Policon Ltd v Owners of Ship 'Lloyd Pacifico' [QBD (Admiralty)]
| Jurisdiction | England & Wales |
| Judge | Clarke J |
| Judgment Date | 24 June 1994 |
| Court | Queen's Bench Division (Admiralty) |
| Date | 24 June 1994 |
Queen's Bench Division (Admiralty Court)
Clarke J.
David Joseph (instructed by Ince & Co) for the plaintiffs.
Graham Dunning (instructed by Stephenson Harwood) for the defendants.
The following cases were referred to in the judgment:
Antonis P Lemos, TheELR [1985] AC 711.
Eschersheim, TheWLR [1976] 1 WLR 430; [1976] 2 LI Rep 1.
Gatoil International Inc v Arkwright-Boston Manufacturers Mutual Insurance Co & OrsELR [1985] AC 255.
Petrofina SA v AOT LtdELR [1992] QB 571.
Queen of the South, TheELR [1968] P 449.
River Rima, TheWLR [1988] 1 WLR 758.
Admiralty — Jurisdiction — Action in rem — Arrest of defendants” vessel — Plaintiffs claiming damages for breach of agreement for carriage of goods — Agreement not specifying vessels to be used for carriage — Whether claim arising out of agreement “relating to the carriage of goods in a ship or to the use or hire of a ship”— Whether Admiralty Court had jurisdiction to hear action — Supreme Court Act 1981, s.20(2)(h),(p).
This was a motion by the defendants seeking a declaration that the Admiralty Court had no jurisdiction to determine an action in rem, and an order setting aside the arrest of the defendants” vessel “Lloyd Pacifico”.
The plaintiffs issued a writ in an Admiralty action in rem against the defendants” ship, Lloyd Pacifico, on 18 April 1994; 15 other ships were named in a schedule. The claim was for damages for breach of a contract dated June 1991 under which the defendants were to carry up to 8,000 containers at the plaintiffs” request; the plaintiffs alleged that the defendants refused to carry more than 826 containers. On 18 April 1994 the Lloyd Pacifico was arrested in another action in rem, and the plaintiffs issued a caveat against release and arrested the ship on 20 June. On 21 June the defendants sought a declaration that the Admiralty Court had no jurisdiction, and an order setting aside the arrest of the vessel. The issue turned principally on the construction of s. 20(2)(h) of the Supreme Court Act 1981, by which the Admiralty Court had jurisdiction to hear and determine “any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship”.
Held, granting the defendants' applications:
1. To determine whether a claim came within s. 20(2)(h), the test was whether, on the particular facts of the case, the agreement in question had some reasonably direct connection with the use or hire of an identifiable ship, or with the carriage of goods in an identifiable ship.
2. The contract in question did not require the defendants to use their own vessels or vessels chartered by them to carry the plaintiffs' goods, but expressly provided for the use of vessels engaged under a conference agreement or in joint service, and contemplated the use or operation of vessels to be identified in due course. It followed that in so far as the plaintiffs asserted a claim based upon an alleged repudiatory breach of the agreement, it did not arise out of a contract relating to the use or hire of or to the carriage of goods in any particular ship, including the Lloyd Pacifico.
3. There was insufficient evidence to establish that the claim arose in connection with another ship and that when the cause of action arose the defendants were the owners or charterers or persons in possession or control of that other ship. Accordingly the sister ship basis for the claim failed.
4. Similarly the alternative basis for the claim under s. 20(2)(p) failed because it did not arise in connection with the Lloyd Pacifico or a sister ship.
5. It followed that, on the material before the court, the Admiralty Court had no jurisdiction over the plaintiffs' claims, and accordingly the plaintiffs were not entitled to maintain an arrest on the vessel.
Clarke J:
On 18 April 1994 the plaintiffs, Policon Ltd, issued a writ in an Admiralty action in rem. The action is described in the writ as being against “The ship ‘Lloyd Pacifico’ (and other ships as per the schedule…)'. the schedule contained the names of 15 other ships. The defendants are described as “The owners of the ship ‘Lloyd Pacifico’ (and other ships as per the schedule herein)”.
The “Lloyd Pacifico” was arrested by plaintiffs in another action in rem on 18 April and the plaintiffs in this action issued a caveat against release on 18 April. The writ in this action was generally endorsed with a claim for:
“Damages for breach of an oral or written contract dated June 1991 under which the defendants undertook to carry up to 8,000 containers at the request of the plaintiffs; the defendants having failed and refused to carry more than 826 containers.”
The writ was served on the Lloyd Pacifico on 11 May. On 25 May, Stephenson Harwood acknowledged service on behalf of the defendant owners of the Lloyd Pacifico. Under RSC, O.18, r. 1 a statement of claim should have been served on or before 9 June. It was not. On 16 June the defendants issued a summons for an order that the action be dismissed for want of prosecution on the ground that the statement of claim had not been served in accordance with the RSC. On 17 June the plaintiffs served a statement of claim, wrongly described as points of claim. By a notice of motion issued on 21 June the defendants seek, inter alia, a declaration that the Admiralty Court has no jurisdiction with regard to the plaintiffs' claim and an order setting aside the arrest. The plaintiffs had arrested the vessel on 20 June. The plaintiffs have now served a draft amended statement of claim upon the defendants' solicitors.
The plaintiffs say that the Admiralty Court has jurisdiction under s. 20(2)(h) of the Supreme Court Act 1981. The defendants say that the court has no jurisdiction. The matter is of some urgency because the defendants have resolved their disputes with the plaintiffs in other actions in rem so that, subject to any outstanding caveat, if the arrest is set aside, the Lloyd Pacifico will be free to sail. It is for that reason that I have thought it right to give judgment today rather than to take further time before doing so.
It is common ground that the beneficial owners of the Lloyd Pacifico both when the cause of action arose (whenever that was) and at the date of the issue of the writ were Compania de Navegacao Lloyd Brasileiro, the defendants. It is further common ground that the plaintiffs and the defendants entered into a contract in about June 1991. The plaintiffs' claim arises out of that agreement.
In the affidavit in support of the application for a warrant to arrest the Lloyd Pacifico, Mr Benjamin Horn of Ince & Co asserted that the plaintiffs applied to arrest the Lloyd Pacifico pursuant to s. 20(2)(h) of the Supreme Court Act 1981, “the plaintiffs” claims deriving from a contract relating to the use of a ship. The jurisdiction of the Admiralty Court is contained in s. 20 of the Supreme Court Act 1981 which provides, so far as material, as follows:
“20 (1) The Admiralty jurisdiction of the High Court shall be as follows, that is to say —
(a) jurisdiction to hear and determine any of the questions and claims mentioned in subsection (2);
(2) The questions and claims referred to in subsection (l)(a) are…
(h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship;…
(p) any claim by a master, shipper, charterer or agent in respect of disbursements made on account of a ship;”
I have referred to subpara. (p) as well as subpara. (h) because the plaintiffs now say that their claim falls within subpara. (p) as well as or as alternative to subpara. (h). Section 21(4) of the Act provides:
“In the case of any such claim as is mentioned in section 20(2)(e) to (r), where —
(a) the claim arises in connection with a ship; and
(b) the person who would be liable on the claim in an action in personam (‘the relevant person’) was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship,
an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the High Court against —
(i) that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or
(ii) any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.”
The plaintiffs say that they were entitled to arrest the Lloyd Pacifico in support of their claim. It is common ground, as I have indicated, or at any rate not in dispute, that the defendants were the beneficial owners of the Lloyd Pacifico...
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