The plaintiff, which provides services of management, brokerage and representation of ships, brought an action in rem against the defendant, claiming USD 420,000 for services provided, work carried and goods delivered, as well as damages for breach of agreement. After the arrest warrant was served on the ship and there was no appearance on the part of the defendant shipowner, the case was set aside by the Court for proof.

On the day the case was set aside for proof, the Court of Justice asked the plaintiff's lawyer whether the jurisdiction in rem of the Court of First Instance could be invoked in the present case, since the plaintiffs claim that Dragon Port Holdings Ltd, a company incorporated in the British Virgin Islands, was the owner of the defendant ship at all relevant times, and the agreement for the provision of the services and goods in question was made with DP Shipping Ltd, described as 'charterers by Demise'.

Held: The plaintiff cannot bring its claim in rem in the Court of First Instance. The lawsuit against the ship is rejected.

Section 3(2) of the Administration of Justice Act 1956 (UK) (AJA) applies in Cyprus under the provisions of art 29(2)(a) of the Courts of Justice Law 1960 (N 14 / 60), provides that admiralty jurisdiction in rem is available in the cases referred to in paras (a)-(c) and (s) of s 1(1) of the AJA. According to s 3(4) of the AJA, if the claim falls under paras 1(1)(d)-(r) of the AJA and arises in relation to a ship, it is also possible to invoke admiralty jurisdiction in rem against the ship, provided that the relevant person link is satisfied. It should be noted here that the AJA has been superseded in England by the Supreme Court Act 1981 (UK), under which it is possible to invoke the jurisdiction of the Admiralty Court in rem where the person who would be held liable to satisfy the claim in personam is the demise charterer at the relevant time: see s 21(4). The new law does not affect the jurisdiction of our own Admiralty Court, as defined by the AJA, since the Supreme Court, when exercising its jurisdiction as an Admiralty Court, applies the law as it was in force in England just before the Independence Day of Cyprus (see art 29 of Law 144/60).

The plaintiff's claim falls within s (1)(m) and (p) of the AJA. The plaintiff must meet the conditions set out in s 3(4) of the AJA. The expression 'beneficially owned' in s 3(4) of the AJA does not have a legally defined definition. Noting that it was open to more than one interpretation, Brandon J in The Andrea Ursula found that the proper sense must be sought by reference to the purpose of s 3(4), which was to implement art 3 of the Arrest Convention 1952. He therefore took the view that the expression 'beneficial owner' should be broadly interpreted to include a demise charterer. Subsequent cases, including I Congreso Del Partido and The Father Thames are to the contrary, ruling that the expression 'beneficially owned as respects all the shares therein' refers only to cases where there is essentially property (equitable ownership) and does not include demise charterers.

It is obvious that the adoption of s 21(4) of the Supreme Court Act 1981 was necessary precisely because s 3(4)(a) of the AJA is not extended in the manner decided by Brandon J in The Andrea Ursula, so as to bring the English legislation into line with the Convention to which the United Kingdom acceded.