Samick Lines Company Ltd v Owners of the Ship "Antonis P. Lemos"

JurisdictionEngland & Wales
JudgeLord Scarman,Lord Diplock,Lord Roskill,Lord Brandon of Oakbrook,Lord Templeman
Judgment Date21 February 1985
Judgment citation (vLex)[1985] UKHL J0221-2
Date21 February 1985
CourtHouse of Lords
Samick Lines Company Limited
(Respondents)
and
Owners of the Ship “Antonis P. Lemos”
(Appellants)

[1985] UKHL J0221-2

Lord Scarman

Lord Diplock

Lord Roskill

Lord Brandon of Oakbrook

Lord Templeman

HOUSE OF LORDS

Lord Scarman

My Lords,

1

I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Brandon of Oakbrook. I agree with it, and for the reasons he gives I would dismiss the appeal.

Lord Diplock

My Lords,

2

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Brandon of Oakbrook. I agree with it, and for the reasons which he gives I would dismiss this appeal.

Lord Roskill

My Lords,

3

I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Brandon of Oakbrook. I agree with him, and for the reasons which he gives I would dismiss the appeal.

Lord Brandon of Oakbrook

My Lords,

4

This appeal raises a question of statutory construction relating to the Admiralty jurisdiction of the High Court.

5

The case concerns a Greek-registered ship, the Antonis P. Lemos (“the vessel”), which is and was at all material times wholly owned by the appellants.

6

By a time-charter dated 22 February 1980 (“the head-charter”) Containerbank Corporation, acting as managers of the vessel for the appellants, chartered her to Sammisa Ltd. (“the head-charterers”) for a period of 10-12 months, later extended by agreement for a further 6-12 months, both periods at the head-charterers' option. The head-charter contained a provision allowing the head-charterers to sub-charter the vessel, subject to an obligation to inform Containerbank Corporation of their doing so.

7

By a sub-time-charter dated 16 October 1981 (“the sub-charter”) the head-charterers sub-chartered the vessel to the respondents, Samick Lines Co. Ltd. (“the sub-charterers”) for one time charter trip. The sub-charter contained a provision similar to that in the head-charter, allowing the sub-charterers to sub-sub-charter the vessel, subject to an obligation to inform the sub-charterers of their doing so.

8

Nearly a month before the making of the sub-charter the respondents had already, by a voyage charter dated 21 September 1980 (“the sub-sub-charter”), chartered to Agri Industries (“the sub-sub-charterers”) a ship to be nominated to carry a full cargo of heavy grains and/or sorghums and/or soya beans from a North American port to Alexandria or Port Said, at the sub-sub-charterers' option. Later, after the making of the sub-charter, the respondents nominated the vessel for the purposes of the sub-sub-charter, and the sub-sub-charterers chose Alexandria as the port of discharge. The sub-sub-charter contained an express guarantee by the respondents that the vessel's maximum draught on arrival at the port of discharge would not exceed 32 feet in salt water.

9

In performance of the sub-sub-charter, the vessel on 20 and 21 October 1981 loaded a full cargo of corn at Houston, Texas, for carriage to Alexandria. When the vessel arrived at the latter port on 11 November 1981, however, her draught exceeded 32 feet in salt water, in consequence of which she had to be lightened before berthing, and delay in her discharge occurred. By reason of these matters, the respondents had to pay the cost of lightening, which they would not otherwise have had to do, and incurred certain other expenses and losses.

10

In order to recover the cost, expenses and losses so incurred, the respondents on 20 May 1983 began an action in rem against the vessel in the Admiralty Court, and arrested her in that action in order to obtain security for their claim.

11

The endorsement on the back of the writ by which such action was begun reads:

“The plaintiffs, as sub-charterers of the defendants' ship ANTONIS P. LEMOS under a time-charter dated 16 October 1981 made between Sammisa Co. Ltd. as owners and the plaintiffs as charterers, claim damages for the loss suffered by them by reason of the negligence of the defendants, their servants or agents in causing permitting or suffering the said ship to load a quantity of corn at Houston, Texas, USA on 20 and 21 October 1981 such that her draft on arrival at Alexandria, Egypt on 11 November 1981 exceeded 32 feet rendering her unable to berth without lightening.”

12

The claim so endorsed is, as your Lordships will have observed, founded solely on the tort of negligence, and is not founded on any breach of any contract made directly between the two parties to the action.

13

By notice of motion dated 24 May 1983 the appellants (defendants in the action) applied to the Admiralty Court for an order that the writ and warrant of arrest be set aside and the vessel released, on the ground that the Admiralty Court had no Admiralty jurisdiction, and therefore no jurisdiction in rem against the vessel, in respect of the claim.

14

On 27 May 1983 Sheen J., having heard the appellants' motion, decided the question raised by it in their favour, and made an order substantially in the terms sought by them. He gave the respondents leave to appeal to the Court of Appeal, and, in order to protect the position of both parties in the event of an appeal being brought, made his order conditional on (1) the appellants giving security for the claim in an acceptable form and (2) the respondents undertaking to pay the appellants' costs of giving such security in the event of any appeal brought by the former proving unsuccessful.

15

By notice of appeal dated 19 August 1983 the respondents appealed to the Court of Appeal against the order of Sheen J. The Court of Appeal (Cumming-Bruce and Parker L.JJ.) heard the appeal on 30 and 31 January 1984, and on 14 February 1984 Parker L.J. delivered a reserved judgment, with which Cumming-Bruce L.J. agreed, allowing the appeal and reversing the order of Sheen J. The Court of Appeal further gave leave to the appellants to appeal to your Lordships' House.

16

My Lords, it is common ground that the sole question for determination in this appeal is whether the respondents' claim, having regard to its nature and the facts on which it is based, comes within that part of the Admiralty jurisdiction of the High Court which is derived from section 20(2)( h) of the Supreme Court Act 1981. For the purpose of determining that question, it is necessary to assume, without deciding, that the respondents have an arguable case in law in respect of their claim.

17

If, on the one hand, the claim does not come within section 20(2)( h) of the Act of 1981, the Admiralty Court, to which the Admiralty jurisdiction of the High Court is assigned, has no Admiralty jurisdiction, as distinct from any other jurisdiction which it may have, to hear and determine it, and accordingly no power to arrest the vessel as security for such claim. On that view, which Sheen J. took, the respondents' action was not properly brought, and the vessel was not properly arrested in it. The result of that would be that the writ by which the action was begun should be set aside, and the security substituted for the vessel given up and cancelled.

18

If, on the other hand, the claim comes within section 20(2)( h) of the Act of 1981, the Admiralty Court has Admiralty jurisdiction to hear and determine it, and further, by virtue of section 21(4) of the same Act, has power to exercise such jurisdiction in rem against the vessel. On that view, which the Court of Appeal took, the respondents' action was properly brought, the warrant of arrest was properly issued and the vessel was properly arrested as security for the claim. The result of that would be that the appellants' attempt to have the writ by which the action was begun set aside, and the security substituted for the vessel given up and cancelled, must fail.

19

Your Lordships have now to choose between these two contrary views. In order to do this, it is first necessary to set out the relevant terms of section 20 of the Supreme Court Act 1981. That sections provides:

“(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 (1)( 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;”

20

My Lords, the appellants put forward two alternative contentions with regard to the construction of section 20(2)( h) of the Act of 1981. Their primary contention was that section 20(2)( h) applied only to claims of a purely contractual character, founded on some agreement of the kinds referred to in it and made directly between the two parties to an action; and that the paragraph did not extend to other claims founded on tort, even though such claims were connected, directly or indirectly, with such an agreement. Their second and alternative contention was that, even if section 20(2)( h) extended also to claims in tort, it only did so if they were directly connected with some agreement of the kinds referred to in it, and provided further (and this was the crucial limitation) that the agreement concerned was one made between the two parties to the action themselves. In terms of the present case this would mean some agreement made directly between the appellants and the respondents relating to the carriage of goods in the vessel, or to the use or hire of the vessel, which it is common ground was never made. If either of these two contentions is accepted as correct, the respondents' claim would plainly not come within section 20(2)( h). Sheen J., whose judgment is reported in [1983] 2 Lloyd's Rep. 310, rejected the first contention but accepted the second. Hence his decision in favour of the appellants. The Court of Appeal, the judgment of which is reported in [1984] 1 Lloyd's...

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