Cargo was shipped on the defendants' vessel, the Anna H, at Port Talbot, United Kingdom, for carriage to Barcelona, Spain, under bills of lading dated 21 December 1990. The shippers were British Steel Exports Ltd, an English company. The receivers were Barcelonesa de Metales SA, a Spanish company. The shippers and the receivers (collectively, the plaintiffs) alleged that the cargo arrived damaged, because of wetting by rain during loading operations, which were part of the defendants' carriage obligations. The defendants alleged that the damage occurred before loading. The defendant owners and demise charterers were domiciled in Germany, which was a Contracting State of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (the Brussels Convention). Article 2 of the Brussels Convention provided:

Subject to the provisions of this Convention persons domiciled in a Contracting State, shall whatever their nationality be sued in the Courts of that State.

However, art 57 of the Brussels Convention provided:

This Convention shall not affect any conventions to which the Contracting States are or will be parties and which, in relation to particular matters, govern jurisdiction …

The Brussels Convention had the force of law in England by reason of s 2 of the Civil Jurisdiction and Judgments Act 1982 (UK) (the 1982 Act).

The plaintiffs sent a draft form of undertaking to the defendants and enquired whether the defendants' German P&I club (the Club) would be willing to 'provide security without arrest'. The defendants stated that the Club was not agreeable to the draft undertaking because it included a provision for English jurisdiction. Instead, the Club offered an undertaking to satisfy a judgment by a court of competent jurisdiction. Meanwhile, the defendants caused a caveat against arrest to be entered, and in doing so, undertook to acknowledge the issue or service of a writ and to give bail.

The plaintiffs subsequently issued a writ and arrested the vessel. The vessel was released after about an hour without any security having been provided. Later in that day, the writ was sent to the defendants' legal representatives and the defendants were called upon to put up bail. A bail bond was executed a few days later. The defendants subsequently acknowledged service of the writ.

Meanwhile, the defendants had commenced proceedings in Germany seeking declarations of non-liability. In England, the defendants applied for an order that the Court decline jurisdiction and stay proceedings.

The plaintiffs argued that the vessel was arrested, which means that the Court has jurisdiction by reason of art 57 of the Brussels Convention, which saves or introduces the jurisdiction conferred by the Arrest Convention 1952: The Deichland [1990] 1 QB 361 (CA) (CMI2233). Article 1.2 of the Arrest Convention provides as follows:

'Arrest' means the detention of a ship by judicial process to secure a maritime claim, but it does not include the seizure of a ship in execution or satisfaction of a judgment.

Article 7 of the Arrest Convention provides:

(1) The Courts of the country in which the arrest was made shall have jurisdiction to determine the case on its merits if the domestic law of the country in which the arrest is made gives jurisdiction to such Courts, or in any of the following cases, namely:

(a) if the claimant has his habitual residence or principal place of business in the country in which the arrest was made;

(b) if the claim arose in the country in which the arrest was made …

The defendants argued that the plaintiffs' arrest was not an arrest as defined by art 1.2 of the Arrest Convention. The vessel was not arrested 'to secure a maritime claim' as it was quickly released after arrest without any security having been provided. Accordingly, art 57 of the Brussels Convention does not apply to provide jurisdiction: The Deichland. The defendants also argued that the Court does not have jurisdiction to permit an arrest if the arrest was to found jurisdiction but not to obtain security for the claim: The Cap Bon [1967] 1 Lloyd's Rep 543, 547.

As for the claims brought by the Spanish plaintiffs, the defendants had an additional argument that the Court does not have jurisdiction. The defendants admitted that ss 20 and 21 of the Supreme Court Act 1981 (UK) (the Act) gave jurisdiction in respect of a claim for loss of or damage to goods carried in a ship such as the present claim. The defendants argued that where a maritime claim does not fall within any of the categories set out in sub-paras of art 7.1 of the Arrest Convention, the Arrest Convention only confers jurisdiction if English domestic law (as the domestic law of the country in which the arrest is made) gives jurisdiction to the English Court. The defendants argued that 'domestic law' under art 7.1 of the Arrest Convention must mean domestic law for the time being, which includes the 1982 Act. Accordingly, ss 20 and 21 of the Act must be read subject to the 1982 Act and therefore to the Brussels Convention. Article 2 of the Brussels Convention deprives the Court of the jurisdiction which it would otherwise have had under those sections.

The plaintiffs counterargued that art 2 of the Brussels Convention was subject to art 57 of the same Convention, which introduces provisions of the Arrest Convention.

The defendants' rebuttal was that the only jurisdiction saved by art 57 was that expressly conferred by the Arrest Convention and that in the present context the only relevant jurisdiction is that conferred by the domestic law, which has been changed by the 1982 Act to exclude jurisdiction conferred on other Contracting States by art 2 of the Brussels Convention.

The plaintiffs' surrebuttal was that in construing arts 2 and 57 of the Brussels Convention and art 7 of the Arrest Convention the expression 'domestic law' should be taken to mean domestic law without reference to any change in domestic law brought about by the Brussels Convention, since otherwise the full force of the Arrest Convention would not be saved by art 57, whereas the purpose of art 57 was to retain any jurisdiction which the Court would otherwise have without reference to the 1968 Convention.

The plaintiffs separately argued that the defendants submitted to the jurisdiction of the Court by their actions, which included putting up bail. The defendants disagreed and argued that s 26 of the 1982 Act caused a departure from the position that putting up bail amounted to a submission to the jurisdiction.

Held: Application dismissed.

This is the third in a series of cases of which the first is The Deichland and the second is The Prinsengracht [1993] 1 Lloyd's Rep 41 (The Prinsengracht).

The Court has jurisdiction. The arrest was an arrest within the meaning of the Arrest Convention: art 1.2. Circumstances show that the arrest was the detention of the vessel 'to secure a maritime claim': ibid. The plaintiffs arrested the vessel to found jurisdiction. The vessel was released before bail was provided. But the defendants had undertaken to put up bail prior to the arrest. But for this undertaking, the plaintiffs would have maintained the arrest until bail or other security was put up. Furthermore, the plaintiffs wanted to proceed by way of action in rem in England. They also wanted security for any judgment obtained in that action. But the defendants were not agreeable to this. The only way in which the plaintiffs could secure both those ends was to arrest the vessel and obtain appropriate security. The vessel would have been arrested partly to obtain security for the claim in England, and such an arrest would be 'a judicial process to secure a maritime claim': art 1.2. In this regard, the defendants' argument is rejected. The defendants in The Prinsengracht were right to not to argue this point in their case.

It is inconsequential that the arrest was executed after the defendants provided their undertakings. A caveat against arrest does not prevent arrest. The nature of an arrest is unaffected by the existence of any caveat against arrest.

The arrest was a step in the action in rem. Even if it can be shown that the motive of the plaintiff in arresting is to found jurisdiction and not to obtain security, that arrest still is the 'detention of a ship by judicial process to secure a maritime claim' and within the meaning of the Arrest Convention, art 1.2. Any other view leads to a surprising conclusion, one that did not occur to anyone involved in The Deichland. The Cap Bon does not support the defendants' argument to the contrary. The defendants' argument would be rejected. Furthermore, the defendant cannot be in a better procedural position than if the vessel had been arrested and kept under arrest until security was provided.

As for the definition of 'domestic law' under art 7.1 of the Arrest Convention, the plaintiffs' arguments are to be preferred over the defendants'. The correct approach is to hold that, as saved by art 57 of the Brussels Convention, the expression 'domestic law' in art 7 of the Arrest Convention means the domestic law for the time being but unaffected by any alterations effected by the other provisions of the Brussels Convention. The purpose of art 57 of the Brussels Convention was to exclude from the exclusive provisions of the Brussels Convention any jurisdiction which was conferred by any other Convention. It would be odd if the provisions of the Brussels Convention itself had the effect of reducing the jurisdiction which the Courts of a Contracting State would otherwise have had under a Convention expressly saved by art 57. Accordingly, at the time of the arrest the Court had jurisdiction to determine the case on its merits because English domestic law gave it jurisdiction. It follows that the plaintiffs are entitled to rely upon art 57 as excluding the exclusive jurisdiction of the German courts otherwise provided by art 2 of the Brussels Convention. It is unnecessary to decide how art 57 of the Brussels Convention introduced the provisions of the Arrest Convention into English law: compare The Nordglimt [1988] QB 183 (CMI2230) with The Po [1991] 2 Lloyd's Rep 206, 210 (CA).

Next, and although it was unnecessary to decide this point, the claim of the Spanish plaintiffs fell within art 7.1.b of the Arrest Convention. The plaintiffs alleged that the damage was caused during loading. The defendants alleged that the damage occurred prior to shipment. In either case the damage occurred because of events in England or Wales. If the damage complained of occurred there or because of events there, art 7.1.b is satisfied. The bills of lading incorporate a charterparty containing an English arbitration clause. The carriage was subject to the Hague-Visby Rules. It would be too narrow a construction of art 7.1.b to hold that the claim arose in Barcelona because that was the port of discharge and the goods were found damaged there. Accordingly, art 57 of the Brussels Convention excluded the exclusive jurisdiction of the German courts.

In any case, the defendants submitted to the jurisdiction of the Court. They undertook to put up unconditional bail and acknowledge the issue or service of the writ. When these undertakings were honoured by way of the bail bond and the notice of bail, the defendants submitted to the jurisdiction: The Prinsengracht. The defendants' reliance on s 26 of the 1982 Act to support their argument to the contrary was misplaced. Section 26 concerns a situation where the plaintiffs have arrested and bail has been given to secure the release of the vessel. Such an arrest will almost certainly have been an arrest to secure a maritime claim and thus be an arrest within the meaning of art 1.2 of the Arrest Convention. Thus, the Court would have jurisdiction under art 7 of the Arrest Convention. The defendants did not even purport to put up bail under protest to avoid submitting to the jurisdiction: The City of Mecca (1879) 5 PD 28; The Bulgaria [1964] 2 Lloyd's Rep 524.

Separately, the parties correctly agreed that this Court (and not the German Court) was first seised with this action when the vessel was arrested: The Freccia del Nord [1989] 1 Lloyd's Rep 388, 392. The German proceedings were irrelevant.

[For the unsuccessful appeal to the Court of Appeal, see The Anna H [1995] 1 Lloyd's Rep 11 (CA) (CMI2267).]