The plaintiffs were making their claim as the owners of cargo that was shipped on board the KH Enterprise. The defendants were the owners and/or demise charterers of the KH Enterprise.

The cargo was loaded in Taiwan in early March 1987 for a voyage to Hong Kong. On 11 March, the KH Enterprise was involved in a collision with the Oriental Faith. As a result of the collision, the KH Enterprise sank. Shortly before the commencement of the voyage, there was a transfer in the ownership of the KH Enterprise from a company called Pro Line to Kien Hung Shipping Co Ltd (Kien Hung Shipping). It was the defendants' case that property passed under the law of the flag in February 1987. This issue was not contested.

In July 1987, the plaintiffs issued a writ in rem against the owners of the Strait Container. Pro Line owned this ship. The basis of the arrest was that the Strait Container was a sister ship of the KH Enterprise. In March 1988, the plaintiffs commenced the present proceedings. The owner of the Pioneer Container was also Kien Hung Shipping. The claim was the same as in the previous proceedings, save that numerous additional cargo owners were making claims. The plaintiffs issued a warrant of arrest of the Pioneer Container on 24 October when the ship visited Hong Kong.

The defendants sought an order that the writ of summons be set aside, together with consequential orders. The main ground being relied upon was that the Court had no jurisdiction to entertain the action on account of the provisions contained in s 21(8) of the Supreme Court Act 1981 (UK) (the Act), which had been applied to Hong Kong. They complained that the plaintiffs had already taken proceedings in rem in respect of the same claim. In the alternative, they sought to strike out the claim as being vexatious for the same reason.

The plaintiffs submitted that s 21(8) of the Act had no application to the present case. It was clear from the facts that the plaintiffs had not proceeded against a sister ship when they had taken action in the previous proceedings. It had now been established that the owners of KH Enterprise were Kien Hung Shipping. The previous proceedings were against the owner of the Strait Container, who was Pro Line. It was common ground that, at the time of the commencement of the previous proceedings, the two vessels were owned by different parties. Accordingly, the litigation in the previous proceedings was entirely separate and distinct from the present proceedings, and had no bearing upon it.

Held: Judgment for the plaintiffs.

There is one case on point which is of assistance: The Stephan J [1985] 2 Lloyd's Law Rep 344. The Judge in that case held that 'the purpose of s 21(8) of the Act is to make it quite clear, that the plaintiff whose claim is within that part of the jurisdiction of the High Court which can be invoked by an action in rem, can arrest only one ship, either the offending ship or another ship in the same ownership, in accordance with the Arrest Convention 1952; while at the same time preserving the practice, which started in 1956, of naming more than one ship on the writ, and then deleting all but one when the time came to serve the writ and arrest a ship. In my judgment s 21(8) cannot be interpreted in isolation. It must be interpreted in conjunction with s 21(4).'

The present case is not distinguishable from The Stephan J. The rationale of that case was the ability of the Judge to read s 21(8) with s 21(4), which led him to a conclusion that the earlier arrest of the vessel in that case was a separate and independent exercise, and accordingly that it did not constitute a violation of the provisions contained in s 21(8).

Likewise, the proceedings in this case are not lacking in jurisdiction.