The plaintiff arrested the Silver Athens. The defendant provided security and applied for the release of the vessel. The warrant of arrest was set aside, the guarantee discharged, and the action stayed. It was common ground that a stay of the action was mandatory by reason of s 1 of the Arbitration Act 1975 (UK).

The plaintiff applied for an order lifting the stay and for a declaration that the plaintiff might apply for the issuance of a warrant of arrest.

Held: The stay of proceedings is lifted, and the security provided to prevent arrest is ordered to be retained as security for the satisfaction of any award which is given in respect of the dispute in the arbitration.

From the time the warrant of arrest was set aside and the guarantee was provided, the parties were in the same position they would have been in if the ship had not been arrested. The principle that when a ship is once released upon bail, it is altogether released from that action and thereafter the bail represents the ship did not apply when the arrest had been set aside and the bail released. This was recognised in art 3.3 of the Arrest Convention 1952.

It was recognised in the Convention that a ship might be rearrested if the bail or other security had been released before the subsequent arrest. There was nothing in the Supreme Court Act 1981 (UK) which prevented a second arrest if the first arrest had been set aside. The first arrest must thereafter be treated as a nullity.