The defendant bareboat chartered its vessel Dacia to the claimant. The charterparty was governed by Romanian law and disputes were to be referred to arbitration in Romania.

The claimant alleged that the defendant wrongfully terminated the charterparty and claimed damages. This dispute was referred to arbitration in Romania which resulted in two arbitration awards in favour of the claimant. The awards were appealed against and the defendant obtained an order from the Romanian Supreme Court for the general suspension of any enforcement of one of the awards.

The claimant arrested two of the defendant’s vessels, the Tirgu Lapus and the Tirgu Neamt, in Romania to satisfy the awards.

The claimant also arrested the Bumbesti in Liverpool to satisfy the awards. The defendant applied to set aside the proceedings and to release the Bumbesti from arrest. The defendant argued that the Court had no jurisdiction to hear a claim to enforce a Romanian arbitration award because s 20(2)(h) of the Supreme Court Act 1981 (UK) (the Act) only grants the Court jurisdiction to hear claims arising out of an agreement relating to the carriage of goods in a ship or to the use or hire of a ship, and thus the current claim does not fall within the ambit of s 20(2)(h). The defendant also argued that the claimant already had sufficient security because of the detention of the two vessels in Romania.

Held: The defendant’s application is allowed. The arrest is set aside and the Bumbesti released.

The Court noted that s 20(2)(h) of the Act reproduced, in the same words, s 1(1)(h) of the Administration of Justice Act 1956 (UK) (the 1956 Act). That section had been enacted to give force in England to the International Convention for the Unification of Certain Rules relating to the Arrest of Seagoing Ships 1952 (the Arrest Convention 1952). In the Arrest Convention a number of 'maritime claims' in respect of which a ship could be arrested are set out in art 1 of the Convention. The wording of arts 1.1.d and 1.1.e of the Convention is exactly reproduced in the Scottish section of the 1956 Act (ss 47(2)(d) and (e)). But although two paragraphs have been rolled into one in s 1(1)(h) of the 1956 Act, their effect is not materially different. The wording of the Arrest Convention list of 'maritime claims' was itself based upon the list of the types of claim set out in s 22(1)(a)(xiii) of the Supreme Court of Judicature (Consolidation) Act 1925, for which the admiralty jurisdiction of the High Court could be invoked. This re-enacted section 5(1)(a) of the Administration of Justice Act 1920.

The Court found that the claim in the current case was an action on the awards and clearly arose out of the arbitration agreement as opposed to the bareboat charter. The arbitration agreement was by itself not an agreement in relation to the use or hire of the ship. Further, the breach of contract relied upon to found the current claim had nothing to do with the use or hire of the ship as it concerned an implied term to satisfy an award made pursuant to the arbitration agreement.