Third Chandris Shipping Corporation v Unimarine S.A.; Aggelikai Ptera Compania Maritima S.A. v Unimarine S.A.; Western Sealanes Corporation v Unimarine S.A. (Angelic Wings, Genie, Pythia)

JurisdictionEngland & Wales
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE LAWTON,LORD JUSTICE CUMMING-BRUCE
Judgment Date24 May 1979
Judgment citation (vLex)[1979] EWCA Civ J0524-1
Date24 May 1979
CourtCourt of Appeal (Civil Division)
Third Chandris Shipping Corporation
First Plaintiff
(Respondent)
and
Western Sealane Corporation
Second Plaintiff
(Respondent)
and
Aggelikai Ptera Compania Maritima S. A.
Third Plaintiff
(Respondent)
and
Unimarine S. A.
Defendant
(Appellant)

[1979] EWCA Civ J0524-1

Before:

The Master of the Rolls (Lord Denning)

Lord Justice Lawton and

Lord Justice Cumming-Bruce

In The Supreme Court of Judicature

Court of Appeal

On Appeal from The High Court of Justice

Queen's Bench Division

Commercial Court

(Mr. Justice Mustill)

MR. R. AIKENS (instructed by Messrs. Clyde & Co.) appeared on behalf of the First Plaintiff (Respondent).

MR. R. BUCKLEY, Q. C. and MR. S. GAULT (instructed by Messrs. Ince & Co.) appeared on behalf of the Second Plaintiff (Respondent).

MR. M. COLLINS (instructed by Messrs. Ince & Co.) appeared on behalf of the Third Plaintiff (Respondent).

MR. N. PHILLIPS, Q. C. and MR. M. HOWARD (instructed by Messrs. Lloyd Deity Neal) appeared on behalf of the Defendant (Appellants).

THE MASTER OF THE ROLLS
1

The first case concerns the motor vessel Genie. She is a Liberian vessel owned by one of the companies of the big Chandris group. It is called the Third Chandris Shipping Corporation, In April 1978 those owners time-chartered the vessel to a company which is one of another big group called the Gulf Shipping Group These charterers were Unimarine S. A. of Panama. The time charter was made in London. It was for a trip at the rate of $3,600 a day. It was on the New York Produce Exchange form, but in the arbitration clause "New York" was crossed out and "London" inserted. So it was governed by English law. The trip took 139 days and three hours, and she was redelivered on the 2nd October, 1978 The charterers did not prepare a voyage account, as they should have done. So the owners did so. They reckoned that the charterers owed $91,087.25 for hire outstanding, but this might be reduced (on vouchers being produced by the charterers) to $48, 29197 owing to the owners. On the 31st January, 1979 the owners wrote to Gulf Charterers asking for prompt settlement. There was no reply to this letter. So on the 25th April, 1979 the shipowners issued a writ for the full $91,087.25: and applied for leave to serve notice of it in Panama: and also for a Mareva injunction. In an affidavit of that date in support a solicitor of Clyde & Co in the City of London said:

2

"I am advised by the plaintiffs' Protection and Indemnity Club that they have made enquiries which have revealed that the defendants have a bank account at the Bank of Credit and Commerce, 100 Leadenhall Street.

3

"It is my belief that the plaintiffs have a good cause of action against the defendants, and I fear that should the plaintiffs obtain a judgment against the defendants in thisaction, such judgment may well remain unsatisfied unless security for the claim is provided by the defendants".

4

On that same day, the 25th April, 1979, Mr. Justice Mustill granted a Mareva injunction restraining the defendants from removing from the jurisdiction any of their assets, and, in particular, any moneys forming an account in the name of the defendants at the Bank of Credit and Commerce International S. A., 100 Leadenhall Street, London, save in so far as the sum exceeds $91,087,200.

5

THE ANGELIC WINGS

6

On getting this injunction, Clyde & Co. had occasion - in another context - to tell another firm of City solicitors, Ince & Co, about it. Now Ince & Co. happened to be acting for the owners of a vessel called "Angelic Wings". She is a Greek vessel and was owned by the Diamlemos Shipping Agencies Limited of Piraeus. In September, 1977 by a charter made in London she had been time-chartered to Unimarine S. A. This charter was also on a New York Produce Exchange form and provided for arbitration in London.

7

She was redelivered at the end of November 1977, but there were several disputes which had been referred to arbitration in London, In particular, the vessel had grounded at a port in Indonesia and had to have substantial repairs done in Hamburg The owners made a claim for breach of the safe port warranty amounting to $170,000. The charterers claimed deductions for slow steaming. The arbitration was still pending when Clyde & Co. told Ince & Co. about the Mareva injunction in the "Genie". Ince & Co. immediately were on the alert. They thought they ought to get a Mareva injunction for the "Angelic Wings". They decided to do it by way of an originating summons undersection 12(6) of the Arbitration Act 1950. On the 27th April, 1979 they applied to Mr. Justice Parker. In the affidavit in support (shown later) the solicitors, Ince & Co., said this:

8

"Diamlemos are very concerned that they have no security for their claims against Unimarine which total approximately $200,000 as set out above. This concern has been heightened by doubts about the solvency of Unimarine and by the fact that Mustill J. apparently granted a Mareva injunction against Unimarine on 25th April, 1979 notice of which was given to Messrs. Ince & Co. by telex from Messrs. Clyde & Co. It would, therefore, appear that unless restrained, Unimarine may seek to remove their assets from the Jurisdiction so far as they exceed the amount caught by the Order of Mustill J."

9

On the 27th April, 1979 Mr. Justice Parker granted a Mareva injunction save as to any excess over $220,000, together with leave to serve the originating summons out of the jurisdiction. Later there was substituted for Diamlemos a company called Aggelikai Maritima S. A.

10

THE PYTHIA

11

Now Ince & Co. at this time was also acting for the owners of a Greek vessel called the "Pythia". The owners were a Liberian corporation called Western Sealanes Corporation. In September 1978 they had time-chartered the "Pythia" to Unimarine S. A. for a trip to the Persian Gulf. It was again on the New York Produce Exchange Form and provided for arbitration in London. On the 2nd November, 1978? while proceeding up river to Khorramshahr, she was in a serious collision with a Russian vessel: in consequence she had to return to her lightening anchorage to discharge her cargo. There was a dispute about the cost of discharge. The owners made a claim against thecharterers: and on the 15th November, 1978 Ince & Co. applied to Mr. Justice Donaldson for a Mareva injunction. The judge granted it. But it was released by agreement between the parties in January 1979 There remained, however, a large sum claimed by the owners amounting to $750,000. In April 1979, when Ince & Co heard about the Mareva injunction in the "Genie", they again were on the alert about the "Pythia". So, on the 27th April, 1979 they applied to Mr. Justice Parker for a Mareva injunction in regard to the $750,000. The affidavit in support said this:

12

"The Defendants are resident out of the jurisdiction but have assets within the jurisdiction. The Plaintiffs are concerned that the Defendants may remove their assets out of the jurisdiction before a judgment in this action could be enforced".

13

The judge on the 27th April granted a Mareva injunction "provided that this Order shall not apply to assets in excess of $750,000".

14

THE APPLICATIONS TO DISCHARGE

15

On receiving these injunctions, Unimarine S. A. were very upset. Their London agents were a company called Gulf Chartering and Marine Services Ltd. Their manager, Mr. Ash, immediately went to their solicitors, Lloyd Denby Neal. They applied to discharge the Mareva injunctions in respect of all three vessels. These applications were supported by affidavits in which they said they had good defences to the claims made against them. They also said that, if an award went against them any arbitration, there was no doubt at all that Unimarine S. A. would honour it. I will quote a few sentences from the manager's affidavit:

16

"Unimarine have, as will appear, very extensive commitments,and the freezing of the bank account effectively paralyses the whole of their operations in this country…

17

"Unimarine are a Corporation which concerns itself exclusively with the chartering of ships for the carriage of goods They are in fact one of the largest Charterers of ships in the world, I have examined the figures which show that from 1971 to date well over 1,000 ships were chartered by Unimarine S. A. I calculate that this represents a total tonnage of several million tons. There are about 100 ships on charter to Unimarine S. A.

18

"These figures reflect the enormous volume of business done by Unimarine in recent years…

19

"In the event of a whole series of injunctions of this type being obtained and upheld there will not be any incentive on Unimarine to continue to use this country as a base for its operations".

20

THE DECISION OF MR. JUSTICE MUSTILL

21

The applications to discharge were heard by Mr. Justice Mustill on the 10th May, 1979. He refused to discharge the injunctions. His reasoning is so valuable that I hope many will read it.

22

THE ASSETS OF UNIMARINE S.A.

23

Before us further evidence was adduced. There was, in particular, a letter from the bankers of Unimarine, saying that the account was sometimes in overdraft. Written on the 9th May, 1979 from their London office, their Luxenbourg branch said:

24

"We write to confirm that Unimarine S. A. are one of our most valued customers and have been so since 1976. we have no doubt that they would be in a position to meet liabilitiesarising, in the normal course of business, for arbitration awards against them as operators of time-charter tonnage.

25

"We have been asked to reveal in this letter the present state of their account with us as at Friday, 27th April, 1979, to date. During this period of time, having overall regard to their trade patterns, they have been in overdraft with. us. Naturally, as valued customers, this is quite acceptable to us, as the income from freight in any one month is very...

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