The appellant claimed the sum of EUR 38,314.07 from the respondent for disbursements made by the appellant on behalf of the ship Almirante Storni or its owner in respect of towage, pilotage, master’s disbursements, including disbursements made by shippers, charterers or agents or goods or materials supplied to the ship for its operation or maintenance, at the port of Bari, Italy, in March 2018. The appellant argued that the claim was a 'maritime claim' within the meaning of art 1 of the Arrest Convention 1952, as given the force of law in Ireland by the Jurisdiction of Courts (Maritime Conventions) Act 1989 (the Act).

The services giving rise to the claim were ordered by GK Shipping, a Greek company, which was the time charterer of the vessel. The respondent, NSC Atlantic Trading GmbH & Cie KG, is a German limited liability partnership and the demise charterer and disponent owner of the vessel. The appellant was appointed as ship's agent for the vessel by GK Shipping in February 2018. The respondent notified the appellant the following day that it, rather than GK Shipping, was the disponent owner of the vessel. GK Shipping failed to pay. The vessel was arrested at the port of Drogheda but released the following day when a bond was put up by way of security for the appellant’s claim. The trial Judge concluded that the appellant was aware of the distinction between GK Shipping and the respondent. He held that the services had been ordered by GK Shipping and that it had not been established that the owner had a personal liability in respect of the services that were provided. The appellant appealed.

Held: Appeal dismissed.

The following questions were raised on appeal:

1. What is the nature of the statutory right in rem given to a ship’s agent who has made disbursements on behalf of a ship or its owner under the Irish legislation implementing the Arrest Convention 1952?
2. In what circumstances can a shipowner derogate from the ship’s agent’s statutory right in rem, such that the ship’s agent is deprived of its right to have recourse to the ship?
3. Was the fact that the ship’s agent became aware the day after its appointment that there were now two entities involved, sufficient to deprive the ship’s agent of its statutory right in rem to have recourse to the ship?
4. Is the fact that the appointment of the ship’s agent is made by a person other than the shipowner sufficient to deprive the ship’s agent of its statutory right in rem; or is the relationship of the owner to its ship, master and crew, and the bringing of the ship to the port to take the benefit of the disbursements sufficient to render the owner liable in rem?
5. Ought the ratio decidendi in The M/FV Avro Hunter (unreported judgment, Finnegan P, 27 April 2004) that 'demise charterers are regarded as the temporary owners of the ship' to be applied in this case or ought the cases to be distinguished by the differences between a demise charter and a time charter?

The first question is based on an error of fact - the disbursements were not made on behalf of the owner but rather on behalf of the time charterer, GK Shipping. The fourth question is also based on an incorrect assumption, namely that the owner took the benefit of the disbursements. It is clear that the disbursements were for the benefit of GK Shipping as time charterer.

The Arrest Convention 1952 was given the force of law in Ireland by s 4 of the Act. Article 1.2 of the Convention defines 'arrest' as meaning 'the detention of a ship by judicial process to secure a maritime claim, but does not include the seizure of a ship in execution or satisfaction of a judgment'. Article 1.1 defines maritime claims. The claim is for a sum of money 'being a debt due and owing to the Plaintiff in respect of disbursement made by the Plaintiff on behalf of the ship "Almirante Storni" or her owner in respect of towage, pilotage, Master’s disbursements, including disbursements made by shippers, charterers or agents or goods or materials supplied to the ship for her operation or maintenance, at the port of Bari, Italy, on or about the 4th day of March 2018 to the 13th day of March 2018'. The claim as pleaded is a 'maritime claim' for the purposes of the Convention, thereby giving the appellant the right to arrest the vessel. Although the vessel is registered in Liberia, which is not a contracting State to the Convention, art 8.2 permits arrest. It follows that the High Court had jurisdiction on the face of the pleadings to hear and determine the claim under the Act.

The claim arising in these proceedings does not give rise to a maritime lien in Irish law. In so far as the claim involves 'disbursements' they were not disbursements made by the master but by the ship’s agents. See The Avro Hunter where the President adopted the decision of Hewson J in The St Merriel [1963] 1 All ER 537. In Atlas Baltic Oü v MV Lady Magda [2018] IEHC 426 [19] (CMI471) McGovern J followed The Avro Hunter:

I am satisfied that this claim is based on breach of contract and the defendants were never a party to that contract. There is no evidence of a contractual relationship between the plaintiff and the defendants. The fact that the claim was one for disbursements merely went to the issue of the admiralty jurisdiction to arrest the vessel. It was not determinative of whether or not the vessel could be condemned for this claim. ... I am satisfied that there is no liability on the part of the defendants in respect of the claim made in these proceedings and therefore neither the vessel nor the security provided can be condemned in respect of that claim.

The appellant’s contention that art 1.1.n of the Arrest Convention entitles an agent to maintain a claim against the shipowner for disbursements made by the agent 'on behalf of a ship', even in the absence of any personal liability on the part of the owner, is not supported by any of the authorities or the text books. The authorities are clearly against this proposition. If the disbursements made do not create a maritime lien, nothing in the Arrest Convention 1952 can be construed as creating any maritime lien under the law of a State where it does not already exist. This is the clear effect of art 9 of the Convention.

The appellant’s argument that in agreeing to the provision of services by the appellant, the time charterer did so as agent of the respondent, is not tenable and is completely against the weight of the evidence. The appellant was unable to establish actual or ostensible authority from the respondent. The respondent made no representations to the appellant holding out the time charterer as its agent and all the correspondence shows that the appellant believed that it was the time charterer who was responsible for the sums claimed.

Article 6 of the Arrest Convention empowers the Court to release a vessel on bail if proper security is put up for the claim. Article 5 states that 'the request to release the ship against such security shall not be construed as an acknowledgement of liability or as a waiver of the benefit of any legal limitation of liability of the owner of the ship'. If a party has a maritime claim against the owner of a vessel 'a claimant may arrest either the particular ship in respect of which the maritime claim arose, or any other ship which is owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship' (art 3.1). Article 3.4 provides 'when in the case of a charter by demise of a ship the charterer and not the registered owner is liable in respect of a maritime claim relating to that ship, the claimant may arrest such ship or any other ship in the ownership of the charterer by demise, subject to the provisions of this Convention, but no other ship in the ownership of the registered owner shall be liable to arrest in respect of such maritime claims'.

The scheme of the Convention appears to provide therefore that if the claim is against an owner, any vessel registered in the name of that owner can be arrested as security for the claim. But if the maritime claim is against a demise charterer a vessel so chartered may be arrested but no other vessel belonging to the registered owner can be arrested as security for the claim. In this appeal the demise charterer has been sued but the trial Judge concluded that the demise charterer was not liable for the claim. In those circumstances it cannot be said that a demise charterer 'is liable in respect of [the] maritime claim relating to that ship'.

A maritime claim, like any other claim, has to be proved before the execution process can take place. If there is a maritime claim against the owner of a vessel then, following upon the arrest of the vessel or the posting of security by the owner, a successful claim can be executed against the vessel or the security bond. Claims which do not have the status of a maritime lien do not attach to the vessel and are in a different category.

Although the pleadings contend for a 'maritime claim' as defined in the Arrest Convention the appellant did not establish on the evidence that it had such a claim.

[For the unsuccessful application for leave to appeal to the Supreme Court, see Spamat SRL v The Owners and All Persons Claiming an Interest in the M/V Almirante Storni (CMI996).]