Iraqi Ministry of Defence v Arcepey Shipping Company S.A. (Angel Bell)
| Jurisdiction | England & Wales |
| Court | Queen's Bench Division (Commercial Court) |
| Year | 1979 |
| Date | 1979 |
Injunction - Interlocutory - Mareva injunction - Cargo owners claim for damages - Injunction restraining shipowners from disposing of assets within jurisdiction - Assets forming security for repayment of creditors' prior loan - Creditors intervening and seeking variation of injunction - Court's jurisdiction to vary Mareva injunction - Ships' Names - Angel Bell
The plaintiffs, who claimed damages against the defendants, a Panamanian company, for the loss of cargo on board the defendants' ship when she sank, obtained a Mareva injunction restraining the defendants from dealing with the defendants' assets situated within the jurisdiction and removing the assets therefrom. The defendants' creditors who claimed repayment of a loan obtained leave from Donaldson J. to intervene in the action. The only assets were the proceeds of the ship's insurance policies held by brokers and they were insufficient to meet the claims of both the plaintiffs and the interveners On an issue between the plaintiffs and the interveners concerning the disposition of the insurance moneys, the judge held that the interveners were equitable mortgagees of the ship and assignees of the policies with title to sue on them. The plaintiffs having raised the question whether the interveners ought to have been registered as moneylenders, the judge ordered the trial of a further issue as to the legality of the loan. Subsequently however, the interveners applied for a variation of the injunction to permit the brokers to repay the amount of the loan from the insurance moneys, contending that the payment would be a payment made in good faith in the ordinary course of business and that Mareva injunctions were not designed to prevent transactions of that kind.
On the application to vary the Mareva injunction: —
Held, granting the application, that the purpose of the Mareva jurisdiction was not to improve the position of any claimants to the property of an insolvent debtor but rather to prevent the injustice of a foreign defendant in English proceedings causing assets to be removed from the jurisdiction in order to avoid the risk of having to satisfy a judgment in pending proceedings in this country; that, therefore, as the plaintiffs had not yet proceeded to judgment but were merely claimants for an unliquidated sum, the defendants should not be prevented from using their assets to pay their debts as they fell due, that it was immaterial whether or not the loan was illegal as the interveners, in applying for a variation of the injunction so that the defendants' insurance brokers would be free to repay the loan, were not seeking to enforce the loan; and that, in the circumstances, to permit the variation of the terms of the injunction would not be inconsistent with the policy underlying the Mareva jurisdiction (post, pp. 494G–H, 495A, C–D, F–H).
The following cases are referred to in the judgment:
Chartered Bank v. Daklouche [
Cretanor Maritime Co. Ltd. v. Irish Marine Management Ltd. (The Cretan Harmony) [
Etablissement Esefka International Anstalt v. Central Bank of Nigeria [
Mareva Compania Naviera S.A. v. International Bulkcarriers S.A. [
Nippon Yusen Kaisha v. Karageorgis [
Rasu Maritima S.A. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Government of the Republic of Indonesia intervening) (Pertamina) [
Siskina (Owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [
Third Chandris Shipping Corporation v. Unimarine S.A. [
The following additional cases, supplied by courtesy of counsel, were cited in argument:
Compania Merabello San Nicholas S.A., In re [
Gebr Van Weelde Scheepvaart Kantoor B.V. v. Homeric Marine Services Ltd. [
Montecchi v. Shimco (U.K.) Ltd. [
Negocios Del Mar S.A. v. Doric Shipping Corporation S.A. [
SUMMONS
By an order of June 9, 1977, Jupp J. granted the plaintiffs, Iraqi Ministry of Defence, Iraqi Stores Co., Middle East Traders, Messrs. Renco, Abu Dhabi Furniture and the Ministry of Water and Electricity, a Mareva injunction restraining the defendants, Arcepey Shipping Co. S.A., from dealing with the defendants' assets within the jurisdiction of the court and from removing any of the assets from the jurisdiction. By an order of June 21, 1977, Kerr J. continued the injunction.
Donaldson J., having given leave to Gillespie Bros. & Co. Ltd., who were creditors of the defendants, to intervene in the action, gave judgment on March 16, 1979, upholding the interveners' claim that an outstanding loan was secured on the ship's insurance policy moneys held by English brokers. The plaintiffs having raised the question whether the interveners were carrying on business as moneylenders without being so registered, the judge gave leave for the pleadings to be amended and ordered the trial of the issue as to the legality of the loan, pending which the plaintiffs' appeal against the previous decision was allowed to stand over.
By summons dated October 22, 1979, the interveners sought an order that the injunction be varied to permit the payment to them of £200,000, being part of the insurance proceeds. Judgment was given in open court after a hearing in chambers.
The facts are stated in the judgment.
Anthony Colman Q.C. and Nigel Teare for the interveners.
John Hobhouse Q.C. and Alan Pardoe for the plaintiffs.
November 13. ROBERT GOFF J. read the following judgment. There is before the court an application by Gillespie Bros. Ltd., who are interveners in this action. Their application is for an order varying a Mareva injunction which was ordered at the instance of the plaintiffs in the action restraining the defendants in the action from dealing with their assets within the jurisdiction of the court and from removing any of such assets from the jurisdiction.
The matter arises as follows. The plaintiffs in the action (to whom I shall refer simply as “the plaintiffs”) were the owners of cargo shipped on a vessel called the Angel Bell. The defendants, who are a Panamanian company, were the owners of the vessel. On February 18, 1976, the Angel Bell sank with the plaintiffs' cargo on board. The plaintiffs then commenced proceedings against the defendants claiming damages in a sum of about $3 million in respect of the loss of their cargo. On...
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