Translink Pacific Shipping Ltd (TPS) was the 'ship's husbandry agent' of the MV Dekabrist. In respect of that relationship it was owed USD 281,828.87. Unable to claim this amount against the Dekabrist, TPS sought the arrest of the Komsomolsk as a surrogate ship at the port of Fremantle.

Following the arrest, the Dekabrist's owner Baltic Shipping Co (Baltic) claimed the arrest was both wrongful and unjustifiable under r 52 of the Admiralty Rules. It sought to have proceedings stayed and the Komsomolsk released, as it did not own the ship when TPS's claim against the Dekabrist began to run.

This case was set against the background of a conciliation and arbitration agreement between Baltic and a company related to TPS, Translink Shipping Ltd (Translink). Translink sought to set off a claim of USD 1,027,027.56 against the amount claimed against it by Baltic. This claim against Baltic was assigned to Translink by TPS. Translink later attempted to reassign that claim back to TPS. Baltic objected to withdrawing that claim from arbitration as Translink was already the possessor of that claim by assignment.

Held: Proceedings stayed. The ship Komsomolsk should be released from arrest.

As well as having the Komsomolsk arrested, TPS had, prior to these proceedings, sought the arrest of three other ships belonging to Baltic. All of these arrests were based on an aspect of the claim that was originally assigned to Translink, but that Translink had reassigned back to TPS. The Court referred to art 3.3 of the 1952 Arrest Convention, which expressly prohibits the arrest of more than one ship in respect of a single maritime claim. Sections 20(3)-(4) of the Admiralty Act 1988 (Cth) (the Act) are in similar terms, with s 20(4) allowing for both a ship and surrogate ship arrested in its place to be arrested, if the amount recovered in the proceedings against the surrogate ship was less than the maritime lien.

In addition to this, Baltic had already obtained an order from the High Court of Justice in England, preventing TPS and Translink from instigating any further legal proceedings against it or its ships.

The crucial point was whether Baltic had in fact been the owner of the Komsomolsk when it was arrested as surrogate for the Dekabrist. The plain wording of s 19 of the Act indicated that while a 'guilty' ship with a maritime lien attached to it could be under charter, the surrogate ship arrested in its place must be owned by that charterer. There is no mention of a surrogate ship being under charter.

The Court referred to the 1952 Arrest Convention as an aid to construing the Act, looking specifically at art 3.2, which states that a ship is in the same ownership when all the shares in it are owned by the same person/s, and art 3.4, which states that, in lieu of a ship under demise charter, another ship owned by that demise charterer can be arrested.

Baltic produced evidence indicating that it owned the Komsomolsk until October 1993, at which point it transferred ownership of the vessel to a Cypriot company, which was a subsidiary of Baltic. This made Baltic the demise charterer of the Komsomolsk.

Ultimately, the Court opted to stay proceedings, in part because the arbitration between Baltic and Translink was ongoing, and the award resulting from the arbitration could completely undermine TPS's claim in this case, and because the Court was of the opinion that the consecutive separate proceedings being brought against Baltic (as well as the Komsomolsk's arrest) were oppressive acts.