Regal International Inc (first plaintiff) entered into two bareboat charterparties with Romline (defendant), but charter hire was unpaid. The first plaintiff’s rights and obligations were subsequently assigned to Willow Maritime Srl (second plaintiff). The plaintiffs brought proceedings in rem to recover monies owed under the two charterparty agreements.

The plaintiffs agreed to purchase the Cristian A and the Cristian C, but failed to honour the agreement and the defendant cancelled the charterparties.

The plaintiffs filed their writ in rem in Cause 1998 AJ No 29 (first cause), claiming the sum of USD 1,293,789 against Romline for payment for goods and materials, the cost of repairs to, and disbursements made on account of, those two vessels. The plaintiffs filed a further writ in Cause 1998 AJ No 40 (second cause) against Romline, which had an identical claim as that in the first cause, adding claims for damages for loss suffered by the plaintiffs as a result of Romline’s breach of charterparties and breach of the purchase agreement, and also retention of the res or its proceeds of sale by way of security for any award which may be made in the arbitration proceedings in London.

The dispute was ultimately referred to arbitration in London, where the plaintiffs claimed payment for goods and materials, the cost of repairs to, and disbursements made on account of, the vessels.

The plaintiffs arrested the Samarina III, owned by the defendant, in Bombay in respect of the same claim, but the vessel was released when the defendants gave security for the sum claimed plus interest. This was later replaced by a bank guarantee furnished by the charterers of Samarina III. Another creditor arrested the MV Leresti, also owned by the defendant, in Gibraltar, and the vessel was sold to satisfy the claim. The proceeds of sale were held in court.

The plaintiffs then commenced the present proceedings in rem to recover the proceeds of sale the moneys due under the two charterparties; the defendant applied for the writs to be set aside. Thereafter, the plaintiffs sought an order that if either action were stayed or dismissed, the proceeds of sale of the MV Leresti would nevertheless be retained as security as previously requested.

There were three main issues, one of which involved art 3.3 of the Arrest Convention 1952. This was whether the writs in the two Gibraltar actions were invalidly served under s 21(8) of the Supreme Court Act 1981 (UK). The defendant submitted that s 21(8) was enacted to give effect to The Banco [1971] 1 Lloyd’s Rep 49, which held that only one vessel could be arrested in respect of a given claim.

In The Banco, the court, in construing s 3(4) of the Administration of Justice Act 1956 (then governing the Admiralty Jurisdiction of the High Court), drew on the Arrest Convention 1952 for assistance. Article 3.3 provides: ‘A ship shall not be arrested, nor shall bail or other security be given more than once in any one or more of the jurisdictions of any of the Contracting States in respect of the same maritime claim by the same claimant … unless the claimant can satisfy the Court or other appropriate judicial authority that the bail or other security had been finally released before the subsequent arrest or that there is other good cause for maintaining that arrest’.

Held: The judge dismissed the first cause, stayed the second cause, and did not award security on the plaintiffs’ application.

The judge found the reasoning by Colman J in the obiter passages of The Kommunar (No 2) [1997] 1 Lloyd’s Rep 8, 20, which also addressed the point in The Banco, to be compelling:

On the face of it, therefore, there are strong indications that although this country has ratified the Convention, Parliament has made no attempt to introduce all its provisions into English law. Indeed, its provisions have been heavily modified by Parliament. It is, in my view, therefore impermissible to construe the 1989 Act on the assumption that Parliament intended to introduce all provisions of the Convention into English law, although, as Lord Justice Cairns observed in The Banco … the 1956 Act 'must have been intended to achieve a broadly similar result' to the Convention. Nevertheless, unless the words of the Act are clearly capable of bearing the meaning of a provision in the Convention, I certainly do not consider that the Convention can be treated as a reliable comparable in all cases of obscurity of meaning in the Act.

If Parliament had intended s 21(8) to have wider application than to proceedings in the Courts of this country I feel sure that it would not have been worded in the way in which one finds it. Express reference would have been made to prior foreign as well as English proceedings. The phraseology used must, in my judgment, have been inserted to deal with facts such as those in The Banco ... where the prior arrest had been effected in an English port. Moreover, art 3.3 restricts multiple arrests to those occurring in the Contracting States and does not apply to prior arrests in non Contracting States. It would be very odd if Parliament had prohibited multiple arrests where the prior arrest had been outside the Contracting States, yet s 21(8) can refer only to prior proceedings in rem or arrests in any jurisdiction if it is not confined to English proceedings. Further, there has been no attempt to introduce into s 21(8) the flexibility to be found in the last words of art 3.3 - 'unless the claimant can satisfy the court … that there is other good cause for maintaining the arrest.'

Accordingly, the judge held that the service of proceedings in the two Gibraltar actions were not invalidated. Section 21 was not to be construed in accordance with art 3.3 of the Arrest Convention 1952 so as to include foreign proceedings and therefore, the Bombay proceedings against the Samarina III were irrelevant. Additionally, the existence of two actions against the MV Leresti in Gibraltar did not breach s 21(8).