Nimenia Maritime Corporation v Trave Gmbh & Company

JurisdictionEngland & Wales
Judgment Date21 February 1986
Neutral Citation[1983] EWCA Civ J0729-3
Judgment citation (vLex)[1986] EWCA Civ J0221-7
Docket Number83/0351,86/0184
CourtCourt of Appeal (Civil Division)
Date21 February 1986
Ninemia Maritime Corporation
Trave Schiffahrtsgesselschaft m.b.H. Und Co. K.G.

[1983] EWCA Civ J0729-3


Lord Justice Eveleigh

Lord Justice Kerr


Lord Justice Dillon





Royal Courts of Justice

MR JOHN GRIFFITHS Q.C. and MR BERNARD. EDER, instructed by Messrs Ince & Co., appeared for the Appellants (Plaintiffs).

MR T.N. YOUNG, instructed by Messrs Holman Fenwick & Willan, appeared for the Respondents (Defendants).


This is the judgment of the court on an appeal from a reserved judgment of Mr Justice Mustill delivered on 10th May 1983 whereby he discharged a Mareva injunction, after a hearing inter partes, which he had himself previously granted on the plaintiffs' application ex parte. In the course of his lengthy judgment the learned judge referred to many of the authorities concerning the grant or refusal of Mareva injunctions in the context of two questions on which he felt that further guidance was needed. He formulated these questions as follows: "First, what probability of success at the ultimate trial is the plaintiff required to demonstrate, before an injunction can be properly granted or maintained? Second, what type of prejudice must the plaintiff demonstrate, in the shape of a risk of dissipation of assets, and with what degree of conviction must it be shown, before the defendant's assets can properly be detained to await a possible judgment?" The voluminous evidence was directed to both these aspects, though mainly to the first. We begin by summarising this, which we can do fairly shortly.


The first question


The dispute arose out of a "Memorandum of Agreement" dated 24th January 1983 in what is usually known as the Norwegian Sale Form whereby the plaintiffs agreed to buy the defendants' vessel "Niedersachsen" for a total price of US $3,74–5,000. As provided in the printed form, a deposit of ten per cent was to be paid by the plaintiffs on signing of the contract and the balance on delivery "without any deductions". Both payments were to be made to the defendants' account with Citibank, London. The printed clause providing for dry docking and inspection was deleted, and the dispute centres on an additional clause 18 of which the following terms are material: "Delivery of the vessel where presently anchored off Dubai, without dry-docking, safely afloat….with steam raised in both boilers and ready to sail between 14th of February, 1983, and 7th of March, 1983, in seller's option….present class fully maintained, free of recommendations, free of average damages affecting class…."


Although the vessel was in class with Germanischer Lloyd, the buyers had grave doubts about the condition of her boilers, since there had been some leakages in February 1983 and further leakages on 6th, 7th and 8th March, the day on which the vessel was delivered, all of which were said to have been repaired, but which understandably gave concern to the buyers. There was also some evidence suggesting that there might be damage to the tailshaft and stern gland. The buyers and an independent surveyor who advised them disagreed with the conclusion of the surveyors of Germanischer Lloyd that the vessel had been properly classed, as required by the contract, and there was also some appearance of dissent from this conclusion by a surveyor of Det Norske Veritas, another classification society which was brought in on behalf of the buyers. The sellers and their advisers refuted all these conclusions. The main point at issue is not the condition of the boilers and the other alleged defects as such, but whether these constituted "average damages affecting class". The vessel was about seven years old; she was bought as she lay at a price which was said to be not greatly in excess of her scrap value (although this value is also in dispute); and the sellers maintained that the alleged defects were due to wear and tear and not "average damages affecting class".


The buyers' first ex parte application for a Mareva injunction was made on 7th March, the day before the vessel's delivery. The judge rightly rejected this as being premature. The buyers then completed the purchase and paid the balance of the price and renewed their application on the following day, asking for an order to "freeze" the total amount of $3,745,000 in the sellers' account at Citibank. The judge granted this application, but only to the extent of $787,000, the buyers' then estimate of the cost of repairs and of their resulting loss. On 29th and 30th March and 11th April there was then an inter partes hearing upon the sellers' application to discharge the injunction, and the judge did so on 10th May for the reasons discussed hereafter. These bear on the second of the two questions posed by him, as set out above, with which we will deal later on in this judgment.


Since the inter partes hearing the buyers have produced further affidavit evidence—without objection from the respondent sellers—describing what the state of the boilers and the tailshaft was in fact found to be after the vessel had been delivered and had sailed to Bahrein and had been opened up for repairs. They say that whereas their original estimate of the cost of repairs and of other losses which they would sustain had been $787,000, their present estimate is $1,300,000. However, the defendants have not had the opportunity of dealing with these allegations, and in the circumstances it is unnecessary to consider them further. There was rightly no application before this court to increase the amount of the injunction beyond the sum of $787,000, and there still remains the hotly disputed issue whether any of the defects were "average damages affecting class". The substance of the buyers' appeal is simply that the injunction should not have been discharged pending the hearing of the dispute by arbitration under the auspices of The London Maritime Arbitrators Association, which has been fixed to begin in about eight months.


It is convenient to pause at this point since this is all that needs to be said by way of summarising the evidence on the first of the questions posed by the judge. Having referred to a number of the authorities, he answered this by saying, in effect: "Have the plaintiffs shown that they have a good arguable case?" He took this test from the judgment of Lord Denning M.R. in Rasu Maritima S.A. v. Perusahaan (commonly known as Pertamina) (1978) 1 Q.B. 644 at page 661G and pointed out that this test was followed by this court in Fary-Jones v. I.F.M. (unreported, 10th April 1979). Although other, and perhaps slightly stronger, words have been used in other cases, the sellers did not challenge this formulation of the present appeal. We respectfully agree with it, but would add that this aspect of the evidence before the court should not be looked at in isolation when deciding whether or not to exercise the discretion to grant a Mareva injunction. The ultimate basis for this jurisdiction is now to be found in section 37 of the Supreme Court Act 1981. Subsection 1 provides: "The High Court may by order (whether interlocutory or final) grant an injunction….in all cases in which it appears to the court to be just and convenient to do so."


In the context of Mareva injunctions one must now also have regard to subsection 3: "The power of the High Court under subsection (1) to grant an interlocutory injunction restraining a party to any proceedings from removing from the jurisdiction of the High Court, or otherwise dealing with, assets located within that jurisdiction shall be exercisable in cases where that party is, as well as in cases where he is not, domiciled, resident or present within that jurisdiction."


It follows that the evidence, including the evidence on the second question posed by the judge to which we turn in a moment, must he looked at as a whole. A "good arguable case" is no doubt the minimum which the plaintiff must show in order to cross what the judge rightly described as the "threshold" for the exercise of the jurisdiction. But at the end of the day the court must consider the evidence as a whole in deciding whether or not to exercise this statutory jurisdiction.


In the present case the judge weighed the evidence on this aspect and also referred to the decision of Mr Justice Robert Goff (as he then was) in Piccinirmi v. Partrederiet Tigon II ( The "Alfred Trigon") (1981) 2 LI. Rep. 333 on the meaning of "average damage affecting class" and concluded that the buyers had satisfied the test of a good arguable case. This was not challenged on behalf of the sellers on this appeal and we therefore find it unnecessary to say anything further about this aspect.


The second question


We then turn to the second of the questions posed by the judge, and we begin again by summarising the evidence which bears on this. The main evidence for the plaintiffs was provided in an affidavit sworn by a Mr Nott-Bower, a director of Embircos Shipping Agency Ltd who act as the agents in this country for the managers of the plaintiffs, Buenamar Compania Naviera S.A. of Piraeus, Greece, the plaintiffs themselves being a company incorporated in Liberia. He said that the sellers were a West German corporation who were selling their only two vessels, the "Niedersachsen" and "Schleswig Holstein", the latter being sold elsewhere. In this connection it appeared later in the evidence that both vessels had originally been built on behalf of the defendants at a cost of about $50,000,000 each and that they were now being sold at low prices due to the shipping slump, but that the mortgages on both of them had been...

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7 firm's commentaries
  • International Fraud & Asset Tracing (3rd Edition), England & Wales
    • United Kingdom
    • JD Supra United Kingdom
    • 5 March 2015
    ...per cent chance of success (Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft M.B.H. und Co. K.G. (The ‘Niedersachsen’) [1983] 2 Lloyd’s Rep. 600). In evaluating whether there is a good arguable case, the court will consider any suggested defence to the claim, including any limit......
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    • 20 February 2024
    ...accepted to be as stated by Mr Justice Mustill in Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft GmbH ("The Niedersachsen") [1984] 1 All ER 398) - namely, that the applicant's claim must "more than barely capable of serious argument, but not necessarily one which the judge considers ......
  • Court Places Assets in the Freezer
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    • 21 June 2018
    ...a "good arguable" case, Justice Tottle considered the decision of Ninemia Maritime Corp v Trave Shiffahrtsgesellschaft GmbH & Co KG [1984] 1 All ER 398. In that case, Justice Mustill held that that the requirement of a "good arguable" case is satisfied when a case is "more than barely capab......
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    ...necessarily one which the judge considers would have a better than 50 per cent chance of success" (Ninemia Maritime Corp v Trave GmbH [1984] 1 All ER 398). As to the risk of dissipation, there must be "solid evidence" (which is to be judged on a case by case basis) of a real risk of any jud......
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14 books & journal articles
    • United Kingdom
    • Emerald Journal of Money Laundering Control No. 4-2, April 2000
    • 1 April 2000
    ...Research Council ν Nasse [1980] AC 1028. (147) See eg Ninemia Maritime Corp ν Trave Schiffahrtsgesselschaft GmbH (The Niedersachsen) [1983] 2 Lloyd's Rep 600. (148) See eg Anton Piller KG ν Manufacturing Processes Ltd [1976] Ch 55. (149) Norwich Pharmacal ν Customs & Excise Commissioners [1......
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    • Emerald Journal of Financial Crime No. 13-2, April 2006
    • 1 April 2006
    ...Crime Act 2002, ss 246(5) and 245 A (UK).103. Ninemia Maritime Corporation v. Trave Schiffahrtsgesellschaft GmbH (The Niedersachsen)[1983] 2 Lloyds Rep, 600, 605.104. Orri v. Moundreas [1981] Com. L.R. 168.105. Criminal Property Forfeiture Act 2004, s 7(2) (Manitoba).106. Prevention of Orga......
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    • Irwin Books Archive The Law of Equitable Remedies. Second Edition
    • 18 June 2013
    ...difficult for third parties to act within 87 Ninemia Maritime Corp. v. Trave Schiffahrtsgesellschaft mbH & Co KG, The Niedersachsen , [1984] 1 All E.R. 398 at 406 (Q.B.), aff’d [1983] 1 W.L.R. 1412 (C.A.). 88 See Third Chandris Shipping Corp. v. Unimarine S.A. , [1979] Q.B. 645 (C.A.), whic......
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    • 18 November 2023
    ...the “balance of probabilities” standard. 129 126 Ninemia Maritime Corp v Trave Schifahrtsgesellschaft mbH & Co KG, The Niedersachsen , [1984] 1 All ER 398 at 406 (QB), af’d [1983] 1 WLR 1412 (CA). 127 Sibley , above note 111 at para 63. 128 Chitel , above note 92; Unilin Beheer BV v Trifore......
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