The defendant was domiciled in the Netherlands and owned the vessel Prinsengracht. The plaintiff owned cargo on the vessel. The plaintiff issued its writ in rem, in the UK, in April 1991. In January 1992, the plaintiff anticipated that the vessel would enter an English port. On 28 January 1992, they asked the defendant if the defendant was agreeable to provide a draft letter of undertaking in favour of English jurisdiction. The defendant was not agreeable because the plaintiff's claim was time-barred in the Netherlands.

On 29 January 1992, the defendant told the plaintiff that a P&I club provided bail. The defendant also acknowledged issue of the unserved writ when no attempt had been made to serve it or to arrest the vessel. On the same day, the defendant's representative reached the Court Registry just before the plaintiff's representative. The Registry, having just accepted the defendant's bail bond for filing, had to deal with the plaintiff's application to arrest the vessel. The plaintiff's solicitor decided to go ahead with the arrest, despite knowing that the bail bond had been filed. The vessel was arrested just one hour after the bail bond was filed.

The vessel was released the same day. The defendant suffered no damage from that brief arrest but applied to set it aside. Having voluntarily provided bail as security for the plaintiff's claim, the defendant argued that: (1) this deprived the plaintiff of the right to arrest the vessel; (2) jurisdiction to hear and determine the plaintiff's claim cannot be founded upon an invalid or wrongful arrest; (3) if bail was lodged prior to arrest, the Court does not have jurisdiction to hear and determine the action; (4) upon the provision of bail the ship is released from the action and cannot thereafter be arrested: The Wild Ranger (1863) Br & L 84 (The Wild Ranger); The Point Breeze [1928] P 135 (The Point Breeze); and (5) bail 'is a substitute for the ship': The Wild Ranger 87. The defendant accepted that the Court would have had jurisdiction had the plaintiff reached the Registry before the defendant on 29 January 1992.

The plaintiff argued that: (1) the defendant had voluntarily submitted to the jurisdiction; and (2) there was good and sufficient reason to arrest despite bail being given.

Reference was also made to the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (the 1968 Convention) which has the force of law in the UK: Civil Jurisdiction and Judgments Act 1982, Sch 1. Under the 1968 Convention persons domiciled in a Contracting State must be sued in the Courts of that State (see art 2). But that provision is subject to art 57 which provides:

This Convention shall not affect any Conventions to which the Contracting States are or will be parties and which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.

This Convention shall not affect the application or provisions which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments and which are or will be contained in acts of the Institutions of the European Communities or in national laws harmonised in implementation of such acts.

The Court identified the following issue. If shipowners who are domiciled in one of the Contracting States of the European Economic Community (ECC) voluntarily give bail for the purpose of avoiding the inconvenience of the arrest of one of their ships, is the consequence of putting up bail that this Court is deprived of jurisdiction to hear and determine the plaintiff's claim? The defendant contended that based on the The Deichland [1990] 1 QB 361 (CA) (The Deichland) (CMI2233) this question should be answered affirmatively.

Held: Application dismissed.

The defendant's arguments are rejected. Those arguments were based upon either a misconception as to the nature of bail or upon a misreading of the decision in The Deichland. The Deichland was a case in which the shipowners' club had given a letter of guarantee but had not agreed to submit to the jurisdiction of this Court. The ship had been served with the writ but had not been arrested. Under the 1968 Convention (The Deichland 385):

if a defendant is domiciled in a Contracting State [it] must be sued in that State unless the case falls within the exceptions contained in sections 2-6 of the 1968 Convention or under the provisions of art. 57, which for the purpose of this case means the 1952 Arrest Convention.

The Deichland held that the 1968 Convention does not affect any jurisdiction given to the High Court under the Arrest Convention 1952: 373. But it further held that the jurisdiction given by art 7 of the Arrest Convention is only preserved by art 57 of the 1968 Convention if there was a ship arrest. Where ships were not actually arrested but some security or undertaking was furnished to prevent an arrest, that was not sufficient to bring an action within art 7 of the Arrest Convention: 377-378. But that did not rule out jurisdiction by express agreement: 385G; or by the defendant submitting to the jurisdiction: 382H.

The defendant had submitted to the jurisdiction. The defendant was entitled to acknowledge issue of the writ if they desired to participate in the proceedings (but not otherwise): O 75 r 3(b) of the Rules of the Supreme Court (RSC), which was introduced following The Gniezno [1968] P 418 (CMI2568). By acknowledging issue of a writ in rem, the defendant thereby became a party to the action, which, from that moment, became in personam as well as in rem: The Deichland 382; The August 8th [1983] 2 AC 450 (PC) 456. The defendant clearly submitted to the jurisdiction because it had voluntarily acknowledged issue of the writ at a time when no action by them was called for, because the writ had not been served: The Deichland 382.

Furthermore, '[b]ail cannot be given … unless the owner acknowledges service and thereby submits to the jurisdiction': Lawrence Collins (ed), Dicey and Morris on The Conflict of Laws, vol 1 (11th edn, Stevens & Sons 1987) 377. As reflected in RSC O 75 r 6, bail 'is an undertaking given to the Court' to satisfy its judgment: DR Thomas, Maritime Liens (Stevens & Sons 1980) 288. It would be absurd if a defendant could procure a bail bond and then take the position that a judgment cannot be obtained against it because its ship cannot be arrested and it has not submitted to the jurisdiction of the Court. That is not the effect of The Deichland.

Similarly, a person who enters a caveat against arrest undertakes to acknowledge service, give bail or pay money into Court (RSC O 75 r 6), and submit to the jurisdiction, subject to the following exception: when the claim endorsed on the writ in rem is not within the Admiralty jurisdiction an application can be made to set aside the writ and the defendant will not be taken to have submitted to the jurisdiction.

The defendant also argued that an acknowledgment of the issue or service of the writ is always subject to the right of a defendant to make an application under O 12 r 8 to dispute the jurisdiction of the Court. But at the time of the defendant's acknowledgement the plaintiff had not invoked the jurisdiction of the Court because the writ had not been served. Furthermore, at that time there were no grounds upon which the defendant could dispute the jurisdiction of the Court because there was no irregularity in the writ. At that time no attempt had been made to arrest the vessel so the defendant's complaint against arrest was irrelevant.

Given that the defendant had submitted to the jurisdiction, its application was dismissed.

There was good and sufficient reason for the arrest. The Court of Appeal in The Arctic Star (The Times, 5 February 1985) held that the rule that bail represents the ship, and, once it has been put up, the ship should be free from any further interruption by arrest in respect of the same claim is viewed in the light of whether it is oppressive and vexatious to re-arrest. Lloyd LJ said that a second arrest is not normally permitted because of the reason that bail represents the ship. Lloyd LJ added that this rule 'is not without exceptions' because its justification was 'the need to avoid oppression and unfairness'.

In this case, there was only one arrest. It lasted less than a day. It was not vexatious or oppressive. The ship was arrested solely because the defendants declined to agree expressly to submit to English jurisdiction and because it was thought that the decision in The Deichland might have made it necessary to arrest the ship, even though bail had been given.

In arresting the vessel, the plaintiff did everything which was necessary to look after its own interests. If the arrest of the ship is necessary to preserve the jurisdiction of this Court it cannot be wrongful to arrest the ship. On the defendant's case, to found English jurisdiction a plaintiff must arrest a ship and cannot achieve that result by accepting bail. If accepted, that would show that bail is not the equivalent of the ship except in money terms. Bail can only be the equivalent of a ship if it provides equivalent security without adverse effect upon the plaintiff. If that was correct, bail can be given without submitting to the jurisdiction and it remains necessary for the plaintiff to arrest the ship; that arrest cannot be unlawful.

The Wild Ranger and The Point Breeze are distinguishable because the vessel in the instant case was not released on bail provided after arrest. Although The Wild Ranger, if literally interpreted, would indicate that there was no power to re-arrest a ship for the same claim after the ship was released on bail, the ground of the decision in The Wild Ranger was the fact 'that the cause of action had passed into res judicata' (The Hero (1865) Br & L 84 (The Hero)). Re-arrest was allowed in The Hero because the Court held that it had the power to do so when the application was made 'before judgment has been pronounced'. Likewise, in The Point Breeze, the Court held that a vessel cannot be arrested after it has been once released on bail in the same action for the same claim.

The procedure for obtaining the release of property under arrest in RSC O 75 r 13 enables the arresting party to consent to the issue of a release when it is satisfied that bail or other security has been given. If bail has been given to the satisfaction of the plaintiff and for that reason the plaintiff has consented to the issue of an instrument of release and the ship has been released, it would ordinarily be vexatious and oppressive to re-arrest the ship.