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7 Post-Arrest Procedure

Sarah C. Derrington, James M. Turner

From: The Law and Practice of Admiralty Matters (2nd Edition)

Sarah Derrington, James M Turner QC

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 07 June 2023

(p. 154) Post-Arrest Procedure

A.  The Effect of Arrest

7.01  Immediately upon arrest, a ship becomes security in the custody of the court to await the result of the proceedings giving rise to the arrest. The ship remains in the custody of the court until released upon the provision of alternative security or sale by the court.1 It is to be noted in this respect that the Marshal has custody but not possession. Any pre-arrest rights and remedies based upon possession are not affected by the arrest.2

(p. 155) 7.02  Once the property has been arrested, the Registrar issues standard directions ordering that the Admiralty Marshal may at any time:

  1. (1)  take measures to preserve the ship, its machinery, and equipment;

  2. (2)  move the ship up to five miles within the limits of the port where it is lying under arrest, either for its safety or to comply with the requirements of the Port Authority;

  3. (3)  supply the minimum victuals, domestic fuel,3 and water necessary to avoid hardship to the crew.4

7.03  Generally, property under arrest may not be moved unless the court so orders, and the property may be immobilized or prevented from sailing in such manner as the Marshal may consider appropriate.5 Interference with the arrest process by any party, such as moving the property to be arrested with knowledge that an arrest has been issued, is a contempt of court and is punishable by committal.6 Interference with the custody of the property under arrest after arrest also amounts to contempt of court.7 In The Synova,8 Brandon J deprecated the removal of the court’s warrant after the debt for which the arrest had been made was paid, but without the permission of the court:9

… it is important that the Court’s process of arrest and actions in rem should remain inviolate, as far as that can be achieved, and that any violations of that process should be punished appropriately.

In The Merdeka,10 the master of the vessel, knowing her to be under arrest, moved the ship and took her out of the jurisdiction. Sheen J was of the opinion that this was a case of serious contempt and that proceedings to redress contempt were necessary in order to impress on others the consequences of flouting the orders of the court.

(p. 156) 7.04  The extent of any punishment will depend on the circumstances of the case. The relatively minor contempt that was the subject of The Synova attracted a fine of only £100. In The Merdeka, the master’s written contrite apology, coupled with his voluntary return to London with the vessel, were taken into account in imposing a fine of £350, together with an order for costs.

7.05  An order for the stay of proceedings has no effect on the arrest of property or the provision of security. An arrest remains in force and any security representing the property remains in place.11

B.  Insurance

7.06  Despite having custody of the property under arrest, the Marshal does not insure the property.12 Section N13 of the present Admiralty and Commercial Courts Guide confirms the position, which was first adopted on 1 May 1970, that the Marshal will not insure arrested property for the benefit of the parties.13 Nonetheless, there is authority for the proposition that the Marshal owes a duty to take reasonable care of the vessel whilst it is in his custody and is liable for damage caused by his negligence.14 The Marshal may therefore insure against his own negligence.

7.07  If the Marshal needs to move the vessel either in accordance with his powers under the standard directions on arrest or pursuant to a specific order of the court, the Marshal will attempt to advise all parties known to him as being on the record in an action in rem of his intention to move the vessel or move it beyond the area covered by the usual port risks policy.15

(p. 157) C.  Joinder of Parties

7.08  Any person interested in property under arrest, or in the proceeds of sale of such property, or whose interests are affected by any order sought or made, may be made a party to any claim against the property or proceeds of sale.16 Such a person will include the owner of cargo on board the arrested vessel, a mortgagee, a charterer, and anyone who may suffer ‘not merely financial loss or commercial difficulty, but even danger to persons or property’.17

D.  Subsequent In Rem Proceedings

7.09  The fact that property is under arrest does not prevent an in rem claim form being served upon it or its arrest by any other person claiming to have an in rem claim against it.18 Nor does the sale of the ship prevent an in rem claim form being issued against the fund in court.19 The High Court of Hong Kong has emphasized that the fund in court represents the ship; it is therefore not a valid basis for challenging jurisdiction to suggest that the fact that a ship has been sold and the proceeds of sale used to constitute a fund in court means that the ‘ownership’ nexus cannot be satisfied by later in rem claimants.20

E.  Applications Relating to Undertakings

7.10  Where any undertaking is required to be given to the Admiralty Marshal, it must be given in writing to his satisfaction and in accordance with such arrangements as he may require.21 A court is unlikely to accept a personal undertaking from a solicitor if it is apparent that the amount of the undertaking is beyond the means of the (p. 158) solicitor.22 It is open to any party to seek a ruling from the Registrar in relation to any requirement relating to an undertaking.23 Disobedience to any undertaking given to the court can result in committal or, in the case of a solicitor’s undertaking, in enforcement of the undertaking pursuant to the court’s inherent power over its officers.

7.11  It is the practice of the Admiralty Marshal to divide the expenses of keeping a vessel under arrest equally between all parties who have arrested the vessel. The reasons for this practice are that the Admiralty Marshal is not in a position to determine whether the claimants in the different actions have valid causes of action, nor the amount for which the claimant in any particular action will obtain judgment, nor the order of priorities. It has been suggested that the basis of this rule of thumb is the maxim ‘equality is equity’. The application of the equitable maxim however, can produce inequity in circumstances where one party becomes liable to pay some part of the expense of the arrest even though it will be unable to recover its contribution from the funds in court or make any recovery on the claim because a party with higher priority will exhaust the fund.24

7.12  In The Falcon,25 Sheen J expressed the view that whilst justice would not necessarily be done by dividing equally between various claimants the expense of maintaining the arrested ship, neither would it necessarily be achieved by dividing the expenses in proportion to the size of the claims. A claimant who had arrested a ship should be required to pay all the expenses of the arrest and maintenance of the arrest until such time as he released his arrest. If a second claimant arrests the ship, the expenses which the first claimant undertook to pay are not thereby increased. Furthermore, if a second arrest is effected, the first arrester can release his arrest and enter a caveat against release. Thereafter, all the expenses of maintaining the arrest will fall on the second arrester. The Judge urged the Marshal to adopt the practice of charging all expenses of custody and sale of the ship to the party who obtains the order for appraisement and sale from the date when he lodges the commission for appraisement and sale, so that each litigant will know the extent of his obligations.

7.13  If there is more than one action and if the ship is appraised and sold by an order in the second or subsequent action, the claimant in the first action should apply to the court for reimbursement of the expenses of preserving the property. The court will so order unless the first claimant has acted in bad faith.26

7.14  A party who seeks to be released from an undertaking must make the application for release himself and must show sufficient grounds for the variation or rescission (p. 159) of the undertaking, supported by appropriate evidence.27 A solicitor who gives an undertaking on an application for an arrest warrant may seek to be released from that undertaking in circumstances where he is no longer able to obtain instructions from his client. In such circumstances, the court may release the solicitor from the undertaking, but usually on condition that the vessel be released immediately and that all the fees and expenses of the Marshal up to and including the release of the vessel first be paid by the solicitor.28

F.  The Provision of Security

7.15  It has been observed above that a claimant with an in rem claim may arrest a ship as of right, provided that there is jurisdiction for the claim and the statutory criteria for the issue of an arrest warrant are satisfied. At that point the ship is held as security for the claim or is released upon the provision of adequate security. Once security is provided, the security replaces the ship.

Form of security

7.16  Originally, bail was given as security for the ship in the same way as bail is provided for an individual under arrest. The security was provided either in the form of a bail bond or cash payment into court. Gradually, in addition to those forms of security, other types of security were provided such as a guarantee to the satisfaction of the claimant or the Marshal, often in the form of a P&I Club letter of undertaking. However, these alternative forms of security were a matter of private arrangement between the parties, and the court had no power to order the provision of security in an alternative form to that to which the plaintiff was entitled under the rules of court, namely, bail or payment into court.29 The use of bail bonds has become obsolete in modern times and there is no longer any specific provision for bail bonds in the CPR.30 The court’s powers with regard to the form of security (p. 160) have been widened considerably by CPR 61.5(10), which gives the court power to specify both the amount and form of security which is to be provided.

7.17  The security most often proffered will take the form of a guarantee or letter of undertaking from a bank, insurance company, or P&I Club, or cash paid into court. The wording of any guarantee or letter of undertaking must be scrutinized carefully to ensure that it deals adequately with substantive rights. It should also contain an appropriate choice of law and forum clause to govern disputes arising from the security itself. Not infrequently, the security includes a submission to the jurisdiction on the part of the defendant.

Amount of security

7.18  The security provided by a defendant for the release of a ship under arrest must be for such sum as represents the claimant’s reasonably arguable best case including interest and the claimant’s costs of the action.31 This principle applies also where the release is pursuant to statutory provisions because of a stay or dismissal of proceedings on account of an arbitration agreement or the commencement of litigation in a foreign jurisdiction.32

Variation of the security terms

7.19  Where security has been given either to obtain the release of property or to prevent its arrest, the court has power in cases of excessive security to order that the amount of security be reduced and may stay the claim until the order is complied with; in cases where the security proves insufficient, the claimant may arrest or rearrest the property proceeded against in order to obtain further security.33 However, the power of the court to order, release, or vary the amount of security provided does not involve the exercise of a broad and unfettered discretion. Prima facie, the sufficiency of the security is a matter for the parties; if they are unable to agree on the (p. 161) quantum or form of security, the court cannot impose an agreement upon them.34 In The Polo II, Brandon J described the power in these terms:35

… the power to arrest a ship is a very drastic power. And the power to insist that she shall remain under arrest unless security of a certain amount is given is equally a drastic power, and my view, which I expressed in The Moschanthy and which I repeat now, is that that power must not be exercised oppressively, and if it is exercised oppressively then the Court can and should interfere to prevent conduct of that kind. At the same time the Court must make sure that the plaintiff is not left without sufficient security to cover his reasonably best arguable case.

7.20  The court may not permit the arrest or rearrest of the property to facilitate further security if the total security would exceed the total value of the property either at the time of the original arrest or when the security was first given.36

7.21  In an application for a reduction in the amount of security sought for the release of a vessel, the conduct of both parties is to be considered in determining who should pay the costs.37

G.  Release from Arrest

Cautions against release

7.22  A person who claims to have a right in rem against property which is already under arrest and who wishes to be notified of any application in respect of that property or its proceeds of sale can protect his interests38 by filing a request for a caution against release.39 On the filing of such a request, a caution against release is entered in the Register.40 There is provision for the filing of a caution against release even where the Registry is closed.41

7.23  A person who has entered a caution against release which results in delay to the release of the property can be ordered to pay damages for losses suffered by any (p. 162) person who has an interest in the property.42 However, a court will not make an order for damages if there was good reason for the entry and maintenance of the caution.43


7.24  Property will be released from arrest if:

  1. (1)  it is sold by the court;44

  2. (2)  the court orders that it be released on an application made by any party;45

  3. (3)  the arresting party and all other persons who have entered cautions against release file a request for release;46 or

  4. (4)  any party files a request for release containing an undertaking, together with consents to the release of the arresting party and all persons who have entered cautions against release.47

As with cautions against arrest, provision has been made for an application for release to be dealt with even when the Registry is closed. It is not automatic that the after-hours process will achieve a release but, if the Admiralty Marshal is contactable and available and there are facilities at the relevant port to assist with a release, it may be possible to proceed after hours.48

7.25  Under South African law, a ship is deemed to be released from arrest one year after the giving of a letter of undertaking, whether the undertaking is given by private arrangement between the parties or pursuant to the rules of court.49

H.  Rearrest

7.26  A vessel which has been arrested and released may be rearrested.50 However, if security has been provided, rearrest will only be permitted where not to do so would create oppression or unfairness. In The Arctic Star,51 subsequent to the provision of adequate security, the vessel’s owners took steps which seriously impaired the value of a guarantee. In the circumstances, the Court of Appeal concluded (p. 163) that rearrest was appropriate. Similarly, in The Hero,52 rearrest was permitted in circumstances where, due to a clerical error, the plaintiff had miscalculated the proper amount of security.

7.27  The New Zealand Court of Appeal has rejected the proposition that rearrest for the purpose of increased security is only appropriate in exceptional circumstances:

On the one hand there is a rule, or immunity, against rearrest. Its expression is ordinarily couched in terms of the need to avoid oppression or unfairness to a ship’s owner who has already provided security and thereby secured the release of the ship in the first place. But, on the other hand, there are clear exceptions to that rule, including in the situation where security was fixed at an inadequate amount initially, or where the actions of the owner have rendered originally adequate security inadequate. In such cases, an application to rearrest may be granted in fairness to the plaintiff.53

It is respectfully submitted that the approach of the New Zealand Court of Appeal correctly reflects the authorities. In truth, the ‘rule’ against rearrest is now no more than a back-stop to a regime driven by a reluctance to see a claimant over- or under-secured.

I.  Applications Relating to the Discharge of Cargo

7.28  It will often be the case that a ship is arrested but the cargo on board is not. In such circumstances, anyone interested in the cargo who wishes to discharge it may request the Marshal to authorize steps to discharge the cargo.54 Those making such a request of the Marshal do not become parties to the proceedings. If the Marshal considers the request reasonable,55 and the applicant gives a written undertaking to pay, on demand, the Marshal’s fees and expenses,56 the Marshal will apply to the court for an order to discharge the cargo. If the applicant is unable or unwilling to give the requisite undertaking, the applicant may be made party to the proceedings and apply to the court for the orders sought and directions as to the Marshal’s fees and expenses in relation to the discharge and storage of the cargo.57 In some circumstances, it may be necessary to seek a declaration as to the ownership of the cargo.58

(p. 164) 7.29  Difficulties arise for those interested in the cargo when the ship is arrested at a port other than the intended port of discharge. Applications have been brought that have amounted, in effect, to applications to continue trading the vessel between the contractual discharge ports. The Court of Appeal considered this type of application in The Bazias 3 and The Bazias 4 59 where, at first instance, Saville J had made an order that the vessels should remain under arrest but could return to their employment on their cross-Channel service against certain undertakings given by the defendant owners and the third party freighters. In delivering the judgment of the Court of Appeal, Lloyd LJ commented60 that the order made by Saville J was a contradiction in terms:

There is no way in which the vessels could remain within the custody of the Admiralty Marshal, as required by the judge, and yet be allowed to trade outside the jurisdiction.

7.30  Accordingly, if there is indeed any power to permit a ship to trade whilst under arrest, it is unlikely that such a ship would be permitted to trade outside territorial waters. The difficulty with the concept of the ship trading whilst under arrest is that the duty of the Marshal, to keep the ship in safe custody and preserve it, does not extend to managerial control and operation of the ship for the purpose of generating an operational profit for the shipowners and those interested in it. This is clear from the procedures in relation to insurance arrangements in England and Australia for ships under arrest,61 which specifically provide that the Marshal does not take out indemnity or commercial insurance. The operational control of a ship requires that the master and crew operate the ship in accordance with the owner’s or demise charterer’s instructions. It is impracticable for the Marshal to exercise a veto in respect of those instructions and the on-board management of the ship unless the Marshal or his nominee is presently on board the ship and supervising its operation. Where the ship is traded, the crew is not engaged by the Marshal.

7.31  The approach taken in Australian cases of the same type was to attempt to distinguish between continuing to trade the ship and moving the ship within the jurisdiction, albeit several hundreds of kilometres, to offload the cargo. Specific power to move a ship that is under arrest is provided in the Admiralty Rules 1988,62 but as the cases referred to below reveal, the court’s use of the provision has become sparing.

7.32  In Den Norske Bank (Luxembourg) SA v The Ship ‘Martha II’,63 orders were sought for the ship to be moved to other ports and for the discharge of cargo. The Martha II(p. 165) was arrested in Melbourne at the behest of the mortgagee. In the expectation that the ship would be refinanced and released, the owner applied to the court for permission to sail the ship to Sydney, and there to load and unload cargo in accordance with its scheduled cargo operations. The application was opposed by the plaintiff mortgagee. The Victorian Deputy Sheriff would not consent to the movement without formal orders of the court. Olney J granted the application subject to certain conditions being fulfilled and undertakings being given by the time charterer, including payment before the ship left Melbourne of the Marshal’s costs of supervising the movement and the costs of arrest up to the time of the order. The Marshal and two armed members of the Australian Protective Service were on board. The ship proceeded to Botany Bay, where some cargo was offloaded. On the same day, Sheppard J varied the order of Olney J to direct that no new cargo be loaded on board, the refinancing not having materialized, and ordered the ship to proceed from Botany Bay to Port Jackson to berth or anchor in the custody of the Marshal. The owner and the time charterer then applied for permission for the ship to proceed to Port Botany to offload the balance of the cargo other than mineral sands and then to proceed to Newcastle to discharge the mineral sands, it being alleged there were no suitable discharge facilities anywhere else. Sheppard J made orders for the movement of the ship and discharge of the cargo, but would not allow the ship to sail to Newcastle. He distinguished his earlier decision in Malaysia Shipyard and Engineering Sdn Bhd v Iron Shortland,64 where he had approved orders permitting the arrested vessel to sail between Port Hedland in Western Australia and Port Kembla in New South Wales, on the grounds that the orders in that case were by consent, undertakings were provided by Australian third party charterers, and the case involved ‘public interest’, namely the potential shortage of iron ore at the Port Kembla steelworks.

7.33  A similar application was made in relation to the cargo on board the Socofl Stream in Sovremenniy Kommercheskiy Flot v The Ship ‘Socofl Stream’.65 The applicant was the consignee of the cargo of steel coils and sought orders permitting the vessel to sail from the port of arrest, Brisbane, to Newcastle in order to discharge the cargo. The arresting party did not oppose the order and the applicant offered cash security to cover the Marshal’s expenses of the voyage. There was evidence that it would not be necessary for the vessel to leave the territorial sea in the course of the voyage and so the vessel could, at all times, remain within the jurisdiction of the Federal Court. However, the Marshal strenuously opposed the application on the basis that nothing, not even the presence of security officers on board, could prevent the ship ‘turning left’ if the master so decided. Kiefel J accepted the Marshal’s argument and declined to make the orders.

(p. 166) 7.34  It is submitted that the approach of Kiefel J in The Scofl Stream and that of Sheppard J in The Martha II accords with the underlying rationale of the jurisdiction to arrest. For some time it seemed unlikely that, at least in the Australian context, the orders made by Sheppard J in The Martha II and The Iron Shortland would again be made. However, in Commandate Marine Corp v The Boomerang I  66 Allsop J permitted a vessel to sail whilst under arrest from Fremantle in Western Australia to Sydney. The basis for the decision appears to have been serious doubt as to the legitimacy of the arrest given earlier authority against the proposition that the word ‘owner’ in s 19(b) of the Admiralty Act included a demise or bare-boat charterer.67 It is submitted, with respect, that this is wrong in principle. Either the vessel is properly under arrest, in which case—at any rate absent very strong factors making it correspondingly unlikely that the vessel will abscond or significant public policy considerations68—obvious practical considerations militate against its being permitted to set sail, even if its ostensible destination is another port within the jurisdiction. Or it is not properly under arrest, in which case it ought to be released. It is difficult to see why the need to resolve a short point of law, even at short notice, should produce a different result.

A more orthodox (and, it is submitted, correct) approach was taken in Tai Shing Maritime CO SA v The Ship ‘Samsun Veritas’ as surrogate for the Ship ‘Tai Hawk’,69 where the Federal Court of Australia made orders permitting a vessel arrested in Port Hedland to sail to the Port of Dampier. The vessel was fully laden with 140,000 tonnes of iron ore and the spring tides meant there was a ‘very real likelihood’ that the vessel would run aground unless she was moved. The journey involved the vessel leaving Australia’s territorial waters for part of the voyage but the Marshal did not oppose the ship going to Dampier provided adequate security arrangements were accommodated. Most importantly, the Court considered that the ‘very significant public policy considerations’ of safety meant the ship should be permitted to sail to Dampier while under arrest.

7.35  In New Zealand, a passenger vessel was arrested near the start of a week-long voyage. The innocent charterer was threatened with the loss of reputation and the tourists on board with the prospect of a wasted and expensive trip to New Zealand to embark on the voyage. The Court held that it had jurisdiction to authorize the Registrar to permit the vessel to continue with the cruise.70 Again, it is submitted that this decision is dubious in principle.

(p. 167) J.  Applications Relating to the Loading of Cargo

7.36  When a trading vessel is placed under arrest, issues will inevitably arise as to whether the loading of cargo should continue, with the obvious risk that the arrest will not be lifted and the cargo will have to be unloaded again. A degree of common sense is to be applied in such cases. In The Myrto (No 2),71 Sheen J remarked obiter:

If the Marshal arrests a ship which is in the process of loading cargo, he will, as a matter of practice, warn the ship’s agent not to continue loading if the writ in the action has been issued by mortgagees. He gives this warning because of the high probability that there will be an order for the sale of the ship. But in other cases the Marshal will not suggest that loading is discontinued because the probability is that security for the claim will be given.

7.37  While Sheen J was, with respect, undoubtedly right to differentiate between an arrest by mortgagees and a more run-of-the-mill cargo claim arrest, the risk that the anticipated security will not materialize must be evaluated in the round, if innocent commercial parties are not to be seriously inconvenienced and the Marshal potentially72 exposed to liability for reducing the value of the security.73 Whilst some Australian judges have permitted vessels to load while under arrest,74 in News Maritime Co Ltd v ‘Hyundai Cosmos’75 Tamberlin J indicated that substantial and persuasive evidence to justify the loading of additional cargo (73,000 tonnes of coal) would be required before it was permitted:

If the loading of cargo were permitted in this case, problems could arise should it become necessary to offload the cargo in order to carry out a possible sale of the vessel. There could also be complications in relation to liability for any incidents occurring during the on-loading of cargo and also in relation to contracts entered into in connection with the remaining cargo.

K.  Applications Relating to the Discharge of the Ship when the Cargo is Arrested

7.38  As with requests for the discharge of cargo, a shipowner can, without becoming a party to the proceeding, request the Marshal to discharge the ship in circumstances where only the cargo on board has been arrested.76 If the Marshal considers (p. 168) the request reasonable77 and the applicant gives a written undertaking to pay, on demand, the Marshal’s fees and expenses,78 the Marshal will apply to the court for an order to discharge the ship. If the applicant is unable or unwilling to give the requisite undertaking, the applicant may be made party to the proceedings and apply to the court for the orders sought and directions as to the Marshal’s fees and expenses.79

L.  Applications Relating to the Crew

7.39  The arresting party will not normally be concerned about the crew on board the arrested vessel because trading ships will usually provide a P&I Club letter of undertaking or post other security to secure release. If they do not, however, and particularly if it becomes necessary to remove the crew from the ship so that it can be sold, the position of the crew may become a lively and intractable issue— and can seriously delay the process of sale.

7.40  To take a fairly extreme example, in The River Andoni,80 the vessel was arrested by bunker suppliers on 20 September 1994 and judgment in default of defence entered and an order for appraisement and sale made on 4 November 1994. By mid-December it had become clear that the position of the crew was not straightforward. Most if not all of the 49-strong crew were Nigerian and could not simply be removed from the vessel, but had to be repatriated; they were, moreover, owed substantial amounts in unpaid wages and lacked the wherewithal on their own to commence proceedings;81 they also had substantial personal possessions,82 which they could not afford on their own to repatriate. Eventually contact was established with the ITF and proceedings were issued on 19 January 1995 on behalf of most of the crew. A month later an order was made that the crew vacate the vessel by a date set a week or so later, but that deadline was later extended by nearly a month. It was not until 17 March 1995, nearly six months after the vessel had first been arrested,83 that the matter was resolved and an order made for the vessel’s release.

(p. 169) 7.41  The court, faced with an impasse such as that which occurred with regard to The River Andoni, is faced with a delicate situation. No judge in the modern era would wish to be the author of an order which resulted in riot police—no doubt on live television—storming a freighter and carrying off her unpaid crew for the benefit of substantial commercial interests owed a few tens of thousands of dollars for fuel or lubricants. Indeed, it would run entirely contrary to the long and, indeed, noble tradition of the Admiralty Court of protecting the seaman for such an order to be made without giving the crew every opportunity to present their legitimate concerns, and without the court making every effort to accommodate them. Although, therefore, the court will be prepared to order a recalcitrant crew to vacate a vessel, and to back that order with a penal notice,84 it is difficult to imagine Clarke J—who as the then Admiralty Judge dealt with the saga of The River Andoni—expressing himself in quite the terms chosen by his predecessor, Hewson J, in The Fairport:85

One thing I can say and that is that if there is anybody left on board 24 hours from now he will get nothing thereafter … There has been quite enough nonsense. This Court is here to help, but it is not going to be humbugged … They prayed this Court’s aid and, having prayed its aid, they must abide its decision …

7.42  It follows that a claimant faced with a situation in which an owner has become insolvent, leaving an unpaid crew on board the vessel, will be well advised to take steps to address the crew’s position sooner rather than later.

The Marshal’s position

7.43  The Marshal owes no duty to the crew on board an arrested vessel, but his approach to crew issues may depend on the extent to which the crew’s continued presence on board the ship impacts on his duty to ensure the safe custody and preservation of the ship. Where a ship can be safely locked up as a dead ship, as would be the case, for example, if a yacht or a trawler could be stored on a hardstand or a permanent slipway, it may be unnecessary for even a ship’s keeper to be appointed,86 let alone for the crew to remain on board.

7.44  The Marshal will incur no liability for crew wages until such time as there is an agreement between the Marshal and the crew that the latter will provide services as and when requested by the Marshal.87 That may arise if, for example, the Marshal (p. 170) is required to move the arrested ship because it is adversely affecting the operation of the port or berth, posing a risk to safety in the position where it was arrested, or if it is incurring substantial wharfage charges where arrested.88 In such circumstances, the Marshal may engage such crew members as are necessary to achieve the purpose and to maintain the crew at a prudent level consistent with the discharge of his duty.89

7.45  In Patrick Stevedores No 2 Pty Ltd v Ship MV Turakina (No 1),90 the Marshal appointed the master of the ship as the ship’s keeper. At the time of appointment, the Marshal made it clear to the master that he had no intention of entering into any contractual obligation in relation to the wages and entitlements of the crew. The appointment of the master as ship’s keeper did not authorize the master, as agent of the Marshal, to engage the crew on behalf of the Marshal. The crew sought to argue that while on board the ship after arrest, and to the knowledge of the Marshal, the crew performed daily tasks in respect of the ship which contributed to its preservation and safe custody. As the Marshal was duty bound to ensure the safety and preservation of the ship, the crew argued that the work was directed at assisting the Marshal in the discharge of his duty. For that reason, the crew submitted that their wages for performing the work should be treated as part of the Marshal’s costs of arrest. Tamberlin J rejected that argument:91

The payment of the wages and other employment entitlements of the crew after arrest and up to sale or repatriation is, generally speaking, not the responsibility of the Marshal unless the Marshal considers it appropriate or necessary to enter into an agreement to engage such crew. The number and nature of the crew to be engaged by the Marshal will vary from time to time depending on the status of particular vessels, such as, for example, whether they are laid up. In many cases the vessels will be carrying cargo. Where this is so the number of crew necessary to man the ship will reflect the need to preserve and exercise custody over the cargo. The appropriate crew number may also depend on whether it was necessary to move the vessel in order to effect discharge of cargo or to berth at a suitable location which may vary from time to time as a result of exigencies at the port of arrest. What is necessary or appropriate in any particular case will depend to a large extent on the nature and quantity of the cargo.

7.46  If the crew on board refuses to assist in the movement of the ship, the Marshal may determine to tow the ship to a new location as a dead ship.92

(p. 171) The employment relationship

7.47  The arrest of the ship does not determine the employment relationship between the owners or demise charterers and the master and crew. Nor will the issue of a claim form against the ship by the master or crew to recover outstanding wages automatically determine this relationship. It will be a question to be ascertained on the facts of each case whether or not the employment contracts of the master and crew have come to an end.93 Even if the employment relationship has been terminated, then crew members may seek to recover wages accrued up until the termination and, thereafter, damages for breach of contract calculated by reference to the wages lost, the cost of sustenance for a reasonable time at the place of termination pending repatriation to their home port, and the cost of repatriation.94

7.48  The consequence of the continued employment of the crew after arrest will be the pro tanto reduction in the value of the ship or proceeds of sale by the amount of the accruing liability for wages—in other words, a reduction in the overall amount available to satisfy those claims which have a lesser priority than the claims of the master and crew.95 Although the continued engagement of the crew by the owner will give the former rights to wages and entitlements, such as accommodation on board and the right to sustenance, those rights are not enforceable against the Marshal. However, the Marshal may, if he considers it necessary for the safety of the ship or to preserve it, pay wages and provide accommodation and sustenance to the crew on board.96

The continued presence of the crew on board

7.49  The presence of the crew on board is justifiable only for so long as it does not interfere with the ship or the Marshal’s custody of it, and does not increase the Marshal’s costs of maintaining custody of the ship and preserving it. If a ship can conveniently be laid up as a dead ship pending trial or the provision of security, a crew will not, all else being equal, be permitted to remain on board where that would involve, for example, unnecessary expense in providing power or access to the ship to enable the crew to live on board. Giles J of the New Zealand High Court observed in this connection that it was unnecessary for the crew to remain on board either to assert or protect their rights; just as a mortgagee would not be allowed to enter into possession or exercise powers adverse to the Marshal’s custody or, a trade creditor (p. 172) asserting a retention of title clause would not be permitted to unbolt the ship’s equipment pending determination of its claims, so it seemed wrong in principle that seafarers should be permitted to remain on board to try and force acceptance of their claims.97 Without disagreeing with Giles J’s observations in principle, it is submitted that much may depend on the particular facts of the case. It may be, as in The River Andoni,98 that disembarking the crew is simply not a practical proposition until arrangements have been put in place to meet their legitimate claims99 and to secure their orderly repatriation together with their belongings.

7.50  If the crew refuses to leave a ship, the manner of resolving the situation can have significant consequences for the fund which is ultimately available to satisfy the claimant’s claim and costs and the claims of others against the ship. The practice of treating wages paid by the claimant after the issue of the writ as the claimant’s costs in the action, and thus recoverable, as the costs of the producer of the fund, in priority to other claimants,100 was disapproved by Cairns J, who said:101

… if wages continue to accrue I think it must follow that they are recoverable by action and not merely as part of the costs of an action.

7.51  The result is that, in the ordinary course, a claimant will receive no advantage by paying out the claim of the crew, including the payment of repatriation costs, unless it receives the leave of the court to make the payment and to stand in the shoes of the crew in respect of any sums so paid.102 Where a party stands in the shoes of the crew after payment, the right to recover monies so paid is postponed until after satisfaction of the Marshal’s costs and expenses, and also until after satisfaction of the costs of the producer of the fund. Payment of the monies without the leave of the court gives the payer no right to subrogation.103

7.52  Nonetheless, in some circumstances, the court will be prepared to treat payments to the crew as part of the costs of the sale, and therefore the costs of the action, if it is appropriate to do so in the interests of all the parties and of justice on the facts of the particular case.104 In The Guiseppe di Vittorio (No 2), it was necessary for (p. 173) the crew to leave the vessel in order for it to be sold, the crew having commenced proceedings for the payment of their wages. By a previous application brought by the claimant trade creditors, the court had determined the amount of wages owed to the crew as at that date, had ordered that the claimants be at liberty to pay the crew, and had declared that, on payment, the claimants would be subrogated to the crew’s maritime lien provided that any sum so paid was paid following the crew’s departure from the ship. Clarke J held:105

Although the Court would never permit the crew to stand in the way of a sale, it was nevertheless reasonable for the plaintiffs to incur these expenses and to pay the crew after the crew had left the vessel. In these circumstances I can see no reason why, on the facts of the instant case, the amounts so paid should not be treated as part of the plaintiffs’ costs like their other costs of arrest and sale.

7.53  Alternatively, where no claimant is prepared or able to pay off the crew in order to obtain vacant possession of the ship, the court may order that the Marshal pay the crew’s repatriation expenses and, if necessary, the claim for wages. Such expenses may then be rationalized as payments made to realize the ship on a Marshal’s sale to best advantage. If so ordered, the expenses will form part of the Marshal’s expenses.106

7.54  These two approaches both result in the payment of the crew’s claim. However, the order in which the outlay is reimbursed from the fund arising from the sale of the ship is dependent upon who has made the payment. When paid by a party other than by the Marshal, the costs will rank after the Marshal’s costs and expenses of the arrest, the costs and expenses of appraisement and sale, and the costs of the producer of the fund. When paid by the Marshal, the crew will obtain a priority unavailable on a proper distribution because its claim will have been met in priority to the costs and expenses of the arresting party and the judgment creditor.

M.  Appraisement and Sale

7.55  A party may apply to the court at any time during the proceeding of a claim, including prior to the determination of the claimant’s claim, for an order for the survey, appraisement, and/or sale of a ship.107 The word ‘party’ does not include a person who has done no more than file a caution against release, but such a person will be given notice of any application concerning the sale of the ship.108 It is not expressly provided in the rules that the property must be under arrest at the time when an order for sale is made, but the Practice Direction envisages that, at least in (p. 174) relation to an order for sale, the property will be under arrest.109 This is consistent with earlier practice.110

7.56  The sale of a ‘ship’ extends to her appurtenances.111 The ordinary meaning of ‘appurtenance’ is a mechanical accessory or some apparatus or gear which appertains or belongs to the ship.112 It does not include fuel oil.113

7.57  The practice relating to the sale of the ship was described by Sheen J in The Silia:114

When this court orders that a ship is to be sold it is the duty of the Admiralty Marshal to realize the highest price, and it is his practice to sell the ship and her contents, other than those articles which are the personal property of someone other than the owner of that ship. He permits the removal of the personal effects of the crew and equipment which is on hire; he destroys perishable food or other food which might attract vermin. In order to realize the highest price it was the practice in the past for the Marshal to sell separately from the ship such things as tinned food, stores, barometers and chronometers. The manner in which such items are sold is left to the discretion of the Marshal. Barometers and chronometers are now sold with the ship. Unbroached drums of oil are usually sold separately. But the oil in a ship’s tanks must, for practical reasons, be sold with the ship. Those reasons are as follows. In some parts of this country the removal of fuel oil from a ship’s tanks is prohibited because of the hazards involved. But even where that operation is permitted the oil would have to be pumped out of the tanks. In the case of a ship under arrest the need to remove the oil would be likely to occur at a time when pumps are not in operation and when no engine-room personnel are available. The oil would have to be pumped into a barge or land tanker, and the cost of the operation would have to be paid for. The quantity of oil might be too small to justify the cost of removing it. Furthermore, if the oil were to be removed from the ship it would be likely to attract import duty. On the other hand, that oil will realize the current market price if it is sold in the ship. If anyone other than the owner of the ship asserts a right of property in the oil the Marshal refers that question to this court, as was done, for example, in The Saint Anna [1980] 1 Lloyd’s Rep 180. In that case it was not contended by the charterers that the Court has no power to sell their fuel oil. The charterers only sought to recover the proceeds of its sale. It is the practice of the Admiralty Marshal to account separately for the proceeds of sale of fuel and lubricating oil sold with the ship because the brokers are entitled to commission on the price of the ship, but not on the price of the oil.

7.58  An application for appraisement or sale contains a personal undertaking by the solicitors for the party making the application to pay on demand the fees and (p. 175) expenses of the Marshal incurred by him or on his behalf in respect of the appraisement and sale of the property, or of endeavours to appraise or sell the property.115 Any person interested in property under arrest or the proceeds of sale or whose interests are affected by any order sought may be made a party to the proceedings.116 Any such application will be heard in public and notice of the application must be served on all parties to the claim, all persons who have requested cautions against release, and the Marshal.117 If the application for appraisement and sale is made by the Marshal himself in the exercise of his general powers in respect of property under arrest, it would appear that the Marshal will have to fund the costs of the sale himself until those costs can be recovered from the proceeds on completion of the sale.118

Sale pendente lite

7.59  The rules clearly contemplate that an order for sale may be made before judgment. Such an order may, however, only be made by the Admiralty Judge and not by the Registrar.119 A court should not make an order for the appraisement or sale of a ship pendente lite, whether or not the action is defended, except for good reason.120 The principles applicable to such an order were identified by Brandon J in The Myrto.121 Normally an order for sale before judgment will be sought only where there is a default of acknowledgement of service or defence. In such circumstances, it is common practice for the court to make an order on the basis that the security for the claim will be diminished by the continuing costs of maintaining the arrest (p. 176) to the disadvantage of all those interested in the ship. If the action is defended, then the court will examine the question of whether there is good reason for making the order more critically, and a significant factor influencing that decision will be the effect of maintaining the arrest on the value of the claimant’s security.122 Where a vessel is sold pendente lite, it is still the Marshal that must appraise the vessel and advertise and invite offers for the sale of the vessel. Except in special circumstances, the court will not order the Marshal to sell to a purchaser found by the arresting party, even if the proposed price appears to be at or around the market value for the vessel.123 This is because a private sale by the arresting party would tend to undermine the impartiality of the Marshal.124

7.60  The decision in The Union Gold reflects sentiments voiced by Waung J in the earlier Hong Kong case of The Margo L.125 The Singapore High Court followed The Union Gold and The Margo L (and an even earlier Canadian case)126 in The Turtle Bay 127 and The Sea Urchin.128 Belinda Ang J held that the court would only permit what it termed a ‘direct judicial sale’ in ‘special circumstances’ or where ‘powerful special features’ required it. In The Sea Urchin, even the presence of a perishable (and perishing) cargo, with mounting daily costs, was insufficient to qualify.

7.61  Evidence in support of an application for sale pendente lite might include:

  1. (1)  the overall value of the claim;

  2. (2)  the number of cautions against release and other claims against the ship and their likely value;

  3. (3)  the value of the ship and its likely diminution in value during the course of the arrest;

  4. (4)  the costs of maintaining the vessel’s arrest, including such costs as port and berth charges, ship’s keeper, crew wages and emoluments, supply of domestic fuel to the vessel, and so on, and the consequent diminution in the claimant’s security;

  5. (5)  any (prospect of) deterioration in the condition of the ship;(p. 177)

  6. (6)  any necessary work to be done on the ship either to keep it afloat or to enable it to be moved;

  7. (7)  the unwillingness of the shipowner to contribute to the costs of the arrest;

  8. (8)  the financial position of the shipowner and his unwillingness or inability to provide security for the ship’s release;

  9. (9)  the likely intervention of claimants with higher priority;

  10. (10)  humanitarian considerations in relation to the crew;

  11. (11)  whether, if the claimant obtains judgment in his favour, the judgment can be satisfied by the defendant without the need to sell the ship in any event.

Private sale before order

The sale process

7.63  Once the court has made an order for sale131 it will usually set a time within which notice of claims against the proceeds must be filed and the time and manner in which the notice must be advertised.132 Unless the court otherwise orders, the Marshal is required to have the ship appraised by an experienced valuer133 who will certify the value of the ship, and the Marshal is required to sell the ship for the highest price he can obtain,134 which—absent a special order—must not be less than the certified value of the ship. If the Marshal conducts the sale of a vessel negligently, he may be liable for loss suffered in the same way as he is liable for loss or damage suffered by the vessel whilst in his custody.135 There is no provision in the rules relating to the manner in which a sale must be conducted by the Marshal, but it will most commonly be by private treaty following reasonable advertisement of the ship for sale.136

(p. 178) Stopping the sale process

7.64  In the event that circumstances change between the making of an order for appraisement and sale and the completion of a sale, a party may apply to the court for the order to be suspended137 or even set aside. The suspension of an order for sale will only be made on confirmation that there are, or will within a specified and short period be,138 sufficient funds within the jurisdiction139 to satisfy all the claims before the court. Such an order will not be made lightly, particularly when the Admiralty Marshal has commenced negotiations with third parties for the sale of the vessel.

The proceeds of sale and the determination of priorities

7.65  The proceeds of sale are paid into court by the Marshal. The Marshal may sell in a foreign currency, in which case, the funds are placed on one day call in an interest bearing account unless the court otherwise orders.140 An application may be made to the Registrar to place foreign currency on longer term deposit.141 In any event, notice of the placement of foreign currency in an interest bearing account must be given to all parties interested in the fund,142 and any party who objects to the mode of investment can apply to the Registrar for directions.143

7.66  After the time prescribed for the filing and advertising of claims against the proceeds of sale, any party with a judgment against the property or the proceeds of sale may apply to the court for the determination of priorities.144 Such an application must be served on all persons who have filed claims against the property.145 The determination of priorities may only be made by the Admiralty Judge, unless the Judge otherwise orders.146 The principles relating to the determination of the order of priorities are considered in Chapter 8. Once a determination of the order of priorities has been made, payment out of the proceeds of sale is made to the judgment creditors in order of that determination or as the court otherwise orders.147

The effect of judicial sale

7.67  Judicial sale as a step in the enforcement of a claim in rem extinguishes the maritime lien or the statutory claim in rem in respect of the ship, and transfers it to the (p. 179) fund in court. A purchaser from the Admiralty Marshal, therefore, gains clear title to the ship free from any claims, liens, or encumbrances.148 Despite this well-established principle, it depends for its recognition upon courts in other jurisdictions. In some circumstances, it may not be possible in fact to relieve a ship of all encumbrances and liens if the courts of another country refuse to recognize the judicial sale as having such effect.149 Difficulties can also arise where a third party, who is neither a party to the arrest proceedings nor amenable to the jurisdiction of the court, is required to facilitate or cooperate in the removal of the registration of an encumbrance on a ship.150 There is little that a buyer can do to remedy such a situation, and this risk must be taken into account when considering entering into a sale agreement with the Admiralty Marshal.

7.68  A conflict may arise between the Marshal’s power with respect to the sale of an arrested vessel in Admiralty proceedings and the entitlement of statutory authorities under other legislation empowering detention and forfeiture of the same ship. It has been held that the court cannot make an order for the sale and delivery of a ship to a purchaser which would deprive a dock authority, without its consent, of its statutory right of detention.151 Brandon J appeared to consider himself bound by these authorities in Corps v Owners of the Paddle Steamer ‘Queen of the South’, although he would have preferred to treat the statutory possessory lien of a dock or harbour authority in the same way as the common law possessory lien of a repairer, and the statutory right of sale of such an authority in the same way as a contractual or statutory right of sale of a mortgagee:152

I should have thought that the court should have power, in an action against a ship, to sell her free of both rights, while transferring equivalent rights with equivalent priority to the proceeds of sale in court, and further should have power to do this whether the dock or harbour authority consents or not. If the court does not have such power it is extremely inconvenient for it means that, in any case where a dock or harbour authority has a right of detention or sale, the court cannot transfer the ship to a purchaser free of encumbrances, with all the disadvantages arising from such a situation …

The inconvenience was resolved in that case by authorizing the Marshal to pay off the rates owed to the authority and include the expenditure in the Marshal’s expenses of sale.153

(p. 180) 7.69  The Federal Court of Australia considered a similar conflict arising out of the detention of an illegal fishing vessel by the Australian Fisheries Management Authority (AFMA) pursuant to the Fisheries Management Act 1991 (Cth) and the subsequent arrest of the vessel by mortgagees.154 The question considered by the court was whether the rights asserted by the AFMA constituted a defect of title to the ship which a purchaser would acquire upon the sale of the ship in the proceedings in rem by the Admiralty Marshal. So far as any conflict between the Admiralty jurisdiction and civil powers of detention are concerned, the conflict has been resolved by s 36 of the Admiralty Act 1988, which provides that the court’s power of arrest prevails, but the claim which is the subject of the statutory power of detention is converted into a claim against the ship having an appropriately high priority.155 In the case before the court, the right of detention claimed was in aid of a forfeiture by way of penalty and had no relation to a civil claim. Thus, s 36 of the Admiralty Act was of no application. In the light of the provisions made in relation to civil claims, Ryan J considered that the legislature intended to leave to the Court of Admiralty the adjustment of competing rights of the authorized officer under the Fisheries Management Act on the one hand and the plaintiff in an action on the other.

7.70  The case was significant in that it emphasized the broad discretion of the court to resolve the competing interests of a statutory authority and the powers of the court following an arrest. Following the decision, however, the Fisheries Management Act was amended to provide expressly that the seizure, detention, or forfeiture of a boat under that Act has effect despite any arrest pursuant to the Admiralty Act 1988, or the sale or order for sale of the boat pursuant to the provisions of the Admiralty Act 1988.156 The Full Federal Court considered the application of s 108A in Scandinavian Bunkering AS v The Bunkers on Board The Ship FV Taruman and Others.157 The Court confirmed that s 108A of the Fisheries Management Act prevailed over any valid arrest of a vessel under the Admiralty Act, with the effect that the arrested vessel, including her bunkers, was automatically forfeited to the Commonwealth under s 106A of the Act.

N.  Applications Relating to Wrongful Arrest

7.71  There is no provision in the CPR which makes provision for an aggrieved shipowner to claim damages for wrongful arrest. Damages will, however, be awarded where the arresting party had no honest belief in his entitlement to arrest the vessel (p. 181) or acted without any serious regard to whether there were adequate grounds for the arrest.158 A defendant shipowner may also be awarded special or indemnity costs in defending such a claim.159 In The Kommunar (No 3),160 Colman J observed that it is in the latter sense that the traditional formulation of the requirements for damages, crassa negligentia or gross negligence,161 are used, as implying malice or being equivalent to it. The traditional formulation was stated by the Privy Council in The Evangelismos:162

Their Lordships think that there is no reason for distinguishing this case, or giving damages. Undoubtedly, there may be cases in which there is either mala fides, or that crassa negligentia, which implies malice, which would justify a Court of Admiralty giving damages, as in an action brought at Common law damages may be obtained … The real question in this case, following the principles laid down with regard to actions of this description, comes to this: is there or is there not, reason to say that the action was so unwarrantably brought, or brought with so little colour, or so little foundation, that it implies malice on the part of the Plaintiff, or that gross negligence which is equivalent to it?

7.72  The justification for the principle is that, in an admiralty action in rem, the arrest of the res is the necessary foundation of the action.163 If the res is arrested under a mistake of fact or law, but bona fide, the court will not punish the arresting party. However, if a malicious intention to punish the owner of the res by the use of arrest is proved, damages will follow.164 A claim for damages for wrongful arrest can be brought in the main action.165 Proof of actual damage is not necessary and nominal damages will be awarded in the absence of proof of special damage.166

7.73  In Gulf Azov Shipping Co Ltd v Idisi,167 the Court of Appeal described Colman J’s formulation in The Kommunar (No 3) 168 as ‘this exposition of the modern law’,169 in holding that the defendants had, at the very least, acted without any serious regard as to whether there were adequate grounds for continuing the arrest in respect of a claim in the sum of USD17 million once it had been decided by Sanyaolu J in the (p. 182) High Court in Lagos that the reasonably arguable best case was a claim in the sum of USD1 million. Following the decision of Sanyaolu J, it was alleged that the first defendant, Chief Idisi, had exercised improper influence in preventing the vessel leaving after the release order had been issued; that Chief Idisi had orchestrated the forcible boarding of the vessel to force it to move to a berth adjacent to the second defendant’s premises where it was blocked; that Chief Idisi was responsible for the use of gunfire and men boarding the vessel when she was legitimately trying to leave, and that Chief Idisi exercised improper influence over the judiciary in Benin. The Court of Appeal held that, on a summary judgment application, it could not be satisfied that the persons preventing the vessel from leaving were under Chief Idisi’s orders, but that it was satisfied that Chief Idisi must have been aware that his claims were not sustainable in the sum of USD17 million. There was thus no arguable defence to the claim for unlawful detention of the vessel and damages were awarded.

7.74  In The Nicholas M,170 the owners had commenced proceedings against the charterers and obtained a maritime attachment of the charterers’ assets under New York law. The charterers counterclaimed for the tort of wrongful attachment, which they argued was analogous to the doctrine of wrongful arrest. The Court considered the charterers had a ‘good arguable case’ that there was a cause of action for wrongful attachment under US federal law. The Court also remarked, obiter, that had English law applied, then wrongful attachment of a person’s assets would probably have fallen within the scope of the existing tort of wrongful arrest such that the charterer would have been entitled to relief.171 These remarks suggest English courts are not averse to widening the application of the doctrine of wrongful arrest in appropriate circumstances.

7.75  In The Fearless I,172 a wrongful arrestor argued it was entitled to reimbursement of its costs in arresting and maintaining two vessels in priority to all others except the Chief Bailiff. The wrongful arrestor’s earlier claims had been dismissed partly on the basis that the claims did not fall within the admiralty jurisdiction of the High Court. The vessels were subsequently rearrested by two other claimants, whose claims against the vessels succeeded. The Hong Kong Court of First Instance roundly dismissed the wrongful arrestor’s claim and distinguished between costs incurred by a wrongful arrestor and those incurred by a lawful arrestor. It was not inequitable for a wrongful arrestor to bear the legal and financial consequences of its own actions and to hold otherwise ‘would only serve as a judicial encouragement for wrongful arrests’.173

(p. 183) 7.76  The principle established in The Evangelismos continues to be applied in several other common law jurisdictions.174 South Africa and Australia are, however, notable exceptions. The former’s Admiralty Jurisdiction Regulation Act 105 of 1983 provides:175

Any person who makes an excessive claim or requires excessive security or without reasonable and probable cause obtains the arrest of property or an order of the court, shall be liable to any person suffering loss or damage as a result thereof for that loss or damage.

7.77  It has been held that a lack of honest belief will negative ‘reasonable and probable cause’ in this context,176 although it is, with respect, a little hard to understand how. ‘Reasonable and probable cause’ is, to English eyes at least, an objective test, in which the subjective mens rea of the arresting party is irrelevant. Of course, the absence of an objectively reasonable and probable cause may point to a lack of honest belief, but it would be unnecessary to go that far in order to hold that the test was not satisfied. Moreover, it may be far harder to establish a lack of honest belief, which would ordinarily require cross-examination, than it would to show that the arresting party had no ‘reasonable and probable cause’ for doing so.

7.78  This provision was used as the basis for the Australian provision now contained in the Admiralty Act 1988. However, there had been criticism of the breadth and vagueness of the language in the South African provision and thus the Australian provision is said to be an attempt ‘to strike a more precise balance between plaintiff and defendant’.177 Further, unlike the South African provision, the Australian provision restricts the right to recover to those parties (or persons with an interest in the property) who have suffered loss or damage as a direct result of the arrest. Thus, s 34 of the Admiralty Act provides:

  1. (1)  Where, in relation to a proceeding commenced under this Act:

    1. (a)  a party unreasonably and without good cause:

      1. (i)  demands excessive security in relation to the proceeding; or

      2. (ii)  obtains the arrest of a ship or other property under this Act; or(p. 184)

    2. (b)  a party or other person unreasonably and without good cause178 fails to give a consent required under this Act for the release from arrest of a ship or other property;

      • the party or person is liable in damages to a party to the proceeding, or to a person who has an interest in the ship or property, being a party or person who has suffered loss or damage as a direct result.

  2. (2)  The jurisdiction of a court in which a proceeding was commenced under this Act extends to determining a claim arising under subsection (1) in relation to the proceeding.

7.79  The need for a statutory provision was said to be that wrongful arrest is otherwise very difficult to prove and, in practice, the vexatious or frivolous plaintiff will seldom need to be concerned with the risk of having to pay damages.179 Despite the legislative interventions, however, it may be noted that there appear so far to have been no decided case in which a shipowner has successfully sought damages for wrongful arrest in Australia and no more than a handful in South Africa.180

7.80  In the absence of such an express legislative provision, the courts have been reluctant to depart from the principle in The Evangelismos. In Armada Lines Ltd v Chaleur Fertilizers Ltd,181 the Supreme Court of Canada upheld an appeal against an award of damages, which comprised loss of use of working capital, for wrongful arrest of the respondent’s cargo. The respondent argued that the disparity between the liability of a plaintiff who obtains a Mareva injunction and the liability of a plaintiff who arrests property in the Admiralty jurisdiction operates unfairly against defendants in Admiralty law actions. The respondent argued for the creation of a new rule, pursuant to which a plaintiff who effects a maritime arrest and then has his claim dismissed will be liable for all damages caused by the arrest. This position was said to find support amongst academic writers.182 In delivering the judgment of the court, Iacobucci J said:183

While I have some sympathy with this argument, in my view, any such change in the law falls not to the courts, but rather to the legislature to carry out. As noted above, the rule in The Evangelismos is of long standing. Whether it does or does not (p. 185) operate harshly upon defendants is a question best resolved by the legislature … In this regard, I note that, apparently alone among the common law jurisdictions, Australia has departed from the rule in The Evangelismos … As pointed out by counsel for the appellant, this change was effected not through judicial means, but rather by specific legislative enactment. In my opinion, any analogous change in Canadian law must originate in the legislative branch of government.

7.81  A similar argument was raised before the High Court of New Zealand in Mobil Oil New Zealand Ltd v The Ship Rangiora 184 by the owners of three arrested vessels who sought to set aside the arrests on the basis that the court’s in rem jurisdiction had not been properly invoked. Giles J observed:185

In my view, the situation is rather unsatisfactory for ship-owning or chartering interests. In this jurisdiction, unlike our Australian counterparts, a plaintiff arresting a ship has little real vulnerability for the economic consequences visited upon an owner. Damages for wrongful arrest may only be recovered where the arrest has been procured with malice. If the claim can meet the subject-matter test established in the Admiralty Act and the jurisdictional fact test established in The Akademik Shokalskiy and Efem Gorbenko, then the prospect of exposure to a claim in malice is obviously limited. The owner must post security and contest a claim (even a weak claim), on the merits but in the event of ultimate success, receives no compensation for the cost of the security bond186 or the loss of use of security funds or for the loss of revenue whilst detained. The situation for an owner is not so bleak in Australia where, as noted, the federal admiralty legislation imposes a liability for damages for unreasonable arrest on parties procuring the arrest of a ship. The test of unreasonableness is a much lesser burden than the test of malice. In my view, a case can be made out for a legislative rebalancing of odds which disproportionately favour plaintiffs in this jurisdiction. In making these observations I acknowledge that our jurisdiction is modelled on the English system which has an ancient heritage. Arrest has always been a very powerful remedy recognized in most jurisdictions—malice is the measurement of English law in wrongful arrest actions. The need for international consistency is … deserving of consideration. But in my view, we ought not to allow that factor to deter reform where the interests of justice so require.

7.82  More recently, the Court of Appeal in Singapore in The Vasiliy Golovnin 187 was highly critical of the test in The Evangelismos, noting that the high threshold had no doubt deterred many shipowners, probably including deserving ones, from pursuing claims for wrongful arrest. Even where such claims were pursued, the ‘one-sidedness of the Evangelismos test’ was particularly harsh in light of the fact that a ship arrest can result in substantial disruption and financial losses for which shipowners will rarely receive sufficient compensation from the arresting (p. 186) party.188 The Court also questioned whether the historical rationale for the test continued to be relevant, given claimants could now commence in rem proceedings through the service of a claim form, without the arrest of the res.189 The Court concluded:

We would agree with the views of both Iacobucci J190 and Giles J191 to the extent that the Evangelismos test is longstanding, and should not be departed from lightly, without good reasons and due consideration. However, it is always open to this court to depart from this judicially created test if the day comes when it no longer serves any relevant purpose.192 [footnotes added]

Apparently on the brink of rejecting the test in The Evangelismos, the Court of Appeal then retreated and instead decided ‘to leave this issue to be addressed more fully at a more appropriate juncture’ after it had received full arguments from counsel and submissions from those in the maritime industry.193

7.83  In fact it was not necessary for the Court to determine the issue because the Court found that the threshold was satisfied on the facts and that the two secured banks had wrongfully arrested The Vasiliy Golovnin. This was said to be for three reasons. First, Crédit Agricole, one of the two banks, had ‘unreasonably persisted’ with the arrest of The Vasiliy Golovnin (a sister-ship) in Singapore after its claim had been disposed of in Lomé, Togo, even though the Lomé court had held that sufficient security had already been provided. Second, the banks’ breach of contract claim against the shipowner under the relevant bills of lading was without substance. Third, the banks had failed to disclose material facts at the ex parte hearing at which the primary Judge had ordered the arrest of The Vasiliy Golovnin. The Court of Appeal concluded:

It appears clear to us that the Banks’ conduct in initiating the arrest could not, after taking account all the circumstances, be fairly said to be the result of an honest belief that they had valid claims, but rather arose from an ill-conceived and reckless attempt to steal a march on FESCO [the shipowner] and to force its hand in providing additional security for their claims. If the Banks felt that the security provided was insufficient, the Banks ought, in the prevailing circumstances, to have appealed this issue in Lomé rather than to open up a second, costly and inherently vexatious, front in Singapore.194

For now, therefore, the test in The Evangelismos remains the law of Singapore but it seems that the Court of Appeal would be receptive to arguments that the threshold should be lowered, should the issue arise again.


1  CPR Part 61.5(9), Admiralty Rules (Cth) r 47(1); Rules of the High Court (NZ) r 25.45; Rules of the High Court (HK) O75 r13; Admiralty Jurisdiction Regulation Act 105 of 1983 (SAf) (AJRA) s 5(3) and Admiralty Proceedings Rules (SAf) r 21; The Falcon [1981] 1 Lloyd’s Rep 13, 17.

2  The Arantzazu Mendi [1939] AC 256; Mooloolaba Slipways Pty Ltd v ‘The Santa Maria’ [2001] QSC 470.

3  ie, enough required to keep the generators going, but not to run the main engine.

4  PD61 §5.6. In Australia, the Marshal is expressly authorized by the Admiralty Rules to take all steps to retain safe custody of and preserve the ship including removing and storing cargo and moving the ship (r 47(2)); in Singapore the Sheriff often applies for an ‘omnibus’ order authorizing him to take appropriate measures to preserve the ship, her machinery, and equipment, to move the ship within the port limits, and to supply victuals, fuel, and water to the crew: Toh Kian Sing, Admiralty Law and Practice (2nd edn, 2007) 210.

5  CPR 61.5(9).

6  Rules of the High Court (NZ) r 25.40; The Seraglio (1885) 10 PD120; The Petrel (1836) 3 Hag Adm 299; The Harmonie (1841) 1 Wm Rob 179; The Synova [1976] 1 Lloyd’s Rep 40.

7  The Jarlin [1965] 1 WLR 1098; The Mathesis (1844) 2 W Rob 286; The Bure (1850) 14 Jur 1123; The Merdeka [1982] 1 Lloyd’s Rep 401; The Abodie Mendi [1939] P 178.

8  The Synova [1976] 1 Lloyd’s Rep 40.

9  Ibid 41.

10  The Merdeka [1982] 1 Lloyd’s Rep 401; the principles established in the English authorities have been followed in the Federal Court of Canada. In Whyte v The Sandpiper VI (2002) 112 ACWS (3d) 666, it was held that a show cause order would be issued to the defendants whose dredge and equipment had been arrested. Evidence was led that, subsequent to the arrest, part of the dredge’s equipment, the floating dredge spoils pipeline, had been rented out by one of the defendants and moved so that it could be used by a third party.

11  CPR 61.12.

12  PD61 §5.7.

13  The Mardina Merchant [1975] 1 WLR 147, 149, [1974] 3 All ER 749, 750–751, [1974] 2 Lloyd’s Rep 424, 425. The Australian Federal Court adopted a similar position: 10 May 1996, Practice Note 12, which was subsequently replaced by Practice Note ADM1, para 7 of which is to the same effect as section N13; see Den Norske Bank (Luxembourg) SA v Ship ‘Martha II’ [2000] FCA 241, 9 March 2000 for a discussion of whether effecting insurance is within the broad powers of the Marshal and as such can be claimed as a cost and expense of the arrest. In New Zealand, the Registrar who effected insurance was held to be entitled to be indemnified for the costs of the insurance by the arresting party: The Cornelis Verolme (1996) 9 PRNZ 409.

14  The Hoop (1801) 4 C Rob 145, 165 ER 566; Auxiliary Schooner ‘Leonora’ (No1480) (1920) 2 Ll. L Rep 9; The Cairnsmore, The Gunda [1915 Nos 690 and 716] [1920] P 209; Patrick Stevedores (No 2) Pty Ltd v MV Turakina (1998) 154 ALR 514 (Federal Court of Australia), (1998) 84 FCR 493; Weir & Lewisporte Shipyards v Bank of Nova Scotia, Hurley & Maher [1979] 30 Nfdl & PEIR 223 (Newfoundland Supreme Court).

15  Admiralty & Commercial Courts Guide N13.2.

16  CPR 61.8(7).

17  The Mardina Merchant [1975] 1 WLR 147, [1974] 3 All ER 749, [1974] 2 Lloyd’s Rep 424.

18  CPR 61.8(1). Such an arrest may serve either or both of the following purposes: (i) to encourage a shipowner to be more forthcoming in the provision of suitable security; and (ii) to found jurisdiction in cases where the shipowner is domiciled in an EU or European Free Trade Association (EFTA) State: The Anna H [1995] 1 Lloyd’s Rep 11; The Deichland [1990] 1 QB 361, [1989] 2 All ER 1066, [1989] 2 Lloyd’s Rep 113 (see para 6.32 above).

19  The Leoborg (No 2) [1963] 2 Lloyd’s Rep 441.

20  International Transportation Service Inc v The Convenience Container [2006] 902 HKCU 1 (Hong Kong Court of First Instance).

21  PD61 §14.1: there does not appear to be any power to tax the Marshal’s costs and expenses. The Federal Court of Australia has held that r 78B(1) of the Admiralty Rules (Cth) sets out a prima facie position that the Marshal’s costs and expenses are not to be taxed. In Bank of China v Ship ‘Hai Shi’ (No 3) [2013] FCA 660, Rares J went so far as to hold that the onus is on the party seeking to displace that prima facie position to establish that the Marshal incurred any costs or expenses unreasonably or otherwise than in good faith.

22  In Den Norske Bank (Luxembourg) SA v The Ship Martha II, unreported No VG70 of 1996, 6 March 1996, the Federal Court of Australia would not accept the personal undertaking of the solicitor where the amount in issue was USD16 million.

23  PD61 §14.2.

24  See further Chapter 8 below.

25  The Falcon [1981] 1 Lloyd’s Rep 13, 17.

26  Ibid.

27  Cutler v Wandsworth Stadium Ltd (1945) 172 LT 207; The Acrux [1961] 1 Lloyd’s Rep 471.

28  Bayside Air Conditioning Pty Ltd v The Cape Don [1997] 790 FCA, 15 May 1997 (Federal Court of Australia).

29  The Alletta [1974] 1 Lloyd’s Rep 40, 50. The Canadian Federal Courts Rules give the court power to order security of four specific types: a bank guarantee (r 486(1)(a); a surety company bond in Form 486A (r 486(1)(b)); a bail bond in Form 486A (r 486(1)(c)); or cash paid into court (r 487(1)). In addition, the plaintiff can consent to release on privately negotiated security terms (r 487(1)(c)). However, the Supreme Court of British Columbia observed that the Court ought not to depart from the type and quality of security contemplated by the Rules unless there is a ‘really good reason’ for so doing: North King Lodge Ltd v Owners of the Ship Gowlland Chief [2003] BCD Civ J 15668, 5 June 2003; see also Pan Ocean Shipping Co v Breeze Navigation Ltd [2003] FCJ No 68, 21 January 2003.

30  Similarly, the South African legislation does not contemplate the use of bail bonds as a form of security, but neither Australia, Canada, Hong Kong, New Zealand, nor Singapore have yet modernized their rules to delete the reference to bail bonds. In South Africa it has been held that the security must be something tangible held or controlled by the Registrar and not a private arrangement: The Merak S [2000] 1 Lloyd’s Rep 619. Similar observations have been made in Hong Kong: The Alacrity [1994] 2 HKC 659. The New Zealand approach is examined in General Motors New Zealand Ltd v The Ship Pacific Charger AD135/81, 24 July 1981.

31  The Moschanthy [1971] 1 Lloyd’s Rep 37; The Gulf Venture [1984] 2 Lloyd’s Rep 445; Freshpac Machinery Pty Ltd v Joana Bonita (1994) 125 ALR 683 (Federal Court of Australia); Navios International Inc v The Ship Huang Shan Hai [2011] FCA 895 (Federal Court of Australia); Brotchie v The Karey T (1994) 77 FTR 42; Amican Navigation Inc v Densan Shipping Co (1997) 137 FTR 132; NHM International Inc v FC Yachts Ltd (2003) 227 FTR 42 (Federal Court of Canada); Canadian Sub Sea Hydraulic Ltd v The Cormorant (2006) FC 1050 (Federal Court of Canada); Schoeller Holidaings Ltd v Owners of Hull CZ007 [2001] 1399 HKCU 1 (High Court of Hong Kong); Hua Tian Long (No 1) [2008] 4 HKLRD 719 (Hong Kong Court of First Instance); Det Norske Veritas AS v The Ship Clarabelle [2002] NZCA 129, [2002] 2 Lloyd’s Rep 479 (New Zealand Court of Appeal).

32  Civil Jurisdiction and Judgments Act, s 26.

33  CPR 61.6 (1) and (2). See also paras 6.70 and following above, and paras 7.26–7.27 below.

34  The Polo II [1977] 2 Lloyd’s Rep 115; The Gulf Venture [1984] 2 Lloyd’s Rep 445; Owners of the Ship Carina v The Owners or Demise Charterers of the Ship MSC Samia [1997] 1001 FCA, 26 September 1997 (Federal Court of Australia); Det Norske Veritas AS v The Ship Clarabelle [2002] NZCA 129, [2002] 2 Lloyd’s Rep 479 (New Zealand Court of Appeal).

35  The Polo II [1977] 2 Lloyd’s Rep 115, 119.

36  CPR 61.6 (3).

37  The Polo II [1977] 2 Lloyd’s Rep 115.

38  Or some of them. A caution against release will not found jurisdiction: in the European context, only an arrest, agreement to submit, or a submission to the jurisdiction can have that effect: cf The Anna H [1995] 1 Lloyd’s Rep 11; The Deichland [1990] 1 QB 361, [1989] 2 All ER 1066, [1989] 2 Lloyd’s Rep 113.

39  CPR 61.8(2), PD61 §7.1 and Form ADM11. A caution can be withdrawn; PD61 §7.5 and Form ADM12A.

40  CPR 61.8 (3), PD61 §7.2.

41  Admiralty & Commercial Courts Guide N7.4–7.10.

42  CPR 61.8(5).

43  CPR 61.8(6).

44  CPR 61.8(4)(a).

45  CPR 61.8(4)(b).

46  CPR 61.8(4)(c), PD61 §7.4 and Form ADM12.

47  CPR 61.8(4)(d), PD61 §7.4 and Form ADM12.

48  Admiralty and Commercial Courts Guide N11.1–11.4.

49  Admiralty Jurisdiction Regulation Act 105 of 1983 s 3(10)(a)(ii), Tiger Food Industries Ltd v The Ionian Mariner (30 July 2001), M Stranex, Shipping Cases of South Africa (3rd edn, 2000) E 110, E141; Mediterranean Shipping Co Geneva SA v The Alexandra CA (13 January 2004), M Stranex, Shipping Cases of South Africa (3rd edn, 2000) E 141.

50  See also Chapter 6, paras 6.70 and following, and paras 7.26 to 7.27.

51  The Arctic Star, The Times, 5 February 1985.

52  The Hero (1865) 13 WR 927.

53  Det Norske Veritas AS v The Ship Clarabelle [2002] NZCA 129, [2002] 2 Lloyd’s Rep 479, 484, [32] (New Zealand Court of Appeal). See also Ooo DV Ryboprodukt v UAB Garant [2008] NZCA 136, [2008] 3 NZLR 326, where the Court permitted the plaintiff to rearrest the vessel three times after the owners reneged on assurances to pay the balance of the claim.

54  CPR 61.8(8)(a)(ii) and (b).

55  CPR 61.8 (9)(a); see also The Myrto (No 2) [1984] 2 Lloyd’s Rep 341, 347–348.

56  CPR 61.8 (9)(b).

57  CPR 61.8 (10).

58  Campbell’s Meat Market Ltd v The Merak (2000) 99 ACWS (3d) 5.

59  The Bazias 3 and The Bazias 4 [1993] QB 673, [1993] 2 WLR 854, [1993] 1 Lloyd’s Rep 101.

60  Ibid 679, 857, 103.

61  PD61 §5.7; Practice Note ADM 1 (2013) (Federal Court of Australia).

62  r 47(2)(d).

63  Den Norske Bank (Luxembourg) SA v The Ship ‘Martha II’, unreported, Federal Court of Australia (VG 70 of 1996).

64  Malaysia Shipyard and Engineering Sdn Bhd v Iron Shorland (1995) 131 ALR 738, (1995) 59 FCR 535.

65  Sovremenniy Kommercheskiy Flot v The Ship ‘Socofl Stream’ [1999] FCA 42.

66  Commandate Marine Corp v The Boomerang I [2006] FCA 859.

67  Ibid [5]‌–[7] citing, inter alia, The Maria Luisa (2003) 130 FCR 1; The Andrea Ursula [1973] QB 265; I Congreso del Partido [1978] QB 500.

68  Tai Shing Maritime CO SA v The Ship ‘Samsun Veritas’ as surrogate for the Ship ‘Tai Hawk’ [2008] FCA 1546.

69  Ibid.

70  Marine Expeditions Inc v The Ship Akademik Shuleykin (unreported, Wellington AD 294, 3 March 1995).

71  The Myrto (No 2) [1984] 2 Lloyd’s Rep 341, 347–348.

72  In some jurisdictions at least.

73  Indeed, the very fact that an application has come before the court for permission to continue loading while the vessel is still under arrest is not an auspicious starting point for the suggestion that security is bound to be provided in the near future.

74  Den Norske Bank (Luxembourg) SA v The Ship ‘Martha II’, unreported, Federal Court of Australia (VG 70 of 1996).

75  News Maritime Co Ltd v ‘Hyundai Cosmos’ [2002] FCA 1164, (2002) 121 FCR 77, 80, [14].

76  CPR 61.8(8).

77  CPR 61.8(9)(a).

78  CPR 61.8(9)(b).

79  CPR 61.8(10).

80  The River Andoni 1994 Fo 1579, 1995 Fo 103.

81  Until proceedings had been commenced and prosecuted to judgment, there could be no certainty as to their entitlement in that regard, which made paying off the crew in return for being subrogated to their claim an unattractive proposition for the trade creditors.

82  Some impression of this may be gained from an order made shortly after the crew had commenced proceedings that:

The Admiralty Marshal to be at liberty to treat as his expenses the reasonable cost of the repatriation of the Master, Officers and Crew, including not more than two (2) 40 foot containers for personal effects (which for the avoidance of doubt do not include cars or other motor vehicles).

In addition to cars, one of the crew had apparently procured a mobile library during the vessel’s stay on Merseyside.

83  During which time the vessel and the predicament of her crew had been raised in the House of Commons: Hansard, HC 28 February 1995, col 851.

84  Such an order was made several times in the course of The River Andoni. The order also required the claimants to deliver sufficient copies of the order to the vessel’s master for each crew member to be given his own.

85  The Fairport [1965] 2 Lloyd’s Rep 183, 185.

86  Clausen v The Ship’Om Alqora’ (No 2) (1985) 38 SASR 494, 499–500; Mooloolaba Slipways Pty Ltd v The ‘Santa Maria’ [2001] QSC 470.

87  Patrick Stevedores (No 2) Pty Ltd v MV Turakina (No 1) (1998) 84 FCR 493, 502, (1998) 154 ALR 514, 523. See also the more recent Singapore decision of The ‘Makassar Caraka Jaya Niaga III-39’ [2012] SGHC 175.

88  The Mardina Merchant [1975] 1 WLR 147, 149, [1974] 3 All ER 749, 750–751, [1974] 2 Lloyd’s Rep 424, 425.

89  See Gulf Azov Shipping Co Ltd v Idisi [2001] 1 Lloyd’s Rep 727, 735, [38] where the Court of Appeal observed that no vessel under arrest needed 27 crew to look after her.

90  Patrick Stevedores No 2 Pty Ltd v Ship MV Turakina (No 1) (1998) 84 FCR 493, (1998) 154 ALR 514.

91  Ibid 502, 523.

92  The Myrto (No 2) [1984] 2 Lloyd’s Rep 341.

93  The Fairport (No 2) [1966] 3 WLR 426, 435, [1966] 2 All ER 1026, 1034, [1966] 2 Lloyd’s Rep 7, 14. In some cases, it may be that the contractual relationship is actually between the crew and a crewing agency rather than the vessel: Ship Hako Endeavour & Ors v Programmed Total Marine Services Pty Ltd [2013] FCAFC 21.

94  United States Trust Company of New York v Master and Crew of the Ship ‘Ionian Mariner’ (1997) 77 FCR 563, (1997) 149 ALR 200.

95  See Chapter 8 in relation to the priority of the master’s and crew’s claims for wages.

96  Clausen v The Ship ‘Om Alqora’ (No 2) (1985) 38 SASR 494, 500.

97  Partenreederei MS Takitimu v The Ship Takitimu (unreported, AD No 882, Auckland Registry, 23 March 1998).

98  Para 7.40 above.

99  That may require the commencement of proceedings by them and the prosecution of those proceedings to judgment. Only when judgment has been entered is a trade creditor, for example, likely to feel sufficiently confident to offer to pay the crew the amount of their outstanding wages in the first instance, in return for being subrogated to their claims against the fund eventually produced upon sale of the vessel.

100  The Fairport (No 2) [1966] 3 WLR 426, [1966] 2 All ER 1026, [1966] 2 Lloyd’s Rep 7.

101  Ibid 435, 1034, 14.

102  Borneo Company v ‘Mogileff’ (1921) 7 Ll LR 130; The Guiseppe di Vittorio (No 2) [1998] 1 Lloyd’s Rep 661.

103  The Petone [1917] P 198. See the obiter comments of Siopis J in Ship Hako Endeavour & Ors v Programmed Total Marine Services Pty Ltd [2013] FCAFC 21 [3]‌.

104  The Guiseppe di Vittorio (No 2) [1998] 1 Lloyd’s Rep 661.

105  Ibid 672.

106  The General Serret (1925) 23 Ll L Rep 14, 15; The Myrto (No 2) [1984] 2 Lloyd’s Rep 341, 348; The Guiseppe di Vittorio (No 2) [1998] 1 Lloyd’s Rep 661.

107  CPR 61.10(1).

108  PD61 §9.1(2)(b).

109  PD61 §9.1(1).

110  The Wexford (1888) 13 PD 10; The Berris (1905) Fo 497.

111  The Eurosun and Eurostar [1993] 1 Lloyd’s Rep 106; The Silia [1981] 2 Lloyd’s Rep 534; Morelines Maritime Agency Ltd v The Ship Skulptor Vuchetich (1996) 62 FCR 602, (1996) 136 ALR 206.

112  The Eurosun and Eurostar [1993] 1 Lloyd’s Rep 106.

113  The Honshu Gloria [1986] 2 Lloyd’s Rep 63; The Pan Oak [1992] 2 Lloyd’s Rep 36; The Eurosun and Eurostar [1993] 1 Lloyd’s Rep 106.

114  The Silia [1981] 2 Lloyd’s Rep 534, 535.

115  Form ADM14: the undertaking is given by the ‘Solicitors on behalf of the claimant’. Presumably this means the firm which is acting for the relevant party and not merely an individual solicitor. In Australia, the Admiralty Rules provide that an application for the valuation and sale of a vessel constitutes an undertaking to pay the Marshal’s costs and expenses by ‘the party’ who made the application (r 69). Other provisions require undertakings by legal practitioners in relation to a caveat against arrest (r 7), an application for arrest (r 41), the discharge of cargo or vessel arrested (r 49), and the release from arrest of a ship or other property (r 53). There are specific provisions dealing with when an undertaking may be given by a law practice rather than an individual legal practitioner (r 75A). Disclosure of matters affecting safety is also required (r 39A).

116  CPR 61.8(7); The Saint Anna [1980] 1 Lloyd’s Rep 180.

117  PD61 §9.1.

118  Unless the undertaking of the arresting party extends this far. In Australia, an application for the valuation and sale of a vessel constitutes an undertaking by the party who made the application to pay the costs and expenses of the Marshal (r 69); see also Tamberlin J in The Rangitata [1998] FCA 244 (Federal Court of Australia). In South Africa there is no requirement that the Sheriff must conduct the sale of a ship. Rule 21(4) of the Admiralty Proceedings Rules provides that ‘any interested party’ is entitled to apply for the sale of a ship. See Credit Commerce de France v The Lady Muriel (21 November 1995) M Stranex, Shipping Cases of South Africa (3rd edn, 2000) E 34.

119  PD61 §9.3.

120  The Myrto [1977] 2 Lloyd’s Rep 243, 260; The Guiseppe di Vittorio [1998] 1 Lloyd’s Rep 661 (where, in addition, there was no objection); MT Tigr v Bouygues Offshore 1998 (4) SA 206; Farocean Marine (Pty) Ltd v Summit One 2003 (6) SA 94.

121  The Myrto [1977] 2 Lloyd’s Rep 243: followed in Hong Kong in The Athenian Zoe (No 2) [1985] 1 HKC 367; and New Zealand in Bank of Nakhodka v The Ship Abruka (1997) 10 PRNZ 326.

122  The Gulf Venture [1985] 1 Lloyd’s Rep 131; Bank of Scotland v Nel (1997) 149 FTR 271; Neves v Kristina Logos (1999) 173 FTR 31 (Federal Court of Canada); Marinis Ship Suppliers Pty Limited v The Ship Ionian Mariner (1995) 59 FCR 245; Bayside Air Conditioning Pty Ltd v The Owners of the Ship Cape Don [1997] FCA 690, 15 May 1997 (Federal Court of Australia); The Beluga Notification [2011] FCA 665 (Federal Court of Australia); UAB Garant v The Ship Aleksandr Ksenefontov (unreported, High Court of New Zealand 21 December 2007); Yang Ming Marie Transport Corporation v the Owners of the Ship Dong Yun 419 [2002] 817 HKCU 1 (High Court of Hong Kong); Dias Compania Naviera SA v Al Kaziemah 1994 (1) SA 570 (D).

123  Bank of Scotland Plc v Owners of the Union Gold [2014] 1 Lloyd’s Rep 53.

124  Ibid.

125  Den Norske Bank ASA v Owners of the ship ‘Margo L’ [1997] HKEC 767.

126  International Marine Banking Co v Dora (No 2) [1977] FC 603.

127  The Turtle Bay [2013] 4 SLR 615.

128  The Sea Urchin [2014] SGHC 24.

129  In The Monmouth Coast (1922) 12 Ll L Rep 22, the court approved a private sale but on condition that the proceeds of sale be paid to the Marshal on account of his expenses.

130  The Ruth Kayser (1925) 23 Ll Rep 95; The Jarvis Brake [1976] 2 Lloyd’s Rep 320, [1976] 2 All ER 886; The APJ Shalin [1991] 2 Lloyd’s Rep 62.

131  Form ADM14, PD61 §9.2.

132  CPR 61.10(2).

133  The expertise of a broker appointed by the Registrar was challenged in Mobil Oil NZ Ltd v Ship Rangiora (unreported, Auckland AD 877, 881, 882, 21 August 1998).

134  The Silia [1981] 2 Lloyd’s Rep 534, 535; Armco Pacific Ltd v Lim Juliano [1989] 2 HKC 237 (High Court of Hong Kong).

135  In New Zealand it has been held that a creditor who is dissatisfied with the price achieved by the Registrar has no standing to seek a declaration challenging the validity of the contract; All Weather Investments Ltd v Sealord Charters Ltd (1997) 10 PRNZ 320.

136  Any advertisement in relation to the vessel which might have the effect of detracting from the vessel and hence from the Marshal’s ability to achieve full market price could be treated as contempt of court: The Cerro Colorado [1993] 1 Lloyd’s Rep 58.

137  The Acrux [1961] 1 Lloyd’s Rep 471.

138  Such an order was made in The River Andoni (above, para 7.40).

139  Or even in court.

140  PD61 §9.5.

141  PD61 §9.6.

142  PD61 §9.7.

143  PD61 §9.8.

144  CPR 61.10(3).

145  CPR 61.10(4).

146  PD61 §9.4.

147  CPR 61.10(5).

148  The Tremont (1841) 1 W Rob 163, 166 ER 534; The Acrux [1962] 1 Lloyd’s Rep 405; The Cerro Colorado [1993] 1 Lloyd’s Rep 58.

149  In The Acrux [1962] 1 Lloyd’s Rep 405, for example, an order for sale by the Admiralty Court in England was not recognized in Italy; a similar situation arose in relation to the Turkish courts in The Emre II [1989] 2 Lloyd’s Rep 182 and in The Cerro Colorado [1993] 1 Lloyd’s Rep 58, it was doubted that the Spanish courts would give effect to a judicial sale by the English Admiralty Court.

150  Palm Compania Naviera SA v Federal Government of Brazil (2 July 1993) M Stranex, South African Shipping Cases (3rd edn, 2000) E40.

151  The Emilie Millon [1905] 2 KB 817; The Spermina (1923) 17 Ll L Rep 17.

152  Corps v Owners of the Paddle Steamer ‘Queen of the South’ [1968] P 449, 461, [1968] 1 Lloyd’s Rep 182, 192.

153  Relying on the decisions in The Parita [1964] 1 Lloyd’s Rep 199; The Westport (No 2) [1965] 1 WLR 871, [1965] 2 All ER 447, [1965] 1 Lloyd’s Rep 549.

154  Readhead, Phillip & Ors v Admiralty Marshall, Western Australia District Registry [1998] FCA 1173.

155  Admiralty Act 1988, s 36(5).

156  Fisheries Management Act 1991, s 108A.

157  Scandinavian Bunkering AS v The Bunkers on Board The Ship FV Taruman (2006) 151 FCR 126, [2006] FCAFC 75.

158  The Kommunar (No 3) [1997] 1 Lloyd’s Rep 22, 30.

159  Morecorp Holdings Ltd v Island Tug & Barge Ltd [2009] BCSC 1692 (Supreme Court of British Columbia).

160  The Kommunar (No 3) [1997] 1 Lloyd’s Rep 22, 30.

161  The Evangelismos (1858) 12 Moo PC 352, 166 ER 1174; The Strathnaver (1875) 1 App Cas 58; The Cathcart (1867) LR 1 A & E 314; The Walter D Wallett [1893] P 202; The Margaret Jane (1869) LR 2 A & E 345; Astro VencedorCompania Naviera SA v Mabanaft GmbH [1971] 2 QB 588.

162  The Evangelismos (1858) 12 Moo PC 352, 359–360, 14 ER 945, 948.

163  The Volant (1864) 22 Br MC 321, Br & Lush 321, 167 ER 385.

164  The Victor [1866] 167 ER 38; The Glasgow (1855) 166 ER 1065; The Nautilus (1856) 166 ER 1043; The Margaret Jane (1869) LR 2 A & E 345.

165  The Evangelismos (1858) 12 Moo PC 352, 166 ER 1174; Lloyd Werft Bremerhaven GmbH v The Owners of the Ship Zoya Kosmodemyanskaya [1997] 1162 FCA (unreported).

166  The Walter D Wallett [1893] P 202.

167  Gulf Azov Shipping Co Ltd v Idisi [2001] 1 Lloyd’s Rep 727.

168  The Kommunar (No 3) [1997] 1 Lloyd’s Rep 22.

169  Gulf Aza Shipping Co Ltd v Idisi [2001] 1 Lloyd’s Rep 727, 735, [40].

170  Congentra AG v Sixteen Thirteen Marine SA (The Nicholas M) [2008] EWHC 1615 (Comm), [2008] 2 Lloyd’s Rep 602. The application before the Court was for the discharge of the charterers’ freezing injunction.

171  Ibid 608, [22]–[23].

172  The Fearless I [2013] 5 HKLRD 48, [2014] Lloyd’s Rep Plus 21.

173  Ibid [43].

174  Mondel Transport Inc v Afram Lines Ltd [1990] 3 FC 684 (TD); The Rhone v The Peter AB Widener [1993] 1 SCR 497; Armada Lines Ltd v Chaleur Fertilizers Ltd [1997] 2 SCR 617; Li Seng Yee v SS Hai Jye [1961] HKLR 567; Victory Star Shipping Co SA v The Owners of the Ship Amigo and World Happy Shipping Ltd [1994] HKEC 231; Banque Worms v The Owners of the Ship or Vessel Maule and Compagnia Sud [1995] 2 HKC 769; Mobil Oil New Zealand Ltd v The Ship Rangiora [2000] 1 NZLR 49; Tomita v The Unnamed Vessel (unreported, High Court of New Zealand, Auckland, 6 May 2003); The Ohm Mariana ‘Ex Peony’; Pacific Navigation Co Pte Ltd v The Owners of the Ship or Vessel Ohm Mariana ‘Ex Peony’[1992] 2 SLR 623; The AA V [2001] 1 SLR 207; Sumitomo Corp (Singapore)Pte Ltd v Owners of the Ship or Vessel Alexandrea [2002] 3 SLR 56; Kiku Pacific [1999] 2 SLR 595; The Inai Selashi (Ex Geopotes X) [2005] 4 SLR 1.

175  Act 105 of 1983, s 5(4).

176  MV Cape Athos Shipping v Blue Emerald Shipping Ltd 2000 (2) SA 327, 336.

177  Civil Admiralty Jurisdiction, ALRC 33 (1986) para 302.

178  The equivalent provision in the Arrest Convention 1999, art 6, is ‘wrongful or unjustified’, a formula which is probably wider than the Australian provision.

179  Civil Admiralty Jurisdiction, ALRC 33 (1986) para 302.

180  RD Summers Fisheries CC v Viking Fishing Co Pty Ltd (MFV Logan Ora) (1999) 4 SA 1081; Cape Athos Shipping v Blue Emerald Shipping Ltd (MV Cape Athos) 2000 (2) SA 327, cf: Guangzhou Maritime Group Co v Dry Bulk SA (The Yu Long Shan) (1997) 2 SA 454; MV Rizcun Trader v Manley Appeldore Shipping Ltd (2000) 3 SA 776; Belfry Marine Ltd v Palm Base Maritime (MV Heavy Metal) (2000) 1 SA 286; The Sandokan (No 2), (28 October 2002). M Stranex, Shipping Cases of South Africa (3rd edn, 2000) B 171; cf The owners of the MV Silver Star v Hilane Ltd (A2282/2013) [2013] ZAECPEHC 40 (28 August 2013).

181  Armada Lines Ltd v Chaleur Fertilizers Ltd [1997] 2 SCR 617; see also The Rhone v The Peter AB Widener [1993] 1 SCR 497, (1993) 101 DLR (4th) 188, (1993) 58 FTR 239, [1993] 1 Lloyd’s Rep 600.

182  S Nossal, ‘Damages for the Wrongful Arrest of a Vessel’ [1996] LMCLQ 368.

183  Armada Lines Ltd v Chaleur Fertilizers Ltd [1997] 2 SCR 617, 627, [26]–[27].

184  Mobil Oil New Zealand Ltd v The Ship Rangiora [2000] 1 NZLR 49.

185  Ibid 65.

186  But see The St Elefterio [1957] P 179, 187 (plaintiff liable for costs including costs of furnishing bail); Antares Shipping Corp v The Ship Capricorn [1977] 2 FC 274 (CA), 279 (expense of giving bail forms part of the taxable costs for which security may be ordered).

187  The Vasiliy Golovnin [2008] 4 SLR 994, [2008] SGCA 39.

188  Ibid [120].

189  Ibid [124]–[125].

190  In Armada Lines Ltd v Chaleur Fertilizers Ltd [1997] 2 SCR 617.

191  In Mobil Oil New Zealand Ltd v The Ship Rangiora [2000] 1 NZLR 49.

192  The Vasiliy Golovnin [2008] 4 SLR 994, [2008] SGCA 39, [134].

193  Ibid.

194  Ibid [141].