Republic of India v India Steamship Company Ltd (No 2)
| Jurisdiction | England & Wales |
| Judge | LORD BROWNE-WILKINSON,LORD STEYN,LORD HOFFMANN,LORD COOKE OF THORNDON,LORD HOPE OF CRAIGHEAD |
| Judgment Date | 16 October 1997 |
| Judgment citation (vLex) | [1997] UKHL J1016-3 |
| Date | 16 October 1997 |
| Court | House of Lords |
and Others
[1997] UKHL J1016-3
Lord Browne Wilkinson
Lord Steyn
Lord Hoffmann
Lord Cooke of Thorndon
Lord Hope of Craighead
HOUSE OF LORDS
My Lords,
For the reasons given by my noble and learned friend, Lord Steyn, in his speech, a copy of which I have seen in draft, I would dismiss the appeal.
My Lords,
In June 1987 the respondents' vessel Indian Grace loaded a cargo of munitions in Sweden for carriage to Cochin in India and delivery to the appellant, the Indian Government. The vessel sailed. A few days later a fire occurred in the No. 3 hold of the vessel. The Master and crew extinguished the fire with water. They also jettisoned 51 artillery shells and 10 charges. The vessel put into Cherbourg for survey and to repack and restow the cargo in No. 3 hold. Upon completion of the necessary work the vessel resumed her voyage to Cochin. She arrived at Cochin in early September, and the cargo was cleared by 4 September 1987.
In the next few months the Indian Government notified two separate claims to the shipowners. The first was a claim for the total loss of the cargo of munitions. The second was a small claim for short delivery based on the loss of the cargo jettisoned after the fire. On 1 September 1988 the Indian Government issued a Plaint in the Subordinate Judge's Court in Cochin, seeking damages for the 51 shells and 10 charges which had not been delivered. The owners served a defence. This action came on for final hearing in December 1989. After a contested trial the judge gave judgment for the Indian Government for the amount of its claim in Rupees. At that time the sterling equivalent was £7200. An appeal against this judgment is still pending.
On 25 August 1989 (i.e. before judgment in the action in Cochin) the Indian Government caused a writ in rem to be issued in the Admiralty Court in England. On 4 May 1990 the writ was served on the Indian Endurance, a sister ship of the Indian Grace, at Tees Dock, Middlesbrough. In due course the parties agreed to the application of English law and the owners submitted to the jurisdiction of the Admiralty Court. The plaintiffs threatened to arrest the vessel in order to obtain security for their claim against the owners. Upon the provision of a Letter of Undertaking by the Steamship Mutual to pay the claim, if proved, the Indian Endurance was allowed to sail. The Statement of Claim, as subsequently amended, was in respect of damage to all the cargo in No. 3 hold. The plaintiffs' case was that the munitions were subjected to radiant heat by the fire, and were consequently unreliable and worthless. The claim was largely made in Swedish kronor. The sterling equivalent was £2.6m.
Initially, the owners pleaded issue estoppel as a defence to the claim: they said that the plaintiffs could and should have brought their whole claim before the court in Cochin. The owners applied to strike out the claim. The summons came before the Admiralty Judge who was then Mr. Justice Sheen. The judge allowed the owners to amend their defence to rely upon section 34 of the Civil Jurisdiction and Judgments Act 1982. Section 34 provides as follows:
"No proceedings may be brought by a person in England and Wales … on a cause of action in respect of which a judgment has been given in his favour in proceedings between the same parties, or their privies … in a court of an overseas country, unless that judgment is not enforceable or entitled to recognition in England and Wales …."
Sheen J. held that the cause of action was the same as that on which the plaintiffs had relied when they obtained judgment in India. He held that section 34 of the Act of 1982 was an absolute bar to the English proceedings. He struck out the proceedings. The plaintiffs appealed. The Court of Appeal dismissed the appeal: The Indian Grace [1992] Lloyds Rep. 124. The Court of Appeal ruled that the causes of action were the same and that section 34 applied. The plaintiffs sought to argue that the owners were debarred by agreement, waiver or estoppel from relying on section 34. The Court of Appeal held that section 34 defined the jurisdiction of the court and that parties cannot by agreement, waiver or estoppel confer a jurisdiction upon the court which it did not have. The plaintiffs appealed to the House of Lords: Republic of India and Another v. India Steamship Co. Ltd. [1993] A.C. 410. Counsel for the plaintiffs argued that the causes of action in the foreign and English proceedings were distinct. The House ruled that there was an identity between causes of action in the two sets of proceedings. But Lord Goff of Chieveley, speaking for a unanimous House, held that section 34 operated as a bar against proceedings rather than as an exclusion of jurisdiction. Accordingly, the operation of section 34 could in principle be defeated by agreement, waiver or estoppel. Lord Goff concluded that the matter ought to be remitted to the Admiralty Court to consider the issue of estoppel or waiver. Lord Goff further observed that the plaintiffs sought to raise for the first time in the House of Lords the argument that the judgment of the Cochin court was not a judgment between the same parties as the plaintiffs asserted in the Admiralty action, because it was a judgment in personam, whereas the action was an Admiralty action in rem: 424G. This matter too was remitted for consideration of the Admiralty judge.
The present Admiralty judge, Mr. Justice Clarke, ordered preliminary issues to be tried. After a 6 day trial he gave a detailed and careful judgment. He ruled that: (i) the owners were estoppel from relying upon section 34 by an estoppel by convention and an estoppel by acquiescence; (ii) in any event, the English action being an Admiralty action in rem, although an action brought on the same cause of action as the Cochin action, was an action brought against a different party viz the ship rather than the owners; and (iii) that the principle laid down in Henderson v. Henderson (1843) Hare 100, at p. 115, did not prevent the plaintiffs bringing in rem proceedings in the Admiralty court: The Indian Grace (No. 2) [1994] 2 Lloyds L.R. 321. The owners appealed. The Court of Appeal came to a contrary conclusion on all three issues and allowed the appeal: The Indian Grace (No. 2) [1996] 2 Lloyd's L.R. 12.
Reversing the order in which the issues were considered in the courts below I propose to examine first whether the English action in rem is "between the same parties, or their privies" within the meaning of section 34 as the action in which the plaintiffs obtained judgment in Cochin. If the answer to that question is yes, the question arises whether the owners are estopped from relying on section 34. If the owners fail on both the principal issues the further question arises whether the owners can rely on the principle in Henderson v. Henderson (1843) 3 Hare 100, viz abuse of process, to defeat the action in rem.
THE NATURE OF AN ADMIRALTY ACTION IN REM
Clarke J. concluded that the authorities show that, although an action in personam and an action in rem may involve the same cause of action, historically they have been regarded as being between different parties: 350, 2nd col. Recognizing that an action in rem affects the owners, the judge cited the dictum of Fletcher Moulton L.J. in The Burns [1907] P. 137 that "the action in rem is an action against the ship itself." He also relied on the judgment of Hobhouse J. in The Nordglimt [1988] Q.B. 183 along the same lines. Accordingly, the judge held that section 34 is inapplicable because the parties in the two sets of proceedings were different. Counsel for the plaintiffs supported this reasoning and amplified it in a helpful argument. It is necessary to understand the nature of the pending action in rem.
The pending action
The claims endorsed on the writ do not involve maritime liens. Instead the claims of the plaintiffs invoked the enlarged Admiralty jurisdiction of the High Court. The grounds of jurisdiction relied on by the plaintiffs are two paragraphs in section 20(2) of the Supreme Court Act 1981, namely:
"(g) any claim for loss of or damage to goods carried in a ship;
(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."
The indispensable conditions upon which in such cases, among others, the jurisdiction of the Admiralty Court is predicated is defined in section 21(4) of the Act of 1981. Section 21(4) provides that in the case of claims of the type under consideration (i.e. falling within section 20(2)(g) and (h)) an action in rem may be brought 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… was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship." (My emphasis)
This is the statutory basis upon which the Indian Government invoked the jurisdiction of the Admiralty court.
The manner in which the Indian Government invoked the jurisdiction of the Admiralty Court was by the issue and service of a writ in the form prescribed by RSC Order 75, rule 3(1), read with Form No. 1 in Appendix B. The writ is expressed to be directed to the owners of the ship as defendants and other persons interested in her.
The historical perspective
The historical context of the problem before the House of Lords is noteworthy. Before the Judicature Acts (1873-1875) the courts of King's Bench regarded the High Court of Admiralty as in a sense a superior court but being of limited jurisdiction, amenable to restraint by prohibition: James v. South Western...
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