Siskina (Owners of cargo lately laden on board) v Distos Compania Naviera S.A.

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Diplock,Lord Hailsham of St. Marylebone,Lord Simon of Glaisdale,Lord Russell of Killowen,Lord Keith of Kinkel
Judgment Date26 October 1977
Judgment citation (vLex)[1977] UKHL J1026-1

[1977] UKHL J1026-1

House of Lords

Lord Diplock

Lord Hailsham of Marylebone

Lord Simon of Glaisdale

Lord Russell of Killowen

Lord Keith of Kinkel

Owners of Cargo Lately Laden on Board the Vessel "Siskina" and Others
(Respondents)
and
Distos Compania Naviera S.A.
(Appellants)

Upon Report from the Appellate Committee, to whom was referred the Cause Owners of cargo lately laden on board the Vessel "Siskina" and others against Distos Compania Naviera S.A., That the Committee had heard Counsel, as well on Monday the 25th, as on Tuesday the 26th and Wednesday the 27th, days of July last, upon the Petition and Appeal of Distos Compania Naviera S.A. of Luis Carlos Chen, Avenida Eloy Alfaro 11-35, P.O.B. 4963, Panama 5, Republic of Panama, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 1st of June 1977, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament, might seem meet; as also upon the Case of the Owners of cargo lately laden on board the Vessel "Siskina", Ibrahim Shanker, and Ire S.p.A. Industrie Riunite Eurodomestici, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 1st day of June 1977, complained of in the said Appeal, be, and the same is hereby Reversed, and that the judgment and Order of the Honourable Mr Justice Kerr of the 20th day of December 1976 whereby inter alia it was adjudged and ordered that Service of Notice of the Writ and all subsequent proceedings therein be set aside, set aside by the Court of Appeal, be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Courts below, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.

Lord Diplock

My Lords,

1

The dispute between the appellants ("the shipowners") and the respondents ("the cargo-owners"), which the latter want to litigate in this action brought in the High Court in England, has no connection with this country. The shipowners are a Panamanian company whose management is in the Piraeus in Greece. At no time has it had any office or agency in England. Its only asset was a single ship, the Siskina, on the Panamanian registry which sank on 2 June 1976, and has become a total loss. The cargo-owners are the owners of cargo laden on the Siskina for carriage from ports in Northern Italy to ports in Saudi Arabia and Somalia under bills of lading issued in Italy by the shipowners on shipment of the cargo in January/February 1976, marked "freight pre-paid" and containing a clause conferring exclusive jurisdiction on the court in Genoa. The Siskina was under charter by the shipowners to an Italian company managed in Genoa. During the voyage to Saudi Arabia disputes, with which the instant case is not concerned, arose between the shipowners and the charterers about the payment of charter hire. A consequence of these disputes was that the shipowners were unwilling to incur the costs of passing through the Suez Canal. After waiting outside the entrance for four weeks the Siskina sailed for Cyprus and discharged her cargo at Limassol. The shipowners claimed a lien over it for freight. This claim is currently the subject of litigation in the Supreme Court of Cyprus.

2

The Siskina was insured at Lloyds. Some six weeks after discharging her cargo when she had become a total loss the shipowners became entitled to claim insurance monies amounting to some 700,000 U.S. dollars. The insurance monies were payable in England to the shipowners' brokers by whom they are now held; but at the time when the instant proceedings were started on 2 July 1976 the shipowners' claim to the insurance monies had not yet been accepted by the underwriters.

3

The first step in the proceedings was an application by the cargo-owners ex parte to the judge of the Commercial Court in London: (a) for leave to issue a writ against the shipowners and to serve notice of it out of the jurisdiction at their office in Piraeus and (b) for an immediate interim injunction to restrain the shipowners from disposing of their assets within the jurisdiction of the High Court, including, in particular, the insurance proceeds in respect of the loss of the Siskina.

4

The claims endorsed upon the writ were stated to be in respect of the cargo diverted to and detained at Limassol and were for:

"(1) damages for breach of duty and/or contract (2) an injunction to restrain the Defendants by themselves, their servants or agents or otherwise from disposing of their assets within the jurisdiction, including and in particular the insurance proceeds in respect of the vessel 'Siskina' or their claims thereto, or removing the same out of the jurisdiction."

(3) ….

(4) …."

5

On the face of it the claim for an injunction is part of the substantive relief claimed in the action; but it is acknowledged by their counsel that all that the cargo-owners are really seeking is an injunction that is interlocutory in character and will continue only until judgment in the action and payment of any damages that may be awarded to them by such judgment.

6

The purpose of this kind of interlocutory injunction against a foreign defendant is to ensure that there will be a fund available within the jurisdiction to meet any judgment obtained by a plaintiff in the High Court against a defendant who does not reside within the jurisdiction and has no place of business there. It is a procedural innovation of very recent origin which has acquired the sobriquet of a "Mareva" injunction from the name of the case in which its validity was first upheld in a reasoned judgment of the Court of Appeal given on an ex parte application. Mareva Compania Naviera S.A. v. International Bulk Carriers S.A. [1975] 2 Lloyd's Rep. 509. A Mareva injunction is interlocutory, not final; it is ancillary to a substantive pecuniary claim for debt or damages; it is designed to prevent the judgment against a foreign defendant for a sum of money being a mere brutum fulmen.

7

On the ex parte application to Mocatta J. on 2 July 1976 that learned judge gave leave for service on the shipowners out of the jurisdiction and granted a Mareva injunction against them until judgment or further order. The matter came before Kerr J. upon an application by the shipowners to set aside the service of notice of the writ and all subsequent proceedings. In a reserved judgment ( [1977] 1 Lloyd's Rep. 404) delivered on 10 December 1976, he granted the application, but also gave the cargo-owners leave to appeal to the Court of Appeal. His reasons for setting aside the service of notice of the writ can be summarised in two sentences: The cargo-owners' claims for damages, whether based in contract or in tort, disclosed no cause of action in respect of which the court had any power to permit service of its process out of the jurisdiction under R.S.C. Order 11. There was therefore no substantive claim to pecuniary relief within the jurisdiction of the court to grant, to which the Mareva injuction sought could be ancillary.

8

Upon appeal the Court of Appeal by a majority (Lord Denning, M.R. and Lawton L. J., Bridge L. J. dissenting) reversed the judgment of Kerr J. and restored the Mareva injunction as originally granted by Mocatta J. It is from that majority judgment that an appeal is brought to this House.

9

My Lords, at no stage of the proceedings in the instant case has counsel for the shipowners sought to argue that the High Court has not jurisdiction in appropriate cases to grant an interlocutory judgment of the Mareva type against a foreign defendant who is amenable to the jurisdiction of the court in respect of the substantive claim to pecuniary relief made against him in the action. He reserved the right should it become necessary to attack the correctness of the decision in The Mareva (ubi sup.) which has recently been followed by the Court of Appeal after full argument on a contested application in another case, The Pertamina (not yet reported), in which judgment was delivered on 4 March 1977. In the view that I take of the instant appeal, however, it can be disposed of on the grounds adopted by Kerr J. and Bridge L. J. They distinguished it from The Mareva and The Pertamina by which decisions they were bound. Your Lordships, of course, are not so bound. Nevertheless I do not think that the instant appeal provides an appropriate vehicle to carry your Lordships into a consideration the wider question of what restrictions, whether discretional or jurisdictional, there may be upon the powers conferred upon the High Court by section 45(1) of the Supreme Court of Judicature (Consolidation) Act 1925 to:

"grant a mandamus or an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the court to be just or convenient so to do".

10

That subsection, speaking as it does of interlocutory orders, presupposes the existence of an action, actual or potential, claiming substantive relief which the High Court has jurisdiction to grant and to which the interlocutory orders referred to are but ancillary....

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    ...is a remedy, not a cause of action (Owners of Cargo Lately Laden on Board the Siskina v Distos Compania Naviera SA (The ‘Siskina’) [1979] A.C. 210). Accordingly, the remedy can only be granted if it protects the effi cacy of underlying court proceedings, domestic or foreign (Fourie v Le Roux......
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