clr/1982/1982_1_1.pdf

(1982)cargo, and/or for breach of contract of affreightment and/or for negligence and/or for breach of contract of carriage and/or for breach of contract for the sale of goods now loaded on defendant ship and/or otherwise onor about 14.1.1980". On the same day, after thefiling of an ex-parte application by the 5 plaintiff, supported by an affidavit*, the Court ordered the arrest** of the defendant ship together with thecargo ladenon her upontheterms***,interalia, that"the Marshal shall release the ship and the cargo upon directions of the Registrar of this Court on thefilingof security bond by oronbehalf of the ship 10 in the sum of £200,000.- (Two Hundred Thousand Pounds) for thesatisfaction of any order orjudgment in favour ofthe plaintiffs-applicants" and that the plaintiffs shall "file a security bond inthesumof £75,000.- (Seventy Five Thousand Pounds) to bo answerable indamages for thedefendant ship, her owners 15 and theowners oi thecargo". The plaintiffs, in compliance with the above order, filed a bank guarantee in thesum of C£75,000.- and on the 18th January, 1980, the defendants put up bail intheform ofa bank guarantee for £200,000, as a result of which theship andthe 20 cargo were released. The ship sailed away and the cargo, after it was unloaded, was sold by defendants No.3. On the 13th February, 1980,defendants No. 1and onthe 11th February, 1980, defendants Nos.2and 3,that is after the ship and thecargo were released,filedoppositions tothe application 25 for theissue of the warrant of arrest. These oppositions were supported by affidavits****. In addition to the affidavit-evidence which was adduced in support of the application forthe warrant of arrest the plain­ tiffs adduced oral evidence***** but after this evidence was 30 given neither of the defendants adduced evidence, affidavit or oral, to contradict it. * The affidavit is quoted at pp.8-10 post. * · The arrest was ordered under rule 50of theCyprus Admiralty Jurisdi­ ction Order, 1893 which is quoted at p. 6 post. *** The terms are quoted at pp.4-5 post. **** - p n e affidavits are quoted at pp. 11-14 post. ***** A summary ofthis evidence, which was given by Mr. Robert Anid, is quoted at pp. 10-11 post. 2 1 C.LR. 5 10 15 20 25 30 Breidi & Another v. Ship"Glorlana' On the oppostions to the application for the issue of the warrant of arrest andon thequestionof theproperprocedural steps that a party has to take whenhe seeks the release of arrested property or of the security he has put up for the release of theproperty: Held,

(1)that in deciding whether the Admiralty Courtwill issue a warrant of arrest, it is not necessary, at that stage to go into the merits of the action and decide whether the plaintiff's factual or legal contentions are right or wrong; that rule 50 of the Cyprus Admiralty Jurisdiction order gives an absolute right for the arrest of property once the Courtis satisfied that there are issues that have to be tried between the parties;that it suffices if it isfound thattheplaintiff hasa right tohavethose issues tried (see Rigas v. The Ship "BAALBECK"

(1973)1 C.L.R. 159, 163); that it is abundantly clear that the plaintiffs have a right to have the issues raised by the oral evidence (evi­ denceof Mr. Anid)tried;and that, therefore,they wereentitled tohavetheshipandthegoodsladenonherarrested; accordingly the oppositions of the defendants should be dismissed.

(2)Thattheparty wishing to have the release of theproperty arrested must apply to the Court and it is upon him to prove that heisentitledto therelease (seerule 60of the CyprusAdmi­ ralty JurisdictionOrder, 1893); thata party claiming therelease of arrested property or the discharge of bail put up tor the release of such property, can only succeed if he can prove that the plaintiff's claim or thedefendant's counterclaimis frivolous and vexatious; that, similarly, since the arrested property is substituted by the bail, it is upon the party seeking its release to apply to the Court;that in the present case, thedefendants have failed to apply to the Court for the discharge of the bail they have put up for therelease of thevessel and thecargo and for this reasonthereleaseof the bail cannot beordered; accord­ ingly the bail put up by the defendants shall remain in force until the final determination of the action. 35 Order accordingly. Cases referred to: Rigas v. The Ship "Baalbeck"

(1973)1 C.L.R. 159 at p. 163; Schwarz& Co. (Grain), Ltd., v. St. Elcfterioex Arion (Owners) [195η 2 All E.R. 374 at p. 377. 3 Breidi & Another τ. Ship "Gloriana"

(1982)Application. Application for the rslease of the defendant ship which was arrested on the application of theplaintiffs in theabove action. D. Demetriades, for plaintiffs-applicants. C. HadjiIoannouy for rsspondent 1. L. Demetriades with 5/.Nathanael, for respondents2and 3. Cur. adv.vult. DEMETRIADES J. read the following judgment. On the 16th January, 1980, a writ of summons was issued by the plaintiffs, by which they claim against the defendants: 5 10 "A. The equivalent amount in Cyprus Pounds of the sum of U.S. Dollars 1,000.000.00 as damages for loss for non-delivery of cargo, and/or for breach of contract of affteightment and/or for negligence and/orfor breach of contract of carriage and/or for breach of conttact 15 for thesale of goods now loaded ondefendant ship and/ or otherwise on or about 14.1.1980. B. Interest at 9% per annum as from 4.1.1980 to final payment. C. The costs and expsnses of this Aclion and of all procee- 20 dings herein". On the same day, after the filing of an ex-parte application by the plaintiffs, the defendant ship, which was then lying at the port of Limassol, was arrested, wilh the cargo laden on her, on the following terms: 25 " 1 . Lst a warrant of arrest of the ship "GLORIANA", now lying at the port of Limassol, and her cargo, bs issued. 2. Notice of such arrest to bs served on tha Master of the ship. 3. The Marshal shall release the ship and the cargo upon directions of the Registrar of thii Couit on thefiling of security bond by or on behalf of theship in the sum of £200,000.- (Two Hundred Thousand Pounds) for the satisfaction of any order or judgment in favour of 35 the plaintiffs-applicants. 4 30 1 C.L.R. 5 10 15 Breidi & Another v. Ship"Gloriana" Demetriades J. 4. The plaintiffs-applicants shall comply with the following requirements(

1. a)lodge in Court the sum of £200.- (Two Hundred Pounds) deposit for any expenses which may bs incurredbytheMarshalinconnection withthecustody of the ship and her cargo whilst under arrest, subject to this sum being increased later on; (
2. b)lodgein Court any further amounl that the Registrar of this Court will askthe plaintiffs to pay with regard to the airest and failing to comply within six days therefrom from the demand, the order of arrest to be discharged; (
3. c)file a security bond in the sum of £75,000.- (Seventy Five Thousand Pounds) to be answerable in damages for the defendant ship, her owners and the owners of the caTgo. 5. Warrant of arrest not to be drawn up and executed until and unless the plaintiffs comply with sub-para (
4. c)of para 4 hereinabove. 20 25 6. The Marshal is required to report to this Court by the latest at9.30a.m. on the22ndJanuary, 1980with regard to the arrest of the ship and the cargo, and probable costs to be incurred in connection with such arrest. 7. This case is fixed for the 22nd January, 1980 at 9.30 a.m.incaseit isdecidedto showcauseagainstth? confinuance in force of the order of arrest madi today exparte. 8. Question of costs reserved". The warrant of arrest wasissued on the basis of an affidavit 30 sworn byMr. Pavlos Kakopieros, an advocate in the law office of counsel for the plaintiffs. The plaintiffs, in compliance with term 4(
5. c)of the above order,fileda bank guarantee in the sum of C£75,000.- and on the 18th January, 1980,the defendants pul up bail in the form 35 of a bark guarantee for £200.- as a result of which the ship and the cargo were r-.Ieased. The ship failed away and the cargo, after it was unloaded, was sold by defendants No. 3. 5 Demetriades J. Breidi &Another v. Ship "Gloriana"

(1982)On the 13th February, 1980, defendants No. 1 and on the 1lth February, 1980, defendants Nos. 2 and 3, that is after the ship and the cargo were released, filed oppositions to tru application for tru isuie of the warrant of arrest. These oppositions were supported by affidavits sworn by Mr. Slavros Pissarides on behalf of defendants No. 1and Mr. Hans Seidenschnur, on behalf of defendants Nos. 2 and

1. 5 Awarrant of arrest is issued byvirtue of rule 50of the Cyprus Admiralty Jurisdiction Order, 1893, which provides:"
2. In an action in rem any party may at the lime of, 10 or at any lime after the issue of the writ of summons, apply to the Couit or a Judge for the issue of a warrant for tile arrest of property. The parly so applying shall bjfore making his application file in the Cour. an affidavit containing Hie particulars 15 prescribed by the following rules. Such applicauon shall be in writing signed by the person making the application or his advocate and shall be filed by the Registrar. The aiiidavit may be inthe Form Cin Schedule 1 hereto". 20 Mr. Hadjiloannou, counsel for the defendant ship, in his able address subnmied thai k is not necessary, at ihis stage of the proceedings, for the COUA lo go into ihc merits of the case in order io decide whether the warrant of arrest ought to have been issued. It is sufficient, he said, if the plaintiffs prove 25 a prima facie case. Going through our case-law, it appears that in deciding whether the Admiralty Court will issue a warrant of arrest, it is not necessary, at that stage, to go into the merits of the action and decide whether the plaimiff s factual or legal conicn- 30 lions are right or wrong, it suffice if ii isfound that the plaintiff has a right to have those issues tried (sec Rigas v. The ship li BAALBECK\

(1973)1 C.L.R. 159, 163). This, in my viuw, is the b^st and safest course to follow or, elsu, ihe Court, before deciding on this matter, will have to 33 hear the whole case of the plaimiff or defendant on a counterclaim, inwhich casellu:wholeconcept ofiheissueofthewatrant 6 1 C.L.R. Breidi & Another v. Ship "Gloriana" Demetriades J. of anest, which is an emergency measure, would b2 defeated. This view is supported by the following extract from the judgment of Willmer J. In the case of Schwarz & Co. (Grain), Ltd. v. St. Elefterio ex Arion (Owners), [1957] 2All E.R. 374, 377, 5 which reads: 10 15 20 25 30 35 . "If counsel for the defendants is right in saying that a plaintiff has no right to arrest a ship at all, unless he can show in limine a cause of action sustainable in law, what is to happen in a case (and, having regard to the argument I have listened to, this may be just such a case) wheie the questions of law raised are highly debatable, and questions on which it may be desired to take the opinion of the Court of Appeal or even of the House of Lords? Suppose, for instance, followiug the argument of counsil for the defendants, that this Court comes to the conclusion, on the preliminary argument held at this stage of the act'on, that the action is not one that is sustainable in law, it will presumably set asidethe writ and the warrant of arrest. It is possible (these things have been known to happen) that a higher Court might take a different view; but in the meantime the ihip, which is a foreign ship, has been freed from arrest, has gone, and may never return to this country. It might be thai inthose circumstances the plaintiffs would have lost their right for ever to entertain proceedings in rem in this country. The fact is, and ihis is the sanction against abuse, lhat the plaintiffs, if their alleged cause of action turns out not to bs a good one, will be held liable for costs, and those costs will include the costs of furnishing bail in order to secure the release of the ship. The defendants can always secure the release of their ship by the simple expedient of furnishing bail. It is perfectly true that if, as they say it will, the action fails, they will probably nol recover inter partes the whole of the costs of furnishing the bail; but in that respect I do not know that they are in any different position from other defendants in other types of action". Turning to the last remark of Willmer J. it must be born in mind that the plaintiffs have already filed a bank guarantee 7 Demetriades J. BrebU &. Another v. Ship "Gloriana"

(1982)inthe sum of C£75,000.-assecurityfor the claim in the action against the ship, her cargo and defendants No.

1. It feel that, for the purposes of myjudgment, it is necessary toset out hereinunder thoseparts of the affidavit of Mr. Kakopieros that led to the issue of the warrant of airest: 5 "
2. Plaintiffs opened an irrevocable documentary credit No. DC224in favour of GRUNDIG AG (above defendants No. 3) for Deutch Marks 3,710.
4. Thisletter of Credit-wasvalid untilthe4.1.1980inclusive and the defendants No. 3 undertook to supply the 10 following documents: A. Commercial invoice madeout inthe name of Ordeiers in 5copies signed by the Seller, including an original copy certified by the Chamber of Commerce. The invoice must bear the following attestation: 'we certify that this invoice is authentic, that it is the only one issued by us for the goods described therein. That shows their exact value without any deduction. We declare also that the origin of the goods is exclusively W. Germany'. B. Full set 'clean on board' Bills of Lading issued to the order of Banque d* Affaires Franco-Arabe S.A. showing freight payable at destination. Notify: MM. Eddy Breidi and Roger Dagher Destination: Beirut 33+9,3 8, 54—, '
5. 15 20 25 C. Certificate of origin issued by the Commerce in 2 copies. D. Certificate of weight in 2 copies. E. Packing list in 2 copies; F. Letter addressed to Banque d' Affaires Franco-Arabe .:0 S.A. Paris issued by beneficiaries certifying that the sets are in accordance with specification (Pal-Secam decoder). G. Trucks consignment not issued in the name of Banque d* Affaires Franco-Arabe S.A. Paris showing: 8 35 1 C.L.R. Bretdi A Another τ. Ship "Gloriana" Demetriades J. Destination: Ravena free zone in Transit mentioning freight prepaid and the L/C number. Notify: Ramar-Ravena-Via Trieste 48-TransporteT Panalpina. 5 H. Undertaking from Panalpina to deliver the goods to Ramar at Ravena free zone only against full set clean on board bill of lading issued to the order of Banqued' Affaires Franco-Arabe S.A. showing freight payable at destination. 10 Notify: MM Eddy Breidi and Roger Dagher-Beirut Destination: Beirut free zone in Transit: Freight charges from-free German border' up to five arrival Ravtna 'Free Zone' are payable at sight tobene­ ficiaries in excess of L/C amount on presentation of documents on the base of max. DDKM1.925,—per container-not to exceed 42 containers totalling DKM 80.850,—max. and against justificative docs. 15 Evidencing the Shipment of the Following goods; 3.024 Televisions as follows: -324 PCSSC823 Metat DKM 1.198—DKM 387.504,- 20 25 5

(1)Plaintiffs by a contract of affreightment for the carriage of above goods agreed with defendants No. 1 and/or her owners and/or her charterers and/or her agents to carry 42 containerscontaining3.024T.V. Sets (20 footer) from Ravena (Italy) to Beirut Lebanon freight payable at destination. 5

(2)In fact 42 containers with 3.024 T.V. Sets weie loaded on defendant ship at Ravena, Italy, to be earned to Beirut,.and this cargo is still on board. 30 35

1. Thedefendants No. 3failed togiveto Banqued' Affaires Franco-Arabe S.A. Paris the certificate that the T.V. sets are in accordance with specification (Pal Se-CAM Recorder) and without this Certification these goods could not be sold in Lebanon and this was part of the agreementfor thesaleof T.V. sets andas aresult of their failure to givs the relevant certificate to the Bank the Letter of. Credit expired on the 4.1.
2. 9 Demetriades J. Breidi & Another τ. Ship "Gloriana"

(1982)(

1. i)this Court has nojurisdiction to try such dispute and (
2. ii)under no circumstances can the defendant 1 be drawn into such dispute or be involved in such dispute or bear the consequences of any breach of any contract between third persons to which they are not a party. 5 In the circumstances I verily believe that the defendants 1 shipwas wrongly joined asdefendants andwas wrongly arrested. 10 3. The true facts of the case as far as defendants 1 are concerned are as follows: (
3. i)On or about the 22.12.1979 the defendants 1 ship received on board at Ravena 42 containers said to contain T.V. sets and issued on the instructions of 15 the owners-shippers, i.e. defendants 3, Bill of Lading No. 20 (which on the instructions of shippers wa» later cancelled) photocopyof which is attachedheieto marked exhibit 1 and delivered same lo the ownersshippers. 20 (
4. ii)The said B/L No. 20 evidenced a contract of carriage between the defendants 1 and the holder or indorsee of the Bill of Lading for the carriage of the goods from RAVENA to Beirut-Lebanon. (iii) When the ship arrived at Beirut theshippers informed the owners of the ship that they were still the holdeis of the Bill of Lading and asked themnot to discharge the cargo. 25 (
5. iv)On the 13th January, 1980 the shippers demanded by telex, photocopyof whichis attachedheretomarked 30 exhibit 2, that the cargo be carried to Limassol and undertook to pay theextra freight. When the owners of defendants 1 were convinced that the shippers were still the holders of the Bill of Lading the ship sailed for Limassol. 35 (
6. v)On arrival at Limassol on the 16.1.1980 the shippers defendants 3 duly authorised attorney one Hans 12 1 CUR. 5 10 15 20 Brddi A Another τ. Ship "Gtorlana" Demetriades J. Buttner produced the three original Bills of Lading No. 20 and by letter dated 16.1.1980 photocopy of which is attached hereto marked exhibit 3, requested their cancellation and theissue of newBills of Lading amended as per the aforesaid lettei. The new bills of Lading were duly issued with the following parti­ culars: Consignee order: National Bank of Greece Nicosia or Mr. H. Buttner. Notify address: Mr. Nicos Prastitis Nicosia Port of discharge: Limassol Freight and other charges payable at destination USD 168000.00 Onthepaymentof theabovefreight andonthe production of thesenew Billsof Lading andtheinstructions of Mr. H.Buttnerwe as agents of theship issued our delivery order in thename of Messrs. E.N.Prastitis & Co.Ltd. on the 16.1.80 and the shipcommenced discharging operations whence it was arrested by order of the Court'*. Mr. Seidenschnur, on behalf of defendants 2 and 3, swore, amongst others, the following: 25 "3. Itis mybelief thatthe ownershipinthecolour television sets, thesubject matter of the present proceedings(here­ inafter called the said goods) has always been and still vested in defendants No. 3 and the plaintiffs had no right to claim themunless and untilthey discharge their obligations under the terms of the sale, which in fact they failed to do. 30 4. I am advised and veiily believe that the defendants 3 have agooddefence in the present proceedings andthat the plaintiffs' claim is unfounded. 35 7. Inthe circumstances,even if theplaintiffs aie successful in the present proceedings, the plaintiffs will be entitled only to damages which they can easily recover against defendants 3 who are certainly in a position to satisfy any judgment debt under the present proceedings. No irreparable damage could have possibly been caused to 13 Demetriades J. Breidl & Another v. Ship "Gloriana"

(1982)the plaintiffs if the said ship 'GLORIANA' and its cargo were allowed to leave the jurisdiction of the Court". Neither of the defendants, after the evidence of Mr. Anid, called evidence, affidavit or oral, to contradict his allegations. From the above, it is abundantly clear that the plaintiffs have a right to have the issues raised by the evidence of Mr. Anid tried, hence they were entitled to have the ship and the goods laden on her arrested. 5 Although my above finding disposes of the case put up by the defendants in opposition, it is, I feel, necessary to decide 10 a further issue raised in these proceedings, namely what is the proper procedural step that a party has to take when he seeks the release of arrested properly or of ihe security he has put up foi the release of vhe property. All the defendants, after their property was arrested, put up security for its release and by doing so the arrested property was substituted by the bail. In my view, rule 50,which I have already quoted above, gives an absolute right for the arrest of property oncethe Court is satisfied that there are issues that have to be tried between the parties. 15 20 The release of the properties involved in this action was effected by virtue of the provisions of rule 60 of the Cyprus Admiralty Jurisdiction Order, 1893, which reads:"60. Any party may apply to the Court for the release of any property arrested and the Court or Judge may, by 25 order, direct the release of such property upon such terms aJ to security or asto payment of any costs of appraisement or removal or inspection or otherwise as to the Court or Judge shall seem fit." It is clear from the woiding of rule 60 and, in particular, 30 of the words "any party may apply to the Court for the release of any property arrested", which appear also in the Rules of the Supreme Court in England, Order 75, rule 13

(4)and in Halsbury's Laws of England, 4th ed., Vol. 1, p. 256, para. 385, that the party wishing to havethe release ofthe property arrested 35 must apply to the Court and it is upon him to prove that he is entitled to the release. 14 1 C.L.R. 5 Breidi & Another v. Ship "Glorlana" Demetriades J. In myview, a party claiming the release of arrested property or thedischarge ofbail put upfor therelease of such property, can only succeed if he can prove that the plaintiff's claim or the defendant's counterclaim isfrivolous and vexatious. Similarly, since the arrested property is substituted by the bail, it is upon the party seeking its release to apply to the Court. In the present case, the defendants have failed to apply to theCourt for the discharge ofthebail they have put upfor the release of thevessel and the cargo and for this reason I cannot 10 order the release of the bail. For all the above reasons, the oppositions of the defendants aredismissedandthebailput upbythedefendants shallremain in force until the final determination of the action. The costs of these proceedings shall be costs against the 15 defendants, to be assessed by the Registrar. Application dismissed with costs. 15