1C.L.R. 1987February16 [A LOIZOU J ] COMPANIA PORTUGUESA DETRANSPORTES MARITIMEOF LISBON, Plaintiffs, SPONSALIA SHIPPING COMPANY LIMITED, Defendants (AdmiraltyAction No 44/87) 5 Provisional order—Admiralty action in personam—Application for an order restraining defendants fromalienating, chargingordisposingof theirinterest inaship under Cyprusflag, but not within thejunsdiction—Section 30of the Merchant Shipping (Registration ofShips and Mortgages)Law 45/63—The term 'interest inthe ship*does not include mere money claims—Mareva injunction—Section 32 of the Courts of Justice Law 14/60—Such an injunction cannot beissuedagainstashipnot withinthe junsdiction—Section 4 ofthe CivilProcedureLaw,Cap6—Itisnot applicablewhen the property inquestionisnotthe subject—matteroftheaction 10 Marevainjunction—See provisionalorder ante Practice—Exparteapplication—Respondent takingpartinproceedings—Modern practice—Utilityof process 15 20 25 Words and Phrases 'Interest inaship»insection 30 of the Merchant Shipping (Registration ofShips and Mortgages) Law 45/63—A mere money claimis notwithinthe ambit ofthe term The liquidating committeeofthe plaintiffs, a company duly registeredin Portugal, invited tenders for the sale of the company's ship ΜV «BAILUNDO· Itwas, however, specified that the pnce would not include > «bunkers andunused lubncahngoils which willbe acquired by buyers atnet marketpnce» The defendants purchased thesaid vessel and registered same intheir name undertheCyprus flag,but,asthey failed topay thesumofΡ Escudos 5,978,914500, whichwas claimedasbeingthevalue ofthesaidbunkersand oils, theplaintiffs brought thepresent action inpersonam,claiming the said amountandeventually appliedexparteforaprovisionalorderrestrainingthe defendants from alienating,charging orinanyway disposing oftheirinterest inthesaid ship untilfinal determinationoftheactionoruntilfurtherorder 11 Companla Maritime v.SponsaHa Shipping
(1987)The application wasbased onsection 30 ofLaw 45/63, section 32ofLaw 14/60,and section 4ofCap. 6. Held, dismissing the application:
(1)The defendants, though not served withtheapplication, cametoknowofitandwerepresentatitshearing,taking part in order to assist the Court. This procedure has been described by Megany J. in *PickwickInternational Inc. (G.B.) Ltd. v. Multiple Sound Distributors Ltd and Another [1972] 3 All E.R. 384 as an opposed ex parte motion and has been commended upon and described as the «modem and verysensible practice.»
(2)Section 30 of Law 45/63 has been held to apply to claimsby persons having an interest in the ship itself, such as legatees, shareholders, heirs or creditorsbutnotmere creditorsorclaimantsofdamages.Thoughthecircleof claimants havingan interestintheshiphasnot been closed,itIsclearthatthe term «interest inthe ship»meanssomethingmorethan amere money claim, anordinary creditor'sclaim. 5 10 5
(3)Section 32 of Law 14/60 hasbeen Judicially considered on numerous occasions.Though a marevainjunction canbegrantedatagainstshipswithin thejurisdiction, itcannot be granted inthe circumstancesofthiscase,where the ship is out of the jurisdiction (MarioBotteghi SPA. v. Bolt Head Navigation Ltd. and Another
(1985)1 C.L.R. 114 at p.124 cited with 2 0 approval).
(4)The essenceofsection4ofCap.6isthatanorderthereunderIsgranted againstproperty «beingthe subject of the action.· Applicationdismissed with costs. 25 Casesreferredto: PickwickInternationalInc. (CB.)Ltd. v.MultipleSoundDistributorsLtd.and Another [1972]3AllE.R.384; MarioBotteghi S.P.A. v. Bolt Head Navigation Ltd. and Another
(1985)1 C.L.R. 114. Application. Ex parte application for a provisional order restraining the defendants from alienating, charging or inany waydisposingof their interest in the vessel «Bailundo L» until the final 12 30 1C.L.R. CompanlaMaritimev.SponaaliaShipping determination of the present action or until further order of the Court. C.K.Saveriades, fortheapplicants. Chr.Christofides, forL. PapaphiJippou, for therespondents. 5 Cur. adv. vult. A. LOIZOUJ. read thefollowingjudgment. Thisisanexparte application for «a temporary order restraining the defendants from: (a) alienating, charging or in any way disposing of their interestinthevessel«BAILUNDO L»untilthefinaldetermination 10 of the present action or until further order of the Court,(b)Any otherremedy ororderthehonourableCourtwould thinkjustand equitable.» Theexparteapplicationhasbeenmadeintheadmiraltyaction inpersonaminwhichtheplaintiffs' claimagainstthedefendants is 15 «(A) Payment of the sum of P. Escudos, 5,978,915.S00 or the equivalent inCyprus currency representing thevalue of bunkers on board defendants' vessel, M/V «BAILUNDO L» registered undertheCyprusflag,atthetimeofthedeliveryofthesaidvessel bytheplaintiffs tothedefendantsandwhichremainunpaidfor.(B) 20 Legal interest. (C)Costs oftheaction.» - The defendants though notserved with a notice or otherwise cametoknow of it, have been presentinthisexparteapplication andtookpartintheproceedings inordertoassisttheCourt.This procedure has been described by Megarry J., in Pickwick 25 InternationalInc(G.B.) Ltd., v.Multiple Sound DistributorsLtd., andAnother[197213AHE.R.384,asanopposed expartemotion andthenpointedoutthefollowing: 30 35 «Thefactthatthisisacontradictionintermsoughtnottobe allowed to obscure the utility of the process. The practice seems tobeofcomparatively recentorigin,thoughithasbeen pointed out to me that at least to some extent it may be a reversion toa procedure inthe early part of thelastcentury which, if not usual was at least permissible: see Acraman v. Bristol Dock Co.,
(1830)1 Russ & Μ321. The procedure supplements without supplanting, the former practice of moving ex parte,with theparty moved against being silently present and taking no part in the proceedings unless an injunction wasgranted,inwhichcasehethereuponmovedex 13 A.LoizouJ. CompanlaMaritimev.SponsallaShipping
(1987)parte to vary or discharge that injunction. Of course, if the party moved against isnot present he can similarly move ex partetovaryordischargetheinjunction whenhelearnsofit.» He then went on to explain the advantages and disadvantages of the procedure for the two parties and the Courts. It is commended and has been described as the «modern and very sensible practice.» 5 The application isbased on section 32 of the Courts of Justice Law 1960, section 30 of the Merchant Shipping (Registration of Ships and Mortgages) Law 1963, (Law No. 45 of 1963) and 10 section 4 of the Civil Procedure Law, Cap. 6 as well as on the relevant Rules of Court. Thefactsreliedupon aresetoutintheaffidavit filed andinsofar as essential for the determination of the issues in this application are these. The plaintiffs were a duly registered company in 15 Portugal and were the owners of M/V «BAILUNDO», now dissolved and under liquidation and the liquidating committeeof the above plaintiff company was given power to represent the company inand out of courtand towind-up the company assets. Publictenderswereinvitedforthesaleofthesaidvessel,theterms 20 of which were specified in the relevant Memorandum of Obligations. By Clause 7 thereof the sale of the vessel and the price paid for her would not include «bunkers and unused lubricating oils which will be acquired by buyers at net market price.» The defendants purchased the said vessel at the price of U.S.$410,000.- and registered same in their name under the Cyprus flag under the name of«BAILUNDOL». Itisclaimedthatthebunkersonboardthevesselwere estimated atP. Escudos5,978,914.S00 and therelevantinvoicewassentby 30 plaintiffs toMessrsJamesKawes&C.L.ofLisbonwhowereacting asagentsfor the defendants forthe purchase ofthevessel,whoin their turn by a letter, dated 6.5.86 sent the said invoice to the defendants for directsettlement of same,but the defendants have not paid to plaintiffs the said sum. By virtue of the above, the 35 plaintiffs contend that they have a lien on the above vessel for breach of contract, which givesarightforthe arrestand/or saleof the said vessel. However as the vessel is not within Cyprus Jurisdiction this isnot at present feasible. The defendants are the 14 25 1 C.L.R. Companla Maritimev.Sponsalla Shipping A.Lolaou J. registeredownersoftheabovevesselwhichistheironlyproperty and theyhave nobankaccount ormoniesoranyother property within the jurisdiction apart from the said vessel. Their share capital being C£100 only. They are a non-resident Cyprus 5 Shipping Company by virtue ot a permit given to them by the CentralBankofCypruswhichenablesthemtoselltheirsaidvessel freely with no restriction whatsoever, and such dealings are allowed to be made in foreign currency and there is no need whatsoever that any money oramount due orreceivable bythe 10 respondentswillcometoCyprus. Upon being served with the writ of summons of the present actionandasitisclaimedinanobviousattempttodefeat plaintiffs justclaim,thedefendantsappliedtotheRegistrarofCyprusShips for the deletion of the vessel «BAILUNDO L»from the Cyprus 15 Registry. Under the circumstances they verily believe that ifthe order applied for is not now granted the applicants will never receive any money or recover their losses, and will suffer irreparable losses, and consequently great injustice will be sustainedbythe plaintiffs/applicants. 20 Sections 30 and 32 have been judicially considered and interpreted innumerous decisionstowhich reference ismadein myjudgmentinMarioBotteghiS.P.A.,v.1. BoltHeadNavigation Ltd., 2. M/VMaranar,
(1985)1C.L.R. 114 and need not really repeatthem here.Section 30hasbeen allalongheldtoapplyto 25 claims by persons having an interest in the ship itself such as legatees, snareholders, heirs or creditors, but not mere creditors orclaimantsofdamages. Learned counsel for the applicants hasdrawn myattention to thefactthatthecircleofclaimantsfound tohaveaninterestinthe 30 ship,inthesenseofsection30oftheLawhasnotbeenclosedbut that ithasalwaysbeen left bytheauthorities tobeconsideredin the particular circumstances of each case. He further drew my attentiontothefactsofthiscase,ascapableofbeingconsideredas havingsuchaninterestintheship. 35 Right as he is in his submission Iam afraid he cannot derive assistancefrom thefactsofthepresentcaseasbringinghisclients claimwithintheambitof theterm «interest intheship»,whichto saytheleast,meanssomethingmorethanameremoneyclaim,an ordinarycreditor'sclaim. 40 As regards section 32, this Court had again on numerous 15 A.LolzouJ. CompanlaMaritimev.Sponsalla Shipping
(1987)occasionsjudicially interpreted itandtheauthonbesare referred tointheBotteghi'scase(supra)atpp 123, 124 «Mareva Injunctionswere grantedasregards goods aswell as moneywithinthejunsdiction,andthejunsdictionwas also applied toassets such as anaircraft as inthecase ofAllenv. 5 Jambo Holdings Ltd, [1980] 1Weekly Law Reports, 1252 and also where the defendants assets included a shipwithin thejunsdictionasinthecaseofClipperMaritimeCompanyof Monroviaν Mmerahmportexport (The 'Mane Leonhardt') [1981]2Lloyds Law Reportsρ458 » 10 TheMareva Injunctionhasbeengainingimportancebecauseof theinternational characterofcommerceandtheconstantcombat to protectclaimantsfrom fraud andcnme Itisadeveloping field of the law and though Mareva Injunctions can be granted as against ships within the junsdiction, Ido not think that Ishould 15 granttheorderappliedfor inthecircumstancesofthiscase Ishall onlyrepeatherewhat Isaid intheBotteghicase (supra)atp.124' «Ihave not,however,beenabletotraceanyauthontytothe effect thataship notwithinthejunsdictionbutregistered and owned by acompanyregistered withinthejunsdictioncanbe 20 the subject of a Mareva Injunction, under a provision corresponding to section 32 of our Courts of Justice Law 1960 By their very nature ships sailing from port to port naturally incurliabilities thatmay renderthemthesubject of arrest, appraisement and sale and other encumbrances in 25 other junsdiction In such circumstances an injunction may not be of any effect vis a vis such claimants with different pnonues Beanng in mindthatthejunsdiction of a Court in grantingsuchremediesshouldnotbeexercised invain, Ihave come to the conclusion that even if the registration and 30 ownership of a ship could be the subject of an injunction under section 32 of the Law, Iwould not be prepared to exercise mydiscretion if I hadone,ingrantingsame.Iwould therefore refuse the present application to the extent thatis based onthesaid section » 35 Ineed hardly deal with section 4 of theCivil Procedure Law, Cap.6 as the essence of section 4 is that it is granted against property«beingthesubject of theaction » Foralltheabove reasonstheapplicationisdismissed withcosts Application dismissed 40 with costs. 16