Lloyd's Maritime and Commercial Law Quarterly
GAPS IN THE ACTION IN REM—PLUGGED?
Steven J. Hazelwood,*
LL.M. (Lond.).
The recent Court of Appeal decision in The Span Terza
1 has again raised, without positively deciding, the difficult topic of the construction of s. 3(4) Administration of Justice Act 19562 and the operation of the so-called “sistership” arrest provisions.3
The facts of the case are simple enough. The plaintiffs were the owners of the vessel Neptunia which was time chartered to the defendants. The defendants, owners of the vessel Span Terza, were charged with being liable for unpaid hire and damages due to the plaintiffs in respect of the time charter of the Neptunia. Basing their claim on s. 1(1)(h) of the 1956 Act,4 the plaintiffs sought the arrest of the defendants’ vessel Span Terza under s. 3(4)(b).
There were two issues presented to the court for its decision. First, it had to be decided whether s. 3(4)(b) could be used to arrest a vessel owned by a person not the beneficial owner of the offending vessel, or whether both offending and arrestable vessels are required to be in the same beneficial ownership—i.e. sisterships. The court, by a majority,5 decided that there was no such requirement that the vessels be sisterships. Secondly, in the present case there was an arbitration clause in the charter-party. Nevertheless, the court held that the mere presence of the arbitration clause did not prevent the arrest of a vessel under the provisions of the 1956 Act.
The “sistership” issue
It was not until the 1956 Act that any question arose as to the ability of arresting any ship other than the offending ship. The possibility of arresting another vessel arises from the enactment of s. 3(4) which provides:
“In the case of any such claim as is mentioned in paragraphs (d) to (r) of subsection (1) of section One of this Act, being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship, the Admiralty jurisdiction of the High Court … may … be invoked by an action in rem against— (a) that ship, if at the time when the action is brought it is beneficially owned as respects all the shares therein by that person; or (b) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid”.
* Member of the Centre for Marine Law and Policy. University of Wales Institute of Science and Technology.
2 From Jan. 1 1982, the Admiralty jurisdiction of the High Court is provided for by the Supreme Court Act 1981. The provisions of s. 3(4) of the 1956 Act are replaced by s. 21(4) of the 1981 Act.
3 See present writer: “Gaps in the action in rem” [1982] 2 LMCLQ 210.
4 See now s. 20(2)(h) Supreme Court Act 1981.
5 Stephenson, L.J., and Sir David Cairns; Donaldson, L.J., dissenting.
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