The River Rima
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE NOURSE,LORD JUSTICE WOOLF |
| Judgment Date | 01 May 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J0501-9 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 May 1987 |
| Docket Number | 87/0478 |
[1987] EWCA Civ J0501-9
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. JUSTICE SHEEN)
Royal Courts of Justice.
The Master of the Rolls
(Sir John Donaldson)
Lord Justice Nourse
and
Lord Justice Woolf (not Present)
87/0478
1987 Folio 130
MR. JONATHAN SUMPTION, Q.C. and MR. M. HAPGOOD (instructed by Messrs. Allen & Overy) appeared on behalf of the (Plaintiffs) Respondents.
MR. RICHARD AIKENS, Q.C. and MR. L. PERSEY (instructed by Messrs. Hill Dickinson & Co.) appeared on behalf of the (Defendants) Appellants.
The "River Rima" is a Nigerian vessel registered in Lagos and owned by the Nigerian National Shipping Line ("NNSL"). In terms of design, she is what is called a "Combo" vessel, being equipped to carry both containers and general dry cargo. Since August 1986 she has been continuously under arrest at the suit of various parties and is berthed in the port of Liverpool. The arrest with which we are concerned was instigated by Tiphook Container Rental Company Limited who, on the 9th March, 1987, issued a writ in rem claiming damages for the conversion of certain containers leased to NNSL and further damages for breach of an obligation to maintain the containers in good condition and repair.
The issue in the appeal is not whether these claims are well-founded, but whether they can be maintained in an action in rem. That jurisdiction of the Admiralty Court is governed, so far as is material, by sections 20 and 21 of the Supreme Court Act 1981. Section 20(2) contains an exhaustive list of "questions and claims" in lettered paragraphs, most of which can found an action in rem (section 21(2) and (4)). The particular lettered paragraphs relied upon in the instant case are the following:
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"(m) any claim in respect of goods or materials supplied to a ship for her operation or maintenance;
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(n) any claim in respect of the construction, repair or equipment of a ship or in respect of dock charges or dues."
However, for completeness, and because it might be thought by anyone who was unfamiliar with the decision of the House of Lords in Gatoil International Inc. v. Arkwright-Boston Manufacturers Mutual Insurance Co. [1985] A.C. 255 to be a more obvious basis for the plaintiffs' claims, I should also mention paragraph (h) which reads:
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"(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 relevant facts are within a small compass and are largely undisputed. NNSL own a number of vessels capable of carrying containerised cargoes. They also have a number of contracts whereby NNSL lease containers from their owners, including one with the plaintiffs. That with the plaintiffs' specified daily rates of hire for the containers, together with handling and other charges. It also specified various depots throughout the world at which containers can be picked up and re-delivered. It is wholly silent as to the use to be made of the containers by NNSL, whether by land or sea. However, this omission is to some extent made good by an affidavit sworn by Mr. Abdullah Abubakar, the Liverpool Line manager of the defendants who deposed as follows:
"The procedure regarding the hire of the containers is as follows. As and when the containers are required, NNSL contact their container leasing agents—all current leasing is now dealt with by Scamar of Paris. The agents then arrange for the containers to be leased and to be delivered to the location where they are required, normally direct to the shippers so that the containers can be stuffed, and sometimes to a container terminal.
The containers will be carried by an N.N.S.L. vessel if such is available. However, if no N.N.S.L. vessel is available, they will be carried aboard any other vessel which is available with N.N.S.L. being named as the shipper on the Bill of Lading…
I am informed by Mr. Alegbeleye, the Hamburg Line Manager of N.N.S.L., that containers leased to N.N.S.L. have been used by Nigerian Green Line (a participating member of both Conference lines) over the last six months by way of an agreement reached between N.N.S.L. and Nigerian Green Line Limited.
Accordingly, I verily believe that the containers hired by N.N.S.L. are for the use of the company and not by way of supplies to N.N.S.L. vessels, for their operation or otherwise. The containers are for the convenience of the various shippers utilising N.N.S.L. services."
Mr. Justice Sheen held that the court had no jurisdiction under paragraph (n), which in his judgment covered only "items which become part of the ship or are carried permanently." That part of his decision is now accepted. However, he held that paragraph (m) did give the court jurisdiction, the containers being "goods…supplied to a ship for her operation". In reply to the argument that the operation of a ship involved only moving the ship from port to port, he said:
"It seems to me that the words 'for her operation' cannot be construed so narrowly that they are confined to the meaning which Mr Aikens submitted should be attached to them, namely 'in order that the ship could operate, in the sense of moving from port to port'. The defendants' ships are operated for commercial purposes. They are only profit earning when carrying cargo. N.N.S.L. took on hire containers solely for the purpose of increasing the profit earned by each ship by reducing the time taken to load and unload the cargo and also for the purpose of reducing the number of men employed in those operations. All these considerations are related to the efficiency of the defendants' commercial activity in the operation of their ships.
The operation of a ship must be viewed as a complete commercial operation.
…
The defendants, as shipowners, operate their ships for the purpose of earning money by carrying goods from one port to another, and for no other purpose. The only purpose for which the defendants hired the containers, supplied by the plaintiffs, and carried them in their ships was and is to facilitate that operation. The House of Lords has held that an agreement for the hire of containers is not an agreement relating to the carriage of goods in a ship. Having eliminated the relationship to the carriage of goods the containers must have been hired by the defendants and supplied by the plaintiffs for the operation of the ship. Accordingly, I agree with the decision of the Rotterdam District Court that containers leased to shipowners are goods supplied for the operation of their ships."
Accordingly he dismissed an application for the writ to be set aside and for the arrest of the vessel to be discharged. NNSL has appealed and, at the conclusion of the argument, we announced that the appeal would be allowed, but indicated that we would give our reasons for this decision at a later date. This I now do.
There is no doubt that the learned judge was much influenced by the decision of the District Court of Rotterdam given on the 29th June, 1984 in the " River Jimini" to which he referred and by the desirability of there being a common international approach to the Admiralty jurisdiction of courts. In this he was clearly right. The 1952 Brussels Convention for the unification of the rules relating to the arrest of sea-going ships, which has been ratified by Great Britain, was intended to have just this effect and the relevant sections of the Supreme Court Act 1981 and their predecessors in the Administration of Justice Act 1956 were intended to give effect to the Convention. Nevertheless, it is not yet the case that there is any established body of law as to the meaning of Article 1(1)(k) of the Brussels Convention, which is the equivalent of paragraph (m).
The " River Jimini" was also owned by NNSL and the claim related to containers leased to them. The decision of the Rotterdam court was provisional in nature—"For the time being it must be…assumed that [the claimant] is right to allege that the claim for which the attachment has been made is a claim under maritime law in the sense of the Brussels treaty". Furthermore, it did no more than decide that "supplied" in the paragraph did not necessarily denote a change in ownership and that it was no obstacle to the application of the paragraph that the containers were not delivered on board the ship and were not used exclusively on board. As the learned judge pointed out, containers are "stuffed" ashore and, to facilitate this process, carriers often make...
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