Haji-Ioannou (the plaintiff) is a Greek Cypriot shipowner. In January 1990 the plaintiff's daughter and Frangos (the defendant) were engaged to be married. Their marriage broke down in 1993. However, during the marriage, the plaintiff agreed that he would (directly or through companies he controlled) transfer sums of monies to the defendant (or his agents) to be used to acquire vessels to be run and managed as a commercial enterprise. They further agreed that the defendant was to hold and manage the funds on behalf of the plaintiff and subject to the instructions of the plaintiff. The plaintiff was still the beneficial owner of the fund. Following the divorce, the plaintiff filed several claims in Greece. The writ in these proceedings was served on the defendant while he was in London in October 1997. Before the end of that month, vessels belonging to the defendant were arrested at the suit of the plaintiff in South Africa, England, Amsterdam and the Netherlands.

Following the first instance Court's decision, the defendant's vessels were released. The overriding issue on appeal was whether the plaintiff's proceedings against the defendant should be allowed to continue in the UK.

The defendant argued that the writ was irregular for various reasons. He said that the statement of claim endorsed on the writ disclosed no reasonable cause of action. Alternatively, he said that the action was an abuse of process because of the way the plaintiff had used it to mount further proceedings in different countries to arrest ships without first applying for leave to serve the writ out of the jurisdiction on the relevant defendant companies.

Held: Appeal dismissed.

The UK is a party to the Arrest Convention 1952, which is an international Convention 'for the unification of certain rules relating to the arrest of sea-going ships'. Article 2 of the Convention provides that a ship flying the flag of one of the Contracting States may be arrested in the jurisdiction of any of the Contracting States in respect of 'any maritime claim'. According to art 1.1.o of the Arrest Convention 1952, 'any maritime claim' includes a claim arising out of a dispute 'as to the title of or ownership of any ship'. According to art 3.1 of the Convention, no ship, other than the particular ship in respect of which the claim arose, may be arrested in respect of such a claim. According to art 4 of the Convention, a ship may only be arrested under the authority of a court or of the appropriate judicial authority of the Contracting State in which the arrest is made.

The Arrest Convention 1952 is given effect in English law by the Administration of Justice Act 1956 (UK) (the 1956 Act). Section 1(1)(a) of the 1956 Act uses the same word 'ownership' in relation to claims to ownership as is used in art 1.1.o of the Convention. In s 3(4) of the 1956 Act, which creates a right to arrest a sister ship in support of most of the maritime claims mentioned in the Arrest Convention 1952 (but not a claim arising out of a dispute as to ownership), the drafter uses the expression 'beneficially owned'. The same distinction is now found in ss 20(2)(a) and 21(4) of the Supreme Court Act 1981 (UK) (the 1981 Act) which have replaced the earlier provisions. Because of this choice of language, it has now for a long time been accepted law that ownership of a ship for the purposes of the Arrest Convention 1952 and for the purposes of the admiralty jurisdiction of the High Court means legal ownership, except in those provisions where the word is qualified by the adjective 'beneficial'. It is also observed in English law that the Arrest Convention 1952 looks to ownership and registered ownership as the same. Even if the legal property in the shares of a one-ship company is held by A and the equitable property by B, this distinction does not affect the ownership of the ship or the shares in the ship. Section 21(2) of the 1981 Act permits an action in rem to be brought in the High Court against a ship in connection with which a claim as to ownership has arisen. The procedure requires the filing of an affidavit which must state the nature of the claim, the name of the ship to be arrested and its port of registry. This Court has held that provided the deponent to the affidavit complies with the requirements of the rule, the warrant will issue as of right, and no greater duty of full and frank disclosure is required.

It follows that in an action in rem the jurisdiction to issue a warrant of arrest in a case like this flows from the sworn assertion that there is a claim as to the ownership of a ship within the jurisdiction. There is no need to show that English courts have assumed jurisdiction over an action in personam against the other party to the dispute.

In the present case, the plaintiff applied for a warrant of arrest of the Angeliki I, a ship owned by the defendant, which was in the port of Teesside. In his affidavit, the plaintiff asserted that the defendant was under a duty to use the funds transferred to him by the plaintiff to acquire vessels to be run and managed as a commercial enterprise, while the plaintiff was to remain the beneficial owner of the funds. It seems that the plaintiff does not have a good claim to the ownership of the ship, not only because of the reason that the plaintiff has failed to prove the existence of any maritime claim against the company in respect of which an arrest could competently occur, but also because as a matter of English law the word 'ownership' in s 20(2)(a) of the 1981 Act means 'legal ownership' rather than 'beneficial ownership'. Beneficial ownership would not be sufficient in itself to found an arrest under the Arrest Convention 1952.

Therefore, the plaintiff's claim should not be brought in the High Court pursuant to s 21(2) of the 1981 Act since the underlying claim is not, when properly analysed, a claim to the ownership of a ship within the meaning of s 20(2)(a) of the 1981 Act.