Seismic Shipping v Total E&P UK Plc (The Western Regent)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Clarke,Lord Justice Rix,Sir Martin Nourse |
| Judgment Date | 29 July 2005 |
| Neutral Citation | [2005] EWCA Civ 985 |
| Docket Number | Case No: A3/2005/0725/QBADF & A3/2005/0735/QBADF |
| Court | Court of Appeal (Civil Division) |
| Date | 29 July 2005 |
[2005] EWCA Civ 985
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
Mr Julian Flaux QC
Lord Justice Clarke
Lord Justice Rix and
Sir Martin Nourse
Case No: A3/2005/0725/QBADF & A3/2005/0735/QBADF
Mr Nigel Meeson QC (instructed by Holman Fenwick & Willan) for the Claimants
Mr Nigel Teare QC and Mr Nigel Jacobs (instructed by Ince & Co) for the Defendant
Introduction
On 2 October 2004, a purpose built seismic survey vessel called the WESTERN REGENT ("the vessel") was operating in the North Sea towing six streamers each 3,600 metres long and with 100 metres separation between them. At about 0130 hours on that day two of the streamers came into contact with a marker buoy which was positioned at a well head in the Total Dunbar oilfield, located about 70 miles east of the Shetlands in the Scottish sector of the North Sea oilfields. As a result it is said that the buoy was dragged from its position and that the well head installation was damaged.
In this action the first and second claimants are the owners and demise charterers of the vessel respectively. They accept that the collision and any resulting damage was caused by the negligence of the demise charterers their servants or agents on board the vessel and accordingly admit liability to the defendant, which was the operator of the Dunbar field and the owner of the installation. This action was brought in order to obtain a decree limiting the liability of the claimants under the Merchant Shipping Act 1995 ("the 1995 Act"). When originally issued on 5 November 2004, the claim form named the defendants as Total E&P UK Plc ("Total") and all other persons claiming or being entitled to claim damages by reason of the collision. However, it was appreciated that only Total has a claim arising out of the collision, with the result that the claim form was amended and before the judge the claimants pursued the limitation claim against Total as the sole defendant.
This appeal arises out of an order made on 22 March 2005 by Mr Julian Flaux QC, sitting as a Deputy High Court Judge in the Admiralty Court, in which he granted the limitation decree sought. No distinction was drawn between the claimants in the order or indeed in the argument in this appeal. For convenience I shall describe them together as "the owners". In the same order the judge refused the owners' application for an injunction restraining Total from continuing proceedings which it had begun against the owners in Texas. Both Total and the owners sought permission to appeal, which was refused by the judge but subsequently granted on paper by Longmore LJ. The neutral citation reference to the judge's judgment is [2005] EWHC 460 (Comm) and it is reported at [2005] 2 All ER (Comm) 51. I will consider the issues under two heads, namely limitation of liability and injunction.
Limitation of liability
By the limitation decree it was ordered that the limit of the owners' liability was 2,590,000 Special Drawing rights. The owners had paid a total of £2,150,000 into court on 10 February 2005. By letters dated the same day the owners' solicitors, Holman Fenwick & Willan, stated that that sum represented both a payment into court inclusive of interest by way of an offer under CPR Part 36 and the constitution of the limitation fund. The decree stated that the relevant liability in pounds sterling was £2,089,383.67 together with simple interest of £43,118.58, from 2 October 2004 to 10 February 2005, making a total of £2,132,502.25.
The claim form was served on Total in England. Such service was permitted under the Civil Procedure Rules ("CPR") because Total is an English registered company. It follows that the English court has personal jurisdiction over Total but Total submitted before the judge and submits before us that the court has no subject matter jurisdiction over it in the sense used by Hoffmann J in Mackinnon v Donaldson, Lufkin and Jenrette [1986] Ch 482 at 493. Total's case is that the only circumstances in which a party in the position of a shipowner or demise charterer (such as the present claimants) can launch limitation proceedings is when underlying legal proceedings or arbitration proceedings have been instituted in this jurisdiction. The judge rejected that submission and the question for decision in this part of the appeal is whether or not he was correct to do so. The answer to the question depends upon the true construction of the Convention for Limitation of Liability for Maritime Claims 1976 ("the 1976 Convention") as set out in Schedule 7 to the 1995 Act which (as so set out) has the force of law in the United Kingdom under section 185(1) of the Act.
Articles 10 to 14 of the 1976 Convention, as set out in Schedule 7 to the 1995 Act, provide as follows:
CHAPTER II. LIMITS OF LIABILITY
…
ARTICLE 10
Limitation of liability without constitution of a limitation fund
1. Limitation of liability may be invoked notwithstanding that a limitation fund as mentioned in Article 11 has not been constituted.
2. If limitation of liability is invoked without the constitution of a limitation fund, the provisions of Article 12 shall apply correspondingly.
3. Questions of procedure arising under the rules of this Article shall be decided in accordance with the national law of the State Party in which action is brought.
CHAPTER III. THE LIMITATION FUND
ARTICLE 11
Constitution of the Fund
1. Any person alleged to be liable may constitute a fund with the Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation. The fund shall be constituted in the sum of such of the amounts set out in Articles 6 and 7 as are applicable to claims for which that person may be liable, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. Any fund thus constituted shall be available only for the payment of claims in respect of which limitation of liability can be invoked.
2. A fund may be constituted, either by depositing the sum, or by producing a guarantee acceptable under the legislation of the State Party where the fund is constituted and considered to be adequate by the Court or other competent authority.
3. A fund constituted by one of the persons mentioned in paragraph 1(a), (b) or (c) or paragraph 2 of Article 9 or his insurer shall be deemed constituted by all persons mentioned in paragraph 1(a), (b) or (c) or paragraph 2, respectively.
ARTICLE 12
Distribution of the fund
1. Subject to the provisions of paragraphs 1 and 2 of Article 6 and of Article 7, the fund shall be distributed among the claimants in proportion to their established claims against the fund.
2. If, before the fund is distributed, the person liable, or his insurer, has settled a claim against the fund such person shall, up to the amount he has paid, acquire by subrogation the rights which the person so compensated would have enjoyed under this Convention.
3. The right of subrogation provided for in paragraph 2 may also be exercised by persons other than those therein mentioned in respect of any amount of compensation which they may have paid, but only to the extent that such subrogation is permitted under the applicable national law.
4. Where the person liable or any other person establishes that he may be compelled to pay, at a later date, in whole or in part any such amount of compensation with regard to which such person would have enjoyed a right of subrogation pursuant to paragraphs 2 and 3 had the compensation been paid before the fund was distributed, the Court or other competent authority of the State where the fund has been constituted may order that a sufficient sum shall be provisionally set aside to enable such person at such later date to enforce his claim against the fund.
ARTICLE 13
Bar to other actions
1. Where a limitation fund has been constituted in accordance with Article 11, any person having made a claim against the fund shall be barred from exercising any right in respect of such a claim against any other assets of a person by or on behalf of whom the fund has been constituted.
2. After a limitation fund has been constituted in accordance with Article 11, any ship or other property, belonging to a person on behalf of whom the fund has been constituted, which has been arrested or attached within the jurisdiction of a State Party for a claim which may be raised against the fund, or any security given, may be released by order of the Court or other competent authority of such State. However, such release shall always be ordered if the limitation fund has been constituted:
(a) at the port where the occurrence took place, or, if it took place out of port, at the first port of call thereafter; or
(b) at the port of disembarkation in respect of claims for loss of life or personal injury; or
(c) at the port of discharge in respect of damage to cargo; or
(d) in the State where the arrest is made.
3. The rules of paragraphs 1 and 2 shall apply only if the claimant may bring a claim against the limitation fund before the Court administering that fund and the fund is actually available and freely transferable in respect of that claim.
ARTICLE 14
Governing law
Subject to the provisions of this Chapter the rules relating to the constitution and distribution of a limitation fund, and all rules of procedure in connection therewith, shall be...
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