This case concerned the Greek ship Antonis P Lemos, which was owned by the appellant and chartered to Sammisa Ltd (S). The charterparty permitted S to sub-charter the vessel as long as it informed the appellant's agent. S, in turn, chartered the vessel to the respondent, Samick Lines Co Ltd (SL), for a one-time charter trip. The respondent further sub-chartered the vessel to Agri Industries for the carriage of a full cargo of heavy grains and/or sorghum and/or soya beans from North America to Alexandria. The charter contained a clause guaranteeing that the vessel's maximum draught upon arrival at the port of discharge would not exceed 32 feet in saltwater. However, upon arrival at the port of discharge, the vessel's draught exceeded 32 feet, resulting in the need for lightening before berthing and causing a delay in the discharge process. The respondent was obliged to cover the expenses and losses associated with the lightening process.

To recover these expenses and losses, the respondent initiated an action in rem against the vessel, arresting it to secure their claim. The claim was founded solely on the tort of negligence and not on any contractual agreement between the parties.

The appellant responded by applying to the Admiralty Court seeking an order to set aside the warrant of arrest and release the vessel, arguing that the Admiralty Court lacked jurisdiction. Sheen J made an order sought setting aside the writ and warrant of arrest. On appeal by the respondent, the Court of Appeal allowed the appeal. The appellant then appealed to the House of Lords.

Held: Appeal dismissed with costs.

The sole question before the House was whether the respondent's claim, considering its nature and the facts, fell within s 20(2)(h) of the Supreme Court Act 1981 (the Act).

The appellant presented two arguments. It contended that s 20(2)(h) exclusively applied to claims that were purely contractual in nature and founded on some agreement referred to in that section, directly made between the two parties in an action. The appellant argued that the section did not encompass other claims arising from tort, even if such claims were indirectly or directly connected to the agreement. Alternatively, the appellant argued that even if s 20(2)(h) extended to claims founded in tort, it only included such claims if they were directly connected with some agreement of the kind referred to in the section.

The Act succeeded the Administration of Justice Act 1956 (the 1956 Act). Part I of the 1956 Act was enacted to implement the Arrest Convention 1952. Moreover, since the purpose of the Act was to give domestic effect to an international Convention, its provisions were to be interpreted broadly and liberally.

Regarding the first contention, the Court held that in certain contexts, the phrase 'arising out of' may, on its ordinary and natural interpretation, be equivalent to the narrower phrase 'arising under' and or the wider phrase 'connected with'. Its interpretation depended on the specific context in which it was used. The Court also noted that the States involved in negotiating the Convention intended for art 1.1 to contain a full and complete list of specific maritime claims or kinds of claims, rather than a few general formulations comprehending them all. Consequently, some degree of overlap between the specific claims and kinds of claims listed in art 1.1 was considered natural and inevitable, and this overlap was replicated in s 20(2) of the Act.

Additionally, the Court held that even though the phrase 'relating to' had been given a narrow rather than a wide meaning in the case of Gatoil International Inc v Arkwright-Boston Manufacturers Mutual Insurance Co [1985] AC 255, it did not follow that the phrase 'arising out of' should be given a similar interpretation. The reason for this distinction lay in the differences between the two phrases.

First, in art 1.1 of the Arrest Convention, 1952 the phrase 'arising out of' was positioned in a way that it governed all the maritime claims, or kinds of claims listed in paras (a)-(q). This arrangement was followed in s 47(2) of the 1956 Scottish Act but not in England and Northern Ireland. Conversely, s 1.1 of the 1956 Act re-arranged and reworded the claims stated in art 1.1. As a result, the phrase 'arising out of' no longer governed all the claims listed in paras (a)-(q) but was transferred so that it only appeared in paras (h), (q) and (r). The Court held that if the phrase 'arising under' in art 1(1)(a)-(q) of the Convention were substituted for the phrase 'arising out of', it would immediately become apparent that the former phrase would make no sense in relation to most of the claims under paras (a)-(q). It would only be sensible in relation to paras (d) and (e). On the other hand, if the phrase 'connected with' in art 1.1 were substituted for 'arising out of', it would make complete sense in relation to all the claims listed in paras (a)-(q), including paras (d) and (e). The Court held that this clarified that, under art 1.1, as followed by s 47(2) of the 1956 Scottish Act, the phrase 'arising out of' could not have the narrower meaning of 'arising under' but should have the wider meaning of 'connected with'.

Furthermore, it was held that it could not have been the intention of the legislature that the rearrangement and rewording of art 1.1 of the Arrest Convention in s 1(1) of the 1956 Act, which involved transferring the phrase 'arising out of' so that it no longer governed all the claims listed in paras (a)-(s) of s 1(1), but only those in paragraphs (h), (q), and (r), would give a different and narrower meaning to the phrase 'arising under' in those two paras compared to its meaning in art 1.1 of the Arrest Convention and s 47(2) of the Scottish 1956 Act. Assuming that the legislature intended this would mean that the 1956 Scottish Act, when giving domestic effect to the Convention to the whole of the United Kingdom, enacted provisions applicable in England and Northern Ireland that differed significantly from those applicable in Scotland. The Court held that the legislature could not have intended such a bizarre result. In contrast, the phrase 'relating to' was used consistently in para (h) of s 1(1) of the 1956 Act, as well as in paras (d) and (e) of art 1.1 of the Convention and s 47(2) of the Scottish 1956 Act.

Lastly, the Court attempted to compare the meaning of the phrase 'arising out of' in the English text of art 1.1 with its French equivalent in the Convention. The French equivalent is 'ayant lune des causes'. However, the Court stated that it had no evidence to establish the meaning of the French text, and since no such expert evidence was admitted, no assistance could be derived from it. This was done while acknowledging that there was no ambiguity in the English text of art 1.1 of the Convention.

The Court, therefore, found that the phrase 'arising out of' in s 20(2)(h) of the 1981 Act should be interpreted with the broader meaning of 'connected with' rather than the narrower meaning of 'arising under'.