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(1980)1980 December 3 [A. Loizou, J.] IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION DEKATHLON SHIPPING CO. LTD., Applicants, v. THE REPUBLIC OF CYPRUS, THROUGH THE MINISTER OF COMMUNICATIONS AND WORKS, Respondent. {Case No. 227/80). Administrative Law-—Discretionary powers—Defective exercise of— Misconception of the situation—Refusal to register a ship—• Respondent failing to examine possibility of allowing registration and imposing conditions, aspreviously announced, and thus choosing less onerous course for the applicants—In proceeding on 5 the basis of an absolute prohibition respondent laboured under a misconception of the situation and exercised his discretion in a defective manner—Sub judice decision annulled. Administrative Law—Administrative decisions—Reasoning—Vagueand uncertain reasoning—Decision refusing registration of ship— 10 Under powers given by section 14(A) of the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 1963 (Law 45/63 as amended), which provides for such refusal on either of two grounds—Sub judice decision not specifying under which of these two grounds it was taken—Reasoning therefor vague 15 and uncertain and leads to its annulment. Ship—Registration—Section 14(A) of the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 1963 (Law 45/63 asamended)—Refusal to registership—Annulled due to uncertainty and vagueness of the reasoning therefor and due to defective 20 exercise of the discretionary powers vested in the respondent. This was a recourse against the decision of the respondent whereby he refused to approve the registration under Cyprus 630 3 C.L.R. flag of a ship purchased by the applicant company. No written communication of the sub judice decision was given to the applicants because they were informed over the telephone about it; but in the relevant file it was stated that "the Minister of Communications and Works exercising the powers vested in him under section 14(A)* of the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 1963 (Law No. 45 of 1963 as amended by Law No. 82 of 1968) decided not to approve the registration in the Cyprus Register of the said Ship as same was less than 500 tons and older than 10 years". 5 10 In November, 1978, the Director-General of the Ministry of Communications and Works stated at a press conference that in the case of ships which are below 500 tons, for which "the International Convention for the Safety of Life at Sea of 1960, does not apply in its entirety there will be put certain special conditions ". 15 20 25 30 Dekathlon Shipping v. Republic • Held, (I) that when considering the application of the applicants the respondent failed to examine the possibility of imposing any conditions as it had been announced by the Director-General in the press conference, that it would be done in such cases and proceeded, as it appears from the contents of the subject decision, on the basis that it decided upon an absolute prohibition with regard to this particular class of ships which was clearly not the case; that the respondent laboured obviously under a misconception of the situation and so exercised his discretion in a defective manner as had he considered the possibility of imposing and in fact by imposing, if he so decided, conditions he could have chosen the less onerous course for the applicants (see VassosEliadesLtd., v. The Republic
(1979)3 C.L.R. p. 259).
(2)That the power of the Minister under the said section 14(A), to givedirections to the Registrar not to effect the registration of a particular ship, or of a particular class of ships consists of two legs, namely where the registration of such ship or ships Section 14(A) reads as follows: "14(A). Notwithstanding the provisions of this Law, the Minister shall have power, where the registration of a particular ship or of a particular class of ships in the Cyprus Register would be contrary to the general policy followed by the Government of the Republic or to the public interest in general, to give directions to the Registrar not to effect the registration of such ship or ships". 631 A. Loizou J. Dekathlon Shipping v. Republic
(1980)would be contrary to (
  1. a)the general policy followed by the Government of the Republic, or (
  2. b)to the public interest in general; that the material in the file of the administration from which the reasoning of the sub judice decision has to be ascertained does not specify under which of the two legs the 5 Minister acted in deciding not to approve the registration of the ships of the applicants; that the situation is suggestive of a lack of due inquiry, and the fact that there is no suggestion in the material in the decision as to which of the alternatives was pursued, renders the reasoning of the subject decision 10 vague and uncertain and all these constitute grounds for annulling the subjudicedecision; and that, accordingly, thesubjudice decision must be annulled and the matter be referred for reexamination by the respondent. Subjudice decision annulled. \5 Cases referred to: Vassos Eiiades Ltd., v. The Republic
(1979)3C.L.R.
  1. Recourse. Recourse against the tefusal of the respondent to approve the registration under Cyprus flag of the ship "Avon" under 20 the name "My Destiny". L. Papaphilippouwith E. Vrahimi(Mrs.), for the applicant. CI.Antoniades, Counsel of the Republic, for the respondent. Cur. adv. vult. A. Loizou J. read the following judgment. By the present 25 recourse the applicants who are a private Company of limited liability and registered as such on the 12th February, 1980, under the provisions of the Companies Laws, Cap. 113, claim: A declaration of the Court that the act and/or decision of the respondent by which on or about the 8th July, 1980, he 30 refused to approve the registration under Cyprus flag of the ship "AVON" under the name "MY DESTINY" is null and void and of no effect whatsoever and that what was omitted ought to be done. The facts of the case are not in dispute. The shareholders and directors of the applicant Company are Cypriots residing in Cyprus and its main object isto acquire, 632 35 3 C.L.R. 5 10 Dckathlon Shipping v. Republic A. I.oizou J. own and exploit ships. The applicants negotiated the purchase of a ship called " A V O N " which at that time was flying the flag of Panama. Before concluding the purchase of the said vessel, they obtained an Exchange Control Permission from the Central Bank of Cyprus for the transaction and payment of the sum of US $ !03.000- The purchase was duly concluded and the Bill, of Sale duly signed, was executed. The ship as described in the Bill of Sale (exhibit 'B'), was built in Holland in December,
  2. She is shown to be on the Bill of Sale 539.23 gross tonnage. The vessel was brought to Cyprus and after certain repaiis were effected on her by the applicant Company, its gross tonnage" was reduced to 497.54 tons. 15 20 25 30 35 4Π On the 5th June, 1980, the applicants through their counsel submitted an application to the respondent for her registration under the Cyprus flag in their name (exhibit 'C') and on the 19th June, 1980, applied to the Registrar of Ships that same be surveyed by one of the surveyors of the Republic and carry out the measurements in ordei to ascertain her gross and net tonnage. This was done and she was found to have the tonnage hereinabove given. On the 8th July, 1980, the applicants through their advocates were informed over the phone that their application for the registration of the said ship vvas rejected and upon that they sent a telex (exhibit Έ ' ) which reads as follows: " T H E MINISTRY O F C O M M U N I C A T I O N S A N D WORKS A T T E N T I O N : T H E D I R E C T O R - G E N E R A L R E : M/V 'AVON" TBR 'MY DESTINY" ON ENQUIRY OVER THE P H O N E WITH T H E MINISTRY WE HAVE BEEN INFORMED THAT OUR APPLICATION F O R R E G I S T R A T I O N O F ABV VSSL DATED 5TH J U N E 1980 HAS BEEN REJECTED. NO REASONS HAVE BEEN GIVEN. WE HAVE BEEN T R Y I N G TO G E T IN T O U C H WITH YOU SO AS TO A R R A N G E A M E E T I N G BUT REGRETTABLY WE HAVE BEEN I G N O R E D . A P P A R E N T L Y T H E SERIOUSNESS O F T H E M A T T E R ISD I S R E G A R D E D . AS WE A R E I N S T R U C T E D TO FILE A R E C O U R S E AGAINST T H E R E F U S A L O F T H E REGISTRATION AND THE SO CALLED 'REGULATION' 633 A. Loizou J. Dekathlon Shipping v. Republic
(1980)RESTRICTING THE REGISTRABLE AGE, WE REQUEST A WRITTEN DECISION AND REASONS BEFORE THE 11TH OF JULY". As rightly pointed out by counsel for the respondent, it was notpossible in the normal course of things togivea writtenreply 5 on such a serious matter within the two-day time limit given by counsel for the applicants in his telex and as this recourse was filed on the 15th July, no written communication of the sub judice decision was given to the applicants, though the applicants were duly informed over the telephone about it, 10 hence the expeditious filing of the recourse. The reasoning of the subjudice decision has then to be ascertained from the material in thefileof the Administration (exhibit 2). In reds 3 and 4 therein, it is stated that the Minister of Communications & Works exercising the powers vested in 15 him under section I4A of The Meichant Shipping (Registration of Ships, Sales and Mortgages) Law 1963 (Law No. 45 of 1963 as amended by Law No. 82 of 1968) decided not to approve the tepistration in the Cyprus Registei of the said ship as same was less than 500 tons and older than 10 years. 20 Connected with the question of reasoning are the contents of a statement made on the 25th November, 1978, at a Press Conference by the Director-General of the Ministry of Communications and Works, copy of which has been produced as exhibit 3. Counsel for the respondent has invited me to find 25 that its contents supplement or explain the grounds and reasons for the sub judice decision. In so far as relevant it reads as follows:2. The purpose of this meeting is to announce certain decisions which the Ministry of Communications and 30 Works took with regard to the Cyprus Merchant Shipping and then to request you to tell us what you have done for the adoption and implementation by the ship owners that you represent of the Cyprus collective agreement which we brought to your consideration some months 35 ago. 3. It is known to all of you that the Cyprus flag was at times the subject of many criticisms and adverse comments from international sailors and stevedores trade unions 634 3 C.L.R. Dekathlon Shipping v. Republic A. Loizou J. and from a section of the international press. I shall mention some of the criticisms and the adverse comments that I have in mind:5 (
  1. a)The Cyprusflagis aflagof convenience and the shelter of very old ships and of ships of low safety level. (
  2. b)There is no real link between the Cyprus ship and the Cyprus flag. 10 (
  3. c)Many Cyprus ships sail over the oceans with incomplete crews or without certificates of competence of members of their crews or without up to date safety certificates. (
  4. d)The Government of Cyprus does not exercise the control which must be exercised over Cyprus ships. 15 20 (
  5. e)In many Cyprus ships the conditions of life and the terms of employment are not considered satisfactory and theCyprus Government does not takethe necessary measures for their improvement. (
  6. f)In the majority of cases the crews of Cyprus ships consist of foreigners who do not have any protection from the Cyprus Government. (
  7. g)Cyprus ships engage in illegal activities. 25 30 35 Probably many of the aforesaid criticisms and comments arc baseless and may be malicious. The Ministry of Communications and Works on many occasions tried to answer many of the accusations that appeared in the international press against the Cyprus flag. In meetings with representatives of the two known international trade unions of seamen with communications through the press and the television in international forums and in contacts with various persons, efforts were made to persuade international public opinion that the Cyprus flag is not as they wished to present it as certain sailor's trade unions and or persons wished to present it. 4. In spite of this, unfortunately the criticisms and the adverse comments continue and I am sorry to say that from elements and reports that we have it appears that the state of certain Cypius ships and the conditions prevai635 Λ. Loizou J. Dekathlon Shipping v. Republic
(1980)ling on them and the actions of certain ship-owners and/or masters not only do not contribute to the teimination of criticisms and adverse comments against the Cyprus flag but give reasons for their continuation. It appears from statistics that we have really many Cyprus ships 5 which are very old and that another number of cargo Cyprus ships is below 500 tons and very old. As in the case of ships which are below 500 tons The International Convention for the Safety of Life at Sea of 1960, which has been ratified by Cyprus, does not apply in its entirety 10 and the contiol of their condition is not easy.
  1. Bearing in mind the aforesaid and after considerable thought and study we have invited an expert to advise us how to modernize the legislation on the Cyprus Merchant Shipping and how to face other connected subjects and 15 concurrently we have decided that as from the 1st December 1978, it is in thepublic interest not to register in the Cyprus Register ships which are more than 17 years old and also not to register in the Cyprus Register cargo boats and fishing ships which are below 500 tons and whose age is 20 over five years. In the case of these ships which are below 500 tons, for which as 1 said the international Convention for the Safety of Life at Sea of 1960, does not apply in its entirety there will be put certain special conditions _ _
  2. The aforesaid measures have been taken within the 25 framework of the wider efforts which the Ministiy of Communications and Works makes for the preservation and the further improvement of the prestige of the Cyprus flag. " From what was said in paragraph 5 regarding the class of 30 ships that had a tonnage of less than 500 tons and were over five years of age, attention has to be drawn to the statement contained in paragraph 5 hereinabove set out that in respect of them "there will be put certain special conditions" and because the Convention For The Safety Of Life At Sea of 1960 35 does not apply in its entirety. Nothingappeared in the relevant file of the administration, exhibit 2, which contains the sub judice decision with regard to any special conditions that were considered when examining this application in particular, nor there has been any suggestion on the part of the respondents 40 that any conditions of general application were thought of 636 3 C.L.R. Dekathlon Shipping v. Republic Λ. Loizou J. and brought into existence since the• statement contained in exhibit 3 was made. On the contrary when the application to the respondents for the registration of the ship in question was made, what were examined were that the proposed name 5 "DESTINY" was free, that the fees of tenpounds were collected and then there followed a record that "the registration of the ship is not recommended since she is below 500 tons and more than fifteen years old. It should be noted that under German flag as "ATAIR" its tonnage was
  3. I suggest that it should 10 be surveyed in accordance with the Cyprus Regulations before the application is considered for registration under Cyprus flag." A survey and measuiements were carried out by Mr. Karydjis whose findings were that she was 498 gross tons. It was then that the Minister approved of the subject decision (red 15 3in exhibit 2)which has been referred to earlier in thisjudgment. Section 14(A) of the Law which was inserted by section 2 of Law 82 of 1968 reads as follows: 20 25 30 "14 (A). Notwithstanding the provisions of this Law, the Minister shall have power, where the registration of a particular ship or of a particular class of ships in the Cyprus Register would be contrary to the general policy followed by the Government of the Republic or to the public interest in general, to give directions to the Registrar not to effect the registration of such ship or ships." The power of the Minister to give directions to the Registrar not to effect the registration of a particular ship, or of a parti­ cular class of ships consists of two legs, namely where the regi­ stration of such ship or ships would be contrary to(a)the general policy followed by the Government of the Republic, or (b) to the public interest in general. The material in the file of the administration from which the reasoning of the subjudice decision has to be ascertained does not specify under which of the two legs the Minister acted in deciding not to approve the registration of the ships of the 35 applicants. Counsel, however, appearing for the respondent, has asked the Court to consider that the contents of exhibit 3, in so far as relevant to the tonnage and age of the ship in question and its registration, constitutes part of the reasoning of the subject 637 Λ. Loizou J. Dekatblon Shipping v. Republic
(1980)decision and that the refusal to register was done in the public interest in general because the ship in question fell within the class of ships of a tonnage less than 500 and over five years of age. The leg referring to the general policy followed by the Government of the Republic on the question of registration of ships was not invoked but this differentiation does not appear from the material in thefile. 5 In any event there did notappear to have been at thattime, that is the 8th July 1980, anygeneral direction of general policy given by the Council of Ministers under Article 54, paragraph 10 (A) of the Constitution in the exercise of its executive power, which includes such power. After the hearing of the case was concluded, counsel for the applicants brought to my attention decision number 19.357 of theCouncil of Ministeis taken onthe24th July 1980, (exhibit 15 "X"), as affecting the outcome of the proceedings and asked that thehearingbereopened,ashewas notaware of thisdecision beforehand. At the reopening of the case counsel for the respondent produced also the Submission which the Ministry of CommunicationsandWorks madetotheCouncilofMinisters 20 on the basis of which this decision was taken. The decision reads as follows: "Cyprus Merchant Shipping. 10. The Council studied the aforesaid subject anddecided that the criteria of the age of ships with regard to their 25 tonnage as well as theremainingconditions for the registra­ tion of ships in the Cyprus Register, mentioned in para­ graphs 14.2 and 15of thesubmission be adopted as govern­ ment policy." A perusal of the submission of the paragraphs mentioned 30 as well as paragraph 14.1 shows that the registration of ships, like the subject-one* could, under this decision, be effected on certain conditions.^ This decision of course could not apply to the present case as\it does not give the legal position that existed at the time the subject decision was taken. The sub- 35 mission, however, was dated 14th July, 1980, that is, at a time very proximate to the taking of the subject decision. Icannot but assume that when the Director General was making the statement contained in exhibit 3, and was saying that therewill 638 3 C.L.R. Dekathlon Shipping v. Republic A. Loizou J. be placed certain special conditions with regard to the registration of ships in the class in which the subject ship falls, was indicating that the prohibition of their registration was not intended to be absolute. 5 This being so it leads me to the conclusion that when considering the application of the applicants the respondent failed to examine the possibility of imposing any conditions as it had been announced that it would be done in such cases and proceeded,asitappearsfrom thecontentsofthesubjectdecision, 10 on the basis that it decided upon an absolute prohibition with regard to this particular class of ships which was clearly not the case. The respondent laboured obviously under a misconception of the situation and so exercised his discretion in a defective mannerashadheconsidered thepossibilityofimposing 15 and in fact by imposing, if he so decided, conditions he could have chosen the less onerous course for the applicants. This latter stand brings the case within the principles enunciated by the Full Bench of this Court in the case of Vassos Eliades Ltd., v. The Republic
(1979)3 C.L.R. p. 259. 20 Furthermore this situation is suggestive of a lack of due inquiry, and the fact that there isno suggestion in the material in the decision as to which of the alternatives was pursued, the reasoning of the subject decision is vague and uncertain andalltheseconstitutegroundsfor annullingthesubjectdecision 25 and the matter should go back for re-examination by the respondent. I cannot, however, fail to observe that a new situation has come into existence sincethe adoption by the Council of Ministers of decision Number 19.357 of the 24th July 1980 which 30 permits the registration of such ships subject to certain conditions which are set out therein and which may be imposed in permitting their registration. For all the above reasons the recourse succeeds, the subject decision is annulled but in the circumstances I make no order 35 as to costs. Subjudice decision annulled. No order as tocosts. 639

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