001A Admiralty Law Sg2021

Master of Laws (LLM)
Postgraduate Diploma in Laws

Postgraduate Certificate in Laws
Admiralty law
Module A: Admiralty
jurisdiction and
procedure
Revised edition, 2021
A. Mandaraka-Sheppard
M. Tsimplis
LWM01A
This Study Guide was prepared for the University of London by:
̆ Dr Aleka Mandaraka-Sheppard (LLB, LLM, PhD, Dip.IArb), formerly Head of the

Shipping Law Unit, University College London – Founder and Chairman of the
London Shipping Law Centre.
̆ Professor Mikis Tsimplis (BSc, LLM, PhD) Professor of Law, City University of
Hong Kong.
This is one of a series of Study Guides published by the University. We regret that
owing to pressure of work the authors are unable to enter into any correspondence
relating to, or arising from, the Guide.
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Contents
Contents
Chapter 1: Introduction..........................................................................................1
1.1 Admiralty law...........................................................................................................1
1.2 Course aims and outcomes................................................................................. 2
1.3 Introduction to Module A.................................................................................... 2
1.4 How to use this Study Guide ............................................................................. 3
1.5 Preparation for the course...................................................................................6
1.6 Allocating your time.............................................................................................8
1.7 The examination....................................................................................................8
Chapter 2: The nature of Admiralty jurisdiction............................................. 13
Introduction...................................................................................................................13
2.1 Statutory rights in rem and maritime liens................................................. 14
2.2 Types of claims enforceable in the Admiralty court................................ 16
Chapter 3: Enforceability of claims under the Admiralty jurisdiction of the
High Court ............................................................................................................ 21
Introduction.................................................................................................................. 21
3.1 Nature of in rem proceedings...........................................................................22
3.2 Statutory requirements for bringing an action in rem against a ship....... 23
Chapter 4: Procedure for enforcement of claims in rem................................ 29
Introduction..................................................................................................................29
4.1 Arrest of a ship and the aftermath.................................................................29
4.2 Appraisement and sale of the ship by the court........................................31
Chapter 5: Ship arrest and jurisdiction on the merits.....................................35
Introduction.................................................................................................................. 35
5.1 Outline legal framework for obtaining jurisdiction on the merits..... 37
5.2 Disputes under the Recast Regulation.......................................................... 37
5.3 Outline of the jurisdictional rules under the Recast Regulation..........39
5.4 Prioritisation and conflicts between jurisdictional rules......................42
5.5 Stay of proceedings on the ground of a foreign jurisdiction
agreement or arbitration agreement.................................................................. 44
i
Admiralty law: Module A
Notes
ii
Chapter 1: Introduction
1.1 Admiralty law

Admiralty law belongs to the category of private law and, as such, it
regulates the rights and duties of people whose object of trade is a
ship. Although the subject comprises areas of the law which regulate
conduct of seamen at sea while navigating or assisting other ships in
need, the subject encompasses many other areas of the law (as you
will find out by studying this subject). However, it does not include the
law relating to the carriage of goods by sea, international trade law and
marine insurance. These are complementary subjects and are covered
by separate courses in the University of London series. Admiralty law
is the core subject of shipping law (or maritime law, in a sense), which
means that you will comprehend shipping law better by studying this
subject.
In particular, when studying this subject you will learn about the
following areas of law in each of the four Study Guides:
• Module A: Admiralty jurisdiction; claims in rem and in personam;
maritime liens; ship arrest as security for civil liability claims.
• Module B: ownership and management of ships and the liabilities
that might be involved; intimately related areas to this are the laws
relating to the sale and purchase of second-hand ships as well as to
shipbuilding.
• Module C: the law of liabilities arising from incidents of navigation
at sea and limitation of liability.
• Module D: the law relating to assistance given at sea and in ports.
Admiralty law has developed from sources common to many maritime
nations and, as such, it is useful to many international lawyers (and
even to non-lawyers) who wish to know about the areas covered by the
subject. Through the ratification of international conventions by most
maritime nations, the internal municipal laws of different countries
show greater similarity to one another. Its substance is, therefore, of
direct interest to nationals of many maritime nations (even though the
law to be studied is common law and has been developed over the
years by the English courts). Thus, many of the principles you will learn
are applied by non-English courts as well.
1.1.1 Study sequence

The Study Guide for each of the four modules is self-contained
(Modules A–D); for example, you can learn about admiralty jurisdiction
without knowledge of the other modules. However, you will need
to understand some concepts which are unique to admiralty law by
looking them up in the textbook.
It is advisable that the study of the subject of admiralty law is
approached in the order of presentation (A to D) and Module C must
be attempted before Module D.
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1.2 Course aims and outcomes

Aims of the course
The primary aims of this course are to enable you to:
• learn the legal principles related to admiralty law
• acquire a deeper understanding of difficult legal concepts
• widen your knowledge of maritime law and commercial reality
• develop lateral thinking.
These skills will be essential for both the final examination and future work
opportunities.
Course learning outcomes

By the end of this course you should be able to:
• interpret maritime statutes, conventions and contractual terms in specialised
maritime contracts
• explain the legal principles and concepts derived from court decisions and
international conventions
• critically analyse admiralty law
• apply legal principles and statutory provisions to practical situations
• distinguish between the principles applicable to different sets of
circumstances.
1.3 Introduction to Module A

Admiralty law is based on the distinct enforcement procedure, the
action in rem, exclusively available under the Admiralty jurisdiction of
the High Court. This is a strong weapon for a claimant who can apply
for the arrest of the ship until security for its claim is provided and, in
some cases, the sale of the ship by the court. In addition, serving the
claim form in rem or arresting the ship establishes the jurisdiction of
the English courts on the merits of the case.
However, this is not the end of the matter. Depending on the type of
claim and any prior arrangement on dispute resolution between the
parties, the English courts may have to or may choose to stay their
proceedings in order to let another court decide the merits.
Whether the English courts can obtain or keep jurisdiction for a claim
is a complicated matter which will be discussed to the extent that it
concerns shipping claims. Within this context the simplicity of the
option of establishing English jurisdiction through arrest of a ship
present within the jurisdiction is a significant parameter in bringing the
claim before courts with great experience in maritime and commercial
disputes.
Essential reading
• Sheppard, Vol. 1, Chapter 1 (see section 1.4.2).
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Learning objectives for Module A

By the end of this module and provided you have completed the reading
and practised the activities, including the self-assessment exercises and past
examination questions, you will have a good knowledge of:
• the nature and extent of the Admiralty jurisdiction of the High Court
• the claims that fall under the Admiralty jurisdiction of the High Court
• the relationship between the Admiralty jurisdiction of the High Court and the
Arrest Convention 1952
• the enforcement procedures available under the Admiralty jurisdiction of the
High Court
• the nature and functions of claims in rem and in personam
• the differences between maritime liens and statutory rights in rem
• the procedure of arrest and release of the ship from arrest and the
consequences for the shipowner, the claimant and any third party
• the concept of maritime liens, their significance in enforcing the claim which
gives rise to a maritime lien and conflict of laws
• the situations under which changes in the legal ownership prohibits the arrest
of the ship
• the circumstances in which the corporate veil can be pierced
• the order of priorities in the payment of claims by the court
• the way English conflicts of laws affect the Admiralty jurisdiction of the High
Court
• the principles of allocation of jurisdiction under EU Regulation (EU) No.
1215/2012 (Recast Regulation) and under common law principles.
Learning outcomes for Module A

By the end of this module, and having completed the Essential readings and
activities, you should be able to:
• distinguish between claims entitling the claimant to an action in rem and
other claims
• identify the defendant’s property that can be arrested
• explain the options for arrest and the procedures required
• explain the priority of claims for actions in rem
• advise a defendant on whether the corporate structure of its company can
shield ships owned by the company from arrest
• explain the options for jurisdiction on the merits and advise on possible pre-
empting strikes in order to determine English jurisdiction.
1.4 How to use this Study Guide

This Study Guide acts as a focal point for the study of Admiralty law on
the Postgraduate Laws programme. It is designed to guide you through
the various important elements of the subject and, in particular,
the difficult areas which you need to master for the examination. In
addition to giving guidance on the sources in which you will find the
information required for your gradual learning, you are also given
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learning outcomes and activities for each chapter, which you must
complete before you move to the next area of study. Some feedback
and advice as to how to approach your answers are also given.
It is impossible in this Study Guide to deal with all the areas in which
you need to expand your knowledge. The Guide simply draws up the
boundaries of the course, and it is recommended that you search for
more reading. The Guide includes suggestions about Essential reading
as well as Useful further reading in each of the chapters.
Without lectures or seminars to attend, you are in charge of your time
allocated to your study and, therefore, it must be used sensibly and
constructively.
This course requires a systematic and methodical approach not only
because of the difficulty of the subject but also because you will not
have lectures, tutorials or group pressure from other students that you
would have were you to complete the course internally. Those of you
from civil law jurisdictions, or non-lawyers, will require even more time
to devote to the subject because of the different way of learning a
common law subject. The role of case-law in common law jurisdictions
cannot be understated, not only for learning and understanding the
law, but also for your success in the course.
1.4.1 Case-law and statutes

The exam assesses the module outcomes. This is done through essay
questions, which ask you to write an essay critically analysing or
explaining a legal principle or development, and problem questions,
normally drawn from real factual situations of previous court cases
with, perhaps, some additional points not necessarily fully discussed in
court.
In order to answer both types of questions you need to be aware
of court decisions and their rationale. It is therefore strongly
recommended that you read the suggested case-law as well as the
case-law cited in the readings. This will enable you to:
• acquire the ability to make the legal argument in support of your
case
• understand the limitations of each court decision
• develop a critical view as to the correctness of the majority, and any
dissenting, judgments forming the decisions
• learn the importance of the commercial reality surrounding a
particular case.
To be able to remember the cases (of which there are many), it is
advisable that you devise a method that is suitable for you. The human
memory is enhanced if the principles of cases are noted in clear and
succinct notes, either by using a card system or another clear form of
note taking. Mind maps have a more long-term effect on learning than
a linear method of note taking. This method is described in a book by
Tony Buzan: The Mind Map Book (BBC Worldwide Publishing, 2009).
In addition to case-law the other main legal sources for studying
admiralty law are the statutory provisions of the Merchant Shipping
Act 1995, as well as other statutory instruments and legislative acts and
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the international maritime and other conventions. These, together with

the case-law, are synthesised in a coherent discussion of admiralty law
in the Study Guide and, more comprehensively, in the textbook (see
below).
Admiralty law evolves continuously. It is good practice to learn how
to keep yourself updated by searching for new leading authorities,
statutory instruments and international conventions. The Online
Library subscribes to several databases including LexisLibrary, Westlaw
and Lloyds Law Reports: https://onlinelibrary.london.ac.uk/
In view of the strict time limit during the examination, you will be
required to remember important decisions and statutes.
1.4.2 Reading
This Study Guide is based on the set textbook:
• Modern maritime law: Volumes 1 and 2 by Aleka Mandaraka-
Sheppard. This is available via the VLeBooks database in the Online
Library.
This is a comprehensive text, which has been chosen by the University
for your study and is supplemented by additional references provided
in this Guide. Throughout this course, the textbook will be referred to
as ‘Sheppard’.
References to other important books and materials are also made
in the Useful further reading. You should expand your knowledge
by referring to these other sources as well, particularly if they are
emphasised in the text.
Essential reading
Primary textbook
• Mandaraka-Sheppard, A. Modern maritime law (Volumes 1 and 2). (Abingdon:
Informa Law, 2014) 3rd edition [ISBN 9780415843201].
• Module A refers to Volume 1: Jurisdiction and risks and Modules B, C and D refer
to Volume 2: Managing risks and liabilities.
Useful legal journals
• Lloyd’s Maritime and Commercial Law Quarterly (referred to as LMCLQ) (extracts
supplied).
• Journal of International Maritime Law (JIML).
• Journal of Maritime Law and Commerce (USA) (JMLC).
• Tulane Maritime Law Journal (USA) (TMLJ).
Statutes
• Senior Courts Act 1981, ss.20–24 and 37 are relevant to Admiralty jurisdiction.
• Civil Procedure Rules Part 61 and Practice Direction 61 are also directly
relevant to Admiralty jurisdiction. They can be found at: www.justice.gov.uk/
courts/procedure-rules/civil
• Civil Jurisdiction and Judgments Act 1982.
• EC Regulation 44/2001.
• Regulation (EU) No. 1215/2012 (Recast Regulation).
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Useful further reading

Books
• Baatz, Y. Maritime law. (Informa Law from Routledge, 2020), 5th edition
[ISBN 9780367496708], Chapter 1.
• Berlingieri, F. Berlingieri on arrest of ships. (Abingdon: Informa Law (Lloyd’s
Shipping Law Library), 2016), 6th edition [ISBN 9781138643277].
• Briggs, A. Civil jurisdiction and judgments. (Abingdon: Informa Law, 2015), 6th
edition [ISBN 9781138825604].
• Bundock, M. Shipping law handbook. (Abingdon: Informa Law (Lloyd’s Shipping
Law Library), 2011), 5th edition [ISBN 9781138440845].
• Derrington, S.C. and J.M. Turner The law and practice of admiralty matters.
(Oxford: Oxford University Press, 2016), 2nd edition [ISBN 9780198729556].
• Dicey, Morris & Collins on the conflict of laws. (London: Sweet & Maxwell, 2016),
15th edition and supplements [ISBN 9780414035027].
• Meeson, N. and J. Kimbell Admiralty jurisdiction and practice. (Abingdon:
Informa Law (Lloyd’s Shipping Law Library), 2017), 5th edition
[ISBN 9781138916678].
• Tetley, W. Maritime liens and claims. (Montreal: Yvon Blais, 1998), 2nd edition
[ISBN 9782894512272].
Articles
• Cohen, M. ‘In defence of The Halcyon Isle’ [1987] LMCLQ 152.
• Berlingeri, F. ‘Lien holders and mortgagees: who should prevail?’ [1988] LMCLQ
157.
• Tetley, W. ‘In defence of The Ioannis Daskalelis’ [1989] LMCLQ 11.
• Kimbell, J.A. ‘Changes in Admiralty Court procedure’ (2019) LMCLQ 353.
• Myburgh, P. ‘Recognition of priority of foreign ship mortgages’ [1992] LMCLQ 491.
• Gaskell, N. and R. Shaw ‘The Arrest Convention 1999’ [1999] LMCLQ 470.
• Tsimplis, M. and N. Gaskell ‘Admiralty claims and the new CPR Part 61’ [2002]
LMCLQ 520.
1.5 Preparation for the course

Bear in mind that the reading required for any postgraduate course
is remarkable and for this subject, in particular, you are required to
study a number of important decisions. But you are guided on how to
proceed and which sources to pay more attention to than others.
It is therefore extremely important to at least complete all the Essential
reading. The suggested materials, including the Useful further reading,
help you to complete the picture: this will all become clear to you at
the end. The required study is extensive and you will not be able to do
all your reading at the last minute. Studying gradually, while making
clear notes, will enable you to obtain a better understanding of this
exciting and difficult subject.
1.5.1 Self-assessment questions

Self-assessment can tell you how well you understand the topic
of study. For self-assessment to be effective, however, you need to
understand the assessment criteria.
6
In addition to the learning objectives and outcomes for each module,

Admiralty law has some overarching aims for the whole course (see 1.2).
There are also specific learning objectives and outcomes for each
module, to help with your self-assessment (see 1.3).
The self-assessment questions – like the examination questions –
always cover several learning objectives and are assessed against the
general and specific learning outcomes.
Example (from Module A): ‘Explain the priority of claims for actions in
rem.’
This question requires an explanation of where an action in rem can be
initiated.
• This engages with the objective ‘the enforcement procedures
available under the Admiralty jurisdiction of the High Court’.
• It also requires an understanding of ‘the concept of maritime
liens, their significance in enforcing the claim which gives rise to
a maritime lien and conflict of laws’ in order to explain why these
have priority.
• It further covers ‘the procedure of arrest and release of the ship
from arrest and the consequences for the shipowner, the claimant
and any third party’ in order to explain how/when the priority
issues arise and who decides them.
• And of course it also covers ‘the order of priorities in the payment of
claims by the court’, which refers to the case-law and its rationale.
The question also reflects the two course learning outcomes:
• ‘explain the legal principles and concepts derived from court
decisions and international conventions’
• ‘distinguish between the principles applicable to different sets of
circumstances’
and to a lesser extent covers:
• ‘critically analyse admiralty law’ and
• ‘apply legal principles and statutory provisions to practical
situations’.
Of course, self-assessment is also concerned with how well each
outcome is met and – for those outcomes and skills that reflect
synthetic and critical ability – how well the various learning outcomes
are integrated. In other words, when you use self-assessment you not
only have to ask ‘Have I done a particular task?’, but also ‘How well have
I done the particular task?’
Stating the law correctly and accurately is, for example, one level,
providing the correct source (whether it is a case or a statute), is a
second, and being able to critically analyse the law is a third level.
Self-assessment will help you to identify areas where your performance
is good and where it is less good. This will enable you to improve in those
areas where you fall below your own standards. By comparing your legal
statements with those made in the Essential and Useful further reading
you will be able to identify where your expression and writing technique
is not precise enough or where you have simply made a mistake.
7
So the self-assessment questions are learning tools to improve your

awareness of what you know and how well you know it. You do not need
to treat them as sample examination questions or complete them within
the time normally allowed in the examination. They are simply another
stage of preparation which you must start after you complete the work in
each module. When you have completed a task, you might like to upload
your answers to the Student Café on the VLE and seek comments from
your peers. Peer evaluation is an excellent method of assessment.
1.6 Allocating your time

It is impossible to say how much time you should set aside for studying
Admiralty law because each student has individual learning rates
depending on personal circumstances, fluency in English and any prior
study of law.
However, as a full-time Postgraduate Laws student you are expected
to spend approximately 120 hours studying and preparing for the
examination for each module of this course. It is advisable to set aside
a specific amount of time each week to study each module, increasing
the amount of time dedicated to studying in the six weeks before the
examination. Some topics of the syllabus will require considerably
more time than others.
1.7 The examination

Important: The information and advice given in the following
section is based on the examination structure used at the time this
Study Guide was written. However, the University can alter the
format, style or requirements of an examination paper without
notice. Because of this, we strongly advise you to check the
instructions on the paper you actually sit.
The course outcomes for each module will be assessed by an unseen
written examination of 45 minutes’ length, with reading time. To the
extent that there are any prerequisites for this module, knowledge
of the materials covered in those prerequisites may be necessary to
answer the questions on the examination of this module.
1.7.1 How to approach the examination questions

The overarching course aims (see 1.2) and the specific learning
objectives and outcomes for each module (see 1.3) encompass both
declarative and functional knowledge:
• Declarative knowledge in our context is what you know about the
relevant area of admiralty law (including the source and how to
reference it).
• Functional knowledge concerns the things you can do with
it. These could be a synthesis, a comparison, a critique or an
application of the law to specific facts.
Examination questions are generally in two forms:
• An essay question could ask you to synthesise, compare, criticise or
agree/disagree with a statement (in many cases quite a provocative
or exaggerated one).
8
• A problem question could ask you to apply the law to a number of

facts and, unavoidably, synthesise the outcomes into some sort of
advice or analysis.
Both types of questions therefore test the same knowledge. In both
cases declarative knowledge must be demonstrated and supported.
Functional knowledge is also tested by both methods, although in
slightly different ways.
• Essay questions emphasise the ability to correctly identify the
issue raised by the question, describe the arguments and counter
arguments, synthesise the declarative knowledge so that it answers
the question asked and so demonstrates your relevant knowledge.
• In problem questions the important first step is to identify the
issues raised by the facts given. Then you need to demonstrate your
knowledge of the law relevant to the facts and synthesise them so
as to give the potential outcomes of such a case.
Some further guidance is given below on each type of examination
question.
Remember that a good structure, an accurate description of the law
and its limitations with appropriate references is needed in both cases
– as well as appropriate reasoning.
Therefore, a poor answer to a question on salvage, for example, would
generally describe the law of salvage instead of focusing on the
question or the facts of the problem. And even with a good structure,
an answer will be poor if it does not state the law correctly. Only good
legal knowledge combined with good functional knowledge will result
in a good answer. That is why it is essential that you not only learn
admiralty law but also develop the required functional skills through
the various activities and self-assessment questions. You should also
practise answering past examination questions, initially without time
constraints and then with the actual examination time limit.
Remember that you are studying for a postgraduate qualification and
this requires more extensive and in-depth declarative knowledge
than undergraduate courses, and significantly improved functional
knowledge. This can only be acquired by broader reading, accurate
analysis of the law and the development of critical and synthesising
skills.
A final and very important point: time in the examination is limited.
Every minute you spend adding irrelevant information is a minute
wasted, when you could have been doing something to gain marks.
So make sure that you are selective in what information you use when
answering an examination question.
Essay questions
Structure
Properly structuring an answer to an essay question will facilitate your
writing, and ensure that it is logical and that the conclusions follow a
logical flow. In general there should be at least three sections:
• First, an Introduction, identifying the limits of the answer and
perhaps the policy or commercial reasons why it is important.
9
• Second, the main part of the essay, identifying and discussing

the arguments for and against, demonstrating the declarative
knowledge (i.e. what the law is, what the source is: statute/case),
what are the problems/unclear issues/unsatisfactory aspects.
Here you should also develop your arguments based on what you
know. Arguments do not need to be one sided: an accurate and
dispassionate analysis is much better than a one-sided analysis. This
section can have more than one sub-section discussing specific
arguments for dealing with partial issues that affect the main part
of the discussion.
• Finally, a concluding section where a clear answer to the question is
given on the basis of the arguments made earlier. Where there are
competing arguments, explain here why you prefer one to another,
and how these affect your answer.
Content
• Demonstrate a good understanding of the topic. You should not
only make accurate statements on the law but also discuss only the
relevant aspects of the law, instead of a general exposition.
• Reference the right legal sources and materials. The primary
textbook is very comprehensive so you are not expected to refer,
in a written examination, to all the case-law. However, reference to
the basic sources are needed to get a pass mark, and discussion of
further sources – including material from the Useful further reading
– will get higher marks (always remembering that this is only part
of the tested learning outcomes).
• Be able to analyse and/or synthesise the law. This must be based on
decided case-law and/or statute, whichever is appropriate.
• Give a dispassionate and rational analysis of the issues involved
by referring to the relevant legal principles or policy objectives.
Discussing only some of the arguments in order to make your
answer more persuasive is not good practice because it implies
lack of knowledge of the counter arguments. It is good practice to
examine all the arguments and counter arguments one by one and
assess them against each other.
• Always keep your discussion relevant to and focused on the
question asked. You may have read something remotely relevant
or prepared an essay on a similar – but not exactly the same –
question. Trying to fit what you have prepared or read as part of the
answer to another question will not gain you a good mark.
Problem questions
A problem question has advantages and disadvantages when
compared with an essay question. The advantage is that because
problem questions are normally based on several legal issues there is
a better chance that you will be aware of at least some of them. The
disadvantage is that identifying these issues is by itself part of the
examination – a part of functional knowledge. Missing out one or more
makes the answer incomplete, with consequently poorer marks.
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Structure
An answer to a problem question can be structured in different ways:
• You can follow the temporal steps in the case. This way you can
discuss every part and identify the issues. This is a very basic
structure, and in the end you should bring all the sections together.
• Another common structure is to identify the major legal issues or
risks, discuss the facts surrounding them and come to a conclusion
on each of them. In the end you should provide a synthesis
according to the question asked (e.g. advise A or discuss).
• For liability problems perhaps the best technique is to identify
the damages, the parties that suffered them and complete your
analysis by looking practically at each of the potential claims and
counterclaims.
You can use other structures, but important elements to always include
are:
• identifying the issues
• explaining and documenting the applicable law
• discussing the facts of the question and the extent to which those
facts permit different outcomes to those in the existing case-law
• performing the task required (advise, discuss, etc) in the conclusion.
Content
• Demonstrate a good understanding of the topic. You should not
only state the law accurately but also explain whether existing
case-law can be distinguished from the facts of the problem, why
and with what potential outcomes.
• Reference the right legal sources and materials. Avoid trying to
demonstrate how much of the case-law you know – use only what
is relevant.
• Show your ability to apply the law to the facts of the case – and
arrive at an outcome.
• Provide alternative analyses where the facts are inadequate. If facts
are missing, then either state what your assumption is in order to
continue your answer or – a better option leading to higher marks
if done correctly – state alternatives and their outcomes.
• Give a relevant analysis of the facts and the case-law, focused on
the problem question asked. If, for example, there are three parties
involved – A, B and C – and you are asked to advise A, do not
concern yourself with any disputes between B and C, unless these
affect A too.
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Notes
12
Chapter 2: The nature of Admiralty jurisdiction
Chapter 2: The nature of Admiralty

jurisdiction
Introduction
The Admiralty jurisdiction of the High Court is mainly concerned
with claims that can be brought against ships and those who may be
liable for claims particular to maritime law. The definition of a ship
is important for the application of the Admiralty law rules and it has
evolved over the years into a general statutory definition that is found
in s.313 of the Merchant Shipping Act 1995 (MSA 1995). The definition
under s.313 is not the only one, and other definitions can be found in
parts of the MSA 1995 narrowing or widening the definition of ship. For
a specific claim concerning a specific type of vessel or craft it would be
a matter of identifying the applicable definition in order to determine
whether there is a claim subject to the Admiralty jurisdiction of the
High Court.
To understand the issues involved with regard to the definition of a ship,
read Sheppard, Vol. 1, Chapter 1, section 7 (The subject matter of in rem
proceedings – the ship) and the decisions mentioned there.
The Admiralty jurisdiction is statutory and is currently based on the
Senior Courts Act 1981, ss.20–24 (SCA 1981). The SCA 1981 replaced
the Administration of Justice Act 1956, the purpose of which was to
incorporate the principles of the International Convention for the Arrest
of Seagoing Ships 1952 into English law. There are slight amendments
made to the provisions of the 1956 Act by the SCA 1981, and you should
bear this in mind when reading cases which interpret the provisions of
the 1956 Act as they may not be representative of the current law.
This chapter will guide you through the Admiralty jurisdiction of the
English courts and introduce you to the two modes which can be used
to exercise this jurisdiction for the enforcement of such claims:
• The first mode of enforcement concerns a procedure against a
person or a legal entity (for example, a company) who might be
liable (claim in personam).
• The second mode of enforcement, which is distinct in admiralty
law, concerns a procedure against the ship in relation to which a
claim arose (a claim in rem). The in rem claim can lead to the arrest
of the ship; in other words the ship is detained, provided it is within
the English jurisdiction, normally at a port, until security for the
claim is provided by the shipowner or the ship is sold by the court.
The principles applicable to arrest of ships within the English
jurisdiction are also examined in this chapter. Most maritime nations
follow the principles of the Arrest Convention 1952, although there is
an updated version (the Arrest Convention 1999) which is also in force
(since 14 March 2011); this is not, however, part of English law. The
1952 Convention has been adopted by England with some national
modifications, and it is incorporated in the SCA 1981. The more recent
Arrest Convention 1999 is not yet ratified.
13
With regard to procedure, the SCA 1981 is supplemented by the Civil

Procedure Rules (CPR), Part 61 and Practice Directions, issued by
the courts. The CPRs are regularly updated and are available online
at: www.justice.gov.uk/courts/procedure-rules/civil/rules. The 2019
update made some important changes. See Kimbell, J.A. ‘Changes in
Admiralty Court procedure’ (2019) LMCLQ 353.
Learning outcomes
By the end of this chapter, and having completed the Essential readings and
• analyse each provision of the statute under s.20 of the Senior Courts Act 1981
• identify the claims that fall under the Senior Courts Act 1981 and which
permit an action in personam
permit an action in rem
• identify the property that becomes subject to an action in rem
• distinguish between claims in rem to enforce maritime liens and those based
on statutory rights in rem and explain the differences in their legal character
and priority.
Essential reading
• Sheppard, Vol. 1, Chapter 2.
2.1 Statutory rights in rem and maritime liens

Essential reading
• Sheppard, Vol. 1, Chapter 2, sections 1 and 2.
The SCA 1981 provides the means for the enforcement of all claims
under the Admiralty jurisdiction of the High Court. The SCA 1981
does not create a cause of action. Thus, the legal right must be based
on other grounds. A breach of duty of care, a breach of statutory
provisions which may govern the relationship of the disputing parties
or a breach of contract are some examples of legal bases on which
claims can be made.
The SCA 1981 establishes statutory rights for the enforcement of the
specific claims that fall under the Admiralty jurisdiction. While the action
in personam is equivalent to any general claim against a wrongdoer it is
the enforcement action in rem which distinguishes the SCA 1981 because
it enables the arrest of the ship. It is then important for a claimant to be
able to demonstrate that their claim falls under the provisions of the SCA
1981 and entitles the claimant to an action in rem and the possibility of
arresting the property of the defendant, usually a ship.
A question which has arisen several times concerns the strength of the
statutory right in rem created by the SCA 1981 where, for example, the
defendant has sold the ship to a third party. Would the action in rem
and the option to arrest have then been lost for the claimant?
The answer provided under English law is that from the time the claim
form in rem is lodged with the court, the statutory right (otherwise
14
known as statutory lien) crystallises on the property (The Monica S

[1967] 2 Lloyd’s Rep 113). The effect of this is that the claimant would
be able to enforce the claim against the relevant ship even if the ship
was transferred to an innocent purchaser after the time of the issue of
the in rem proceedings.
For a sub-category of claims under the SCA 1981 – namely those
which have been characterised under case-law as maritime liens – the
claimant’s rights attach to the property from the moment the maritime
lien is created, and this attachment does not depend on the issue of
the in rem claim form. Having been so attached, it travels with the
property, even if the property is sold to an innocent purchaser.
The claims supported by maritime liens are those that arise from:
• damage done by a ship (e.g. caused by a collision between ships)
• the entitlement to a salvage reward
• outstanding wages, or damages for unfair dismissal, owed to the
master and crew of a ship
• a financial undertaking by the master to ensure the continuation of
the voyage in the form of master’s disbursements
• the now obsolete bottomry and respondentia. (These concern
the hypothecation of the ship’s hull and cargo (respectively) to
creditors of the master in situations where the master is unable
to obtain authority from their employer or the cargo owner, and
acting reasonably needs the funds to ensure the continuation
of the voyage. With the development of international banking
facilities and communications these are no longer relevant.)
In some other jurisdictions there are also other claims that attract a
maritime lien, such as ship repairers’ claims.
You will learn more about the nature of maritime liens through the
leading authorities: The Bold Buccleugh (1851) 7 Moo PC 267 and The
Tolten [1946] 2 All ER 372. Read their summaries in Sheppard, which
quotes extracts from these decisions.
There are also other types of liens which must not be confused with the
maritime lien. Such liens are:
• Statutory liens as provided by a statute (e.g. a lien on goods by an
unpaid seller).
• The statutory rights in rem, as you have read already, which become
statutory liens upon the issue of the proceedings.
• Common law possessory liens which depend on possession of the
property (e.g. a ship repairer can keep possession of the ship, which
they have repaired, in their shipyard until they are paid).
• Contractual common law rights to lien property as provided by a
contract.
Although the maritime lien attaches on the property from the moment
it has arisen, it needs to be enforced by proceedings in rem against
that property. Thus, the procedural enforcement is identical to that of
statutory rights in rem.
15
It is also important to note that the claims supported by a maritime

lien also attract statutory rights in rem when exercised against a sister
ship (this will be discussed further below). For example, a claimant for a
salvage award can enforce its maritime lien by an action in rem against
the ship it salved or it can proceed against a sister ship exercising its
statutory right in rem. In the first case the right has attached at the time
the salvage claim arose, while in the second case the issue of a claim
form in rem is needed to protect the claim in rem against the transfer
of the targeted sister ship. The claimant’s choice of how to proceed will
also affect the priority of the claim (as will be seen further below).
2.2 Types of claims enforceable in the Admiralty

court
Essential reading
• Sheppard, Vol. 1. Chapter 2, section 3.
The Admiralty jurisdiction of the High Court under the SCA 1981 is set
out under s.20. This includes claims under s.20(2) or described under
s.20(3), as well as claims which have been subject to such jurisdiction
by earlier or later laws and decisions. The most important provision
is s.20(2), which contains an extensive list of claims that covers most
shipping claims. If a claim does not fall within the wording of s.20(2)
of the SCA 1981, the chances are that it will not be subject to the
Admiralty jurisdiction of the High Court: an action in rem will not be
available for its enforcement and therefore the arrest of a ship will not
be an option through which the claimant can obtain security for its
claim.
The Essential reading provides a detailed discussion of each of the
categories of claims, while comments on some of them are made
below. However, they are all important and you are required to know
the scope and relevant case-law for all of them.
Disputes in relation to ownership or shares in a ship are nowadays
governed by special agreements which will invariably provide the
jurisdiction of a court for the enforcement of the parties’ rights. So
there have not been many developments in so far as sub-paragraphs
(a) and (b) of s.20(2) are concerned. The court has the powers to
determine ownership of a ship and this was done in the case of Smith v
All Other Persons Claiming to be Interested in the MV ‘Ross Revenge’ [2017]
EWHC 787 (Admlty), [2017] 2 Lloyd’s Law Rep 288.
Under sub-paragraph (c) a mortgagee can enforce their rights whether
they are registered or not. Under English law, if a mortgagee is not
registered, their right will be an equitable mortgage enforced in the
same way. But if a foreign mortgage is not registered, some foreign
legal systems will not recognise the concept of an equitable mortgage,
so such a mortgage will not be enforceable against the ship by an in
rem claim in the English court under s.20(2)(c), but instead by a claim
against the person (in personam), the debtor (The Angel Bell [1980] 1
Lloyd’s Rep 632).
16
A claim for damage done by a ship is enforceable under sub-paragraph

(e). Such claims, which include consequential loss flowing from the
damage to property and caused to the person who has property rights
on that property, attract a maritime lien. Note that s.20(5) extends the
application of s.20(2)(e) to claims under the MSA 1995, Chapter VI Part
III, liability for oil pollution claims. The extension concerns the statutory
rights in rem only and does not extend to maritime liens.
Sub-paragraph (h) is defined quite widely and includes charterparty
claims. In The Antonios P Lemos [1985] AC 711 HL, the claim in rem was by
the sub-sub charterer against the shipowner. As there was no contract
between the two parties the shipowner’s defence was that such a claim
did not fall under this section. However, it was held that the words used
in the sub-paragraph, namely ‘arising out of’, are wide enough to include
claims in tort. These words have been interpreted to mean ‘connected
with’ an agreement which relates to the carriage of goods or the use or
hire of a ship. You will find that the ambit of s.20(2)(h) is wide enough
to include the arrest of the ship by the receivers of goods which have
been detained on board by the shipowner for the purpose of obtaining
payment of freight (The Gina [1980] 1 Lloyd’s Rep 398).
In The Antonios P Lemos it was clarified that the court does not examine
the merits with regard to liability when arrest is made. The only
question is whether the wording of the SCA 1981 includes such a claim.
Other maritime claims enforceable in the Admiralty court are those
under s.20(3) and (5) of the Senior Courts Act 1995 ,which deal with
claims under the MSA 1995, such as collisions, limitation actions and
claims relating to pollution liability.
The provisions of the SCA 1981 with regard to enforcement of maritime
claims apply to all ships or aircraft (water-borne), whether British or
not and wherever the residence or domicile of their owners may be
(s.20(7)).
Activities 2.1–2.11
2.1 Identify which was the guilty ship in The Eschersheim [1976] 2 Lloyd’s Rep 1
HL.
2.2 Explain the operation of the SCA 1981, s.20(2)(e).
2.3 Compare and contrast those claims which are enforceable under s.20(2)(f ) for
personal injury or loss of life with those which are enforceable under s.20(2)(e);
summarise the elements of sub-paragraph (f ) and its ambit.
2.4 How did the defendant try to construe the words ‘related to’ used in s.20(2)(h)?
2.5 Consider whether a claim arising out of a breach of a management
agreement between an owner and a manager of the ship comes within
s.20(2)(h). Read Harms Bergung Transport und Heavylift GmbH & Co KG v Harms
Offshore AHT ‘Uranus’ GmbH & Co KG [2015] EWHC 1269 (Admlty), [2015] 2
Lloyd’s Rep 175.
2.6 In relation to the word ‘agreement’ used in s.20(2)(h), consider what the
agreement was in the cases Queen of the South [1968] 1 Lloyd’s Rep 182 and
Conoco Britannia [1972] 1 Lloyd’s Rep 342.
2.7 Do claims against salvors for negligence during salvage operations causing
damage to the ship being salved come under s.20(2)(h)?
17
2.8 In what way can you distinguish The Eschersheim and The Tesaba [1982] 1
Lloyd’s Rep 397 cases?
2.9 Note with care which claims do not come within s.20(2)(h). Give the reasons
for the decision in The Sandrina [1985] AC 255 HL.
2.10 What is the decisive factor for a claim related to containers on board a ship
to be enforced under s.20(2)(m)? Why could such claims not be enforced
under s.20(2)(h) in The Lloyd Pacifico [1995] 1 Lloyd’s Rep 54?
2.11 Note the wording used in s.20(2)(m). What was the main issue in The River
Rima [1988] 2 Lloyd’s Rep 193, and later in The Lloyd Pacifico and in The
Hamburg Star [1994] 1 Lloyd’s Rep 399? Read also The Fairport (No. 4) [1967] 1
Lloyd’s Rep 602 and The Kommunar [1997] 1 Lloyd’s Rep 1.
Feedback is available at the end of this chapter.
Self-assessment questions
1. Compare the way arrest operates under the Arrest Convention 1952 and the
way arrest operates in English law.
2. Compare and contrast the similarities and differences between statutory
rights in rem and maritime liens.
3. Why are there some claims which attract both a maritime lien and a statutory
right in rem?
4. Compare the extent and nature of a claim for damage done by a ship under
s.20(2)(e) and a claim for loss of life or personal injury under s.20(2)(f ) as stated
in the statute and as interpreted by the courts.
5. Explain how s.20(2)(h) was interpreted by the court in The Antonios P Lemos,
and also what claims are excluded from being enforced under this sub-
paragraph and why.
6. Why did the court decide The Sandrina the way it did? How did the plaintiff try
to fit his claim within sub-paragraph (h)? What was the ratio in the decision?
Read Lord Wilberforce; why did Lord Keith disapprove of the previous decision
in The Sonia case (cited in The Sandrina)? What are your views? What is the
position under the Arrest Convention 1999?
7. Have the courts been consistent in the interpretation of the statute in relation
to s.20(2)(h), which is construed broadly, and s.20(2)(m), which is construed
restrictively? Which are the crucial words used in these sub-paragraphs?
8. How will claims relating to containers be treated under the Arrest Convention
1999? Will this convention make a significant difference for claimants and
shipowners?
9. The Tacoma City [1991] 1 Lloyd’s Rep 330 case has been regarded as an unfair
decision for seamen who have been made redundant. The court decided
that they do not have a maritime lien in relation to an overdue redundancy
payment because a redundancy payment is not regarded as wages. Do you
see any difference between a redundancy payment and a damages claim for
unfair dismissal? Read The Halcyon Skies [1976] 1 Lloyd’s Rep 461; The Westport
(No. 4) [1968] 2 Lloyd’s Rep 559; The Turidu [1998] 2 Lloyd’s Rep 278; and The
Ever Success [1999] 1 Lloyd’s Rep 824.
10. Note also that there is a statutory lien by s.41 of the MSA 1995, for the
expenses the master incurs for the needs of the ship, known as master’s
disbursements. Contrast this with the ship agents’ disbursements incurred
on behalf of the ship; agents’ disbursements are enforceable by in rem
proceedings under s.20(2)(p): The Sea Friends [1991] 2 Lloyd’s Rep 322, but they
have no maritime lien: The Zafiro [1960] P 1.
18
Reminder of learning outcomes

Having completed this chapter, and the Essential readings and activities, you
should be able to:
• analyse each provision of the statute under s.20 of the Senior Courts Act 1981
permit an action in personam
permit an action in rem
• identify the property that becomes subject to an action in rem
• distinguish between claims in rem to enforce maritime liens and those based
on statutory rights in rem and explain the differences in their legal character
and priority.
19
Feedback to activities: Chapter 2

You will find the answers in the recommended text.
Remember to summarise the principles of these decisions in your system of note taking
so that you have the record for your revision later.
Back
20
Chapter 3: Enforceability of claims under the Admiralty jurisdiction of the High Court
Chapter 3: Enforceability of claims

under the Admiralty jurisdiction of the
High Court
Introduction
The jurisdiction of the court is invoked by a claim either in personam or
in rem.
Claims in personam are commenced on the basis of s.21(1) of the SCA
1981 by the issue of a claim form in personam in the Admiralty and
Commercial division of the High Court against the defendant, the
person or the company in question (if the defendant is within the
jurisdiction to be served). If the defendant is not within the jurisdiction,
leave from the court is needed for service out of the jurisdiction. Such
leave can be sought in certain circumstances as provided in the court
rules. Note that for claims where the jurisdiction of the English courts
is established by one of the EU regulations on civil jurisdiction, service
out of the jurisdiction may not require the court’s permission. How
the law will change after the end of 2020 is currently unclear and will
depend on an agreement between the UK and the EU.
Note the limitations of an in personam claim in relation to claims arising
from a collision under s.22 of the SCA 1981. These reflect the provisions of
the International (Jurisdiction) Convention 1952. A judgment in personam
can be executed against any property of the defendant by a writ of
execution (known as Fi Fa (Fieri Facias)). This can be executed against a
ship when it comes within the jurisdiction, but such a claim will have lower
priority than those which have been commenced by an in rem claim.
Claims in rem are commenced on the basis of one of ss.21(2)–(4) of the
SCA 1981 by the issue of a claim form in rem. The in rem claim form
starts proceedings against a ship or a list of ships including the relevant
ship and sister ships, and waits for a ship listed in the claim form to
come within this jurisdiction. Then an application for the issue of a
warrant of arrest against that ship is made and then served or arrested.
This has a dual effect:
• it establishes jurisdiction on the merits for the claim as of right
• it enables the claimant to obtain security for their claim.
Learning outcomes
• explain the features and functions of in rem proceedings including their
advantages for the claimant over in personam proceedings
• discuss the House of Lords’ decision in The Indian Grace, its implications and
limitations
• illustrate the requirements for arresting a ship
21
• state what is meant by the term ‘beneficial ownership’ within the context of
s.20(4) of the SCA 1981
• explain what is a ‘corporate veil’ and whether or not the court can look behind
it to ascertain the real owner of a ship for the purpose of allowing its arrest.
Essential reading
• Prest v Pedrodel, Petrodel Resources Ltd v Prest [2013] UKSC 34, [2013] 2 AC 415.
Available via Westlaw in the Online Library.
3.1 Nature of in rem proceedings

Essential reading
• Sheppard, Vol. 1, Chapter 4, pages 97–116.
• Senior Courts Act (SCA) 1981, ss.20(2), 21(2), (3) and (4). Available via Lexis in
the Online Library.
• Civil Jurisdiction and Judgments Act 1982, s.34. Available via Lexis in the
Online Library.
The advantages of the in rem claim over the claim in personam are
several:
• It provides the claimant with security. The claimants in rem can have
the ship arrested and either released when the shipowner provides
security or, in some cases, the ship can be sold by the court in order
to satisfy the in rem claims.
• It establishes jurisdiction on the merits for the claim.
• Once the in rem claim form is issued, its effect is to crystallise the
statutory right in rem on the relevant ship, thus protecting the
claimant even if the ship has been sold.
A disadvantage of a claim in rem is that, unless a defendant turns up in
court to release the ship and defend the claim, the claim is capped to
the value of the ship.
These special aspects of a claim in rem have been linked to the
development of the personification theory. Thus, it was argued in the
past that the ship was the defendant person. Of course the whole
notion of arrest has the effect of forcing the shipowner to appear
before the arresting court or lose its ship. Thus, it was also recognised
that the in rem action was used as a procedural means against the
shipowner (the procedural theory).
You will find out by reading The Indian Grace [1997] UKHL J1016-3,
[1998] 1 Lloyd’s Rep 1 HL, that it is now settled that the procedural
theory is the preferred one and the in rem proceedings are meant to be
against the person interested in the ship.
However, this decision was taken within the specific context of s.34
of the Civil Jurisdiction and Judgments Act 1982, and it concerned
cargo claims which are supported by statutory rights in rem but not
by maritime liens. Thus, questions remain on whether the decision
extends to maritime liens or whether it is or should be restricted to its
22
narrow context of s.34. See the comments of LJ Tomlinson in The Stolt

Kestrel and The Niyazi S [2015] EWCA Civ 1035, para.68.
Statutory rights in rem are divided for convenience into those which are
‘non-truly in rem’, and those which are ‘truly in rem’. ‘Truly in rem’ claims
have proprietary characteristics. Such claims are:
• maritime liens (under s.20(2)(e), (j) and (o) of the SCA 1981)
• ownership rights (under s.20(2)(a) and (b))
• mortgages (under s.20(2)(c))
• rights of forfeiture of a ship (under s.20(2)(s)).
All these proprietary rights attach automatically to the property from
the moment of their creation. The issue of in rem proceedings is only the
mechanism for their enforcement. The other statutory rights in rem are
classified under s.20(2) from sub-paragraphs (e) up to and including (r).
This division has significance in the way in which these types of claims
are enforced, as you will find out below.
3.1 Read The Indian Grace decision of the House of Lords and consider the
extent to which this decision may have altered the nature of the in rem
action.
3.2 Read The Stolt Kestrel BV v Sener Petrol Denizcilik Ticaret AS (The Stolt Kestrel
and The Niyazi S) and CDE SA v Sure Wind Marine Ltd (The SB Seaguard and
The Odyssée) [2015] EWCA Civ 1035, [2016] 1 Lloyd’s Rep 125, [2015] Lloyd’s
Rep Plus 82. Would the judge’s comments on The Indian Grace change your
answer to Activity 3.1?
3.3 Write an essay plan considering the effects of The Indian Grace upon
the in rem action and its possible ramifications upon other assets of
shipowners. Include an analysis as to whether you consider that there are
any inconsistencies in this decision in principle and the extent to which the
principle established by it may be limited.
3.4 Summarise the functions of in rem proceedings, including when the
statutory right in rem crystallises on the ship and the effect of it.
3.2 Statutory requirements for bringing an action

in rem against a ship
Essential reading
• Sheppard, Vol. 1, Chapter 4, pages 116–26.
• Senior Courts Act (SCA) 1981, ss.20(2), 21(2), (3) and (4).
You will now learn the particular requirements for bringing an action in
rem. These differ depending on whether the action in rem is prescribed
under s.21(2), (3) or (4) of the 1981 SCA.
Under s.21(2) an action in rem is available against ‘the ship or property’
in connection with a claim described under s.20(2)(a), (b), (c) or (s).
The basic requirement is that there is an identifiable ship in relation to
which the claim arises. The enforcement is restricted to this ship alone.
The position is similar for s.21(3) which prescribes that an action in rem
23
is available for claims supported by a maritime lien. Again the action in

rem is restricted to the ship to which the maritime lien attaches.
The wording of s.21(4) is significantly different to that of s.21(2) and (3)
in several aspects.
Similarly to s.21(2) and (3), s.21(4) also requires that the claim arises in
relation to a ship (let’s call it the guilty ship). However, it also has two
additional requirements:
• It requires the identification of the person liable in personam who
must, at the time the claim arose, be linked with the ship and be
either the owner or the charterer or in possession or in control of
the ship.
• It also requires that at the time the claim form is issued there
must be an ownership link between the ship to be arrested and
the person who would be liable in personam under s.21(4) of the
SCA 1981. This ownership link includes beneficial ownership of
all the shares in the ship or demise chartering when the action in
rem is launched against the guilty ship, and is restricted solely to
beneficial ownership of all the shares in the ship when an action
against a sister ship is sought.
As noted earlier the claims that are supported by maritime liens also
fall under s.21(4) because they are described as claims under s.20(2)
(e), (j) and (o). The operation of s.21(4) thus enables claimants to start
an action in rem against a sister ship and not only against the ship to
which the maritime lien has attached under s.21(3).
There are several important decisions concerning the correct
interpretation of s.21(4). Note and learn the decisions which are
referred to in the Essential reading (see above). These provisions are
quite tricky.
Starting with the requirements for an action in rem against the ‘guilty
ship’, a number of examples can help you understand the issues:
• Consider a claim (falling under s.20(e)–(r)) arising against a person
who was, at the time the claim arose, the owner of the guilty ship.
To bring a claim in rem against the guilty ship it must still be under
the exclusive ownership of the same legal or physical person or, if
sold, must have the original owner as the demise charterer.
who was, at the time the claim arose, the charterer (any type of
charterer will do) of the guilty ship. To bring a claim in rem against
the guilty ship the ship must be, at the time the claim form in rem
is issued, under the exclusive ownership of the original charterer
or the original charterer must be the demise charterer of the ship.
Such situations are rather rare.
Now consider the following two examples, concerning an action in rem
against another ship:
who was, at the time the claim arose, the owner of the guilty ship.
To bring a claim in rem against another ship, this other ship must
be, at the time the claim form is issued, under the ownership of the
original shipowner.
24

who was, at the time the claim arose, the charterer (any charterer
will do) of the guilty ship. To bring a claim in rem against another
ship, this other ship must be, at the time the claim form is issued,
under the ownership of the original charterer. Thus, claims by the
shipowner (but not only) against the charterer of the guilty ship can
be brought against a ship that belongs to the charterer.
The requirement under s.21(4) of beneficial ownership with respect
to all the shares in the ship has posed questions on what exactly is
beneficial ownership and when two ships can, on the basis of this
requirement, be considered as sister ships – thus enabling a claimant to
go against each for a claim (under s.(20(2)(e)–(r)) arising with respect to
the other.
Under English law a sister ship is one which is owned by the same
company (or person) as the guilty ship. Ships owned by two separate
companies and which may be owned by the same person (thus, being
sister companies) are not sister ships (for example, see Evpo Agnic
[1988] 2 Lloyd’s Rep 411 CA). It follows that organising a fleet in one-
ship companies provides immunity from the operation of the sister
ship arrest under s.21(4).
For those claims that fall under s.21(4) and which are supported by
maritime liens, the action in rem would enable arrest of the guilty ship
irrespective of ownership at the time the claim form is issued. Whether
in personam liability of the owner of the ship would be required or not
would then depend on case-law as s.21(3) does not by itself impose
such a requirement.
The guilty ship could still be arrested even if its owner would not
(strictly speaking) be personally liable for the claim (see The Father
Thames [1979] 2 Lloyd’s Rep 364).
It is important that you understand the operation of s.21(4) of the SCA 1981. The
following activities will help you in doing so.
3.5 What is ownership for the purpose of defining the person who would be
liable in personam when the cause of action arose?
3.6 Is ownership necessary in order to identify the relevant person?
3.7 What is the difference between the definition you found for Activity 3.5 and
beneficial ownership which is needed when the claim form is issued?
3.8 For the different categories that could be the ‘relevant person’ when the
cause of the action arose, consider what should have changed or not have
changed in order for a claim form against that ship to be available under
s.21(4).
3.9 Repeat the question under Activity 3.8 focusing on any other ship.
3.10 Whose beneficial ownership is relevant at the time of issuing the claim
form for the arrest of a sister ship?
3.11 Explain the hindrances in law to allow the court to pierce the corporate
veil to find out who is the real owner of a ship. Explain the circumstances in
which the court could order the lifting of the veil.
25
3.2.1 Process of arresting a ship

The seven steps below describe the process of arresting a ship.
(1) Identify the section of the SCA 1981 which is applicable to the
claim.
If the legal basis is not covered by any part of s.20(2) and there is no
case-law supporting arrest for such a claim, then the claim would
probably not be under the Admiralty jurisdiction of the High Court.
(2) Identify the ship or property connected with the claim.
(3) For the arrest of the ship in connection with which the claim arose,
and provided the claim is not one of a proprietary character, such
as maritime liens and those under s.20(2)(a), (b) and (c), you should
consider:
• Who would be liable for such a claim in personam when the
cause of action arose? In other words, look back to identify that
person. That person may be the owner, the charterer or the
person in possession or in control of that ship.
• Then look at whether that relevant person is either the
beneficial owner of that ship in all shares, or the charterer by
demise, at the time you issue the in rem proceedings.
(4) For the arrest of a sister ship or ‘other’ ship, the inquiry is as follows:
• Identify the relevant person who would be liable in personam
when the cause of action arose.
• Investigate whether or not that person is the beneficial owner
in all shares of that other ship at the time you issue the in rem
proceedings.
(5) A sister ship arrest is only permitted for those claims under
s.20(2)(e)–(r), which also include those claims that give rise
to maritime liens, but not for claims related to mortgages or
ownership rights of a particular ship.
(6) Remember, however, that when a sister ship is arrested for a claim
attracting a maritime lien, there is no right to arrest the guilty
ship too, which means that the maritime lien cannot be exercised.
Thus, the claim will rank in the same category as that of the other
statutory rights in rem (see The Leoborg (No 2) [1964] 1 Lloyd’s Rep
380).
(7) Once the in rem proceeding is issued, the maritime claim crystallises
on the ship against which it is issued, and the claimant acquires a
status of a preferred creditor (in the sense that the claim will follow
the ship even in the hands of an innocent purchaser). Protection for
the purchaser can be obtained (before purchase) if a search is made
in the court’s register of in rem proceedings.
26
Consider this practical problem of a corporate structure:
Company R is the registered owner of Ship A. R holds the legal title to the ship but
Ship A was bought for the benefit of Company X under a trust deed.
The shares in Company X are equally owned by another two companies, Y and
Z, who have financed the purchase of Ship A. Company Y is a sister company
of R, the registered owner of Ship A, and operates the ship as a manager, but it
does not have powers to dispose of or mortgage the ship. Company Y also owns
Ship S.
Company Z was the demise charterer of Ship A when a claim for breach of a sub-
charter party with C arose, but Company Z is no longer the demise charterer of
Ship A. Company Z owns another ship, Ship B.
Questions:
(a) Who would be the person liable in personam for the claim of C?
(b) Who would be the owner and/or beneficial owner of all shares in Ship A, for
the purpose of arrest of Ship A?
(c) Would companies Y and Z be within the definition of beneficial ownership?
(Consider the application of the decisions in Congresso del Partido [1983] AC
244 and Nazym Khikmet [1996] EWCA Civ J0523-13; compare the latter with
the decision in Guiseppe [1997] EWCA Civ J1029-14 ).
(d) If Ship A has sunk, could you (on behalf of your client, C) arrest Ship S or
Ship B?
(e) Assuming that Ship B is sold to Company Y before you issue the in rem claim
form on behalf of your client, C, could you still proceed with the arrest of Ship
B, or would you be able to persuade the court to make an order to lift the
corporate veil? (Assistance from cases such as Aventicum [1978] 1 Lloyd’s Rep
184, Saudi Prince [1982] 2 Lloyd’s Rep 255, Evpo Agnic [1988] 2 Lloyd’s Rep 411
CA and Maritime Trader [1981] 2 Lloyd’s Rep 153 may be sought.)

should be able to:
• explain the features and functions of in rem proceedings including their
advantages for the claimant over in personam proceedings
• discuss the House of Lords’ decision in The Indian Grace, its implications and
limitations
• illustrate the requirements for arresting a ship
• state what is meant by the term ‘beneficial ownership’ within the context of
s.20(4) SCA 1981
• explain what is a ‘corporate veil’ and whether or not the court can look behind
it to ascertain the real owner of a ship for the purpose of allowing its arrest.
27

There is extensive analysis in the textbook.
It should be noted that the Indian Grace concerned res judicata under s.34 of the Civil
Jurisdiction and Judgments Act (CJJA) 1982 (e.g. when the same cause of action has
already been litigated in another jurisdiction and a foreign in personam judgment has
been obtained); so that very same cause of action can not be re-litigated by the issue
and service of an in rem claim in this jurisdiction (because it would concern the same
person as that of the foreign in personam judgment). See also the comments in The
Stolt Kestrel BV v Sener Petrol Denizcilik Ticaret AS (The Stolt Kestrel and The Niyazi
S) and CDE SA v Sure Wind Marine Ltd (The SB Seaguard and The Odyssée) [2016]
1 Lloyd’s Rep 125, [2015] Lloyd’s Rep Plus 82.
Back
For Activities 3.5 to 3.7 read The Evpo Agnic [1988] 2 Lloyd’s Rep 411 CA, Haji-
Ioannou v Frangos [1999] 2 Lloyd’s Rep 337, The Tian Sheng [2000] 2 Lloyd’s Rep 430,
Congresso del Partido [1978] 1 All ER 1169, 1201-02, The Looiersgracht [1995] 2
Lloyd’s Rep 411.
For Activity 3.6 read The Permina 108 [1978] 1 Lloyd’s Rep 311 CA, The Span Terza
[1982] 1 Lloyd’s RE 225 CA, The Tychy [1999] 2 Lloyd’s Rep 11 CA, The Fajal [2000] 1
Lloyd’s Rep 473.
For Activity 3.8 develop a list of who is the relevant person and what must have
changed or not changed for the ship to be subject to an action in rem. Similarly for
Activity 3.9.
For Activity 3.10 read The Maritime Trader [1981] 2 Lloyd’s Rep 153, The Evpo Agnic.
Particular attention should be paid to the decisions which deal with the issue of
whether or not the court can order evidence to investigate who is the real beneficial
owner (e.g. behind the corporate veil) of the ship arrested. Note the circumstances in
which such a court order can be made and the principle derived from these decisions;
read in particular: Salomon v Salomon [1897] AC 22 HL, Adams v Cape Industries
[1991] 1 All ER 929, The Evpo Agnic, The Aventicum [1978] 1 Lloyd’s Rep 184, The
Saudi Prince [1982] 2 Lloyd’s Rep 255, The Tjaskemolen [1997] 2 Lloyd’s Rep 465, The
Ocean Enterprise [1997] 1 Lloyd’s Rep 449, The Coral Rose [1991] 1 Lloyd’s Rep 563,
The Kommunar (No. 2) [1997] 1 Lloyd’s Rep 8, The Glastnos [1991] 1 Lloyd’s Rep 482.
With regard to state immunity and beneficial ownership read Nazym Khimet [1996] 2
Lloyd’s Rep 362, Guiseppe di Vittorio [1998] 1 Lloyd’s Rep 136.
See also the decision of the High Court of Singapore, The ‘Min Rui’ [2016] SGHC 183,
[2017] 1 Lloyd’s Rep 37.
Back
28
Chapter 4: Procedure for enforcement of claims in rem
Chapter 4: Procedure for enforcement

of claims in rem
Introduction
Only one ship can be arrested under an action in rem (The Banco
[1971] 1 Lloyd’s Rep 49). The in rem claim form could name more than
one ship. However, the one that comes within the jurisdiction will be
named in the warrant of arrest (The Berny [1977] 2 Lloyd’s Rep 533).
Service of the in rem claim form on the ship does not amount to arrest;
a separate application must be made to the Admiralty Marshal for the
issue of a warrant of arrest which will be executed on the ship by the
Admiralty Marshal.
After the arrest, either security will be provided in lieu of the release of
the ship from arrest, or the ship will remain under arrest and eventually
be appraised and sold by the Admiralty Marshal. The effect of the court
sale is that it extinguishes all encumbrances from the ship, including
maritime liens. Thus, the judicial sale of the ship provides clean title to
the buyer.
Learning outcomes
• explain how a ship can be arrested and what happens after the arrest
• illustrate the instances when a second arrest may be permissible
• advise on the court’s power to sell the ship and satisfy claimants out of the
proceeds
• advise on the priorities in which the claims in rem will be satisfied.
Essential reading
• Sheppard, Vol. 1, Chapter 5, paying particular attention to priorities of claims.
4.1 Arrest of a ship and the aftermath

Essential reading
• Sheppard, Vol. 1, Chapter 5, sections 1–5.
• Civil Procedure Rules (SI 1998/3132) Part 61 and PD 61. Available at:
www.justice.gov.uk/courts/procedure-rules/civil
When the ship is arrested, the defendant may provide security for the
release of the ship from arrest. The form of security may be a letter of
undertaking by the defendant’s third party liability insurers or a bank
guarantee. In that undertaking the defendant is requested to submit to
the jurisdiction (or instruct solicitors to do so on its behalf ). Thus, from
the moment the defendant shipowner defends the ship the procedure
continues as a hybrid of in rem and in personam, and the defendant
becomes liable for the full claim because recovery is not capped by the
value of the ship, even if the security provided for the release of the
ship is.
29
During arrest the ship is under the custody of the court. Arrest by
another claimant does not confer benefits because the priority of
claims in rem does not depend on the order of arrest. When the ship is
already under arrest and another claimant wishes to secure its claim,
a caution against the ship’s release can be placed on the court register
of arrests. The claimant must also issue the in rem claim form to ensure
that the court is seised of the matter, and to cause the crystallisation of
its statutory right in rem on the ship. If the ship is to be released under
the first arrest – for example because security for the specific claim has
been provided – then the Admiralty Marshall will, before releasing the
ship, notify the person which has entered the caution against release,
so that it has the opportunity of arresting the ship.
If a defendant wishes to prevent the arrest of the ship because it has
provided (or intends to provide) security for claims, it can enter a
caution against the arrest of the ship to be issued and provide bail in
court (as a form of security). This action does not remove the right of
claimants in rem to apply for the arrest of the ship. A claimant may do
this where it wishes to establish English jurisdiction on the merits of
the case, in addition to obtaining security. The consequence of such an
action for the arresting party is that it may become liable for damages
caused to the party that has entered a caution against arrest.
Re-arrest of the same ship for the same claim is possible, provided the
total security does not exceed the value of the ship (The Daien Maru
[1986] 1 LLR 387 (Singaporean Court)).
In The Clarabelle [2002] 2 Lloyd’s Rep 479 (New Zealand decision)
re-arrest was allowed to obtain an increase of the security already
provided. The New Zealand Court of Appeal explained that re-arrest
is permitted as an exception to the rule against it only in exceptional
circumstances and on the basis of a reasonably arguable best case. In
this case it was permitted because of the very low security obtained by
the first arrest.
See also The Ruta [2000] 1 LLR 359 where the ship was released
following a letter of undertaking which became worthless due to
the bankruptcy of the party providing the letter. In this case the
judge approached the matter of re-arrest on the basis of discretion
considering circumstances of fairness and whether or not there was
oppression by the re-arrest.
On whether a second vessel could be arrested see The Banco [1971] 1
Lloyd’s Rep 49 and also the Scottish case of The Afala [1995] 2 Lloyd’s
Rep 286.
See also Gulf of Azov Shipping Co Ltd v Idisi [2001] 1 Lloyd’s Rep 727 where
damages were awarded by the English courts for the wrongful arrest of a
foreign ship in a foreign jurisdiction – a rather confused position.
In the MV Alkyon [2018] EWHC 2033 (Admlty), [2018] 2 Lloyd’s Law
Rep 601; [2018] EWCA Civ 2760 a request was made to the court by
the shipowner that the arresting bank provides a cross-undertaking
in damages in the form usually given in the context of freezing orders
asserting that the current practice not to require a cross-undertaking is
anomalous and unjustifiable. The Court of Appeal, confirming the High
Court decision, rejected the request as going against the established
30
right to arrest following an action in rem, authority and the long-

standing practice of the court.
4.1 Explain the circumstances in which an arrested ship could be, or should be,
released.
4.2 Explain the circumstances in which there could be a re-arrest.
4.3 An arbitration agreement is in essence an agreement not to go to court.
Explain how an action in rem and ship arrest are treated by the English courts
when an arbitration agreement exists between the parties.
4.4 What is the position of the shipowner in cases where there is a wrongful
arrest? Compare the position of English law as it stands now with the
provision of the Arrest Convention 1999 on this matter.

• Eder, B. ‘Wrongful arrest of ships: a time for change’ [2013–2014] 38(1) Tulane
Maritime Law Journal 115. Available via HeinOnline in the Online Library.
• Davies, M. ‘Wrongful arrest of ships: a time for change – a reply to Sir Bernard
Eder’ [2013–2014] 38(1) Tulane Maritime Law Journal 137. Available via
HeinOnline in the Online Library.
• Mandaraka-Sheppard, A. ‘Wrongful arrest of ships – a case for reform’ [2013]
Journal of International Maritime Law 41.
• Tsimplis, M. and N. Gaskell ‘Admiralty claims and the new CPR Part 61’ [2002]
LMCLQ 520
• Tsimplis M. ‘Procedures for enforcement’ in Baatz, Y. Maritime law. (Informa Law
by Routledge, 2020), 5th edition [ISBN 9780367496708], Chapter 12.
4.2 Appraisement and sale of the ship by the court

Essential reading
• Sheppard, Vol. 1, Chapter 5, sections 2.6 to 7.2.
• The court’s powers on appraisement and sale are described in CPR

61, PD 61 and various cases: see The Westport (No. 2) [1965] 1 Lloyd’s
Rep 549; The Halcyon the Great (No. 2) [1975] 1 Lloyd’s Rep 525.
• Any interference with the court sale will be contempt of court: see
The Jarvis Break [1976] 2 Lloyd’s Rep 320; The APJ Shahin [1991] 2
Lloyd’s Rep 62.
• Sale pending litigation: see The Myrto [1977] 2 Lloyd’s Rep 243; The
Gulf Venture [1985] 1 Lloyd’s Rep 131.
• Sale by the court gives the purchaser title free of encumbrances:
see The Cerro Colorado [1993] 1 Lloyd’s Rep 58.
• What property is included in the sale? See The Silia [1981] 2 Lloyd’s
Rep 534; The Eurostar [1993] 1 Lloyd’s Rep 106.
• Time charterers can intervene: see The Saint Anna [1980] 1 Lloyd’s
Rep 180; The Pan Oak [1992] 2 Lloyd’s Rep 36.
• For a review of situations where the established in rem priority may
be departed from see the Singaporean case The Posidon [2018] 3
SLR 372, [2017] 2 Lloyd’s Law Rep 390.
31
• For the position of foreign maritime liens in Australia see the Sam
Hawk [2016] FCAFC 26, [2016] 2 Lloyd’s Law Rep 639.
Pay particular attention to the distribution of the fund. The primary
issue is to distinguish the priority between categories of rights, namely,
the arresting court’s rights, maritime liens, possessory liens, registered
and unregistered mortgages and statutory rights in rem. Then it is
important to understand the priority structure in each subcategory.
Which claims are supported by a maritime lien is a procedural matter
for the arresting court, according to English law. Thus, claims which
are classified as maritime liens under a foreign law but not so classed
under English law will not be given the maritime lien priority even
if the foreign law concerned is the one that governs the substantive
claim between the parties.
4.5 When a ship is under arrest its value may be reduced because the market
changes or its maintenance costs may be high. Explain the powers the
Admiralty Marshal has in such circumstances and how these have been
exercised in the past (by studying the case-law).
4.6 How are the sale proceeds of the ship distributed among the various
claimants?
4.7 Explain what the court should do when there is a competing exercise of
power of detention by a port authority in England.
4.8 Summarise when maritime liens can be extinguished; could they be
assigned? Explain the position of the person who voluntarily pays off a
claimant whose claim had a maritime lien attached to it.
4.2.1 Limitation periods/time bars

• One year for cargo receivers under the Hague-Visby Rules (HVR)
extendable by agreement; two years under the Hamburg Rules,
from the date of delivery of the goods or the date the goods should
have been delivered for cases where the goods have been lost at
sea or misdelivered.
• Three years in actions for loss of life/personal injury, where the
Athens Convention 2002 applies.
• Three years if the action is based on the Fatal Accidents Act 1976,
against the carrying vessel.
• Three years if an action arises from collision damage caused by
another vessel against that vessel (the court has discretion to
extend this period) (see The Berny [1979] 2 Lloyd’s Rep 533; s.190
MSA 1995). For recent case-law see: CDE SA v Sure Wind Marine Ltd
(The SB Seaguard and The Odyssée) [2015] 2 Lloyd’s Rep 268; The
Stolt Kestrel BV v Sener Petrol Denizcilik Ticaret AS (The Stolt Kestrel
and The Niyazi S) [2016] 1 Lloyd’s Rep 125 and Former Owners of
the Melissa K (now named Jasmine I) v Former Owners of the Tomsk
(subsequently named Pure Energy and now named Thayer) [2016] 1
Lloyd’s Rep 503.
32
• One year for contribution actions under s.190 of the MSA 1995, but
two years under s.1 of the Civil Liability Contribution Act 1978.
• Two years for salvage claims.
• Six years in actions for sailors’ wages (contract).
1. Read The Ruta [2000] 1 Lloyd’s Rep 359 carefully. What was the problem with
the security provided by the P&I Club to one of the collision claimants? What
would the commercial consequence be if the court did not recognise the
maritime lien for that claim?
2. What were the arguments used by the judge for giving priority to the wage
claims? Do you think the outcome would have been the same if the crew who
claimed wages were on board during the collision?
3. What are the arguments for and against changing the test for awarding
damages for wrongful arrest? Are these arguments equally strong for
commercial claims as well as crew claims?
4. Explain the procedural steps that must be taken in order to obtain security
through arrest for a collision claim.

should be able to:
• explain how a ship can be arrested and what happens after the arrest
• illustrate the instances when a second arrest may be permissible
• advise on the court’s power to sell the ship and satisfy claimants out of the
proceeds
• advise on the priorities in which the claims in rem will be satisfied.
33

The decision in The Alletta may not be followed nowadays as the new CPR provide
that an arrest of a ship is allowed for a judgment creditor; but The Alletta was a case
based on very particular facts. Read Part 61 of CPR which seems to have altered the
position of arrest after judgment and that may include a judgment in personam.
With regard to the release of the ship from arrest when the court orders a stay of the
in rem proceedings in favour of arbitration, look at the court’s powers under s.26 of
the Civil Jurisdiction and Judgments Act 1982 (Sheppard, Chapter 5, section 2.3), The
Bazias [1993] 1 Lloyd’s Rep 101, The Jalamatsya [1987] 2 Lloyd’s Rep 164.
Activity 4.3
Read The Rena K [1979] QB 377 and Comandate Marine Corp v Pan Australia
Shipping Pty Ltd [2006] FCAFC 192, Federal Court of Australia; Raukuna Moana
Fisheries Ltd v The Ship Irina Zharkikh [2001] 2 NZLR 801.
Back
Activity 4.5
Refer also to cases in the Essential reading relating to the release of the ship and to
those relating to the court’s power of sale.
Activity 4.6
Refer to The Steam Fisher [1926] P 72; The Lyrma [1978] 2 Lloyd’s Rep 30; The Veritas
[1901] P 304; The Inna (1938) 60 LlL Rep 414; The Leoborg (No. 2) [1964] 1 Lloyd’s Rep
380; The Ruta [2000] 1 Lloyd’s Rep 359; The Tergeste [1903] P 26; The Russland [1924]
P 55; The Katingaki [1976] 2 Lloyd’s Rep 372.
Activitiy 4.7
Read The Queen of the South [1968] P 449; The Charger [1966] 2 Lloyd’s Rep 670; The
Blitz [1992] 2 Lloyd’s Rep 441.
Activity 4.8
Read Trendtex Trading v Credit Suisse [1981] 3 All ER 520, 531; The Sparti [2000] 2
Lloyd’s Rep 618.
Back
34
Chapter 5: Ship arrest and jurisdiction on the merits
Chapter 5: Ship arrest and jurisdiction

on the merits
Introduction
The Admiralty jurisdiction of the High Court under s.20(7) SCA 1981
permits the exercise of the Admiralty jurisdiction irrespective of the
nationality of the ship or the domicile or residence of its owner. It
further extends the Admiralty jurisdiction to claims irrespective of
where such claims arise and to mortgages – registered or unregistered
– created under a foreign law.
Thus, a foreign flagged ship can be arrested under the Admiralty
jurisdiction of the High Court even if the claim related to something
that happened in the high seas or a jurisdictional zone of another state,
and is governed by the law of a foreign state.
Because the purpose of arresting the ship is primarily to obtain security
for the claim, the wide jurisdiction established is appropriate and
reasonable. The practical use of ship arrest would have been much
narrower if it depended on whether the arresting court had jurisdiction
on the merits of the dispute.
Arresting the ship in England establishes jurisdiction on the merits for
the English courts (The Anna H [1995] 1 Lloyd’s Rep 11 (CA)). Service
of the claim form in rem on the defendant, even without arresting the
ship, is enough to establish jurisdiction on the merits.
The establishment of jurisdiction on the merits through arrest is not a
characteristic of the English courts only. Article 7 of the Arrest Convention
1952 and Art.7 of the Arrest Convention 1999 both, albeit in a slightly
different way, endorse such national arrangements. The difference
between English law and the Arrest Convention 1952 is that the latter
requires the arrest of the ship for national jurisdiction to be established.
The reason why arrest and jurisdiction on the merits are linked is a
practical one. Unless the arresting court has jurisdiction on the merits,
obtaining security for a claim would not be of much use to the claimant
unless there is a way by which the court passing judgment will be able
to order the distribution of the security.
While this is a reasonable position and one which can certainly be
used where, for example, after the ship is arrested the defendant does
not turn up in the arresting court and the ship is sold, it is problematic
if it is always applied. Consider, for example, the position where in a
charterparty or in a bill of lading there is an exclusive jurisdiction clause
agreed. Establishing jurisdiction on the merits through arrest would
create a problem of conflict of laws, as the arresting court – if it keeps
its jurisdiction – would be assisting the arresting parting in avoiding its
contractual commitment.
Actions by parties to the dispute, where they try to establish the
jurisdiction of a court they consider provides substantive and/or
procedural advantages for their claim, are termed forum shopping.
Arrest is only one example of such efforts that may be made.
35
Where there is a dispute on the forum, the court uses the nationally
applicable conflict of laws rules to determine whether, in a specific
case, it is entitled to keep the jurisdiction on the merits established
through arrest, or whether it has no discretion and has to either keep or
dismiss the established proceedings.
To understand the way the conflict of laws rules operate, it is necessary
to understand how the jurisdiction of the English courts is established.
This is made more complicated because it currently involves two
significantly different regimes, in terms of principles and objectives:
• The first regime is the common law way of establishing jurisdiction
on the merits, which is based on the ability to serve the court
documents on the defendant and which resolves the situation of
multiple proceedings on the principle of identifying the court that
is more appropriate for the dispute.
• The second regime is the one developed under the European
Union system. This has been developed with a view to facilitating
the development of the common market by simplifying dispute
resolution and enforcement within the EU. This is achieved by
prescribing jurisdiction on the merits, so that there are no different
national laws giving different outcomes, and by establishing that
the court first seised of a legal dispute has the first say on whether
it has jurisdiction or not, and that its decision on the jurisdictional
matter, as well as on the merits, is directly enforced by the other EU
courts without further questioning – with very few exceptions.
Thus, the common law approach is based on English procedural
rules for establishing jurisdiction and on the discretion of English
courts where a foreign defendant or a foreign court is involved. The
EU jurisdictional framework, by contrast, is based on prescription of
jurisdiction among the EU courts, without discretion in most cases, and
in a mechanical way of deciding the court that has jurisdiction where
there are conflicting proceedings.
In addition to these rules, which will be outlined below, there are
also restrictions expressed in statutory provisions which reflect well
established principles of international law. The State Immunity Act
1978, for example, grants immunity to a state from proceedings
provided it does not trade its ships commercially. Thus, a ship
belonging to a foreign government and not used for commercial
purposes cannot be arrested. Also, where a claim is time barred, arrest
proceedings may not be possible.
Learning outcomes
• explain how English courts obtain jurisdiction on the merits for maritime
claims under the European jurisdictional framework
claims outside the European jurisdictional framework
• identify the differences between the two ways of obtaining jurisdiction and
explain the reasons for their difference
36
• explain how ship arrest operates within and outside the European
jurisdictional framework
• identify, in specific situations, the appropriate path for establishing jurisdiction
and advise on the options available to English courts.
Essential reading
• Sheppard, Vol. 1, Chapters 6 and 7.
5.1 Outline legal framework for obtaining

jurisdiction on the merits
The starting point for approaching the question whether the English
courts have jurisdiction on the merits is by identifying whether one of
the EU jurisdictional instruments is applicable to the dispute. Currently
the starting point is Regulation (EU) No. 1215/2012 of the European
Parliament and of the Council of 12 December 2012 on jurisdiction and
the recognition and enforcement of judgments in civil and commercial
matters (recast) (‘the Recast Regulation’).
This has replaced Council Regulation (EC) No. 44/2001 of 22 December
2000 on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters (‘the Jurisdiction
Regulation’), which in turn replaced various pre-existing EU-wide
conventions on jurisdiction and enforcement. There are significant
differences between the various versions, and this is important
when you study the relevant case-law. However, with respect to
Norway, Denmark, Switzerland and Iceland the revised 2007 Lugano
Convention applies.
The common law rules will only apply where the aforementioned
conventions do not apply to a dispute or where they apply to a dispute
but they instruct the court to refer to national law.
This Study Guide will focus on aspects of the Recast Regulation which
are relevant to shipping and will also outline the English common law
position.
How the law will change after the end of 2020 is currently unclear and
will depend on an agreement between the UK and the EU.
5.2 Disputes under the Recast Regulation

Essential reading
• Baatz, Y. Maritime law. (Abingdon: Informa Law, 2017) 4th edition
[ISBN 9781138104839] Chapter 1. Available on the VLE.
Note that this chapter covers both Regulation 44/2001 and the
currently applicable Recast Regulation. However, although the
emphasis is on the Recast Regulation, it is also important to understand
how the treatment of arbitration and exclusive jurisdiction clauses has
evolved between the two regulations and the way this evolution has
taken place.
37
The Recast Regulation applies in civil and commercial matters (Art.1).

When a dispute concerns a civil and commercial matter is not always
easy to assess. In Netherlands State v Rüffer (Case 814/79) a port
authority sued a shipowner for wreck removal under a national law. The
European Court of Justice (ECJ) held that
The concept of ‘civil and commercial matters’ … does
not include actions brought by the agent responsible for
administering public waterways against the person having
liability in law in order to recover the costs incurred in the
removal of a wreck carried out by or at the instigation of the
administering agent in the exercise of its public authority.
The fact that the agent responsible for administering public
waterways is seeking to recover those costs by means of a claim
for redress before the civil courts and not by administrative
process cannot be sufficient to bring the matter in dispute
within the ambit of the Convention.
For example, a claim for damages due to negligence in navigation

caused on a buoy or a dock will be subject to the Recast Regulation
if brought under ordinary negligence. If, however, the claim is based
on statutory rights provided exclusively to the harbour authority, like
those in the Harbours, Docks and Piers Clauses Act 1847, then it is likely
that the dispute will not be subject to the Recast Regulation but to the
common law system of establishing jurisdiction.
There are several exceptions to the scope of the Recast Regulation
(Art.1). The major exception for the shipping industry is the one
referring to arbitration. Generally, all legal proceedings before,
during or after the arbitration (and of course arbitration proceedings
themselves) are excluded from the scope of the Regulation. The parties
cannot avoid this conclusion even where they deny the existence
of the arbitration agreement. The reason for this exception is the
protection of the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards 1958.
Consequently, the dispute resolution rules of the Recast Regulation
are not applicable in a claim involving arbitration. For example, in a
salvage situation where one party claims English arbitration under
a Lloyd’s Open Form salvage contract and the other party denies it
and seeks foreign jurisdiction, the English courts have jurisdiction
and discretion under common law rules, despite the fact that judicial
proceedings have already started elsewhere (The Lake Avery [1997] 1
Lloyd’s Rep 540).
The Recast Regulation has clarified its interaction with arbitration
arrangements in two respects:
• It expressly states in Art.73(2) that its provisions do not affect the
application of the New York Convention on Arbitration 1958.
• In its preamble it states that decisions by a court of a member state
regarding the validity of an arbitration clause will not be subject to
the rules of enforcement and recognition of the Recast Regulation.
This in essence deprives such rulings from EU-wide recognition.
38
5.3 Outline of the jurisdictional rules under the

Recast Regulation
A defendant domiciled in a member state must be sued in the courts
of that state (Art.4). The use of the word ‘defendant’ indicates that
whoever sues first has to go to (in the general case) a foreign court.
The Recast Regulation defines the domicile for individuals as being
determined by the national law (Art.62). In England the defendant
is domiciled in the country if they reside there and the nature and
circumstances of residence indicate a special connection with the UK
(Civil Jurisdiction and Judgments Order 2001 (SI 2001/3929), Sch.1,
9.2). For legal persons and companies the Recast Regulation sets the
domicile under Art.63 as where a statutory seat, central administration
or principal place of business is established.
Article 4 in essence sets the fall-back provision. Other sections of
the Recast Regulation include provisions which override the default
position by prescribing the court that has jurisdiction for a dispute
in an exclusive manner or which provide for additional jurisdiction
options.
Section 2 of the Recast Regulation provides for additional jurisdictional
options. The options depend on the legal basis of the claim concerned.
Two of the legal bases will be considered here.
Matters relating to contract

In ‘matters relating to contract’ a defendant domiciled in a member
state may be sued in the courts of the place ‘of the obligation in
question’ (Art.7(1)).
The European Court of Justice (ECJ) has given the term ‘matters
relating to contract’ an autonomous meaning, and it therefore does
not coincide with the relevant English term (see, for example, Shenevai
v Kreischer (Case 266/85) [1987] ECR 239; Definitely Maybe (Touring) Ltd
v Marek Lieberberg Konzertagentur, GmbH (No. 2) [2001] 2 Lloyd’s Rep
410).
Where there is more than one obligation in question, the principal
obligation will determine the court’s jurisdiction. If, however, there is
more than one main obligation performed in different places then the
clause provides options for more than one forum – with respect to each
separate obligation. If the claimants wish to have all claims considered
by the same court they have to go for the courts of the domicile of the
defendant (i.e. under Art.4). See Union Transport Group plc v Continental
Lines SA [1992] 1 All ER 161; Leathertex Divisione Sintetici SPA (Case
C-420/97 5.10.99).
For contracts of services and for sales of goods the place for the
performance of the obligation in question is determined to be,
respectively, where the services were provided or should have been
provided, and where the delivery of goods has taken place or should
have taken place (Art.7(1)).
Where goods are carried by sea and then by rail through different EU
countries and arrive damaged the jurisdictional options are:
39
1. the courts of the domicile of the defendant (assuming it is in a

member state)
2. the place of the performance of the contract in question.
For understanding how this is done see Reunion Europeenne SA v
Spliethoff’s Bevrachtingskantoor (Case C-51/97) [1999] CLC 282.
The parties can agree the place of performance but the agreed
place must be related to the actual performance of the contract (see
Mainschiffahrts-Genossenschaft eG v Les Gravières Rhénanes (Case
C-106/95; EU:C:1997:70 [1997] All ER (EC) 385, which concerned an oral
agreement for chartering an inland waterway vessel. The ECJ decided
that the oral agreement that Germany was the place of performance
was not valid because the performance was actually in France. The
Recast Regulation does provide for exclusive jurisdictional clauses but
these need to have specific prerequisites and could not be overridden
by an oral agreement of the kind made in this case).
Matters relating to tort

The second legal basis which is of relevance to shipping claims
concerns claims in tort. The wording under Art.7(3) is ‘in matters
relating to tort, delict or quasi-delict’ and the additional option for a
claimant is to go to the courts of the place where the harmful event
occurred which have jurisdiction in addition to Art.4. All obligations
not related to tort fall under this section (see Kalfelis v Schröder,
Münchmeyer, Hengst and Co (Case 189/87) [1988] ECR 5565).
Difficulties arise where, for example, financial losses have occurred
(see Marinari v Lloyds Bank plc (Case C-364/93) [1996] All ER (EC) 84;
Mecklermedia Corporation v DC Congress GmbH [1997] 3 WLR 479;
Reunion Europeenne SA v Spliethoff’s Bevrachtingskantoor BV (Case
C-51/97) [1998] ECR I-6511, [2000] QB 690; Domicrest Ltd v Swiss Bank
Corp [1998] 3 All ER 578).
The ECJ has held that:
Where the place of the happening of the event which may
give rise to liability in tort , delict or quasi delict and the place
where that event results in damage are not identical , the
expression ‘place where the harmful event occurred’ … must be
understood as being intended to cover both the place where
the damage occurred and the place of the event giving rise to it.
(Bier v Mines de Potasse d’Alsace (Case 21/76) [1976] ECR 1375)
The result is that the defendant may be sued, at the option of the
plaintiff, either in the courts of the place where the damage occurred or
in the courts of the place of the event which gives rise to the damage.
As explained, the jurisdictional options for contract and tort are
additional to Art.(4) jurisdiction. In addition, the Recast Regulation
provides special rules, excluding Art.(4) jurisdiction in several occasions.
For insurance (excepting marine insurance as well as other large risks)
under Section 3, consumer contracts under Section 4 and employment
contracts under Section 5 special jurisdictional arrangements are
provided.
40
Furthermore, Article 24 prescribes exclusive jurisdiction for particular

claims (immovable property, constitution and dissolution of
companies, public registers, patents, enforcement of judgments) to a
specific court linked with that claim.
Article 26 provides that a court of a member state before whom a
defendant enters an appearance shall have jurisdiction. Article 26 will
apply even where there is a valid jurisdiction agreement, as entering
an appearance will constitute a variation of the agreement (Elefanten
Schuh v Jacqmain [1981] ECR 1671).
However, this rule does not apply where the appearance was entered
solely to contest the jurisdiction, or where another court has exclusive
jurisdiction under Art.24 (Marc Rich & Co AG v Societa Italiana Impianti
PA (The Atlantic Emperor (No. 2) [1992] 1 Lloyd’s Rep 624).
Article 71
Perhaps one of the two most important articles for shipping claims is
Article 71 of the Recast Regulation, which permits the operation of
jurisdictional rules contained in other conventions which are in force
in the member state. Many maritime conventions have some type of
jurisdictional arrangement, and these arrangements remain active.
Thus, the following conventions remain active:
• the provisions of the Arrest Convention 1952 (Art.7), which provide
for the establishment of jurisdiction on the merits where the ship is
arrested, if under the national law arrest establishes jurisdiction on
the merits
• the Collision (Civil Jurisdiction) Convention 1952
• the Athens Convention 2002
• the 1992 Civil Liability Convention 1992 (CLC)
• the Bunker Oil Pollution Convention 2001.
This, however, does not mean that establishing jurisdiction on the
merits under one of the specialised conventions makes the Recast
Regulation completely inactive. The Recast Regulation remains
active in the background and fills in any gaps left by the specialised
convention.
As an example, consider a situation where English jurisdiction has been
established through the Arrest Convention 1952 while competing
proceedings have started in another European court. Establishing
English jurisdiction by the Arrest Convention does not mean that the
English courts can then rely on national law to resolve the conflict; they
have to use the Recast Regulation provisions and methodology (see
The Maciej Rataj (Case C-406/92) [1995] 1 Lloyd’s Rep 302; The Anna H
[1995] 1 Lloyd’s Rep 11; The Po [1991] 2 Lloyd’s Rep 206).
See also TNT Express Nederland BV v AXA Versicherung (C-533/08) [2011]
RTR 11, and for limitation of liability proceedings see Maersk Olie & Gas
A/S v Firma M de Haan en W de Boer (C-39/02) [2005] 1 Lloyd’s Rep 210.
41
Article 25
The second very important article for shipping provision is Article
25. This provides for exclusive jurisdiction where there has been a
choice of jurisdiction by the parties. This provision and its significance
has changed considerably between the Recast Regulation and its
predecessor (Regulation 44/2001). Under the Recast Regulation the
requirement that at least one party should be domiciled in a member
state has been removed. Thus, the rule will apply irrespective of the
domicile of the parties.
The agreement on jurisdiction must be in writing or evidenced in
writing, or in a form reflecting established practice between the parties
or in a form used in international trade. This can be problematic for oral
agreements which are valid under English law. The supremacy given to
jurisdictional clauses under the Recast Regulation over the ‘court first
seised’ rule under Art.31(2) applies irrespective of the domicile of the
parties.
Article 25 defines a valid jurisdictional agreement and is independent
of any validity test which each national court may have applied (see
Trasporti Castelletti Spedizioni Internazionaii SPA v Hugo Trumpy SPA
(Case C-l59/97 16.3.99)).
The present understanding of the wording indicates that the term
‘evidenced in writing’ refers to the need to prove agreement to a
jurisdiction clause rather than a signed version of the clause. Indeed,
the reference to international trade practices significantly widens
the scope of Art.23, and allows for jurisdiction clauses in unsigned
or signed by only one party documents to be valid provided that
this is customary in the particular branch of international trade (see
Mainschiffahrts-Genossenschaft eG (MSG) v Les Gravières Rhénanes Sarl
(Case C-106/95) [1997] All ER (EC) 385; Trasporti Castelletti Spedizioni
Internazionaii SPA v Hugo Trumpy SPA (Case C-159/97 16.3.99)).
Special difficulties are encountered when one has to examine the
validity of jurisdiction clauses in documents transferred to third parties
(for example a bill of lading). Are these clauses which have been agreed
by the original parties still binding on the third parties? Provided that
the jurisdictional agreement between the original parties is valid under
Art.23 then it is a question of whether the national law provides that
the third party succeeds to the rights and obligations of the original
party (see Partenreederei Ms Tilly Russ v Haven & Vervoebedriif Nova NV
[1985] 1 QB 931; Corek Maritime v Handelsveem BV (Case C-387/98)
[2000] ECR I-9337; The Poseidon [2010] EWHC 2578 (Comm)).
5.4 Prioritisation and conflicts between

jurisdictional rules
Where there is an arrest of a ship in England based on a contractual
claim, for example a bill of lading, this establishes English jurisdiction
through the operation of Art.71 of the Recast Regulation which permits
Art.7.1 of the Arrest Convention 1952 to define jurisdiction. However, if
the contract contains a valid jurisdiction clause for another court then
Art.25 of the Recast Regulation gives jurisdiction to the agreed court.
42
How would, then, the English courts resolve the conflict? If Art.25
establishes exclusive jurisdiction then any jurisdiction established
through arrest is in direct conflict. The English courts have held that
Art.71 (and therefore the specialised convention) prevails and it
does not matter whether there is a jurisdictional agreement. Thus,
the English courts have discretion (under common law) to stay the
proceedings and at this second stage the existence of the jurisdictional
agreement is one of the factors that influences the decision of the
court (The Bergen (No. 1) [1997] 1 Lloyd’s Rep 380; The Bergen (No. 2)
[1997] 2 Lloyd’s Rep 710).
The Recast Regulation deals with multiple proceedings. The major
objective is to avoid multiple judgments being given. Article 29 of the
Recast Regulation provides for a ‘first come first served’ arrangement.
Where proceedings on the same cause of action, between the same
parties, are brought in courts of different EU member states, the court
first seised is entitled to examine whether it has jurisdiction. All other
courts have to stay their proceedings and dismiss them if the court first
seised decides it has jurisdiction on the merits. However, where there
is an exclusive jurisdiction clause this rule does not apply and only the
selected court has jurisdiction on the merits.
There are also rules where the actions before different courts are
related (Art.30). Actions are ‘related’ where they are so closely
connected that it is expedient to hear and determine them together
to avoid the risk of irreconcilable judgments resulting from separate
proceedings – for example, proceedings on the merits and limitation of
liability proceedings. See Art.32 to find out when a court is seised.
Under the Recast Regulation a valid jurisdiction clause is not subject
to the ‘first come first served’ arrangement, although under its
predecessor the position was different (see Eric Gasser GmbH v MISAT
Srl (Case C-116/02) [2005] QB 1). The Recast Regulation effectively
overrules Gasser v MISAT.
If the defendant is not domiciled in an EU member state, Art.6 of the
Recast Regulation provides that English national law will apply to
determine the jurisdiction of the English courts, except where they
concern consumer or employment contracts or exclusive jurisdiction
and jurisdiction clauses.
5.1 Consider the claims covered by s.20(2) of the SCA 1981. Which of these
claims would have their jurisdiction determined under the Recast Regulation
– and when?
5.2 Identify the sections of the Recast Regulation which prescribe the exclusive
jurisdiction of one court and those which provide for alternatives.
5.3 Explain how Art.71 operates to preserve the Collision (Jurisdiction)
Convention 1952 and what is required in order to establish Admiralty
jurisdiction under Art.1 of the Collision (Jurisdiction) Convention and under
Art.7 of the Arrest Convention 1952.
5.4 Outline the requirements under the Recast Regulation for an exclusive
jurisdiction clause to be enforceable and the way the Recast Regulation
supports the choice of the parties.
43
5.5 Describe the allocation of jurisdiction under the Recast Regulation for
contractual claims where there is no valid jurisdiction clause.
5.6 How does the Recast Regulation resolve the issue of multiple proceedings?
Would this mechanism apply where there is jurisdiction established under
an international convention? Would it apply where there is an exclusive
jurisdiction clause?
5.7 In a claim for negligence, which court will get jurisdiction under the Recast
Regulation? Would this rule also apply to collisions at sea?
5.8 What were the issues in The Maciej Rataj case?
5.9 When does a court of a contracting state have an obligation to stay its
proceedings and when does it have discretion?
5.10 How does the Recast Regulation deal with limitation of liability
proceedings?
5.5 Stay of proceedings on the ground of a

foreign jurisdiction agreement or arbitration
agreement
The Recast Regulation does not cover claims which are not for civil and
commercial matters, or where Art.6 permits the operation of national
rules or where there is an arbitration clause in the contract. In all such
cases the English rules for establishing jurisdiction will apply.
At common law jurisdiction is founded as of right for in personam
proceedings where a defendant is served with proceedings within the
jurisdiction in accordance with Part 6 of the Civil Procedure Rules (this
includes in rem jurisdiction).
Where the defendant is not within the jurisdiction, the claimant can
require the permission of the court in order to serve proceedings on
the defendant outside the jurisdiction. Note that for cases falling under
the Recast Regulation as well as the other European instruments service
outside of the jurisdiction does not need the permission of the court.
For a common law claim the court will only allow service out of the
jurisdiction if one of the conditions described in Practice Direction
6B(3.1) are met. These conditions include cases where a contract:
• was made within the jurisdiction, or was made by or through an
agent trading or residing within the jurisdiction
• is governed by English law
• contains a term to the effect that the High Court shall have
jurisdiction to determine any claim in respect of the contract.
The claimant must have a good arguable case that the claim falls under
one of the categories in Practice Direction 6B(3.1) (see Seaconsar Far
East Ltd v Bank Markazi Jomhouri Islami Iran [1993] 4 All ER 456).
The claimant does not have to prove their version of the case: it suffices
to show that there is a serious issue to be tried (Seaconsar Far East Ltd v
Bank Markazi Jomhouri Islami Iran [1993] 4 All ER 456).
The question then is whether the English court chooses to assume
this jurisdiction. This depends on whether the English court is the
44
appropriate court for the case (including the forum non conveniens test)
(see Spiliada Maritime Corp v Cansulex Ltd (The Spiliada) [1987] AC 460).
Where a claim has been served within or outside the jurisdiction then
the English courts have jurisdiction on the merits. In such a case the
defendant can either challenge the formality of the service or rely on
the general discretion of the courts to stay proceedings. This latter
discretion has been developed judicially since 1974. In general the
court has discretion to grant a stay.
A stay will only be granted on the ground of forum non conveniens
where the court is satisfied that there is some other forum with
competent jurisdiction where the case may be tried more suitably for
the interests of all the parties and the ends of justice (Spiliada Maritime
Corp v Cansulex Ltd (The Spiliada) [1987] AC 460).
There is a difference in the test applied under Practice Direction 6B
(permission to serve outside the jurisdiction) and when applying
for staying an action. In the permission for service outside the
jurisdiction the claimant attempts to persuade the court to exercise
its discretionary power to permit service on the defendant outside the
jurisdiction, and the proof rests on the claimant. In the application for a
stay that burden of proof rests on the defendant.
When there is no jurisdiction clause involved the test applied
is whether justice will be served better by a stay of the English
proceedings. The party that is asking for a stay must show that there is
an alternative forum which is more appropriate than the English court,
and if the party successfully shows this then the other party still has an
option to persuade the court that there is some reason why it should
not stay the proceedings (Spiliada Maritime Corp v Cansulex Ltd (The
Spiliada) [1987] AC 460).
The principles applied are not concerned with the strength of the
plaintiff’s claim (see Connelly v RTZ Corporation [1998] AC 854, where
on the facts the existence of legal aid in England was considered by
the House of Lords by majority as a reason sufficient not to order a
stay of the English proceedings, even though there was clearly a more
appropriate forum in Namibia).
The fact that the foreign jurisdiction has some disadvantages for
the claimant is not enough to refuse a stay – they must show that
substantial justice cannot be done in the appropriate forum.
To that extent there are cases where procedural or even substantive
law issues have led the court to deny a stay to an otherwise more
appropriate forum.
Thus, in a collision case, where the Limitation Convention 1957 was in
force in Singapore and the Limitation Convention 1974 was in force
in the UK, the Court of Appeal rejected statements of the High Court
that this difference was sufficient to justify a stay. Nevertheless, where
the Hague-Visby Rules have the force of law they strike out a foreign
jurisdiction clause and therefore the refusal to stay follows suit (The
Herceg Novi and The Ming Galaxy [1998] 2 Lloyd’s Rep 454; The Morviken
[1983] 1 AC 565).
The applicable limitation provisions were also not considered of
relevance in Al Khattiya v Jag Laadki [2018] EWHC 389 (Admlty), [2018]
45
2 Lloyd’s Law Rep 243 based on the Herceg Novi and the Western Regent
[2005] EWCA Civ 985, [2005] 2 Lloyd’s Rep 359. However, the dismissal
of the limitation proceedings by the foreign court was of relevance in
that there were no multiple proceedings as a matter of fact.
The alternative forum must be available. So where the claimant’s liberty
or safety are threatened in the alternative forum that is not an available
forum and a stay is not ordered (Mohammed v Bank of Kuwait [1996] 1
WLR 1483).
Where proceedings are pending in a foreign court (not a party to the
Recast Regulation or Lugano Convention) and proceedings are starting
in the English courts, one party will be seeking permission to serve the
claim form outside the jurisdiction while the other party will be arguing
that even if permission is given the proceedings should be stayed.
The criteria applied are set out in The Spiliada. The existence of other
proceedings is taken into account in considering whether the foreign
forum is distinctly more appropriate, but is not conclusive. Only where
the foreign proceedings have advanced significantly does this appear
to be particularly important. This situation is very different from that
under the Recast Regulation where the court first seised is entitled to
decide on jurisdiction on the merits.
Where there is a jurisdiction agreement then the situation is different
in at least one aspect: there is a potential breach of contract and the
purpose of the claim is to force the parties to fulfil the agreement. For
this to be applicable the party that claims the protection of the clause
must show that on the correct construction the clause is valid, covers
the matter in dispute and obliges the other party to submit to the
jurisdiction of the English courts.
These issues raise difficulties in identifying the proper law of the
jurisdiction clause. At common law there are no formal requirements
for a jurisdiction agreement. It could be an oral agreement. It is
necessary to consider whether the jurisdiction clause is valid. It could
be invalid, for example, where it cannot be disentangled from a floating
proper law clause which is invalid (The Iran Voydan [1984] 2 Lloyd’s Rep
380) or where the jurisdiction clause would have the effect of lessening
the carrier’s liability under an international convention which has the
force of law, such as the Hague-Visby Rules (The Morviken [1983] 1
AC 565).
Where the parties have agreed a choice of jurisdiction the English court
will usually give effect to that choice, as the court chosen would be
the appropriate forum, unless there are multiple proceedings (lis alibi
pendens) between multiple parties (Citi-March Ltd v Neptune Orient
Lines Ltd [1997] 1 Lloyd’s Rep 72; The MC Pearl [1997] 1 Lloyd’s Rep
566; and Bouygues Offshore SA v Caspian Shipping Co [1998] 2 Lloyd’s
Rep 461).
Where the bill of lading contains an exclusive foreign jurisdiction clause
there is a strong prima facie case for a stay, and the plaintiff can avoid
a stay only if it shows strong cause for keeping the proceedings in
the English courts, having regard to all the circumstances of the case
(Aratra Potato Co Ltd v Egyptian Navigation Co (The El Amria) [1981]
2 Lloyd’s Rep 119). Where the foreign jurisdiction clause is valid the
46
English courts will respect it unless it would be unjust to do so.

In The Benarty [1984] 2 Lloyd’s Rep 244 the Court of Appeal gave a stay
on the basis of an exclusive jurisdiction clause in favour of the court of
Djakarta unless the carrier elected otherwise, on the ground that the
carrier sought the benefit of lower tonnage limitation in Indonesia and
not lower package limitation, a situation expressly permitted by Art.
VIII of the Hague-Visby Rules. In that case the defendants had given
an undertaking not to rely on the lower package limits applicable in
Indonesia.
Time bars may also be relevant in deciding whether a stay will be
granted (Baghlaf Al Zafer Factory Co v Pakistan National Shipping Co
(No. 2) [2000] 1 Lloyd’s Rep 1) but not where there was negligence in
missing a time bar (The Pioneer Container [1994] 1 Lloyd’s Rep 593).
Where a claimant has failed to issue protective proceedings in the
contractual forum, a stay will not be ordered or service set aside unless
strong cause is shown why English jurisdiction should be maintained
(Citi-March Ltd v Neptune Orient Lines Ltd [1996] 2 All ER 545; see also
the decision of Rix J in The MC Pearl [1997] 1 Lloyd’s Rep 566, a multi-
party litigation case).
5.11 Explain in which situations jurisdiction for maritime claims will fall to be
decided by the forum conveniens rules.
5.12 Explain the two-stage test as established by the decision in The Spiliada
and distinguish the differences between the two stages.
5.13 Illustrate whether or not the English courts have encouraged ‘forum
shopping’ in cases in which the English jurisdiction has been invoked by a
limitation action irrespective of any connection with the jurisdiction.
5.14 Explain what the courts would take into account to determine whether
or not there is a strong cause for exercising its discretion not to stay the
proceedings commenced in the English court in the event of a foreign
jurisdiction agreement.
5.15 What weight have the English courts given to the fact that the claim in
the contractual jurisdiction has become time-barred in the exercise of their
discretion to stay the proceedings?
5.16 State the basic principles of a stay of proceedings in favour of the
jurisdiction in which the parties wish to arbitrate and have agreed an
arbitration agreement.
No feedback provided.

• Peel, E. ‘Forum non conveniens and European ideals’ [2005] LMCLQ 363.
• Briggs, A. ‘Forum non conveniens and ideal Europeans’ [2005] LMCLQ 378.
47
1. Outline the main differences in the principles between the common law way
of establishing and disputing English jurisdiction on the merits and the way
this is done under the Recast Regulation (EC Regulation 1215/2015).
2. Detail the way jurisdiction is determined by the English courts where:
(a) There is a valid jurisdiction clause in a contractual relationship.
(b) There is a valid arbitration clause in a contractual relationship.
(c) There is an oral agreement for salvage under a Lloyd’s Open Form (LOF)
contract.
(d) There is a collision in the territorial waters of another state.
Consider EU courts and parties, exclusive non-EU courts and parties and a
mixture of both.
(In relation to question (d) the case Al Khattiya v Jag Laadki [2018] EWHC 389
(Admlty), [2018] 2 Lloyd’s Law Rep 243 provides a good example of how the
English Courts approach the issues. Note however the specifics of the case,
namely the dismissal of limitation of liability proceedings by the foreign Court
and the admission of liability by the defendant both of which were crucial in
assessing whether there was an alternative forum available.)
3. Read The Bergen (No.1) [1997] 1 Lloyd’s Rep 380 and The Bergen (No.2) [1997] 2
Lloyd’s Rep 710. What was the problem faced and how was this resolved by
the English court?
4. Read The Maciej Rataj and summarise the important points it decided. This
decision was also discussed in The Indian Grace. Do you think it influenced the
decision in that case?
5. Forum conveniens is about finding the most appropriate court for the specific
case. However, parties do engage in forum shopping in order to optimise their
chances of winning their case. How do English courts deal with substantive or
procedural differences between English courts and foreign courts when there
is an application of a stay for the English proceedings?
6. Are the aforementioned differences relevant where a claim falls under the
Recast Regulation, and if not why not?

should be able to:
claims under the European jurisdictional framework
claims outside the European jurisdictional framework
• identify the differences between the two ways of obtaining jurisdiction and
explain the reasons for their difference
• explain how ship arrest operates within and outside the European
jurisdictional framework
• identify, in specific situations, the appropriate path for establishing jurisdiction
and advise on the options available to English courts.
48

Activity 5.1
The issue here is which claims fall within the definition of ‘civil and commercial
matters’. This is a division that must be made by reference to relevant ECJ decisions.
Activity 5.2
Activity 5.3
Compare The Bergen (No.1) [1997] 1 Lloyd’s Rep 380 and The Bergen (No.2) [1997] 2
Lloyd’s Rep 710) with the The Po [1991] 2 Lloyd’s Rep 206.
Activity 5.4
Activity 5.5
Activity 5.6
Read TNT Express Nederland BV v AXA Versicherung AG Case C533/08 in addition to
the cases under 5.3.
Back
49
Sample examination questions

These questions appeared in the October 2017 paper.
Question 1
‘The test for the award of damages for wrongful arrest in the The Evangelismos is
outdated and unfair. Counter-security by the arresting party should be provided
as a matter of course.’
Discuss your agreement or disagreement with this statement. The Court of
Appeal decision in the MV Alkyon [2019] 1 Lloyd’s Rep 406 provides an excellent
source of information on the issues involved.
Question 2
John, who is domiciled in England, is owner of 100 per cent of the shares in two
Singaporean companies, Fox and Hound. Fox and Hound are the registered
owners of the SS Fox and SS Hound respectively. Both vessels are demise chartered
to FH Shipping, a company registered in Panama and time chartered back to
John.
During July 2019, cargo on board the SS Fox was damaged due to the ingress
of water through hatch covers negligently left open by the crew. During the
same period of time SS Hound was involved in an incident where it caused wash
damage to a moored vessel and which hit the docks. Both SS Fox and SS Hound
put into a US port for repairs in September 2019. The master of the SS Fox paid for
the repairs and he is awaiting reimbursement. The repairs of the SS Hound remain
unpaid. On 1 October, the SS Fox was sold to Evade Shipping, a company wholly
owned by John’s wife. The SS Hound is presently detained for unpaid port charges.
Discuss any claims that may be brought against the SS Fox and the SS Hound and
their in rem priority.
50
Notes
Notes
51
Advice on answering the questions

Question 1
The answer requires the following elements.
1. A good understanding of the actual test, that is, that the test requires mala fides or
crassa negligentia.
2. An explanation what each of them means, that is:
i) For mala fides, that the arresting party had no honest belief in his entitlement to
arrest the ship.
ii) For crassa negligentia, that ‘the action was so unwarrantably brought, or
brought with so little colour, or so little foundation, that it rather implies malice on
the part of the Plaintiff, or gross negligence which is equivalent to it’.
3. Reference to The Kommunar No 3 [1997] 1 Lloyd’s Rep 22 with a bit of discussion
on how the test was not satisfied there despite the known-to-the-arresting-party
change of the legal ownership from a government entity to a private entity. (A
reference to The Peppy [1997] 2 Lloyd’s Rep 722, where the test was successful with
some facts, would give additional marks. An explanation of the origin of the test as
coming from criminal law (see Mandaraka) would also gain marks.)
4. The position under the Arrest Convention 1952 (at least) and, for more marks, that
under the Arrest Convention 1999, should be outlined. The compatibility of the
English test with the Arrest Convention 1952 should be outlined.
5. The terms ‘outdated and unfair’ in the question need to be addressed too. This can
be done independently or by looking at the consequences of changing the test
as suggested by the question. The best way is by identifying the effect the change
of the procedure to one of providing counter-security will have on the availability
of ship arrest to the various claimants. By examining the claims that lead to ship
arrest some weaker parties can be identified. For example, crew, for whom the
provision of security would be financially difficult because the very claim may be
one of unpaid wages, and contrasting them with claims by, for example, arresting
banks. This argument can be made by individual claims in rem or by discussing the
different categories of rights, that is, maritime liens and statutory rights in rem or
‘true’ claims in rem and others.
6. A further comparison that could be made is one freezing orders where undertaking
for damages to the defendant and also third parties are required and the applicant
must be good for damages. Another additional comparison could be with the
states that use a different test (those discussed in Mandaraka). These comparisons
gain additional marks but are not essential.
Mandaraka Chapter 5, s.2.4 has a detailed analysis of the test. Two articles in
the additional reading also provide a good exposition of the two sides of the
argument. These are:
• Eder, B. ‘Wrongful arrest of ships: a time for change’ (2013–2014) 38(1) Tulane
Maritime Law Journal 115. Available via HeinOnline in the Online Library.
• Davies, M. ‘Wrongful arrest of ships: a time for change – a reply to Sir Bernard
Eder’ (2013–2014) 38(1) Tulane Maritime Law Journal 137. Available via
HeinOnline in the Online Library.
7. The arguments for a need to change the arrest procedure have been brought
before the High Court in the MV Allkyon in a case where the bank arrested the
ship for an alleged default in payment of a mortgage instalment. The shipowner
argued that the ship had to be released unless counter security was provided
because the ship would lose a significant amount of hire money. The court held
that any such change was a matter for Parliament or the Rules Committee and
that the practice was well established, supported by authority and supporting the
right to arrest following an action in rem.
52
Question 2
1. The corporate structure needs to be analysed.
John is a shareholder of the two shipowning companies – link with The Antaios and
Salomon v Salomon. John is NOT the beneficial owner and the corporate structure is
permissible.
John is also the time-charterer. This could be relevant for the application of s.21(4).
Fox and Hound ARE the legal and beneficial owners of the two ships. Thus, according
to The Evpo Agnic these are sister companies but the ships are NOT sister ships.
FH Shipping is the demise charterer. As such, it can be assumed that the crew are
employed by them and vicarious liability will attach to them.
The claims:
a. Cargo damage onboard the SS Fox: this claim falls under 1981 SCA s.20(2)(g)
and can be enforced in personam (s.21(1)) and in rem (s.21(4)). For s.21(4) there
is a need to identify the relevant person. This could be FH Shipping for a claim
in negligence or bailment (the case does not suggest any change of ownership
from shipment) or (for more points consider an alternative) John as the time-
charterer if John is the contractual carrier.
If the claim is against FH Shipping then the SS Fox can be arrested if when
the claim in rem is issued FH Shipping are the beneficial owners (they are not)
or remain the demise charterers of the SS Fox (we are not told of a change in
relation to this).
If the claim is against John (as contractual carrier – The Span Terza) then the
SS Fox can be arrested if at the time the claim in rem is issued John is either the
beneficial owner (he is not – The Antaios) or the demise charterer of this ship.
There is no sister ship to arrest. The change of ownership of the SS Fox, whether
a sham or not, is immaterial for this claim as John was not the owner in the first
place.
b. Master’s disbursement (The Bold Buccleugh) for repair costs of SS Fox. These
can be enforced by an action in personam or an action in rem because they
fall under s.20(2)(p). There is a maritime lien available (and would survive any
change of ownership). There is a statutory right in rem too under s.20(2)(p) but
no sister ship arrest is possible because the relevant person (FH Shipping) is not
the owner of any other ship.
c. Wash damage caused by SS Hound. This is collision damage and attracts a
maritime lien. An action in personam is subject to s21(1) of the 1981 SCA which
requires satisfaction of the conditions under s.22. The two owning companies are
registered in Singapore and therefore only if ship arrest is made or the collision
took place in UK internal waters or a UK port would an action in personam be
available.
An action in rem is available against the SS Hound for the maritime lien under
s.21(3). There is also a statutory right in rem s.21(4) against any sister ship – but
there isn’t any here (The Hound is not the beneficial owner of any other ship).
d. Repair costs for the SS Hound remain unpaid. These are included in s.20(2)(n)
and can be enforced by an action in personam or an action in rem. The English
courts will not treat the claim by the yard as a maritime lien even if this has such
character in the US and has been created by a contract with US law applicable to
it (The Halcyon Isle). Therefore, an arrest would be on the basis of s.21(4) and to
the extent that the relevant person (FH Shipping) who should have paid remains
the demise charterer of the ship, the SS Hound can be arrested. But there is no
sister ship to be arrested.
53
e. The detention of the SS Hound for unpaid port charges (presumably in an English
port) would also fall under s.20(2)(n) and the resolution is as above. A more difficult
point (with extra marks) concerns whether statutory rights to sell are available to
the detaining authority which, if they exist, may give them priority.
Priority: assuming that the SS Fox is arrested and sold (or security given) the
Admiralty Marshall’s expenses for the arrest first, the master’s disbursement claim
next and the cargo claim at the end (provided that FH Shipping is still the demise
charterer – if not, the cargo claimant cannot arrest any ship).
Assuming the SS Hound is arrested and sold (or security given) the Admiralty
Marshall’s expenses for the arrest first, the collision damage claim next and the
repair yard’s claim equally with the port charges (except if there is a statutory right
to sell for the port authority).
The sale of the SS Fox, from Fox to Evade Shipping, a company wholly owned by
John’s wife, is not really relevant because it is difficult to imagine a scenario where
Fox is the ‘relevant person’ at the time of the cargo damage and the master’s claim
as a disbursement is enforceable even after the change of ownership.
Applying more relevant case-law would gain extra marks.
Back
54
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Master of Laws (LLM)

Postgraduate Diploma in Laws

̆ Dr Aleka Mandaraka-Sheppard (LLB, LLM, PhD, Dip.IArb), formerly Head of the

Published by the University of London

1.1 Admiralty law

1.1.1 Study sequence

1.2 Course aims and outcomes

Course learning outcomes

1.3 Introduction to Module A

Learning objectives for Module A

Learning outcomes for Module A

1.4 How to use this Study Guide

1.4.1 Case-law and statutes

the international maritime and other conventions. These, together with

Useful further reading

1.5 Preparation for the course

1.5.1 Self-assessment questions

In addition to the learning objectives and outcomes for each module,

So the self-assessment questions are learning tools to improve your

1.6 Allocating your time

1.7 The examination

1.7.1 How to approach the examination questions

• A problem question could ask you to apply the law to a number of

• Second, the main part of the essay, identifying and discussing

Chapter 2: The nature of Admiralty

With regard to procedure, the SCA 1981 is supplemented by the Civil

2.1 Statutory rights in rem and maritime liens

known as statutory lien) crystallises on the property (The Monica S

It is also important to note that the claims supported by a maritime

2.2 Types of claims enforceable in the Admiralty

A claim for damage done by a ship is enforceable under sub-paragraph

Reminder of learning outcomes

Feedback to activities: Chapter 2

Chapter 3: Enforceability of claims

3.1 Nature of in rem proceedings

narrow context of s.34. See the comments of LJ Tomlinson in The Stolt

3.2 Statutory requirements for bringing an action

is available for claims supported by a maritime lien. Again the action in

• Consider a claim (falling under s.20(e)–(r)) arising against a person

3.2.1 Process of arresting a ship

Reminder of learning outcomes

Feedback to activities: Chapter 3

Chapter 4: Procedure for enforcement

4.1 Arrest of a ship and the aftermath

right to arrest following an action in rem, authority and the long-

Useful further reading

4.2 Appraisement and sale of the ship by the court

• The court’s powers on appraisement and sale are described in CPR

4.2.1 Limitation periods/time bars

Reminder of learning outcomes

Feedback to activities: Chapter 4

Chapter 5: Ship arrest and jurisdiction

5.1 Outline legal framework for obtaining

5.2 Disputes under the Recast Regulation

The Recast Regulation applies in civil and commercial matters (Art.1).

For example, a claim for damages due to negligence in navigation

5.3 Outline of the jurisdictional rules under the

Matters relating to contract

1. the courts of the domicile of the defendant (assuming it is in a

Matters relating to tort

2.2 Types of claims enforceable in the Admiralty

3.2 Statutory requirements for bringing an action

5.1 Outline legal framework for obtaining

5.3 Outline of the jurisdictional rules under the

5.4 Prioritisation and conflicts between

5.5 Stay of proceedings on the ground of a