Panamanian Oriental Steamship Corporation v Wright (Anita, West Sea.)
| Jurisdiction | England & Wales |
| Judge | THE MASTER of THE ROLLS,Sir GORDON WILLMER |
| Judgment Date | 25 March 1971 |
| Judgment citation (vLex) | [1971] EWCA Civ J0325-2 |
| Date | 25 March 1971 |
| Court | Court of Appeal (Civil Division) |
[1971] EWCA Civ J0325-2
The Master of The Rolls (Lord Denning),
Lord Justice Fenton Atkinson and
Sir Gordon Willmer.
In The Supreme Court of Judicature
Court of Appeal
Appeal by defendant from judgment of Mr. Justice Mocatta on 31st July 1971.
Mr. M.J. MUSTILL, Q.C., Mr. CHRISTOPHER STAUGHTON Q.C. and Mr. JONATHAN GILMAN (instructed by Messrs. Ince & Co.) appeared on behalf of the Appellant Defendant.
Mr. ROBERT GOFF, Q.C., Mr. BASIL ECKERSLEY and Mr. IAN KINNELL (instructed by Messrs. Hill Dickinson & Co.) appeared on behalf of the Respondent Plaintiff.
The steamship "Anita" is an elderly vessel. Sir Gordon Willmer describes her from a photograph as "of Edwardian age". She is registered in Panama and owned by the Panamanian Oriental Steamship Corporation. The beneficial owner was a Mr. Nilson in 1966 she was in Far Eastern waters. Mr. Nilson was in Hong Kong. She was insured with lloyds' underwriters in the sum of £60,000. When she was at Saigon she was seized by the Customs authorities, and afterwards confiscated by order of the Court.
The question is now whether the underwriters are bound to pay the owners for her loss. They allege that they are excepted by reason of one of the conditions which excludes "loss, damage or expense arising from arrest, restraint or detainment by reason of infringement of any customs regulations". Such is the point eventually at issue. But I must state the facts.
In 1966 Vietnam was in turmoil. The man in charge was Marshal Ky. On the 22nd February, 1966, the "Anita" sailed from Taiwan, bound for Saigon, calling at Hong Kong on the way. On the 7th March, 1966, she arrived at the Cape St. Jacques anchorage, which is 40 miles down river from Saigon. She was in ballast. The customs authorities inspected her. It took them 24 hours. They found concealed in the ship a large quantity of transistor radio sets, watches, batteries, cigarettes and flasks of "liniment", so called. All things useful to fighting men. These goods were hidden in a cavity behind the rudder of the ship. The opening to the cavity was closed by wooden planks over which there was a layer of cement and iron bolts. It was a deliberate concealment of materials of war. The "Anita" was taken up riverforty miles to Saigon itself and searched again. This time, inside another hiding place closed by wooden planks, the customs authorities found many more transistor radio sets.
At first the customs authorities took proceedings under some old customs regulations of 1931, which had existed from the French regime in Vietnam. Clause 429 authorised the customs authorities to seize the smuggled goods, and provided for fines to be levied. The ship could be seized as security for the fines. A few days later the customs authorities recommended to the Government Commissioner that proceedings should be taken under a new law. They thought that Article 429 of the old law was too lenient for this case because the smuggled goods were hidden on board the ship "in an extremely scientific and subtle manner". A new law had been passed on the 19th July, 1965 by the Government of Vietnam specially to deal with speculation, illegitimate transfers, contraband, and the like. It was numbered Decree 4/65. This new law contained Article 5, which, translated into English, is as follows:
"These are punishable by imprisonment:-
"Those who import or attempt to import products or goods, the import of which is prohibited by the legislation in force.
"The products, goods and means of transport belonging to private persons (It is to be noted that the French text read "moyens de transport des particuliers") shall be confiscated.
"The settlement procedure may not be invoked."
The customs authorities recommended to the Government Commissioner that proceedings should be taken under that Decree 4/65.
The case was sent before the Special Court which had just been established especially to deal with black market transactions and transactions entered into by dishonest merchants. This Special Court was set up under a Decree of the 15th February, 1966, which said that the Court was to be manned by "Judges who can be vouched for from all points of view as to integrity, and who, above all, have an exact idea and profound comprehension of the higher interests of the nation and the people at the present time." That Special Court had been inaugurated on the 8th March, 1966, in the presence of Marshal Ky. At its first sitting the Court sentenced a trader to death for unscrupulous business practices, and he was publicly executed in the market square.
That was the Special Court before which this case of the "Anita" was to be brought. On the 21st March, 1966, the Master highly qualified was arrested and imprisoned. Maitre Jaquemart, a highly qualified lawyer, was instructed on his behalf. He put in a plea saying that the Master was not implicated in the smuggling and suggested that they had better examine the crew. As a result, nine of the crew were arrested and brought up for trial, pleadings were exchanged in the nature of an indictment and defence.
On the 25th April, 1966, the case was heard by the Special Court at the Palais de Justice in Saigon, It was held in open Court. The members of the Court were the red robes of Judges over their military uniforms. The President was a Mr. Quyen. There were two Judges with him: Mr. Phong and Mr. Huu. We were given information showing that all three had taken degrees of law, but had not had practical training in the law, MaitreJaquemart appeared for the Master and the crew. The beneficial owner of the ship, Mr. Nilsen, came from Hong Kong to attend the hearing. So did the broker. The Court heard the case for the whole day. They listened to the representations of the advocates. They afterwards retired to consider their decision. After two hours they came back and gave their decision in public. They acquitted the Master of the ship altogether. They found five of the seamen guilty and sentenced each to several years imprisonment. They fined four of the seamen sums of money which they settled by payment. The Court ordered the confiscation of the seized goods; that is, of the transistors, and so forth.
In addition the Court made the order which is important for present purposes. They ordered the confiscation of the steamship "Anita", which was used as the means of transport. From that day, the 25th April, 1966, onwards the "Anita" remained seized. Many efforts were made to get her released. The lawyers, the brokers, the owners" representatives, all made representations to those in authority in Vietnam - even to Marshal Ky himself - seeking to get this ship released. Another ship had likewise been confiscated - the "West Sea". They tried to get her released too. But with no success.
It is agreed that the "Anita" is now to be regarded as a constructive total loss.
The owners claim on the insurance policy. The vessel was insured with Lloyds underwriters under a war risks policy. This took the usual form which is very complicated but hallowed by practice. It starts with Llloyd's S. G. policy covering the usual perils, including "restraints of people", "barratry", and soforth. That is followed by the F.C. and S. Clause "warranted free of capture, seizure, arrest, restraint or detainment and the consequences thereof or of any attempt thereat". Next there are Institute War and Strike clauses which reinstate the perils which are excluded by the F.C. and S. clause. Finally, there are exclusions in clause 4 of the Institute War and Strike clause.
There was much discussion before the Judge on the question whether the loss here was due to "restraint of people". The Judge held that it was. And there was some discussion on "barratry". But I propose to cut out all those discussions and come straight to the point which is taken by Lloyd's underwriters. They say that they are exempted from liability by reason of the exclusion in clause 4(1)(e), which excludes:
"(1) Loss, damage or expense arising from ….
(.) capture seizure arrest detainment or confiscation by the government of the country in which the vessel is owned or registered.
(e) arrest, restraint or detainment under quarantine regulations or by reason of infringement of any customs regulations."
The underwriters said that there was infringement of the Vietnam "customs regulations". The shipowners denied it. I think the underwriters are clearly right. The words "customs regulations" must be given a businesslike interpretation. They cover the customs code of 1931 which dates from the French regime. Also the Special Decree No. 4/65 which was passed by the new regime in Vietnam to deal with emergency conditions. The regulations contained in it were plainly broken.
The underwriters said that the seizure of the "Anita" was an "arrest, restraint or detainment". The shipowners denied it, saying that it was none of those but a "confiscation", which they suggest is different. They referred to clause 4(1)(d). The underwriters are clearly right in this also. Mr. Mustill pointed out that, in order for the shipowners to make a claim at all, they must bring themselves within the opening Words of the Institute War and Strike clause "arrest, restraint or detainment": so the seizure must be included amongst them.
The Judge held in favour of the underwriters on those two points: but he decided against them because he thought that the Special Court in Vietnam acted without any jurisdiction and under the directions of the political arm in Vietnam: or, more accurately, he thought that the burden of proof was on the underwriters, and they had failed to discharge it.
The Judge was impressed by some things which appeared to throw doubt...
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