would not be oppressive to permit the plaintiffs to retain the security provided that they in turn provide security for any loss which the owners prove that they have suffered as a result of arresting the vessel in England if their claim fails before the arbitrators. I recognize that such counter-security is not required in the ordinary case of an arrest, but this case is unusual. As I understand it, if the arrest had been maintained in Holland and the plaintiffs’ claim in the arbitration failed, the owners would be entitled to recover from the plaintiffs any loss caused by the arrest without having to prove mala fides or crassa negligentia (to use the old expressions). They would also have been able to obtain security for that claim. In my judgment the plaintiffs must bear their share of the responsibility for the fact that the arrest was not maintained in Holland. In these circumstances it appears to me that on the facts of this case the position here should be the same as it would have been in Holland if the arrest had been maintained and that it would be oppressive to permit the plaintiffs to retain the security for their claim if to do so would put them in a better position than they would have been in Holland. On the other hand, the maintenance of the security will not be oppressive if appropriate counter-security is given. (per Clarke J. at 481; 484)

8.2.1. COURT’S DISCRETION TO PERMIT RE-ARREST

The Hero (1865) Br. & L. 447 [167 E.R. 436]:

[The earlier cases] would indicate that I have no power to grant a rearrest for the same cause of action after the property has been released on bail: but those expressions must be read subject to the fact which formed the ground of the decision in each of those cases, that the cause of action had passed into res judicata. I am of opinion that where application to increase the amount of the action is made before has been pronounced, the Court has power to direct measures to be taken to do full justice to the plaintiff. I am of opinion, therefore, that the Court has power to grant this motion, and that under the circumstances it is just and proper that the plaintiffs should be relieved from the mistake committed. I allow the rearrest, but the plaintiffs must pay all the expenses arising from their mistake. (per Dr Lushington at 447; [167 E.R. 436]) Naval Consulte Assitencia A Maquinas Maritimas LDA v. The Arctic Star, The Times, 5 February 1985 (C.A.):

[Counsel] referred us to a number of cases which establish the general rule that, once a vessel has been arrested and released on bail (whether in this jurisdiction or in any other jurisdiction) this court will not normally permit a second arrest, the reason being, as stated by my Lord, that the bail is said to represent the ship. But that rule is not without exceptions. The justification for the rule is, and always has been, the need to avoid oppression and unfairness. For myself, I can see nothing in the least oppressive or unfair in allowing the

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plaintiffs to arrest this vessel within this jurisdiction to top up their security in the circumstances which my Lord has mentioned. (per Lloyd L.J.)35

Det Norske Veritas AS v. The Clarabelle [2002] 3 N.Z.L.R. 52 (C.A.); [2002] 2 Lloyd’s Rep. 479:

… [I]n our view the principles relevant to the determination of the present application to re-arrest are clear and well settled. First, following arrest a plaintiff is entitled to security assessed on a reasonably arguable best case basis ... Departure from that approach may be appropriate, in which case strict terms designed to provide adequate alternative security, for example of the kind described in Meeson’s Admiralty Jurisdiction and Practice at par. 4-066 … are to be expected. But the present was not a case in that category.

Second, we do not accept the argument that re-arrest for the purpose of provision of increased security is only appropriate in exceptional circumstances. On the one hand there is a rule, or immunity, against re-arrest. Its expression is ordinarily couched in terms of the need to avoid oppression or unfairness to a ship’s owner who has already provided security and thereby secured the release of the ship in the first place. But, on the other hand, there are clear exceptions to that rule, including in the situation where security was fixed at an inadequate amount initially, or where the actions of the owner have rendered originally adequate security inadequate. In such cases, an application to re-arrest may be granted in fairness to the plaintiff. (per Panckhurst J. at 59-60)

8.2.2. RE-ARREST FOR THE COSTS OF THE ACTION The Freedom (1871) L.R. 3 A. & E. 495:

… [T]his Court can always issue a monition in personam for the payment of costs which have exceeded the amount in which the suit was instituted; moreover, if the vessel had not been bailed and were still under arrest, there can be no doubt that she would not be released without payment of costs, and the fact of bail having been given in no way affects the liability of the owner of the ship for costs as well as damages, and I think that even under the old law, if necessary, the Court would have ordered the re-arrest of the ship for the payment of costs. (per Sir Robert Phillimore at 498-499)

8.3. Arrest after release of a sister ship · “one claim, one ship” principle

The Marinero [1955] P. 68; [1955] 1 Lloyd’s Rep. 230; [1955] 2 W.L.R. 607:

The question then arises whether I am to extend what I may call the principle of The Christiansborg to a case in which it is not the offending ship, but another ship belonging to the same owners, which has been the subject of arrest in the foreign proceedings. It seems to me that the effect of what was done in Holland in the present case was to purchase the future immunity from arrest of the Marinero. It seems to me that the giving of the guarantee in the Dutch proceedings had that effect, just as much as if it had been the Marinero herself that had been arrested. I apprehend that if the Marinero were to proceed to

35 Also available on Lexis.

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Holland the Dutch court would refuse to sanction her arrest in respect of the same collision. It seems to me that to continue to harass the defendants by arresting their ship in this country, notwithstanding the provision of security in the Dutch proceedings, is in all the circumstances vexatious and contrary to good faith, just as much as was the action that was taken in The Christiansborg. (per Willmer J. at 74-75)

8.4. Arrest after security The Point Breeze [1928] P. 135; (1928) 30 Ll. L.R. 229:

In this case what the plaintiffs have been trying to do is to arrest the ship after they have got bail for their claim and have released the ship, and have got judgment, but before the amount of their claim is ascertained. Under the judgment the assessment of the damages was referred to the registrar, but he has not ascertained what amount is due, and it may well be that it will be some time before he does ascertain it. If the plaintiffs are right in their contention that they are entitled to arrest this ship, it seems to me that it will open the door to the re-arrest of vessels, or arrest after getting bail, whenever a party thinks that his claim may be more than he originally thought it was. No immunity from arrest will be obtained by giving bail, and the result of that, on the question of maritime liens, might be very serious. The only right to arrest in a damage case is that which the party claiming has got by a maritime lien, and a maritime lien follows the ship into other people’s hands. The position of people who have ships that have been released on bail – if I were to allow this arrest to stand – might be very unfortunate. (per Bateson J. at 142)

8.5. Arrest after another ship is mistakenly arrested · not an infringement of the “one claim, one ship” principle (9) Arrest after judgment

Reading · Toh Kian Sing, Admiralty Law & Practice (1998), 183-185

9.1. Enforcement of the judgment of a foreign court The City of Mecca (1879) 5 P.D. 28:

The question to be decided is whether this Court can and ought to enforce the sentence of a foreign admiralty court by a proceeding in rem. It appears to be expedient to make two preliminary observations. First, I express my opinion that whatever authority upon this subject was incident to the Court of Admiralty before the Judicature Act belongs to this Court now. Secondly, that this Court has always exercised a jurisdiction founded upon international comity with respect to the execution of the sentences of foreign admiralty courts. I proceed to consider the authorities on this subject in their chronological order, as it is important to shew that the duty of the Admiralty Court in England to enforce the decree of a foreign admiralty court has been steadily recognized for a great number of years. (per Sir Robert Phillimore at 30)

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9.2. Enforcement of a domestic judgment in rem 9.2.1. THE ENGLISH VIEW The Alletta [1974] 1 Lloyd’s Rep. 40:

If a ship may be arrested after judgment on liability has been obtained against her and she is by the date of the arrest the property of a third party who had bought her without knowledge of the maritime lien, grave injustice may be done. The third party may have no right of indemnity or, which is less unlikely supposition, his indemnity may be worthless. His vendor may, through lack of adequate funds, incompetent legal advice or other reason, not properly and fully have contested the issue of liability. Despite [counsel’s] efforts to answer these supposed circumstances by saying that the Court would find some method of reopening the issue of liability so as to enable the third party to contest it properly and anew, I cannot see how such an end could be achieved. The position would be quite different from that obtaining when an arrest is effected after transfer of the res to such a third party, but before there had been judgment on liability. The third party can then intervene; see O. 75, r. 17. Similar circumstances, mutatis mutandis, can readily and perhaps more realistically be envisaged in relation to the rights of a mortgagee, who can intervene to protect his interest, if this be possible on the facts, against the claim of a holder of an alleged maritime lien provided the vessel mortgaged be arrested before judgment on liability; aliter, if the arrest be subsequent to such judgment. (per Mocatta J. at 50)

· Cf. CPR 61.5(1)36 9.2.2. THE VIEW IN SINGAPORE

*The Daien Maru No. 18 [1984-1985] S.L.R. 536; [1985] 2 M.L.J. 90; [1986] 1 Lloyd’s Rep. 387:

→ Can always do so. It is necessary to consider on principle whether in an action in rem against a vessel the right to arrest that vessel is lost after judgment in that action has been obtained on the ground that the cause of action has merged in the judgment. In the consideration of this point it is helpful to start with the following basic propositions, which, on authorities, are incontrovertible. First, an admiralty suit in rem is an action against the res … Secondly, following from the first proposition …, if no appearance is entered by the defendant to such an action, judgment when entered is enforceable only against the res, quoad res and no more, and the defendant in such an action will not suffer any personal liability. Thirdly, once the defendant to an action in rem has entered an unconditional appearance he submits to the jurisdiction of the court personally and from then onwards the action continues as an action in rem and in personam … In consequence, if the judgment is not fully satisfied by enforcement thereof against the res, execution proceedings can be initiated against the defendant ... It must follow that in such a case the judgment when obtained is a judgment in rem against the res as well as in personam against the defendant personally, and it must further follow that the judgment can be enforced against the res by,

36 And see the obiter comments by David Steele J. in The Ruta [2000] 1 Lloyd’s Rep. 359, 365.

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a remedy in rem – the procedure of arrest. If it is correct that in an action in rem against a res, in which no bail has been put up for the res, the plaintiff after judgment cannot arrest the res, then it must follow logically that the judgment is not one operating in rem against the res and no recourse can be had against the res, except by way of a writ of seizure and sale which is an execution proceeding for enforcing a monetary judgment in personam. Such a conclusion is extremely strange and, in my view, untenable. (per L.P. Thean J. at 540-541)

(10) Applications relating to the property under arrest

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1566-1567; 1595-1597 · Toh Kian Sing, Admiralty Law & Practice (1998), 187-191

→ What happens after arrest? Most of the time, the s/o will provide security to obtain the ship’s release. If not, the ship is sitting there while the action proceeds to the merits. In the meantime, the ship is in the custody of the sheriff. If any interference with custody, will be in contempt of court. The sheriff or other parties can make an application to the Court for various orders. One of them is the Omnibus order – allows the sheriff to take appropriate measures to desert the ship, provision of fuel, water, food, to allow sheriff to move the ship…etc. 10.1. Generally � O. 70, r. 11 10.2. “omnibus” orders

C. Clausen Dampskibs-Rederi A/S v. The Om Alqora (No. 2) (1985) 38 S.A.S.R. 494:

… [T]he Marshal asked for an “omnibus order” in the following terms: That the Marshal be at liberty in his discretion at any time–

(a) to take measures to preserve the ship Om Alqora her machinery and equipment; (b) to move the Om Alqora within the limits of the port where she is lying under arrest, either for her safety or to comply with the requirements of the Port Authority; (c) to supply the minimum victuals, domestic fuel and water necessary to avoid hardship to the Master, officers and crew. (per Bollen J. at 501)

� sheriff is the agent of the court and not the parties � The sheriff will not execute a warrant of arrest unless he gets a satisfactory undertaking that he will be reimbursed for his costs. O70 r9(3). The Mari Chandris [1942] P. 94; (1942) 71 Ll. L.R. 225:

It is clear that the Admiralty authorities had the actual control of the ship when she was brought into St. Mawes Harbour. In law it appears to me at least probable that the Admiralty Marshal had, strictly speaking, the control, and it is suggested by Mr. Porges that the Marshal was in control as agent for the plaintiffs because he had been put in possession at their instance for their benefit. This contention raises the interesting and rather considerable point whether the Admiralty Marshal could ever be properly regarded as the agent of

35

any private individual. Without attempting to determine it I will only say that the first inclination of my mind is towards the belief that the Admiralty Marshal is the agent of the Admiralty Court, and acts for and on behalf of the court and is not in law the agent of anybody else. (per Langton J. at 96)

10.3. Applications by owners of bunkers

The Pan Oak [1992] 2 Lloyd’s Rep. 26:

… [T]he bunkers in a ship may belong to charterers, as frequently they do. Nevertheless in an action against the shipowners (in which there is no suggestion of any liability upon charterers) oil which is acknowledged to be the property of the charterers is sold by the Court. It is always accounted for separately. If it is agreed or proved that charterers were the owners of the oil when it was sold, the proceeds of the sale will be paid out to the charterers. If the oil is the property of the shipowners the proceeds of sale are available for distribution to creditors who establish a claim against the shipowners. In default of agreement between all caveators those claimants must be judgment creditors. But a great saving in costs can be effected by agreement between claimants. (per Sheen J. at 39)

10.4. Applications by owners of goods on board the vessel � request to the Sheriff to take appropriate measures � O. 70, r. 11(3)

10.5. Applications for inspection of the ship or other property � O. 70, r. 28 The Mare del Nord [1990] 1 Lloyd’s Rep. 40:

…. [It] may be helpful to practitioners if I set out what seem to me to be the principal matters to which the Court should have regard when exercising its discretion whether or not to order that samples be taken for the purpose of analysis. There is, of course, an infinite variety of circumstances which may arise. The Court should take into account all the circumstances of the particular case. The following matters appear to me to be important. The evidence on affidavit in support of the plaintiffs’ application must show that the plaintiffs have a good arguable case on the merits. Next, the plaintiffs must show that the taking of samples and analysis of, or any other experiment on, those samples may assist the Judge at the trial … Obviously there will be many borderline cases in which the decision will not be an easy one. It is in the interest of justice that, when in doubt, it is better to preserve evidence than to let pass an opportunity of obtaining evidence. Shipowners must be protected from unnecessary interference with the running of their ships. But, provided that shipowners are fully protected against any damage which they may suffer, the provision of a sample of oil which may be relevant to the issues in the action is no more burdensome than is discovery of many documents, the disclosure of which puts the shipowners to a great deal of trouble and inconvenience. Both processes help the Court to ascertain the true facts, and thus to reach a decision which is fair and correct. An order that shipowners must allow an inspection to be made of parts of their ship and samples to be taken of the oil in bunker tanks will probably cause

36

some inconvenience to the owners or charterers of the ship and possibly to others. Accordingly the plaintiffs should be required to give an undertaking in damages should it appear subsequently that the defendants have suffered loss as a result of the order obtained by the plaintiffs. The plaintiffs should also be required to give an undertaking to indemnify any third party adversely affected by the order. (per Sheen J. at 44-45)37

� an order as to inspection cannot be exercised in respect of a ship or property outside jurisdiction not to be exercised where these are not in the ownership, possession, custody or power of a person over whom the court has jurisdiction

Unicargo v. Flotec Maritime S. de R.L (The Cienvik) [1996] 2 Lloyd’s Rep. 395; [1996] C.L.C. 434:

In my judgment, there is no reason to give the words of O. 75, r. 28 other than their ordinary and natural meaning, save that it does seem to me that the rule cannot have been intended to give the Court power to make an order for the inspection of a ship or other property out of the jurisdiction which was not in the ownership, possession, custody or power of a person over whom the Court had jurisdiction, either because he was personally within the jurisdiction or because leave to serve an originating summons upon him out of the jurisdiction could be granted under O. 11, r. 1, or O. 73, r. 7. If the ship or other property were within the jurisdiction, I see no reason why the Court should not make an order for the inspection of the property even if it was not in the ownership, possession, custody or power of a person over whom the Court had jurisdiction. In fact such a situation is very improbable because in practice it would be likely to be in the ownership, possession, custody or power of a person who was in fact within the jurisdiction and thus of a person over whom the Court had jurisdiction. (per Clarke J. at 406)

(11) Intervention

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1572-1574 · Toh Kian Sing, Admiralty Law & Practice (1998), 191-195

→ MORTGAGEE’S, SHIP’S REPAIRERS..ETC ALL ALLOWED TO INTERVENE 11.1. Procedure · O. 70, r. 16 The Dowthorpe (1843) 2 W. Rob. 73 [166 E.R. 682]:

Now an interest to establish a persona standi in judicio is not an absolute right to a given sum of money: but if a person may be injured by a decree in a suit, he has a right to be heard as against the decree although it may eventually turn out that he can derive no pecuniary benefit from the result of the suit itself. (per Dr Lushington at 77; 166 E.R. 684])

37 Noted Dockray [1990] Lloyd’s Maritime & Commercial L.Q. 319-323.

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11.2. Intervener’s defence to the action → He does not actually prosecute his claim but rather protecting his interest in the arrested property. He can set up defences. The only limitation is that if you are intervening, you have no locus standi to raise issues which are not directly related to his interest. *The Soeraya Emas [1992] 1 S.L.R. 33:

The right to intervene as provided by this rule is consonant with the nature of admiralty proceedings in rem since a judgment entered in rem binds not only the defendant but all other persons who have an interest in the res. The significant words in O 70 r 16(1) are, “a person who has an interest in that property”. Such interest need not and generally does not have anything to do with the original subject matter of the action, or the matter in dispute which are essential requirements in non-admiralty or ordinary civil actions. A person who has been given leave to intervene in an admiralty action in rem does not prosecute his claim in that action. He protects his interest in the property by defending the action in rem. In doing so he will be permitted to set up such defences which the owners of the ship could have set up had they defended the action. (per Karthigesu J. at 43)

The Lord Strathcona [1925] P. 143:38

As to the first contention I asked and received no satisfactory answer to the question: What right have the interveners to raise this contention at all in this action? The interveners have a contractual right and nothing more. I cannot see what locus standi they have to dispute the validity of the plaintiffs’ mortgages. But I need not further consider this, for the interveners took the benefit of the performance of the charterparty by the Lord Strathcona Steamship Co. (No. 2) as owners for several seasons and cannot now be heard to say that the Strathcona Co. never were owners. As to the second contention, while it is clear that the interveners cannot, as against the plaintiffs, dispute the judgment which pronounced for the validity of the mortgages and condemned the ship, they are entitled to be heard when they allege that, by reason of their contractual right, the plaintiffs ought to be restrained from exercising their own rights as mortgagees in such a way as to interfere with the contractual right of the interveners; and the question is whether the interveners are entitled at all, or on the facts of this case, to limit the plaintiffs’ right to procure a sale by the Court. They cannot question the judgment in rem. Can they interfere with the plaintiffs’ right to obtain execution of that judgment by appraisement and sale? A similar question would be involved if, instead of proceeding in rem, the plaintiffs had taken possession and proposed to sell or to use the ship without regard to the charterparty. (per Hill J. at 150)

11.3. No direct interest, but adversely affected? → Generally allowed them to intervene. The Courts do so not because of a rule of law, but rather as part of their inherent jurisdiction recognized in the following case.

The Mardina Merchant [1974] 2 Lloyd’s Rep. 424; [1975] 1 W.L.R. 147:

This is an application by the British Railways Board (“the Board”) as interveners in an Admiralty action in rem for a direction to the Admiralty marshal to move a ship from the place where she is at present under arrest to another place.

38 See too The m.v. Brihope [1995] 1 M.L.J. 676.

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The Board are interested in this way. They are port authority at Newhaven and they are the owners of the berth at which the ship is lying and the presence of the ship under arrest at that berth is causing serious interference to the working of the port. The interference is such as to cause financial loss to the Board, and to persons who have rights of use of the jetties and berth in the harbour, and it is also resulting in ships being turned away from the port which would otherwise discharge there, and, because of this, causing harm to the reputation of the port I am of the opinion that there must be an inherent jurisdiction in the Court to allow a party to intervene if the effect of an arrest is to cause that party serious hardship or difficulty or danger. One can visualize cases where the presence of a ship in a particular place might cause not merely financial loss or commercial difficulty but even danger to persons or property. In all such cases it seems to me that the Court must have power to allow the party who is affected by the working of the system of law used in Admiralty actions in rem, to apply to the Court for some mitigation of the hardship or the difficulty or the danger. (per Brandon J. at 424-425)

The Nagasaki Spirit [1994] 2 S.L.R. 621:

I respectfully agreed with Brandon J. [in The Mardina Merchant] which in my view applied to the position Hitachi was in this case. Accordingly at the conclusion of the hearing before me on 29 September 1993 I gave leave to Hitachi to intervene in these proceedings and reserved for mature consideration whether the expenses incurred by Hitachi, as claimed, could in law, be considered to be part of the Sheriff’s expenses. In this case when the Nagasaki Spirit was arrested she was in a disabled state, badly damaged and burnt. She was then in relative safety at Hitachi’s shipyard. There was a duty on the Sheriff into whose custody she came when the warrant of arrest was executed to see that the Nagasaki Spirit was preserved and maintained in the state in which she was when arrested. If she was moved she would have to be moved to another shipyard for it was plainly evident that she could not have been laid up anywhere else except in the safety of a shipyard. She could not have been towed out to an anchorage in the condition in which she was, as without motive power she would have been a hazard to other shipping and exposed to the elements, she would deteriorate to a worthless hulk. Had the Sheriff been appraised of the condition in which the Nagasaki Spirit was in at the time of her arrest, which, in my view, the plaintiffs, the arresting party, should have done but which they failed to do, the Sheriff would have come to some arrangements with Hitachi for her to remain alongside at its shipyard and for the necessary care to be accorded to her to preserve and maintain her to prevent her from depreciating in value. Of this I have no doubt. What should have been done by the Sheriff was done by Hitachi and although it was done, partially in its own interest, that is money was expended to prevent the Nagasaki Spirit from becoming a wreck in its own shipyard, it benefitted all those who have claims on the Nagasaki Spirit. That it was done without the prior sanction of the Sheriff begs the question in the particular circumstances and exigencies of this case. (per Karthigesu J.A. at 626; 631-632)

(12) Preliminary acts

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1574-1581

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· Toh Kian Sing, Admiralty Law & Practice (1998), 195-197

→ Relates to section 3(1) of the HC(AJ)A.

12.1. Procedure: purpose

· O. 70, r. 17 The Vortigern (1859) Swa. 518 [166 E.R. 1242]:

Preliminary acts were instituted for two reasons,-to get a statement from the parties of the circumstances recenti facto, and to prevent the defendant from shaping his case to meet the case put forward by the plaintiff. In practice they have been found very useful; and neither party is allowed to depart from the case he has set up in his preliminary act. Some of the facts stated in the preliminary act are facts absolutely within the knowledge of the party making the statement, some are matters of opinion only. The Court will expect correctness where correctness is in the power of the party. (per Dr Lushington at 518 [166 E.R. 1243])39

12.2. Effect of filing a preliminary act The Nagasaki Spirit (No. 1) [1994] 1 S.L.R. 434:

By O. 70, r. 17 of the RSC, in an action to enforce a claim for damage, loss of life or personal injury arising out of a collision between two ships, unless the court otherwise orders each party is required to file a document in a closed and sealed envelope giving certain specified information about the circumstances of the collision. It is called a preliminary act. The purpose is to require each party to state its version without knowing the version of the other. Except where the court grants dispensation one party cannot demand of the other information on the cause of the collision. The defendants are therefore precluded from revealing their case before preliminary acts have been filed by both parties. The plaintiffs could apply to dispense with preliminary acts but they had not done so. Nonetheless I was prepared to assume for the purpose of this interlocutory matter that a collision where both ships are in motion at open sea is a sufficient circumstance from which to infer some negligence on the part of both vessels. (per Selvam J.C. at 440)

The Seacombe; The Devonshire [1912] P. 21:

In my opinion, the learned judge took a wrong view of the nature and status of the statements in the preliminary act. They are not mere pleading allegations. They are statements of fact made under such circumstances that they rank as formal admissions of fact binding the party making them perhaps as strongly as any admissions of fact can do. An admission of fact, as such, does not constitute an estoppel. It may be shewn that it was made under mistake, and the Court may be satisfied that such was the case; but it is evidence against the party making it, its strength varying according to the conditions under which it is made. An admission, under circumstances which necessitate that it must have been made after full consideration, has an evidential value far higher than a casual admission made without any opportunity of reflection or verification. The statements of fact in a preliminary act are statements which must be

39 See also The Frankland (1872) L.R. 3 A. & E. 511: “The object of the preliminary act is to obtain from the parties statements of the facts at a time when they are fresh in their recollection …” (per Sir Robert Phillimore at 511).

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presumed to be made after the most careful examination and consideration. To my mind they carry such weight, from the nature of a preliminary act and from the circumstances under which it is made, that I should doubt whether otherwise than under the most special circumstances, and with the special leave of the Court, a party would be allowed to depart from the admissions in the preliminary act, at all events as far as evidence-in-chief is concerned. The judge was, therefore, in my opinion, wrong in refusing to take the statements in the defendants’ preliminary act into consideration in arriving at his decision. (per Fletcher-Moulton L.J. at 59)40

12.3. Failure to lodge a preliminary act · O. 70, r. 18

Further reading

� Nigel Meeson, Admiralty Jurisdiction and Practice 1st ed. (1993), Chapter 7 (“Collision Actions”)41

(13) Judgment by default

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1581-1585 · Toh Kian Sing, Admiralty Law & Practice (1998), 197-200

13.1. Grounds

· failure of a party at whose instance a caveat against arrest was issued to fulfil the undertaking given by him to procure the caveat within 14 days after service of the writ

· failure of the defendant to enter an appearance within the prescribed time · failure by the defendant to serve a defence within the prescribed time

· failure of a defendant to a counterclaim to serve a defence to the counterclaim in the prescribed time

13.2. Procedure · O. 70, r. 20 (14) Summary judgment

Reading · Toh Kian Sing, Admiralty Law & Practice (1998), 200

→ Judgment in default is when the other party fails to comply with procedure in some way.

40 See also The Channel Queen [1928] P. 157, 160-161 (per Bateson J.); The Semiramis [1952] 2 Lloyd’s Rep. 86, 93 (per Willmer J.). 41 See the 3rd ed. (2003) – the same chapter – in relation to such claims under the CPR.

41

→ A summary judgment is an instant judgment. When one party has a hopeless case, has not entered a defence…etc. Not often in admiralty proceedings.

14.1. The pre-1999 United Kingdom position · RSC, O. 14(1)(2)(c) – no summary judgment in an action in rem42 14.2. Position in Singapore

The August 8 [1983] 2 A.C. 450 (P.C.); [1983] 2 W.L.R. 419; [1983] 1 Lloyd’s Rep. 351:

In their Lordships’ opinion, the situation in this respect as it now exists under the present Rules of the Supreme Court in England cannot have any bearing whatever on the situation which exists under the differently worded Rules of the Supreme Court of Singapore 1970. So far as the situation which existed in England before 1975 is concerned, there are historical reasons, derived from the organisation of the High Court in England in a number of separate divisions, which explain the fact that Admiralty actions, whether in rem or in personam, were formerly excluded from the scope of Order 14. As to the continued exclusion, even after the amendment of the relevant rules in 1975, of Admiralty actions in rem from the scope of Order 14, there may or may not be sensible reasons for it. But, whether there be sensible reasons or not for such exception, so far as English procedure is concerned, their Lordships can see no justification whatever for importing it into paragraph (2) of Order 14, rule 1 of the Rules of the Supreme Court of Singapore 1970, which do not, and it must be presumed intentionally do not, contain any such exception. (per Lord Brandon at 455)

(15) Appraisement and Sale

Reading � Jeffrey Pinsler (ed.), Singapore Court Practice 2003 (2003), 1588-1591 · Toh Kian Sing, Admiralty Law & Practice (1998), 201-208

→→→→ This is what happens after judgment. Assuming the ship is still under arrest. 15.1. Procedure · O. 70, r. 22 + Forms 165 + 166 15.2. Appraisement · necessity in order to ensure that a ship is not sold below its true worth

The Halcyon The Great (No. 2) [1975] 1 Lloyd’s Rep. 525:

I was not satisfied on the evidence that there would necessarily be a better bid if the ship were re-offered. It seemed to me at least possible that there might not even be such a good bid. There was, therefore, to my mind a risk involved in doing what the parties interested wished me to do. In order to get over that risk I asked Counsel for the plaintiffs whether his clients and their parent company

42 See Meeson 1st ed. (1993) 117.

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would be willing to give an undertaking to the Court, which would have the effect of indemnifying the Court against any loss which might be sustained as the result of refusing the Marshal leave to accept the highest bid at present available and directing him to re-offer the ship for sale. An undertaking has been offered, and approved by the Court, and has now been reduced to writing and signed on behalf of the plaintiffs and their parent company. I shall order that the Admiralty Marshal be not at liberty to sell the ship for less than the appraised value without further order of the Court, but that he do re-offer the ship for sale, again in such currency as he thinks fit. (per Brandon J. at 526-527)

15.3. Sale pendente lite43 15.3.1. BACKGROUND The Myrto [1977] 2 Lloyd’s Rep. 243:

So far as the sources of the power are concerned it appears to be derived, in the first place at least, from the inherent jurisdiction of the Court, exercised before the Judicature Acts by the High Court of Admiralty, and inherited by the unified High Court created by those Acts. Referring to the power of a Court to sell property under arrest, Mr. Justice Blackburn, giving the opinion of himself and four other Judges on a question put to them by the House of Lords in Castrique v. Imrie, (1869) L.R. 4 H.L. 414, said at p. 428:

It is not essential that there should be an actual adjudication on the status of the thing Our Courts of Admiralty, when property is attached and in their hands, on a proper case being shown that it is perishable, order that it shall be sold and the proceeds paid into Court to abide the result of the litigation. It is almost essential to justice that such a power should exist in every case where property, at all events perishable property, is detained.

The figure (1) appears as a suffix to the word “order” in this passage, and there is a footnote which reads: “(1) For the benefit of all parties concerned”. The power of the Court in this respect derived from its inherent jurisdiction appears to be supplemented, and/or its exercise regulated, by R.S.C., O. 29, r. 4. (per Brandon J. at 259)

15.3.2. PROCEDURE · O. 29, r. 4

Sale of perishable property, etc. (O. 29, r. 4) 4. —(1) The Court may, on the application of any party to a cause or matter, make an order for the sale by such person, in such manner and on such terms (if any) as may be specified in the order of any movable property which is the subject-matter of the cause or matter or as to which any question arises therein and which is of a perishable nature or likely to deteriorate if kept or which for any other good reason it is desirable to sell forthwith. (2) Rule 2 (5) and (6) shall apply in relation to an application for an order under this Rule as they apply in relation to an application for an order under that Rule.

43 “pending litigation”.

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15.3.3. GROUNDS · good reason The Myrto [1977] 2 Lloyd’s Rep. 243: → Many factors such as the amount of time between arrest and judgment. The Court must also take in account the interests of all the parties. So if the s/o doesn’t want the ship sold, the court will consider this. But this is not irregular.

I accept that the Court should not make an order for the appraisement and sale of a ship pendente lite except for good reason, and this whether the action is defended or not, I accept further that, where the action is defended and the defendants oppose the making of such an order, the Court should examine more critically than it would normally do in a default action the question whether good reason for the making of an order exists or not. I do not accept, however, the contention put forward for the owners, that the circumstance that, unless a sale is ordered, heavy and continuing costs of maintaining the arrest will be incurred over a long period, with consequent substantial diminution in the value of the plaintiffs’ security for their claim, cannot, as a matter of law, constitute a good reason for ordering a sale. On the contrary, I am of opinion that it can and often will do so. (per Brandon J. at 260)

Further reading

· D. Rhidian Thomas, “Admiralty Sales Pendente Lite” (1998) 17 Civil Justice Q. 409-420.

15.4. Preparatory steps � court to act in the interest of all the parties whenever possible The Honshu Gloria [1986] 2 Lloyd’s Rep. 63:

The Court must do its best to safeguard the interests of all parties, but that is not the same as saying that the Court has no power to order expenditure unless it is for the benefit of all parties. Money may be expended if the likely result of that expenditure will be to increase the price which will be obtained for the ship by more than the amount of that expenditure. Nevertheless, if the price realized on sale is less than the amount due on a mortgage that expenditure will not have been of any benefit to claimants who rank after the mortgagees. If [counsel] is right that an application to the Court should be made before the ship is sold there is no way of knowing whether the expenditure will have been a benefit to anyone. If the ship is sold for scrap no one will benefit. If the sum realized is very small it may do no more than satisfy the claims for wages of the master and crew. There are many other possibilities. (per Sheen J. at 66)

15.4.1. MASTER AND CREW

Hobbs, Savill & Co. Ltd. v. The Vasilia [1972] 1 Lloyd’s Rep. 51:

In this motion in default of appearance by the defendants, the plaintiffs, Hobbs, Savill & Co. Ltd., sought leave, as mortgagees of the Panamanian motor vessel

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Vasilia, to make payments through the Admiralty Marshal to the master and crew to enable them to be signed off and repatriated. The sum advanced was to be £4500, the balance of which, after repatriation expenses, was to be shared among the crew in proportion to their wages claims. [Brandon J.] granted leave and also gave the plaintiffs leave to be subrogated to the rights of the master and crew in respect of their claims for wage arrears. Members of the Vasilia’s crew had continued to live on board since the vessel was arrested at Fleetwood on Aug. 20. On Dec. 16, [Brandon J.] made an order for the Vasilia’s appraisement and sale, but directed that it should lie in the office until the Greek crew were repatriated. Mr. J. C. B. Gilman (instructed by Messrs. Holman, Fenwick & Willan) for the plaintiffs; Mr. A. P. Clarke (instructed by Messrs. Charles Ingham, Clegg, Crowther & Laytons) for the master and crew. Mr. GILMAN said that in the previous motion he and Counsel then appearing for the master and crew discussed the prospect of an agreement which would enable the crew to leave the ship and the vessel to be sold. Agreement had now been reached subject to approval. The Vasilia had been valued at about £40,000. Claims by the master and crew had been put at about £17,000, but no writ had yet been issued on their behalf. Other caveators had been given notice of today’s motion. Mr. CLARKE said that his side had accepted the agreement because it was considered to be the only basis on which the mortgagees could be persuaded to put up the money. Unless the vessel was sold nobody would be in a position to recover anything. [Brandon J.] approved the agreement in principle, subject to further consideration of the form of the order.

15.4.2. PROPER MAINTENANCE OF THE SHIP The Westport (No. 2) [1965] 1 Lloyd’s Rep. 549:

This motion asks that an order be made for the Admiralty Marshal to put in hand repairs to the feed-water pump of the Westport. This ship is under the arrest of this Court, which has already ordered her appraisement and sale pendente lite, which order was made, strangely enough, on the defendants’ application on Mar. 23, 1965. I am informed by the Admiralty Marshal that about the time the crew left the ship on Mar. 19, 1965, cement box repairs to one of the feed pumps were found to have failed to such an extent that it was, and is, impossible to maintain working pressure in the boilers. Without dismantling the pump the full extent of the damage to it cannot be ascertained. I am informed that the ship was built in Canada in 1945. The Admiralty Marshal is advised that any spare parts which may be required are unlikely to be available in this country and might well have to be made; the casting of one of the parts may well be necessary. The delay caused by the fabrication of these parts, should it be necessary, may well amount to two or three weeks. The brokers have advised that it would be sound commercial practice to repair the ship forthwith so that the ship, the sale of which has been advertised, may be sold as a going concern. In their view the price this vessel may realize could be adversely affected if the pump was unfit for its work as the ship would have to remain idle after purchase until it was repaired. The owners of the ship, who have not appeared in this motion, have informed the Admiralty Marshal that there is no substance in the brokers’ opinion and that the probable cost of repairs and survey, estimated to be between £200 and £300, is put too high. The Court must do its best to safeguard the interests of all claimants as well as

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the owners of the ship and, accepting the opinion of the brokers, as I do, I accede to these plaintiffs’ prayers that the Admiralty Marshal do arrange for repairs to the feed pump and necessary survey forthwith. (per Hewson J. at 549-550)

15.5. Judicial sale → Any judicial sale of the court must be effected by the Court. � no interference by private parties The Ruth Kayser (1925) 23 Ll. L.R. 95:

…[W]hen an order for sale had been made in that Court, and the owner chose to carry out some private negotiations of his own, he would land himself into difficulty, while anyone dealing with him would know he could not give a good title. If an owner in such circumstances got private information, his duty was to bring it to the attention of the Marshal so that everyone might benefit by it. He was not going to have private owners interfering with the orders of the Court when it gave an order that there was to be a sale. If anyone did interfere, he would have to consider whether it was contempt of Court or not. If there were any private offers, let them be brought to the notice of the Marshal. The sale must go on by the Marshal without interference. (per Hill J. at 95-96)

The A.P.J. Shalin [1991] 2 Lloyd’s Rep. 62:

While a ship is under arrest, that ship is in the custody of the [Admiralty] Marshal. It is immaterial who are the owners. If the owners can find someone willing to purchase a ship under arrest, they can sell the ship, but it will remain under arrest. But when an order for sale by the court has been made, there cannot be a private sale because that would be open to abuse. All offers to purchase the ship must be made to the Admiralty Marshal who must realise the highest price obtainable. Private negotiations could adversely affect the market, because they could have the result that potential bids would be withheld. If all parties with a claim against the ship agree to a sale, they can seek the approval of the Court. (per Sheen J. at 67)

*Elinoil-Hellenic Petroleum Co. S.A. v. Wee Ramayah [1999] 4 S.L.R. 513

� highest price � Usually still not sufficient to satisfy the claim.

The Silia [1981] 2 Lloyd’s Rep. 534:

When this Court orders that a ship is to be sold it is the duty of the Admiralty Marshal to realise the highest price, and it is his practice to sell the ship and her contents, other than those articles which are the personal property of someone other than the owner of that ship. He permits the removal of the personal effects of the crew and equipment which is on hire; he destroys perishable food or other food which might attract vermin. In order to realise the highest price it was the practice in the past for the Marshall to sell separately from the ship such things as tinned food, stores, barometers and chronometers. The manner in which such items are sold is left to the discretion of the Marshal. Barometers and chronometers and stores are now sold with the ship. Unbroached drums of oil are usually sold separately. But the oil in the ships tanks must, for practical reasons, be sold with the ship. Those reasons are as follows. In some parts of this country the removal of fuel oil is prohibited because of the hazards

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involved. But even where that operation is permitted the oil would have to be pumped out of the tanks. In the case of a ship under arrest the need to remove oil would be likely to occur at a time when pumps are not in operation and when no engine-room personnel are available. The oil would have to be pumped into a barge or land tanker, and the cost of the operation would have to be paid for. The quantity of oil might be too small to justify the cost of removing it. Furthermore, if the oil were removed from the ship it would be likely to attract import duty. On the other hand, that oil will realise the current market price if it is sold in the ship ... It is the practice of the Admiralty Marshal to account separately for the proceeds of fuel and lubricating oil sold with the ship because the brokers are entitled to commission on the price of the ship, but not on the price of the oil. (per Sheen J. at 535)

15.6. Effect of a judicial sale � purchaser obtains a clean title, free of all liens44 � all claims to be brought against the proceeds of the sale and not the res

The Acrux [1962] 1 Lloyd’s Rep. 405:

The title given by such process [a sale by the Admiralty Marshal] is a valid title and must not be disturbed by those who have knowledge or who may receive knowledge of the proceedings in this Court. So far as all the claimants against this ship before her arrest are concerned, their claims are now against the fund in this Court and not against the ship properly sold to an innocent purchaser free of encumbrances. Were such a clean title as given by this Court to be challenged or disturbed, the innocent purchaser would be gravely prejudiced. Not only that, but as a general proposition the maritime interests of the world would suffer. Were it to become established, contrary to general maritime law, that a proper sale of a ship by a competent Court did not give a clean title, those whose business it is to make advances of money in their various ways to enable ships to pursue their lawful occasions would be prejudiced in all cases where it became necessary to sell the ship under proper process of any competent Court. It would be prejudiced for this reason, that no innocent purchaser would be prepared to pay the full market price for the ship, and the resultant fund, if the ship were sold, would be minimised and not represent her true value. (per Hewson J. at 409)

© Associate Professor Dr Stephen Girvin 3 February 2004.

44 See The Cerro Colorado [1993] 1 Lloyd’s Rep. 58, followed by the Federal Court of Australia in Readhead v. Admiralty Marshal 87 F.C.R. 229 (per Ryan J.).