Span Terza, The (Neptunia)

JurisdictionEngland & Wales
Judgment Date18 November 1981
Judgment citation (vLex)[1981] EWCA Civ J1118-2
Docket Number81/0463
CourtCourt of Appeal (Civil Division)
Date18 November 1981

Admiralty Action in Rem Against: the Ships Clara Express, Span Prima, Span Terza, Span Quinta

The Owners of the Ship "Neptunia"
Plaintiffs (Applicants)
The Owners of Clara Express, Span Prima, Span Terza, Span Quinta
Defendants (Respondents)

[1981] EWCA Civ J1118-2


Lord Justice Stephenson

Lord Justice Donaldson


Sir David Cairns


1981, Folio 678







Royal Courts of Justice,

MR. J. SUMPTION (instructed by Messrs. Ince & Co., Solicitors, London EC3R 5EN) appeared on behalf of the Plaintiffs (Applicants).



I ask Sir David Cairns to give the first judgment in this appeal.


A writ in rem has been issued by the owners of the ship Neptunia against the owners of the ship Span Terza and other ships, claiming charges and damages pursuant to a time charterparty of the Neptunia to the defendants.


The plaintiffs applied for the arrest of the Span Terza, which is now in the Mersey. The Admiralty registrar refused to order the arrest; the plaintiffs appealed to Mr. Justice Sheen, who dismissed the appeal, but gave them leave to appeal to this court.


Mr. Justice Sheen's order was made at about a quarter past ten this morning. By a piece of good luck the plaintiffs (because the Span Terza might sail away at any moment unless it is arrested) this court was able to hear the appeal at about a quarter to eleven. By about noon we had decided, by a majority, to allow the appeal, and I now give the reasons why I consider that this appeal should be allowed.


The exercise of the Admiralty jurisdiction in this country is now governed by the Administration of Justice Act, 1956. Section 1(1) of that Act provides as follows: "The Admiralty jurisdiction of the High Court shall be as follows, that is to say, jurisdiction to hear and determine any of the following questions or claims". There follow nineteen lettered paragraphs of which one is: "(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". Then in section 3 subsection (1) reads: "Subject to the provisions of the next following section the Admiralty jurisdiction of the High Court…may in all cases be invoked by an action in personam".


Subsection (4) reads: "In the case of any such claim as is mentioned in paragraphs (d) to (r) of subsection (1) of section one of this Act, being a claim arising in connection with a ship, where 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, the Admiralty jurisdiction of the High Court…may (whether the claim gives rise to a maritime lien on the ship or not) be invoked by an action in rem against—(a) that ship, if at the time when the action is brought it is beneficially owned as respects all the shares therein by that person; or (b) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid".


Mr. Sumption, appearing in this court on behalf of the plaintiffs, says: This is a claim arising under section 1(1)(h) of the Act of 1956, i.e. in one of the paragraphs (d) to (r). The defendants are the charterers of the Neptunia. They would be the persons who would be liable in personam. The claim arises in connection with the ship. The defendants were at the material times the charterers of that ship. They were the beneficial owners of another ship, namely the Span Terza, at the time when the action was brought. Therefore the action in rem can be invoked against that ship, the Span Terza.


On the literal meaning of the words of the Act, this seems to be an inescapable conclusion. The only way of escaping from it is by interpreting the word "charterer" in section 3(4) to mean "demise charterer". If it is to be supposed that Parliament meant to be included as the "person" mentioned in the subsection only a person who, like the owner or one of the types of person mentioned after "charterers", was at the time in question a person in possession or control of the ship, then that interpretation would give effect to that contention.


For my part, as a matter of construction I find it impossible to construe the words in that way. If only a demise charterer were meant, one would of course have expected the word "demise" to have been inserted before the word "charterer". Alternatively the word "charterer" could have been omitted altogether, because a demise charterer would be included in the words "the person in possession or control".


In The Eschersheim (1976) 1 Weekly Law Reports, page 436, in the House of Lords, the first speech was delivered by Lord Diplock and the other four of their Lordships simply agreed with Lord Diplock. At the foot of page 436 of the report, he made this observation: "It is clear that to be liable to arrest the ship must not only be the property of the defendant to the action but must also be identifiable as the ship in connection with which the claim made in the action arose, or a sister ship of that ship". Again, in the middle of page 439 opposite the letter E, Lord Diplock said: "As I have already pointed out, the right of arrest conferred by section 3(4) is confined to a ship in connection with which the claim arose, or a sister ship". The Span Terza is of course not a sister ship of the Neptunia.


The problem with which we are concerned did not in any way arise in The Eschersheim. The issues to which their Lordships were directing their attention were several, but none of them came anywhere near to what we are considering today. What Lord Diplock said was clearly obiter, and it does not seem to me that he could possibly have had in mind the kind of problem with which we are dealing.


I therefore consider that it is open to this court to hold, and that we should hold, that in the very special circumstances of this case the Span Terza is liable to arrest although not a sister ship.


In previous cases concerned with the arrest of ships, assistance has been derived by this court from the International Convention Relating to the Arrest of Sea Going Ships of 10th Hay 1952, the provisions of the Act of 1956 having been enacted in pursuance of that convention, though not adhering to its language or its substance in every respect. Such assistance was derived by this court in, among other cases, The Banco (1971) Probate, 137 and The Eschersheim.


Article 3 of the Convention contains provisions about what ships may be arrested. In the first four numbered paragraphs there, there is nothing which would enable a charterer or a shipowner to be brought in, other than a charterer by demise, a charterer by demise being expressly referred to in numbered paragraph (4). But then, at the end of the Article, these words appear: "The provisions of this paragraph shall apply to any case in which a person other than the registered owner of a ship is liable in respect of a maritime claim relating to that ship"—words which seem to be far wider than section 3(4), because they do not include the limitation of any such person as the charterer.


In the circumstances, I do not find that the provisions of the Convention are of assistance to me in deciding this case; I prefer to go on my interpretation of the words themselves.


It so happens that this matter has been considered in two courts in the Far East, one in Singapore in a case called The Permina, (1978) 1 Lloyd's Reports, page 308, where the decision arrived at was the one that I have arrived at. The other case was in Hong Kong, the name of the case being The Ledesco Uno, (1978) 2 Lloyd's Reports, page 99, which went the other way.


The only previous English case dealing with the matter is The Maritime Trader, (1981) 2 Lloyd's Reports, page 154, which was a decision of Mr. Justice Sheen himself. He felt bound to follow The Eschersheim, by which he can only have meant that he felt bound to follow the dictum of Lord Diplock, because I think nothing else is to be found in the reports in the House of Lords, in the Court of Appeal or at first instance before Mr. Justice Brandon, as he then was, which could in any way be regarded as relevant.


In The Maritime Trader Mr. Justice Sheen said that it was with reluctance that he felt bound to take that view. Clearly this morning he felt reluctance to take the same view in the instant case, and readily gave leave to appeal in order that the matter might be considered in this court.


I should mention one further point: there is in this case, as there was in the case of The Maritime Trade, an arbitration clause in the charterparty. In The Maritime Trader, as appears from the grounds of appeal, which are set out on page 154, in the second column, one of those grounds was "…that the plaintiffs having elected to prosecute their claim by way of arbitration are precluded from maintaining these proceedings, the only purpose of which is to obtain security for any award in the arbitration". At the very end of his judgment Mr. Justice Sheen said: "I share the view of Mr. Justice Brandon that it is unfortunate that Parliament has not given this court power to arrest a ship in order to provide security for a maritime claim which is to be referred to arbitration as contemplated by the Convention. I agree with Mr. Justice Brandon that this court has no jurisdiction to arrest ships for that purpose, which was admittedly the only purpose in issuing the writ in this action. Accordingly on the third ground I would...

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