This was an appeal by Atlas Baltic Oü (the agents) against the judgment of McGovern J in Atlas Baltic Oü v The Owners and All Persons Claiming an Interest in the MV Lady Magda [2018] IEHC 426 (CMI471). The Judge dismissed the agents' claim against the respondent shipowners in respect of 'disbursements' (primarily port expenses but also including agents’ fees) said to have been made by the agents on behalf of the Lady Magda.

On appeal, the agents emphasised that they made no claim to any maritime lien. Instead, they argued that they had a statutory right in rem, referring particularly to ss 31 and 33 of the Court of Admiralty (Ireland) Act 1867 (the 1867 Act). The agents also said that they have a 'maritime claim' within the meaning of the Arrest Convention 1952, relying specifically on arts 1.1.k and 1.1.n. The agents accepted that, in order to succeed in their claim, they must establish personal liability on the part of the owners for the outstanding debt. They said that the necessary personal liability was based on contract and arose from the fact of ownership. The disbursements made, and services provided, by the agents were to the benefit of the vessel and were necessary for it to use the ports concerned. In the circumstances, the agents were entitled to proceed on the basis that the requests made of them were made with the authority of the owners, who were at all times in possession of the vessel as a matter of law. The Judge had taken too narrow a view of the Arrest Convention 1952. All the agents had to do was to establish that they had supplied, or funded the supply, of necessaries to the vessel. That was established by the invoices and it would completely undermine the 'statutory scheme' not to allow the agents to have recourse to the owners.

Counsel for the owners disputed the suggestion that any presumption of personal liability could arise in the circumstances. No such presumption arose from the 1867 Act or from the Arrest Convention 1952. The former was concerned only with jurisdiction and the latter with jurisdiction and the availability of arrest. The agents' submissions conflated the issue of jurisdiction on the one hand and the issue of substantive liability on the other hand.

Held: Appeal dismissed and the judgment and order of the High Court affirmed.

The purpose of the Arrest Convention 1952 was to agree 'certain uniform rules of law relating to the arrest of seagoing ships'. In many Civil Law countries, ships were liable to attachment in support of non-maritime claims. The Convention confined the power of arrest to 'maritime claims' as defined. No reference to maritime liens is to be found in the Convention, other than in art 9 which makes it clear that the Convention does not create any rights of action or any maritime liens. The Convention is entirely silent as to the 'nature and legal incidents' of maritime claims in national law. That being so, the agents' submission that art 1.1.n is to be read as providing or implying a right to proceed against a ship 'without any condition as to ownership' cannot be accepted. Whether such a right arises is a question for the law of the relevant contracting State - here the law of Ireland - and cannot be reverse-engineered from the provisions of art 1.1 of the Convention.

In this Court's earlier decision in The Almirante Storni (see Spamat SRL v The Owners and All Persons Claiming an Interest in the MV Alimirante Storni [2020] IECA 58 (CMI729)), the Court considered that cases such as The Perla (1858) 1 Swabey 353 and The Tolla [1921] P 22 turned on the involvement of the master. Though that view is said by the agents to be in error, a review of the authorities clearly confirms the correctness of that conclusion. As the evidence does not disclose any involvement whatever by the master in the transactions at issue here, no presumption of any liability on the part of the owners arises on the basis of The Perla. The services were requested by the charterers and there has been no suggestion that the charterers were authorised to act as agent of the owners in this context, or that the agents understood them to be so authorised. In fact, the charterparty makes it clear that the charterers were obliged to 'provide and pay for' all of the services provided by and/or paid for by the agents.

There is no evidence that the agents were aware that the Lady Magda was let on a time charter. However, they were aware that the charterers (with whom they had extensive dealings over a number of years) were not the ship's owners. It was open to them to ask the charterers to explain the basis on which they were operating the ship and in due course to look for a copy of the charterparty. They could have insisted on the charterers providing some form of security for their liabilities to the agents. Alternatively, they could have contacted the owners to seek their confirmation that they would be liable for services provided to the charterers. Even if the master had been involved in the engagement of the agents (and there is no evidence to that effect), a compelling argument can be made that, in such circumstances, the agents would have been put on inquiry and thus would not have been entitled simply to assume that the master was authorised to pledge the credit of the owners for the services they were being asked to provide.

The agents' alternative ratification argument also fails on the evidence.

The claim here is in very similar terms to the claim made in The Almirante Storni. It is said on behalf of the agents that the facts are different in that, in The Almirante Storni, the agents had had 'two streams' of communication, one with the charterers and one with the owners. That is undoubtedly the case, but it does not constitute a significant difference from the facts here. Here, while they appear to have had no direct dealings with the owners in the course of 2016, the agents were aware that the charterers were not the owners and were aware of the identity of the owners (or, at least, of their agents). The key fact here, as it was in The Almirante Storni, is that the agents knew that they were not dealing with the owners and did not claim to have understood the charterers to be acting on behalf of the owners.

Here, as in The Almirante Storni, the master was not involved in the arrangements between the agents and the charterers. That was regarded by McGovern J as an important point. This Court’s decision in The Almirante Storni also indicates that the argument that the Judge here misunderstood the import of The Avro Hunter is without merit. The Avro Hunter involved a demise charter. However, the significance of the decision for present purposes lies in its clear endorsement of the general principle that the basis of maritime liens lies in the personal liability of the owner. In The Avro Hunter the application to arrest was refused because the claimant had no claim against the person who owned the vessel at the time the proceedings were instituted and therefore no right to arrest the vessel. If the demise charter had not been terminated prior to the institution of the proceedings, a right to arrest would have arisen. That is unexceptional. The claim arose from fuel supplied to the demise charterer and thus gave rise to a statutory claim in rem for necessaries. However, that claim was lost when proceedings were not instituted during the currency of the demise charter, the termination of such a charter amounting to a change of ownership. The position would have been different had a true maritime lien arisen. The facts here are materially different. The charterers were time charterers only. They were never regarded in law as owners of the Lady Magda and their liability to the agents did not provide any basis for the agents to assert any lien or statutory claim in rem against the vessel or the owners.