The plaintiffs in this matter were the owners of cargo lately laden on board the Riau. The defendant was the owner of a number of ships, one of which was the Djatisari. The claim was for damages for breach of contract and/or duty regarding the loading, handling, custody, care and discharge of the plaintiffs' cargo on the Riau. The Riau was not owned by the defendant at the material time but by PT Mare Shakti Indonesia Bulk Transport. The defendant was the time charterer of the Riau. The defendant was at all material times the owner of the ship Djatisari which was arrested in this action.

The defendant asked for an order that the writ of summons beginning this action and all subsequent proceedings in relation to the Djatisari be set aside on the ground that the court had no jurisdiction as:

1. the defendant at all material times was not the owner of the Riau;
2. the defendant at all material times was the time charterer of the Riau.

Further or alternatively, under the inherent jurisdiction of the Court, all further proceedings in this action should be stayed on the ground that the plaintiffs and the defendant have by the terms of the contract agreed to refer and submit all disputes arising out of the contract to the court in Jakarta, Indonesia.

Held: Judgment for the plaintiff. The defendant’s action is denied.

The Administration of Justice Act 1956 (the Act) applies in the Colony of Hong Kong. Section 1 provides that the admiralty jurisdiction of the High Court shall include the power to hear and determine any claims for the loss or damage to goods carried in a ship.

Section 3(4) provides:

In the case of any such claim as is mentioned in paragraphs (d) to (r) of subsection (1) of section one of this Act, being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship, the Admiralty jurisdiction of the High Court and (where there is such jurisdiction) the Admiralty jurisdiction of the Liverpool Court of Passage or any county court may (whether the claim gives rise to a maritime lien on the ship or not) be invoked by an action in rem against -

(a) that ship, if at the time when the action is brought it is beneficially owned as respects all the shares therein by that person; or

(b) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid.

Part 1 of the Administration of Justice Act does not give legislative effect to the provisions of the Arrest Convention 1952. Rather the inspiration for s 3(4) of the Act was art 3.4 of the Arrest Convention 1952 which reads:

When in the case of a charter by demise of a ship the charterer and not the registered owner is liable in respect of a maritime claim relating to that ship. The claimant may arrest such ship or any other ship in the ownership of the charterer by demise, subject to the provisions of this Convention, but no other ship in the ownership of the registered owner shall be liable to arrest in respect of such maritime claims.

The defendant submitted that the word 'charterer' in s 3(4) means 'demise charterer'. This submission was supported with two arguments. First, when interpreting the Act it is permissible to look at the Convention, which the Act was bringing into force, and that when the Arrest Convention 1952 is looked at, it is plain that the word 'charterer' in s 3(4) means demise charterer. For that contention, the defendant relied on the judgment of Lord Diplock in The Eschersheim [1976] 2 Lloyd’s Law Rep 1 where he says:

If there be any difference between the language of the statutory provision and that of the corresponding provision of the Convention, the statutory language should be construed in the same sense as that of the Convention if the words of the statute are reasonably capable of bearing that meaning.

Second, the defendant submits that even if the Arrest Convention 1952 is not looked at, s 3(4) must be interpreted in accordance with the maxim noscitur a sociis and 'charterer' must mean 'demise charterer' on the basis that a demise charterer is the only person who can be coupled with an owner or a person in possession or in control of a ship. The arrested ship and the Riau were not sister ships and therefore the Djatisari was not liable to arrest.

The plaintiff argued that the Act uses the word 'charterer' without any qualification and argued that as this is a common word it must have its ordinary meaning ascribed to it without any reference to the Arrest Convention 1952.

In The Permina 108 [1978] 1 Lloyd’s Law Rep 311 (CMI395), the Singapore Court of Appeal held that the word 'charterer' in s 4(4) of their Act (which is in the same terms as s 3(4) of the Act) should be limited to mean charterer by demise only. However, it must be borne in mind that, in that case, the Court observed that it was not only unnecessary to look at the Arrest Convention 1952 but it would be wrong in the case of Singapore because even when it was a Colony of the United Kingdom, was not one of the colonies to which the United Kingdom had, under art 18, extended the Arrest Convention 1952 and because, since independence, Singapore had not acceded under art 15 to the Arrest Convention 1952.

In the Ledesco Uno [1978] 2 Lloyd’s Law Rep 99 (CMI1147), the Judge was satisfied that the Court of Appeal in Singapore had come to their conclusion on the interpretation point 'purely and simply because they held that the word "charterer" in s 3(4) of the Act (or s 4(4) of the Act in Singapore) was not ambiguous and refused to construe the word "charterer" in the light of the terms of the Arrest Convention 1952'. However, the Judge went on to say that when it came to construing the word in light of the law as it stood in Hong Kong he did not find that he could construe the word without hesitation and thought that he could properly turn to the Arrest Convention 1952 for assistance. At p 105, after looking at art 3 of the Arrest Convention 1952, the Judge said '[i]t clearly shows that as far as art 3 is concerned it supports the view that the word "charterer" in s 3(4) of the Act meant a demise charterer'. The Judge took the view that it was proper to be assisted by the Arrest Convention 1952 and accepted that the English authorities had laid down that only sister ships were liable to arrest.

In the Span Terza [1982] 1 Lloyd's Rep 225, Sir David Cairns considered s 3(4) and found it impossible to construe the word 'charterer' as being limited to demise charterer. If only demise charterer were meant, one would have expected the word 'demise' to have been inserted. Alternatively, the word 'charterer' could have been omitted altogether because a demise charterer would be included in the words 'a person in possession or control'. As to whether the Arrest Convention 1952 assisted in the interpretation of the Act in this regard, he said 'in the circumstances, I do not find that the provisions of the Arrest Convention 1952 are of assistance to me in deciding this case; I prefer to go on my interpretation of the words themselves'.

The word 'charterer' when it is used in s 3(4) of the Act is not limited to demise charterers, and the words 'any other ship' used in s3(4)(b) are not limited to sister ships, but include any other ships which were in the beneficial ownership of the person liable in personam at the time when the action was brought.