This was an appeal in cassation against the judgment of the Saint-Denis de la Réunion Court of Appeal, 2 July 1993. Armstell Shipping (Armstell), whose head office is in Monrovia (Liberia), time chartered its ship, Jay X, to Schiffahrtgesellschaft Detlef Von Appen mbH (DVA). While carrying out this charterparty, the vessel was carrying a cargo of cotton and steel from a Brazilian port to a Thai port when the ship caught fire off Singapore. The cargo was lost. After compensating their insureds, the insurers sued DVA for compensation for their damage before a Brazilian court for the steel, and before an arbitral tribunal in London for the cotton. DVA claimed that the fire giving rise to the losses was attributable to the bad condition of the chartered vessel. In order to guarantee the exercise of its recourse against Armstell, DVA instituted separate arbitration proceedings in London in accordance with the charterparty, and obtained an authorisation from the President of the Commercial Court of Saint-Denis de la Réunion to arrest the Bahamanian-flagged Gure Maiden at the port of La Pointe des Galets, which was allegedly owned, at the time of its arrest, by Armstell. Jupiter Maritime Corp (Jupiter), claiming to have acquired the arrested vessel, applied for its release. The Court of Appeal refused the request. Jupiter appealed.

Jupiter argued that the Court of Appeal violated arts 4 and 6 of the Arrest Convention 1952.

Jupiter also criticised the judgment for having refused the outright release of the vessel from arrest, despite the constitution of a limitation fund which excludes the right for a creditor to exercise any legal remedy against its ships. Jupiter argued that the judgment violated the provisions of arts 11 and 13 of the LLMC 1976. Further, art 4 of this Convention could only preclude limited liability if there was a personal fact or omission of Armstell, committed with the intention of causing damage, or committed recklessly and aware that damage would probably result. The Court of Appeal therefore deprived its decision of a legal basis with regard to art 4 of the LLMC 1976. The fact that Brazil was not a party to this Convention was absolutely irrelevant, since the liability of Armstell with regard to DVA had no connection with Brazil. The claim which DVA had against Armstell was indisputably one of those mentioned in art 2.1.a of the LLMC 1976.

Held: Appeal dismissed.

By application of arts 4 and 5 of the Convention, the French judicial authority has exclusive international competence to authorise the arrest of the ship or to order its release.

It follows from art 13 of the LLMC 1976, that it is only when the limitation fund has been constituted in one of the places mentioned by this provision that the Judge must order the release of the arrest of any vessel belonging to a person for whose benefit this constitution was made. Here, the limitation fund had been set up in London, the place of arbitration of part of the dispute on the merits, and not in one of the ports mentioned in art 13, or in France, where the arrest of the vessel took place. The Court of Appeal was entitled to consider that there was insufficient reason to order release of the vessel's arrest as a result of the constitution of the limitation fund.