This was a joint hearing of an interlocutory appeal against a decision of Hamblen J sitting in the Admiralty Court and an application for permission to appeal against a decision of the Admiralty Registrar, in three collision actions in the Admiralty Court.

The Stolt Kestrel appeal

On 10 October 2010, the vessel Stolt Kestrel was struck by the vessel Niyazi S near the Port of Liverpool, England. The Niyazi S was then owned by Sener Petrol Denizcilik Ticaret AS (Sener) (the defendant). The Niyazi S sustained structural damage to the starboard side between frames 33 and 105. Sener’s P&I Club, The Standard Club, issued a letter of undertaking for the sum of $300,000 inclusive of interest and cost in favour of the owners of Stolt Kestrel (the claimant). The issue of jurisdiction was not addressed in the letter. On 8 and 9 October 2012, The Standard Club verbally agreed to a one-year time extension with the claimant’s P&I club, Gard, and indicated a willingness to agree to an indefinite time extension.

On 9 October 2012, the claimant issued an in rem claim form in respect of the collision damage suffered. The claim form unusually provided for the actual name and address of the owners and/or bareboat charterers of the Niyazi S. However, by that time, the Niyazi S had already been sold by Sener to Delmar Petroleum Co Ltd (Delmar), renamed Favour, and traded exclusively in West Africa (ie the vessel no longer traded to English ports). On 8 October 2013, Eder J granted the claimant's application (made on 3 October 2013) for an order to extend the validity of the claim form by eight months (to 9 June 2014) and an order for permission to serve the claim form out of the jurisdiction. On 23 January 2014, Flaux J granted the claimant's application (made on 10 December 2013) for permission to amend the in rem claim form to add four sister ships (all but one owned by Sener) as defendants.

On 11 December 2013, the claimant issued an in personam claim form naming Sener and Delmar as defendants; and on 13 December 2013, the claimant issued an application for an extension of time for commencing the in personam proceedings and for permission to serve the claim form out of the jurisdiction.

On 4 March 2014, Sener issued a cross application for (1) orders setting aside the orders extending the validity of the in rem claim form, and the permission to add the sister ships; and (2) a stay of the in personam claim on the grounds that it was time-barred.

Article 7 of the International Convention for the Unification of Certain Rules of Law relating to Collision between Vessels (1910) (Collision Convention 1910), which time bars actions for the recovery of damages after an interval of two years from the date of the casualty, was first given domestic effect in the United Kingdom via s 8 of the Maritime Conventions Act 1911 (MCA) which was subsequently superseded by s 190 of the Merchant Shipping Act 1995 (MSA).

Section 190(3) of the MSA provides for a two-year time limit for the bringing of proceedings to enforce a claim or lien against a ship or her owners in respect of damage caused by that ship which may be extended by the court on a discretionary basis (s 190(5) MSA) or, in the absence of a reasonable opportunity to arrest the defendant ship, on a mandatory basis (s 190(6) MSA).

In the court below, Hamblen J held that the claimant was entitled to a mandatory extension of time for service of the in rem claim form pursuant to s 190(6) MSA.

However, the judge also held that the permission to serve the in rem claim form out of the jurisdiction on Sener in

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.

should be set aside; the mandatory extension of time for in personam proceedings was not available as s 190(6) MSA only applied to in rem proceedings; the discretionary extension of time in respect of the in personam proceedings was refused as s 190(5) MSA required the satisfaction of a two-stage test which the claimant failed to satisfy; and an extension of time was required for the bringing of proceedings against the sister ship (which s 190(6) MSA was capable of applying to) and in the circumstances, the joinder of the sister ships was appropriate and should not be set aside.

Four issues formed the subject of the appeal application. First, whether the judge erred in regarding s 190(6) of the MSA as applicable only to in rem proceedings (applicability issue). Second, whether the judge erred in holding that the in personam claim form was time barred (time bar issue). Third, whether the discretion conferred by s 190(5) MSA involved an unfettered one-stage exercise (discretion issue). Fourth, whether the judge erred in holding that he did not have power to order alternative service of the in rem claim form on Sener in

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.

Held: The appeal was dismissed.

For the applicability issue, the court held that s 190(6) MSA applied only to in rem proceedings and this was clear from the wording of the statute.

For the time bar issue, the court held that the action in rem is an action against the ship itself and rejected submissions such as proceedings had been brought against Sener in time because in reality it is the same party being sued whether the claim form was in rem or in personam. The sister ship joinder did not assist the claimant’s case as well because they were, like the original in rem claim form, not proceedings against Sener. Tomlinson LJ stated that strictly speaking Hamblen J did not hold that “the claim was time-barred” but instead that the in personam proceedings were brought after the period of two (or three) years from the accrual of the cause of action. There are two types of time bars discussed by the judge. First, the usual time bar found in most English statutes of limitation and some international conventions which bars the remedy while leaving the claim itself in existence. Second, a special kind of time bar that extinguishes the claim. The court clarified that the time bar referred to in s 190(3) MSA is the first type and not the second type. Hence, the court held that in the absence of acknowledgement of service, no personal liability can be established against Sener on the basis of the in rem claim form.

For the discretion issue, the court held that the judge below was correct to apply the two-stage approach. The court stated that, while the discretion to extend time conferred by s 190(5) MSA was expressed in unfettered terms, it was to be exercised on the basis of the same two-stage approach as applied to applications under the Civil Procedure Rules, CPR 7.6(3). The two-stage test is as follows. First, the court must consider whether there is a good reason for an extension of time. Secondly, if there is a good reason, the court must consider whether it is appropriate to exercise its discretion in favour of extending or refusing to extend time. The power to extend time under s 190(5) MSA could only be exercised if the claimant was able to show good reason for not issuing the in personam claim form in time. Normally, the court could only proceed to stage two when the claimant succeeds in establishing a good reason at stage one. This was a discretionary exercise involving value judgments including, where appropriate, the balance of hardship. While good reason had to be shown, it was normally impossible to extend time without first showing good reason. There was a degree of overlap between each stage, and a judge addressing the inquiry at stage one was entitled and bound to take into account any matters which appeared to be relevant to the issues of good reason and satisfactory explanation, notwithstanding that the same matters would also be relevant to the exercise of the discretion at stage two.

For the alternative service issue, Tomlinson LJ rejected the proposition that the judge below erred in law in holding that he had no power to order alternative service of the in rem claim form upon Sener to take effect prospectively in the event it could later be established that Niyazi S or one of her sister ships called within the jurisdiction because it ignores the proviso to para 3.6(7) of Practice Direction 61 (PD 61) which requires that the vessel be in the jurisdiction before an order for substituted or alternative service can be made. Even if it is impractical to serve the in rem claim form on the ship physically, Tomlinson LJ stated that para 3.6(7) of PD 61 is of utility whenever a defendant vessel is within territorial waters.

The Odyssée appeal

On the evening of 17 April 2011, the SB Seaguard, a 26 metre support craft owned and operated by Sure Wind Marine Limited (English company), collided with the Odyssée, a catamaran yacht said to have been purchased in 2007 by Mr Nobili (Belgian citizen), but owned by the claimant company, CDE S.A., whilst she was still moored at the visitor's berth of Ramsgate Harbour and sustained substantial damage.

At all material times, The SB Seaguard was insured by Shipowners’ P&I Club with Mr McCooke dealing with the matter; while the Odyssée was insured by ESA Euroship Allianz (Belgian insurer) with Mr Yves de Ruyter, an experienced claim handler, dealing with the matter.

Discussions were entered into between the parties to resolve the matter. The arrangement seemed to be that after completing the repairs, a 'final statement' with supporting invoices will be submitted and thereafter SB Seaguard’s Club would settle the claim. In addition, the Shipowners’ P&I Club apparently encouraged the CDE S.A. and ESA Euroship Allianz not to instruct solicitors.

However, as the repairs to the Odyssée were complicated, they were only completed in late March 2013 and cost €275,000. The two year time limit for bringing a claim against the SB Seaguard expired on 17 April 2013, which neither party appeared to have taken notice of. When Mr de Ruyter submitted the final claim statement to the Shipowners’ P&I Club in September 2013, Mr Cooke responded on 21 October 2013 that claim has already been time barred. An in personam claim form was issued on 23 December 2013. On 20 January 2014, an application was made for an extension of time in accordance with section 190(5) of the MSA.

The questions before the Admiralty Registrar in the court below were as follows:

First, when considering an application to extend time for the commencement of proceedings under s 190 MSA, is the test applicable the two-stage test as applied and accepted in recent cases or a single-stage test based solely upon the overriding objective and the requirement to do justice, and whether or not it is necessary to show good reason? The Registrar concluded that the two-stage test is the applicable test.

Second, whether there was a good reason for the claim form not having been issued within the limitation period set out in s 190 MSA? The Registrar concluded that the claimant had failed to demonstrate that there was a 'good reason' for failing to commence proceedings in time.

Third, assuming that the single stage approach is the correct approach, are the circumstances in this case such that it would be proper to allow an extension of time? The Registrar concluded that it would not be proper because there was a lack of satisfactory reason for the failure to commence proceedings in good time.

Held: The appeal was dismissed.

The Court of Appeal considered the submissions and found that there was no real prospect for interfering with the Registrar’s assessment.