On 13 October 1944, the Tolten collided with a wharf at Lagos Harbour, Nigeria, owned by United Africa Co Ltd (United) causing serious damage. On 23 January 1945, United issued a writ in rem in the Admiralty Division and sought damages. It claimed that the owners of the Tolten, or their servants or agents in charge of the vessel, were negligent when exiting the harbour, causing the damage.

The owners of the Tolten denied negligence. They claimed that the Court had no jurisdiction to hear the claim, arguing that an action for tort relating to land abroad could not be heard in the Admiralty Court.

United made two points about the defence. First, s 22 of the Supreme Court of Judicature (Consolidation) Act 1925 (UK) provided that the Court should have jurisdiction to determine any claim for damage done by a ship. These words should be given a wide and unrestricted meaning. Second, the rule might apply to actions in personam in the Admiralty Division, but it did not apply to actions in rem involving maritime land.

Bucknill J granted United's application. The distinction between in personam and in rem actions was merely procedural. It should not affect a substantive rule of law, such as one governing the exercise of jurisdiction by the Court.

The owners of the Tolten appealed.

Held: Appeal dismissed.

Scott LJ: In British South Africa Co v Companhia de Moçambique [1893] AC 602, the House of Lords stated that '[t]he Supreme Court of Judicature has no jurisdiction to entertain an action to recover damages for trespass to land situate abroad'.

The Moçambique rule was inapplicable, regardless of whether the proceeding was in rem or in personam, and even apart from the maritime lien to which the damage gave rise. The House of Lords in that case was not addressing an Admiralty action in rem against a ship, but an ordinary common law action for breaking and entering the plaintiffs' lands, for ejecting the plaintiffs therefrom, and for damages for such trespass.

The Moçambique rule was incompatible with both the general law of the sea and admiralty law and jurisdiction as expressed in judgments and statutes. The judicial and Parliamentary history of the Moçambique rule showed that it was a concept completely foreign to the essential nature of admiralty jurisdiction.

English Admiralty Courts had original jurisdiction over an admiralty cause of damage, even if declared or extended by statute. The general nature of admiralty law and jurisdiction differed from that of the common law. In admiralty judgments, both original and appellate, policy considerations such as the interest of maritime commerce and the world's need for uniformity in maritime law have influenced the judicial development of British admiralty law (Currie v M'Knight (The Dunlossit) [1897] AC 97). There was no reason why the admiralty principle should give way to the common law rule.

English maritime law has largely grown from the general law of the sea. It should strive for uniformity and not make unnecessary divergence for the interest of maritime commerce. Such an approach would likely be the true reading of English legal development.

The maritime lien is one of the first principles of the law of the sea, and its effects are wide-reaching. In the Bold Buccleugh (1851) 7 Moo PC 267, 284, Sir John Jervis said:

Having its origin in this rule of the civil law, a maritime lien is well defined by Lord Tenterden, to mean a claim or privilege upon a thing to be carried into effect by legal process; and Mr Justice Story (1 Sumner 78) explains that process to be a proceeding in rem, and adds, that wherever a lien or claim is given upon the thing, then the Admiralty enforces it by a proceeding in rem, and indeed is the only Court competent to enforce it. A maritime lien is the foundation of the proceeding in rem, a process to make perfect a right inchoate from the moment the lien attaches.

A maritime lien is 'a privileged claim upon a thing in respect of service done to it or injury caused by it, to be carried into effect by legal process' (Ripon City [1897] P 226, 241 (Gorell Barnes J)). It adheres to the ship from the time the facts that gave rise to the lien occurred and binds the ship until discharged (The Sara (1889) 14 App Cas 209, 225 (Lord Macnaghten)). Thus, according to the general law of the sea, a maritime lien attaches from the moment of damage.

The general law of the sea also requires a maritime lien to be applied equally in favour of the owner of an injured ship or land-based structure. It is right in principle, and only reasonable, that third persons whose property is damaged by negligence in the navigation of a vessel by those in charge of her should not be deprived of the security of the vessel, to secure prudent navigation.

English Admiralty judges applied the general law of the sea to achieve two purposes. First, to resolve doubts on a question of English law by adopting what they believed to be the relevant rule of the general law. Second, to avoid creating divergence between English law and the general law.

In this appeal, it was proper to resort to the general law of the sea. Critics might argue that there was no evidence of foreign law before the court. However, past Admiralty judges also took this approach when making statements about the 'general law of the sea'. English Admiralty judges, including Dr Lushington, used the phrases 'the general law of the sea', 'the general maritime law' and 'the ordinary maritime law' to describe the body of law which the Admiralty Court recognised as administered in all maritime countries and applied in England (eg The Bonaparte 3 W Rob 298; The Hamburg Br & L 253). It was unclear how they obtained their knowledge of the 'general law of the sea', but it was not from expert witnesses in Court.

Critics might also argue that any reference to the MLM 1926 and the LLMC 1924 should be inadmissible due to lack of proof and relevance. However, references to the MLM 1926 and the LLMC 1924 are relevant for four reasons. First, English maritime liens and the Continental privilège were materially identical. Second, the MLM 1926 was based on this identity. Third, this identity was a fundamental assumption of the LLMC 1924. Fourth, the relationship of liens to the limitation of liability was characteristic of the general law of the sea, English law, the MLM 1926 and the LLMC 1924.

Limitation and privilège were interdependent in historic origin. While the limitation of shipowners' liability and maritime lien may not seem connected, there is an integral - almost an organic - connection between the two in the history of English admiralty law, deeply rooted in the ancient law of the sea. The MLM 1926 and the LLMC 1924 were adopted from the customs of merchants, who then included shipowners, to encourage sea commerce. Their first objective was to bring those risks undertaken by shipowners when their ships adventured on a commercial enterprise within foreseeable and moderate limits. These rules kept shipowners' financial liabilities within the ambit of their ship and freight at risk on the voyage, or fortune de mer. The second objective was to give the protection of a 'privileged' position (ie maritime lien or privilège) to the main creditors of shipowners whose claims arose out of their maritime adventure.

The phrase 'maritime lien' was not originally in English admiralty diction. It was borrowed from the French word privilège. A privilège came into existence automatically without any antecedent formality and simultaneously with the cause of action. It conferred a true charge upon the ship and freight of a proprietary kind in favour of the 'privileged' creditor. The charge accompanied the ship everywhere, even in the hands of a purchaser for value without notice, and had a certain ranking with other maritime liens, all of which took precedence of mortgages. While privilège had a clearer and less ambiguous name, privilège and maritime lien did not have different meanings.

The rule of droit de l'abandon gave operative effect to the limitation principle in shipping. This rule allowed shipowners to abandon their ships to their creditors, and acquit themselves of all créance du voyage. The Admiralty Court would realise the sale of the ship and distribute the proceeds proportionally among the creditors based on the priorities of their privileges. In 1734, the UK passed legislation which limited shipowners' liability for cargo loss caused by the negligence of the master and crew to the value of the ship and freight. This codification obviously originated from the general law of the sea as administered by Continental nations even though this legislation may have merely declared maritime law as applied by the Admiralty Court. In 1813, the UK passed legislation applying the same limitation to collision claimants. It sought to encourage and increase UK ship registrations.

Hence, the English system was based on the fortune de mer in the Continental system, which was part of English admiralty law at that time. Parliament adapted it from the general law of the sea.

The correlation between the limitation of shipowners' liability and maritime lien alone provided a strong, if not compelling, reason for resolving any doubtful question of law in favour of maintaining the essential character of the maritime lien, wherever it may arise and attach worldwide. No exceptions, unless relating to a paramount rule of law should be made (eg the immunity of a sovereign before the courts of another sovereign: The Parlement Belge 5 PD 197; The Tervaete [1922] P 259).

Over the past 40 years, the correlation between the MLM 1926 and the LLMC 1924 had been emphasised. They were the result of a worldwide effort led by the International Maritime Committee to unify maritime law in the interest of global commerce. The Committee was formed in Belgium at the initiative of the late Louis Franck. The first Conventions to be passed were the Salvage Convention 1910 and the Collision Convention 1910. In the United Kingdom, they were enacted by the Maritime Conventions Act 1911, which was supplemented by the abolition of the defence of compulsory pilotage in the Pilotage Act 1913. The Carriage of Goods by Sea Act 1924 gave legislative effect to the Hague Rules. In 1926, a similar process produced three more Conventions on (1) Immunity of State-owned Ships; (2) Mortgages and Liens; and (3) Limitation of Shipowners' Liability.

The Immunity Convention, as extended by a Protocol of 1934, provides for the abolition of immunity of State-owned or State-operated ships when engaged in commerce, preventing State-owned commercial vessels from escaping adjudication on a sovereign immunity plea.

The MLM 1926 contained an agreed code of law on all charges upon ships, whether written or unwritten. A claimant enjoyed its maritime lien on the offending ship for damage caused by its faulty navigation on the same footing for damage to fixed structures (ouvrages d'art) and harbours, docks, or navigable waterways (vries navigables) for damage to a ship (art 2.4). The MLM 1926 did not suggest that the automatic creation of a damage lien was affected in any way by the fact that the fixed property on land was situated in a foreign country, so the courts in any other country could still have jurisdiction. Any exception to this would be contrary to the general law of the sea as well as the positive and universal language of the MLM 1926.

The LLMC 1924 assumes that the law of the sea shall prevail over any national court, any secured claim and any country where the claim originated. The MLM 1926 laid out the exact order of priorities explicitly and did not contemplate any exceptions. Article 2 provides that '[m]aritime liens shall attach to a vessel, to the freight for the voyage during which the secured claim arises'.

Article 2 continued with five categories of maritime liens. The fourth category provides for '[c]laims due for collision or other accidents of navigation, and for damage caused to works in or about harbours, docks, and navigable waterways'.

Article 11 provides that, '[s]ubject to the provisions of this Convention, liens established by the preceding provisions are subject to no formality and to no special condition of proof'.

The language of art 11 appears to exclude the application of any inhibition such as the Moçambique rule. Even if the letter does not exclude it, the spirit will exclude it because the article clearly mandates the world's admiralty courts that 'this is the law which you shall apply'. Such a mandate of jurisdiction appears to be a proper and even necessary attribution to courts whose jurisdiction extends universally over 'the high seas' and to all foreign ports 'where great ships go'.

The LLMC 1924 effectively substituted the conventional value of the ship and freight for abandonment. Under the Continental system, shipowners could clear their liabilities by abandoning their ships and freight to their creditors. Under the English system, shipowners have a maximum monetary liability based on the size of the ship. The LLMC 1924 combined the economic effects of the Continental system with the English system.

The international consensus was based on the essential principle that the existing correlation between limitation of liability and maritime liens, inherent in the general law of the sea, should be preserved. This ensures that the proceeds of the ship and freight or the fund coming from the statutory payment are distributed by courts strictly according to the rights and priorities of the lien creditors.

Article 6 of the LLMC 1924 mandates that a limited fund be distributed according to the order of ranking of all liens on the ship, emphasising the principle of correlation. Article 8 allows the shipowner to bring all claims, whether privileged or not, that have already been lodged against it or its ship in other courts. This prevents the total limit of liability from being exceeded by proceedings in multiple courts.

The MLM 1926 and LLMC 1924 did not endorse the principles of English maritime liens. However, the fact that many nations with different legal systems adopted these principles indicated their consistency with the 'general law of the sea', as relied by English admiralty judges. Further, the conclusions reached regarding admiralty law did not deviate from the widely accepted terms of the MLM 1926 and the LLMC 1924.

Cohen J: It was not against the comity of nations for the Admiralty Court to hear a case where a person claiming to be the owner of foreign land sought damages for harm done to that land by a ship, as long as that ship is within the Court's jurisdiction. The ship's presence created a maritime lien in favour of the landowner. Most countries recognise maritime liens, and it was not inconsistent with comity of nations for the Admiralty Division of the Court to hold that a maritime lien arose in favour of the owner of land situated outside the Court's jurisdiction.