Polygreen International DMCC (Polygreen) was a UAE salvage company. Shiny Shipping & Logistics Pvt Ltd (Shiny Shipping) owned a river barge, the MT Pamboor 2. Tresta Trading, a Mauritius company, owned another ship, the MT Tresta Star. Tresta Trading was a wholly-owned subsidiary of Shiny Shipping. On 3 February 2022, the MT Tresta Star was caught in tropical cyclone Batsirai and ran aground off Réunion island in the Indian Ocean. Tresta Trading asked Polygreen to send a rescue tug to tow the MT Tresta Star back to Port Louis in Mauritius. Polygreen forwarded a Lloyd's Standard Form Salvage Agreement (LOF form) by email to Tresta Trading. The LOF form provided by Polygreen stated that salvage services were authorised by the 'captain or other persons signing for and on behalf of the property Tresta Trading Limited [followed by the address] and/or Shiny Shipping and Logistics Private'. The LOF form was returned to Polygreen, signed and stamped by Tresta Trading only. Polygreen removed environmentally damaging materials from the stranded MT Tresta Star. The situation was so bad that Polygreen had to access the site by helicopter. According to Polygreen, massive ecological damage was averted. Polygreen invoked the SCOPIC clause in the LOF form.

Polygreen subsequently arrested the MT Tamboor 2 on 1 April 2022, arguing that it had an in personam claim against Shiny Shipping under the LOF form. In Polygreen's view, Shiny Shipping 'own[ed] and/or beneficially own[ed]' both the MT Pamboor 2 and the MT Tresta Star, thereby making both vessels 'sister ships'. Polygreen further asserted a maritime claim recognised under s 4(1)(i) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 (the Act).

The defendants applied to have the arrest of the MT Tamboor 2 lifted, arguing that Shiny Shipping and Tresta Trading were separate corporate entities.

Held: The defendants' application succeeds. The order of arrest is vacated forthwith.

Section 3 of the Act sets out the admiralty jurisdiction, and states that this will vest in the respective High Court, subject to the provisions of ss 4 and 5. Section 4 provides:

4. Maritime claim. -

(1) The High Court may exercise jurisdiction to hear and determine any question on a maritime claim, against any vessel, arising out of any - ...

(i) salvage services, including, if applicable, special compensation relating to salvage services in respect of a vessel which by itself or its cargo threatens damage to the environment; ...

The contentious s 5 provides:

5. Arrest of vessel in rem. - (1) The High Court may order arrest of any vessel which is within its jurisdiction for the purpose of providing security against a maritime claim which is the subject of an admiralty proceeding, where the court has reason to believe that -

(a) the person who owned the vessel at the time when the maritime claim arose is liable for the claim and is the owner of the vessel when the arrest is effected; or

(b) the demise charterer of the vessel at the time when the maritime claim arose is liable for the claim and is the demise charterer or the owner of the vessel when the arrest is effected; or

(c) the claim is based on a mortgage or a charge of the similar nature on the vessel; or

(d) the claim relates to the ownership or possession of the vessel; or

(e) the claim is against the owner, demise charterer, manager or operator of the vessel and is secured by a maritime lien as provided in section 9.

(2) The High Court may also order arrest of any other vessel for the purpose of providing security against a maritime claim, in lieu of the vessel against which a maritime claim has been made under this Act, subject to the provisions of sub-section (1):

Provided that no vessel shall be arrested under this sub-section in respect of a maritime claim under clause (a) of sub-section (1) of section 4.

Polygreen argues that s 5 of the Act has made a conscious departure from the wording of the Arrest Convention 1999. Specifically, it contends that under s 5(1) of the Act there need not be a maritime claim at all against the vessel sought to be arrested. The reason is that the expression 'in respect of which' in art 3 of the Convention has been consciously omitted in s 5 of the Act. Therefore, the legislature permitted arrest of even a vessel against which there is no maritime claim at all, without anything further, under s 5(1) of the Act.

The defendants argue that this is not a viable interpretation of the Act. The requirements of s 5(1) of the Act are that it must be the same ship, and the same owner. The ownership must be continuing, and the liability must be that of the owner. Then ss 5(1)(b), (c), (d), and (e) speak of other situations such as demise charters and so on. Section 5(1)(e) includes a manager and operator and speaks of a maritime lien.

Section 5(2) of the Act uses a specific phraseology. It says that the High Court may also order the arrest 'of any other vessel'. This would necessarily inform the interpretation of s 5(1) of the Act. The reason is simple. If what Polygreen suggests is correct, that a vessel against which there is no maritime claim can be arrested under s 5(1) without requiring anything further, s 5(2) is entirely otiose. Section 5(1) requires that there be a maritime claim against the vessel sought to be arrested. Section 5(2) is the fallback position; if the vessel against which there is a maritime claim cannot be arrested, then any other vessel can be arrested, but this has to be lieu of the vessel against which there is a maritime claim. The maritime claim itself must exist in both cases. An action positioned under s 5(2) is subject to its proviso. Arrest of a 'sister ship' is thus also entirely within the framework of s 5(2).

It cannot possibly be said of Tresta Trading that it is a sham, a camouflage, or anything of the kind. It was set up many years ago. It has independent contracts. It pays tax overseas. There is no question of an asset being moved by Tresta Trading to defeat a creditor, and no such case is pleaded. Can alter ego/pierced corporate veil jurisprudence be invoked willy-nilly each time it is found that one company is the holding company or the parent of another? There is enough law to indicate that there is nothing wrong with one family setting up multiple companies with common shareholding, each holding different assets. A different consideration may arise when a company is a debtor, and it deliberately incorporates another company to move assets away to put them beyond the reach of the creditors. There, courts have frowned upon these attempts, and have always allowed a creditor to follow the assets into the hands of the so-called separate company. But what is required is that there must be an element of deceit, an attempt at fraud, something colourable.

Polygreen contends that the alter ego argument is its 'fallback' argument. Its primary argument is that Shiny Shipping is liable for the salvage services provided to Tresta Trading as a matter of contractual obligation. This Court is unable to accept that Polygreen has made out any such case for an arrest. The entirety of its case comes down to a single insertion made by Polygreen itself in the LOF form, and the failure of Shiny Shipping's employee to delete that endorsement. Whether this was in the mind of Shiny Shipping's employee, was an oversight, or was deliberate, are matters for trial.

Polygreen contends that it was 'deceived', 'induced', 'misled' - and other words of that stripe - into 'believing' that the two companies were one. This argument makes no sense at all. There is no logical reason why Tresta Trading would lead Polygreen to believe that it and Shiny Shipping were one, thereby opening the door or paving the road for Polygreen to move against the MT Pamboor 2. If Polygreen's argument is to be accepted, it completely torpedoes any case on fraud or deceit in hiding assets, and puts paid to any invocation of the alter ego doctrine.

Has Polygreen been able to establish its case under s 5(2) of the Act? To do that, Polygreen had to establish in personam liability on the part of Shiny Shipping, the registered owner of the MT Pamboor 2. To cross the bridge or divide between Tresta Trading and Shiny Shipping, Polygreen had to show with cogent and persuasive material that the two were indeed the same, that Tresta Trading was set up to defraud creditors, or that Tresta Trading was in fact nothing but a shell company with no business and no assets. Polygreen fails on every single one of these determinants. Its entire case is built on conjecture and surmise.