On 31 October 2013, Egyptian Bulk Carriers (EBC), an Egyptian company, time chartered Sam Hawk from her owners. The registered owner of Sam Hawk was a Hong Kong company. The ship manager was a Greek company and the operator was a Swiss company. Sam Hawk was flagged and registered in Hong Kong.

The time charter contained a clause which required the charterer to bunker Sam Hawk during the currency of the charterparty. The obligation to pay for bunkers was imposed on EBC. EBC was not authorised to contract for necessaries, including bunkers, on behalf of the owner. Nor was EBC authorised to bind Sam Hawk with a maritime lien for necessaries.

Between 15 November 2013 and 6 December 2013 EBC communicated with Reiter Petroleum Inc (Reiter) in relation to a contract for supply of bunkers to Sam Hawk upon her arrival in Istanbul. During the course of the communications, Reiter informed EBC that the supplier of the bunkers would be Socar Marine. EBC informed the master of Sam Hawk who then issued a ‘no liability’ notice advising that Sam Hawk and her owner did not accept liability to pay for bunkers and that payment was the responsibility of the time charterer. Socar Marine received the notice but refused to sign it. On 6 December 2013, Reiter sent EBC a revised quote which EBC accepted. Reiter then sent EBC an Amended Confirmation of the price and quantity. This amended confirmation was not sent to the owner.

The terms of the Amended Confirmation provided that it was subject to Reiter Petroleum’s general terms and conditions, cl 15(a) of which required any contract to be construed according to the law of Canada. However, cl 15 was subject to cl 7 which provided that the seller was entitled to assert a lien wherever it finds the vessel and that the law of the United States of America should apply to determine the existence of any maritime lien, regardless of the court in which the proceedings were instituted.

On 17 May 2014, Reiter wrote to the operators of Sam Hawk informing them that it supplied bunkers to her in Istanbul while she was under time charter but that its invoice (USD 122,675) remained unpaid. Reiter sought their assistance to recover the unpaid sum from the time charterers. The owner was unable to persuade EBC to pay and subsequently Reiter made a demand for payment from the owner which the owner declined to meet.

On 5 November 2014, Reiter filed an in rem writ in relation the unpaid invoice and arrested Sam Hawk in Albany, Western Australia. The owner applied to have the writ set aside for want of jurisdiction and the action dismissed. The primary judge dismissed the application. The owner of Sam Hawk appealed.

Held: The Full Court allowed the appeal. Per Allsop CJ and Edelman J, although Australia has not ratified the Arrest Convention 1952, the Convention was deeply influential in the Australian Law Reform Commission Report 33, Civil Admiralty Jurisdiction 1986 and thus the Admiralty Act 1988 (Cth). The phrase ‘maritime lien’ is not used in the agreed list of maritime claims in art 1.1 of the Arrest Convention 1952 nor art 1 of the Arrest Convention 1999. Art 9 of the Arrest Convention 1952 directs attention, for the question of the existence of maritime liens to the law of the court seised of the arrest of the ship. This does not negate the possibility of recognising the lex causae for the recognition of the nature of rights.

Per Allsop CJ, Edelman, Kenny and Besanko JJ, the Admiralty Act 1988 (Cth) s 15 provides that ‘[a] proceeding on a maritime lien or other charge in respect of a ship or other property subject to the lien or charge may be commenced as an action in rem against the ship or property.’ This section should be interpreted as referring not only to maritime liens arising under Australian law but also to maritime liens arising under foreign law.

Per Allsop CJ and Edelman J (Kenny and Besanko JJ agreeing), to determine whether the Australian court has jurisdiction to recognise a foreign maritime lien, a two-step approach is required. The first step is to determine what rights exist by reference to the lex causae. The second step requires the characterisation of those rights, in the circumstances in which they arose, for the purposes of Australian law, to determine whether they can be described as a ‘maritime lien’. In this case, any foreign law right in issue arises from a contract between Reiter and EBC for the supply of bunkers. The owner was not a party to that contract and there was no evidence the owner knew of the contract when it was made. Therefore, the issue cannot be characterised as contractual so the law of the United States or the law of Canada becomes irrelevant. The only other relevant laws (other than the lex fori) can be the law of

This case involved problems at the north side of the Bosporus during a voyage from Tuapse (Russia) to Djibouti by the MS Rochester Castle, registered in Malta, property of Navalmar, which had entered into a contract of affreightment with Glencore Grain. These problems lead to the pilot asking for tugboat assistance. After the arrival of three tugboats of the Turkish Directorate General of Coastal Safety (DGCS) and after the passing of a rope, the Rochester Castle continued on its route and was ordered to drop anchor at the Istanbul (Türkiye) Roads awaiting an investigation concerning the assistance rendered by the tugboats. The master declared general average as a consequence. Navalmar and the DGCS reached a settlement of USD 1,550,000 for the rendering of assistance. The cargo insurers issued an average guarantee. The average adjustment prepared by an average adjuster in Genoa (Italy) set the part of the general average to be paid by cargo interests at USD 955,800. Navalmar issued proceedings against the cargo interests for a declaration that they were obliged to pay their contribution in general average in accordance with the average adjustment.

Held: Navalmar succeeds in proving that the ship was in danger at the moment the master accepted the assistance. It follows from BMT's report and a video reconstruction that the Rochester Castle's anchors no longer held, and that the ship was drifting towards shallow waters. The fact that there is no mention of a dragging anchor or a situation of danger in the ship's journal does not carry enough counterweight to the report that is based on several sources. It is not relevant that the danger was (partly) caused by bad seamanship to accept that there is a situation of danger as referred to in r 6.a, York-Antwerp Rules 1994.

Navalmar also succeeds in proving that the salvage reward of USD 1,550,000 it paid was reasonable to have the attachment lifted instead of issuing a guarantee and await the outcome of legal proceedings in Türkiye. It follows from an opinion of a Turkish professor that in Türkiye when determining the settlement amount one normally looks at the salved value of the ship, the cargo, the bunkers on board and the outstanding freight. It also follows from that opinion that a settlement below 6% of total salved value amounts to an excellent closing of the matter, and that a settlement between 6% and 7% of the salved value would be a reasonable result. The settlement reached in this case corresponds with around 6% of the salved value, which therefore is reasonable to prevent protracted and costly proceedings in Türkiye, despite the fact that the Turkish courts have awarded a lower salvage reward (2.5%) in the matter of the Energizer.

The cargo interests, who argue they are not obliged to contribute in general average because the incident is the direct result of unseaworthiness before or at the beginning of the voyage, remain stuck in assumptions and do not deliver any concrete evidence of the alleged unseaworthiness of the ship before or at the beginning of the voyage. This is not changed by the fact that during the voyage the crew possibly spoke over the telephone with the shipowner about technical problems which could possibly have caused the need to accept tug assistance. The requested declaratory judgment is rendered.

(where the bunkers were supplied) or Hong Kong (the flag state of Sam Hawk). Since there was no evidence of the law of Hong Kong or the law of

This case involved problems at the north side of the Bosporus during a voyage from Tuapse (Russia) to Djibouti by the MS Rochester Castle, registered in Malta, property of Navalmar, which had entered into a contract of affreightment with Glencore Grain. These problems lead to the pilot asking for tugboat assistance. After the arrival of three tugboats of the Turkish Directorate General of Coastal Safety (DGCS) and after the passing of a rope, the Rochester Castle continued on its route and was ordered to drop anchor at the Istanbul (Türkiye) Roads awaiting an investigation concerning the assistance rendered by the tugboats. The master declared general average as a consequence. Navalmar and the DGCS reached a settlement of USD 1,550,000 for the rendering of assistance. The cargo insurers issued an average guarantee. The average adjustment prepared by an average adjuster in Genoa (Italy) set the part of the general average to be paid by cargo interests at USD 955,800. Navalmar issued proceedings against the cargo interests for a declaration that they were obliged to pay their contribution in general average in accordance with the average adjustment.

Held: Navalmar succeeds in proving that the ship was in danger at the moment the master accepted the assistance. It follows from BMT's report and a video reconstruction that the Rochester Castle's anchors no longer held, and that the ship was drifting towards shallow waters. The fact that there is no mention of a dragging anchor or a situation of danger in the ship's journal does not carry enough counterweight to the report that is based on several sources. It is not relevant that the danger was (partly) caused by bad seamanship to accept that there is a situation of danger as referred to in r 6.a, York-Antwerp Rules 1994.

Navalmar also succeeds in proving that the salvage reward of USD 1,550,000 it paid was reasonable to have the attachment lifted instead of issuing a guarantee and await the outcome of legal proceedings in Türkiye. It follows from an opinion of a Turkish professor that in Türkiye when determining the settlement amount one normally looks at the salved value of the ship, the cargo, the bunkers on board and the outstanding freight. It also follows from that opinion that a settlement below 6% of total salved value amounts to an excellent closing of the matter, and that a settlement between 6% and 7% of the salved value would be a reasonable result. The settlement reached in this case corresponds with around 6% of the salved value, which therefore is reasonable to prevent protracted and costly proceedings in Türkiye, despite the fact that the Turkish courts have awarded a lower salvage reward (2.5%) in the matter of the Energizer.

The cargo interests, who argue they are not obliged to contribute in general average because the incident is the direct result of unseaworthiness before or at the beginning of the voyage, remain stuck in assumptions and do not deliver any concrete evidence of the alleged unseaworthiness of the ship before or at the beginning of the voyage. This is not changed by the fact that during the voyage the crew possibly spoke over the telephone with the shipowner about technical problems which could possibly have caused the need to accept tug assistance. The requested declaratory judgment is rendered.

it is ‘presumed’ those laws are the same as Australian law. Under Australian law, no maritime lien would arise.

Even if it were possible for the foreign law issue to be characterised as contractual and the laws of either the United States or Canada applied, then any foreign rights recognised would need to be characterised, including by reference to the circumstances in which they arose, by Australian law to determine whether they could be described as a ‘maritime lien’. Whatever foreign rights might have arisen in this transaction, they are neither a maritime lien nor analogous to a maritime lien as understood in Australian law.

Rares J disagreed with the majority on the proper role of the lex fori. His Honour’s opinion was that Australian choice of law principles for both contract and tort claims ordinarily require the lex loci or lex causae to be used to classify the substance of the particular claim. Accordingly a claim on a maritime lien that is properly characterised under the law of the place where it attached will ordinarily be maintainable under s 15 of the Admiralty Act 1988 (Cth) even though no such maritime lien would attach if the same events had happened in Australia. This would not result in an enforceable maritime lien on Sam Hawk because, first, nothing occurred in the jurisdiction of the United States in which any lien could have attached. Second, neither the ship nor the owners did, or were affected by, anything to cause a lien to attach, and third, the lex causae and lex loci on the facts had nothing to do with the United States or the US Liens Act.