Cretanor Maritime Company Ltd v Irish Marine Management Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BUCKLEY,LORD JUSTICE GOFF,SIR DAVID CAIRNS |
| Judgment Date | 15 February 1978 |
| Judgment citation (vLex) | [1978] EWCA Civ J0215-1 |
| Docket Number | 1976 C. No. 10240 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 February 1978 |
In the Matter of the Arbitration Act, 1950
and
In the Matter of an Arbitration
[1978] EWCA Civ J0215-1
Lord Justice Buckley
Lord Justice Goff
and
Sir David Cairns
In The Supreme Court of Judicature
Court of Appeal
On Appeal from the High Court of Justice
Queen's Bench Division
(Mr. Justice Donaldson, in Chambers)
MR. PETER HILLETT Q.C. and MR. M. PICKERING (instructed by Messrs, nce. & Co., Solicitors, London) appeared on behalf of the Claimants (Appellants).
MR. G.M. GODFREY Q.C. and MR. A. LONGMORE (instructed by Messrs. Richards, Butler & Co., Solicitors, London) appeared on behalf of the Respondents (Respondents).
The claimants in these proceedings, Cretanor aritime Co. Limited. (whom I shall call "the owners") are a company incorporated in Cyprus. They have had no place of business in England at any material time. The respondents, Irish Marine Management Limited. (whom I shall call "the charterers") are a company incorporated in the Irish Republic and carrying on business there. The owners own a vessel called "Cretan Harmony". On 7th November 1974 the owners chartered this vessel to the charterers.
On 25th March 1975 the charterers executed a debenture in favour of the Ulster Bank Ltd. (whom I shall call "the Bank") creating a floating security for all monies due or to become due by them to the Bank. By the debenture the charterers charged their undertaking and all their property both present and future including uncalled capital. Condition 1 of the Conditions endorsed on that debenture provided that it should rank as a first charge on the property charged and be a floating security but so that the charterers should not be at liberty to create any mort-gage or charge in priority to or pari passu with it. Condition 10 conferred upon the debenture holder a power to appoint a Receiver in common form and provided that any Receiver so appointed should have power to take possession of, collect and get in the property charged by the debenture and for that purpose to take any proceedings in the name of the company or otherwise. It further provided that a receiver so appointed should be deemed to be the agent of the company and that the company should be solely responsible for acts or defaults and for his remuneration. That debenture was registered with the Registrar of Companies in Dublin in accordance with the (Irish) Companies Act 1963.
Disputes subsequently arose under the charterparty whichwere referred to arbitration in London in January 1976. On 9th April 1976 the owners applied ex parte to Mr. Justice Mocatta for on order restraining the charterers from removing or disposing of any assets out of the jurisdiction up to a sum of U.S. $700,000, or the sterling equivalent, until fourteen days after the publication of the award or further order. The learned judge granted the injunction, the precise terms of which are "It is ordered and directed that the respondents by themselves their servants or agents or otherwise howsoever be restrained and an injunction is hereby granted restraining them from removing or disposing out of the jurisdiction any assets up to the sum of U.S. $700,000 or the sterling equivalent until fourteen days after the publication of the award in any arbitration between the claimants and the respondents or further order". The language is not entirely felicitous, for the expression "disposing out of the jurisdiction any assets" is clumsy and, I think, ambiguous. The words "up to the sum of U.S. $700,000 or the sterling equivalent" must be taken to mean that the restraint is not to operate so long as assets to that value remain.
In the arbitration the owners claimed the sum of U.S. $700,000 against the charterers, but on 28th Nay 1976 the arbitration was compromised by an agreement in writing. The agreement recited the injunction. It provided that the charterers should pay to the owners the sum of U.S. $375,000 by five instalments, the first of which was to be $200,000 payable on 21st June 1976. Post-dated cheques were to be given by the charterers for the succeeding four instalments, which cheques were to be deposited with Messrs. Richards Butler & Co., the solicitors acting for the charterers aid now for the Receiver, within seven days of the signature ofthe agreement and were to be released only at the specific request of the owners on or after the respective dates upon which the several instalments were to fall due. Clause 7 of the agreement was in the following terms: "For their part Owners agree that upon receipt of the U.S. $200,000 referred to in Clause 2 above and receipt of Richards Butler & Co. letter acknowledging that they hold the post-dated cheques referred to in Clause 3 hereof and upon performance by Charterers of their obligations under Clause 5 hereof they will immediately take steps to withdraw the injunction and arrange for an adjournment sine die of the London arbitration and Irish Court proceedings". Clause 8 provided "Owners agree that on receipt of all sums due under Clauses 1 and 2 hereof they will arrange for discontinuance of the London arbitration and Irish Court proceedings and shall if required execute a formal release freeing Charterers of all liability under the time charter". Clause 9 was in these terms: "Should Charterers breach any of their obligations set out herein it is agreed that Owners shall have the option of claiming all amounts referred to in Clauses 1 and 2 of this agreement or proceeding with the London arbitration and Irish Court proceedings or pursuing any other remedies open to them". It was provided that the agreement should be governed by English law. On 28th Nay 1976 the terms of the agreement were by common consent varied so as to provide that the first instalment should be U.S. $119,719.07 payable on 12th August 1976. The balance of the $375,000 was to be paid by five instalments of amounts differing from the amounts originally agreed, the Last of which instalments was to be payable on 30th November 1976.
The charterers paid $93,364.41 under this agreement but nothing more.
On 25th October 1976 the owners commenced an action against he charterers by writ in the Queen's Bench Division, Commercial Court, for a sum of $281,635.59. On 24th January 1977 they recovered judgment for that amount under Order 14. That judgment is unsatisfied.
The debenture had been guaranteed by a Mr. Mullion who was called upon by the Bank to honour his guarantee and did so. On 23rd September 1976 the debenture was assigned by the Bank to Mr. Mullion. On 27th September 1976 Mr. Mullion appointed a Receiver under the debenture.
The charterers became entitled to receive certain insurance monies in respect of another vessel. The underwriters accounted to the charterers' insurance brokers, who drew cheques in favour of the Receiver in the sum of $70,494.73. This sum is now represented by a certificate of deposit issued by the First National City Bank dated 28th October 1977 payable 180 days after date. It constitutes, so far as I am aware, the only asset of the charterers within this jurisdiction.
On 24th November 1977 the Receiver applied by summons in the arbitration proceedings for an order discharging the injunction and, if necessary, appointing him Receiver for the purpose of getting in any assets of, or debts owing to, the charterers in England, upon that summons Mr. Justice Donaldson on 29th November 1977 ordered that the charterers should procure that the certificate of deposit be held to the order of the Court. Upon a further hearing the summons on 2nd December 1977 Mr. Justice Donaldson discharged the injunction and ordered that the certificate of deposit be released by Messrs. Richards Butler & Co. to the charterers at the expiration of 21 days from the date of that order unless the ownersshould before then have lodged notice of appeal, in which case the order should be stayed until further order. He gave the owners Leave to appeal. The present appeal is from that order.
Mr. Millett, appearing for the owners, has presented his argument in support of the appeal under four heads. (1) The Receiver, he says, applies for the discharge of the injunction in the name of the company, and as the company's agent. The company could not secure the discharge of the injunction without first satisfying the conditions of Clause 7 of the compromise agreement, which they have not done. The Receiver can be in no better position. (2) It is submitted that it is an implied term of the compromise agreement that the injunction should not be discharged until the conditions of Clause 7 have been fully complied with. The agreement in this respect constituted a dealing with the charterers' assets at a time when the charge under the debenture was still floating. It consequently binds the Receiver. (3) Alternatively, if there is competition for priority between the owners and the debenture holder the rights of the owners to maintain the injunction have priority over rights arising on a subsequent appointment of a Receiver. (4) If that is not so, nevertheless the rights of the owners prevail over rights resulting from the appointment of a foreign Receiver under a foreign floating charge.
Before dealing with these arguments it may, Is think, be convenient if I say something about the form and effect of the various injunctions which have been granted in those reported cases in which recourse has been had or has been sought to this kind of relief, which seems to have acquired the label of a Mareva injunction. They are four in number. In Nippon Risen Kaisha v. G. & J. Karageorgis (1957) 2 Lloyd's Law Reports, 137 and (1957) All England Reports, 282, an injunction was granted (as the Court file shows) restraining the defendants ...
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