1987 Apnl 29 ILORIS J ] NATIONALIRANIANTANKERCOMPANY LTD , Plamtiffs-Apphcants, ν PASTELLAMARINECOMPANY LTD , Defendants-Respondents {Application inAdmiraltyAction No 212/86) Admiralty -intenm order • The Merchant Shipping (Registration of Ships Sales and Mortgages) Law 45/63 - Section 30 - -Any person interested· - Includes not only persons interested in the ship herself but also creditors and claimants of damages against the owners of the ship - Departure from pnnciples laid down by cases decided by Court of co-ordinate junsdtction 5 Injunctions - Interlocutory injunctions - The Civil Procedure Law Cap 6 - Sections 4 and 9 - Restraining dealings with a ship - Relevant order cannot begranted in this case thereunder as the ship was no longer the subject matter of the action Injunctions - Interlocutory injunctions - The Courts of Justice Law 14/60 - Section 32 • Mareva injunction - History and development of the doctnne - Doctnne applicable in Cyprus as developed in England until 1981, when the Supreme Court Act, 1981 was enacted in England - Said Act not applicable in Cyprus Section 29 of Law 14/60 Equity 10 Doctnne of -Applicable in Cyprus in virtue of section 29 of the Courts of Justice Law 14/60 15 Injunctions - Intedocutory injunction - Like all injunctions an interlocutory injunction is the offspnng of equity The claims of the plaintiffs in this case are in reality a claim for damages for breachofcontract,whereby thedefendantsagreedtoselltothe plaintiffstheir ship «BURMBAC BAHAMAS,and a claim for the return of the U S $905,000 deposit, 2 0 which, in accordance with the said contract,the plaintiffshad lodged with the defendants' solicitors in London The ship is registered in Cyprus and is the only asset of the defendant company Upon ex parte application, based on sections 4 and 9 of Cap 6, section 30 of Law 45/63, section 32 of Law 14/60 and rules 203 to 212 and 237 of the Cyprus 2 5 Admiralty Junsdiction Order, 1893, the plaintiffs obtained an intenm order restrainingthe defendantsfromselling,mortgaging or otherwise alienatingthe said Cyprus ship for a penodof three months asfrom the day of the order On the day, 120 1 C.L.R. IranianTanker v. Pastella when the said order was returnable defendants opposeditand asaresult thecase was eventually heard whilst fromtime totime the penodoftheorderwas extended until the day when the judgmentof the Court was delivered The mam question for determination was whether in the light of all the matenal 5 before the Court the interlocutory order granted as aforesaid could be so granted under the said or any of the said legal provisions Held making the interlocutory determination of the action injunction absolute pending the final
(1)As it isclear that the plaintiffshave renouncedthe contracttobuy the ship in 10 question the ship is not anymore the subject matter of the action notwithstanding that claims (
- a)a n d (
- c)of the action refer t o possession and ownership of the ship transfer of ownership and delivery of possession of the same It follows that the interlocutory injunction could not be granted under ss 4 and 9 of the Civil Procedure Law Cap 6 15
(2)The Court of Appeal has left entirely open the issue of to what extent and in what circumstances «a creditor» would be entitled to obtain an order under s 30* of Law 45/63 Having given the matter anxious consideration this Court decided to depart from the pnnciples laid down in a number of cases of Courts of co ordinate jurisdiction startingfrom thecase of Tokio Manne and Fire Insurance Co 20 Ltd ν Fame Shipping Co Ltd
(1976)1 C L R 33 to the effect that the term «person interested» in the section means «a person having an interest in the ship itself. The words «anyinterested person,are quitecieai and uitonib^^uc-c - c c i " 3 n n construction They must apply according to their literal meaning It is arbitrary lo 25 construe themasmeaning aperson having an interest in the ship herself If thatw.aa the intention Of the legislator he could have omittedthe word «any.(παντός) and added«a person interestedin the ship. The phrase «any interested person,covers not only persons having an interest in the ship herself but also creditors and claimants ofdamages against the owners oftheship Itfollows that the interlocutory 30 injunction in thiscase couldbegrantedunder the saidsection The initial order was for a specified penod as provided by the section
(3)Section 3 2 of L a w 14/60 was applied in some way as section 45 of the Supreme Court o f Judicature (Consolidation) Act, 1925 was applied a n d on the basis of which Mareva injunctions were granted in England 35 T h e interlocutory injunction, which like all other injunctions is the offspnng of equity, was k n o w n to the L a w of England from o l d times being exercised o n the basis o f the Lister ν Stub [1890]4 5 C h D 1 [1886-90]All Ε R Rep 797 line u p to 1975, when the Mareva line was introduced by case law This line is not something new, but the evolution of the interlocutory injunction 40 and only its name, after the vessel Mareva, marks the n e w era of evolution Such e v o l u t o n continued ever after 1975 being extended by case law from •Quotedatp 129post 121 Iranian Tanker v. Pastella
(1987)«forogn babed defendants with assets in England» to «defendan* out of the junsdrction but with assets inFngland»and thenonwards in 1980 tocover «a defendant who isnotaforeigner or isnotforeign based inanysense of these terms and also «preventing an aircraft horn being removed out of the lurwiiction» The doctnnes of equity are applicable in Cyprus mvirtue of section 29 of Law 14/60 As at present advised there is no provision in any law which is repugnant tothedoctnneof Mareva injunction which isthe evolution of the interlocutory injunction exercised in virtue of the Supreme Court of JudicatureAct 1873 andsubsequently invirtue of section 45 oftheSupreme 1 0 Court of Judicature (Consolidation) Act 1925, ι e long before the establishment of the Republic It follows that the Marevadoctrine and itsevolution up to 1981,when the Supreme CourtAct 1981 was enacted(thisAct isnotapplicable in Cyprus) isapplicable inCyprus Inthe light of thematerial before thisCourt,itisclear thatthere isa senous question tobe tnedatiheheanng tnatthereisaprobability thatthe plaintiffs are entitled to relief, and that bearing in mind that the defendants have no other asset except thevesselinquestion, itshall be difficult, ifnot impossible to do complete justice at a later stage, unless an interlocutory injunction is granted
(4)Inthecircumstancesitisjustandconvenientthattheinterlocutoryorder given ex parte andwhich could be granted both unders 30 of Law 45/63 as wellas section 32 of Law 14/60 onthe Marevalineshould continuein force pending the final determinationof theaction 15 20 «-5 Orderaccordinglywith costs againstrespondents-defendants Casesreferredto Sophoclis Mamas and Co ν CarlF W Borgwardand the CharteredBank of Nicosia,J 9 6 2 C L R 209, 30 CyprusPalestinePlantationsν Olivierand Co ,16 C L R 122, Eastern MediterraneanMantime Ltd ν Nava Shipping Co Ltd
(1975)5 J S C 666, VerolmeDockand ShipbuildingCo Ltd ν LamantShipping Co Ltd
(1975)11 J S C 1618, Tokio Manne and FireInsurance Co Ltd ν Fame Shipping Co Ltd
(1976)1 C L R 33, 122 35 1 C.L.R. Iranian Tanker v. Pastella GerlingKonzem Allgemeine VersicherungsA G. (No.1) ν TheShip*Dimitrakis* andAnother{\976) 1 C L R 385. London andOverseas Co v.TempestBayShipping
(1978)1CLR. 367; 5 Algemeen VrachtkantoorB.V, andOthersν Sea Spnnt Navigation Company Ltd
(1976)1C.L.R 368; Botteghi v.BoltHeadNavigation
(1985)1CLR 114; 77ieShip *GeorghiosC* andAnother ν Mutsui SugarLtd andAnother
(1976)1 C L R 105: 10 Reederei SchulteandBrunsBaltic etc.ν IsmmiShipping Co Ltd.
(1976)1 CL R. 132; Re Cushla Ltd. [1979]3All E.R.415. Barclay-Johnson v. Vui//[1980] 3All ΕR 190; 15 Rasu Maritima SA ν PerusahaanPertambanganMinyakDan Gas BumiNegara (Pertaminaf and Government of Indonesia(as interveners)
(1977)3 All Ε R 324; AllenandOthersv. Jambo HoldingsLtd. andothers[1980]2AH E.Ri 502. LsterandCo. ν Sfubos{1890] 45Ch D.1:[1886-90]All E.R Rep 797: NemitsasIndustnesLtd.v.SandS MantimeLinesLtd. andOthers
(1976)1 C.L Κ 302 20 Application Application for an order of the Court prohibiting the defendants, their servants or agents from selling, mortgagingor otherwisealienating theship«BURMBACBAHAMAS» L.Papaphilippou, fortheapplicants-plaintiffs 25 P.Sam'siv/f/iMChrisfodou/ou.forrespondents-defendants. Cur.adv. vult. LORISJ. readthefollowing decision. Onthe25th September 1986 the plaintiffs filed AdmiraltyActioninpersonam, under No. 212/86claiming: 123 Loris J . IranianTanker v. Pastella
(1987)(
- a)A declaration of the Court that they are entit'ed to the possession and ownership of the ship "BURMBAC BAHAMAS" fully classedunder thetermsand conditionsof aMemorandumof Agreement dated 4thAugust 1986. 'hj damages forbreach of contract. 5 (c)An order directing the Defendants totransfer the ownership and deliver possession of the said vessel to the plaintiff fully classed. (d)Interest at 12%p.a. from 4th August 1986 (e)Costs. 10 On the same day the plaintiffs filled an ex-parte application praying for: Aninterlocutory orderprohibiting the defendants theirservants and or agents, from selling, mortgaging or otherwise alienating the Cyprus Ship «BURMBAC BAHAMAS» for a period of nine 15 monthsorforsuch othertimeastheCourtmay specify. Theaforesaid ex-parte application wasbasedonsections4and 9 of the Civil Procedure Law, Cap.6, section 30 ofthe Merchant Shipping (Registration of Ships,Salesand Mortgages) Law, 1963 (Law 45/63), s. 32 of the Courts of Justice U w No. 14/60 and 20 Rules 203 to 212 and 237 of the Cyprus Admiralty Jurisdiction Order, 1893. The ex-parte application in question was supported by an affidavit sworn onthesamedaybyacertainSimosPapadopoulos, an employee of the firm of advocates representing the plaintiffs; 25 the following facts, interalia, arestated therein bythe affiant: «(
- a)According to the records of the Registrar of Cyprus Ships the defendant company isthe registered owner of the ship 'BURMBAC BAHAMAS',a tanker built in 1975, of 126,468.62 grosstonnage (104,442 nettonnage.) (
- b)In virtue of a memorandum of agreement dated 4th August 1986 (A photo-copy of which is attached to the affidavit together with appendices and marked ex. SP1) the defendants agreed to sell the said ship to theplaintiffs at the 124 30 1 C.L.R. IranianTanker v.Pastella Lorfa J. price of U.S.$9,950,000. (
- c)Pursuant to the terms and conditions of ex. SP.l, the plaintiffs have lodged with the solicitors of the defendants a ten per centof thesale price i.e. U.S.$905,000. 5 10 15 (
- d)The defendants have failed under clause 14 of exhibit SP. 1 to deliver the vessel in the mannerand within the time inS.P.I provided. (
- e)The vessel was in fact out of class and for this reason Messrs Berwin Leighton (the London Solicitors of the ρlaintiffs-applicant) sent to-day (25.9.86) a telex to the defendants. (This telex is attached to the affidavit and it is market ex. SP2 - I shall have the opportunity later on in the presentdecision torefer tothenatureandeffect ofthistelex.) (f)There is a fear that the defendants will sell, mortgage or alienate thesaid ship and suchrisk,as advised isimminent. (g)According to my investigations the said ship is the only asset of the Defendants.» This ex-parte application was urgently placed before me on 25.9.86 at 1.45 p.m.; after considering same in the light of the 20 *rrnmpanying affidavit with the exhibits aforesaid appended thereto, and the address of counsel appearing for the ex-parte applicant, I have granted the interlocutory injunction applied for,. limitingthetimeof itsdurationtothreemonthsfrom thedateofthe order. " " 25 30 On 3.10:86, the date on-which the said-order-was-returnable- ._ — counsel for respondents-defendants appeared and opposed same; it was directed by this Court that the opposition be filed within the next 15 days and the hearing thereof was fixed on 26.11.1986. Inordertocompletethepicturethefollowing may be added: On 15.10.1986 counsel for the defendants appeared in the main action under protest stating that he will be filing an application with a view to setting aside the service of the writ on thedefendants. Itwas directedthatsuch anapplicationbe filed by 35 thedefendants within a month from 15.10.86. 125 Lori· «I. Iranian Tanker v. Pastella
(1987)The opposition of the respondents to the continuance of the interlocutory order was notfiled asdirected; itwas belatedly filed on 14.11.1986; it was accompanied by an affidavit in support sworn by leading counsel appearing for the defendant Co., namelyMr.PolakisSarris. 5 On the same day (i.e. 14.11.86) the defendants filed an application praying for: (a)Anorder stayingfurther proceedings inthismatter «due tothe fact that any disputesbetween thepartiesbyvirtue ofa special condition in their agreement dated 4.8.86... must be 10 referred toarbitration» and (
- b)An order setting aside «the service and/or the writof Summons in the present proceedings due to the fact that all proceedings and/or the writ of Summons is contrary to an explicit provision of their agreement dated 4.8.86, and 15 especially section 15 which provides that all disputes should be referred to arbitration.» The plaintiffs opposed this application. On 25.11.86 the respondents filed a supplementary affidavit swom byMr.Sarris,withoutfirstobtaining theleave ofthe Court, 20 in relation to their opposition in the continuance of the interlocutory injunction. Owing to the fact (
- a)that objections were raised by the applicants-plaintiffs as to the filing of the opposition of respondents outoftimeand thefiling ofasupplementary affidavit 25 on25.11.86, i.e.justthe daybefore the hearing ofthe opposition tothe continuance ofthe interlocutory injunction, (
- b)that I had to sit in an urgent Appeal, the application in connection withthe interlocutory injunction wasadjourned tothe 24.1.87;on thesame timetheinitialorderfor3monthswhichwas 30 expiringon25.12.86wasextended uptothe31stJanuary, 1987. On 28.11.86 on the oralapplication of counsel for defendantsrespondents, counsel for the plaintiffs-applicants consenting, I refuted thehearinginconnection withtheinterlocutory injunction on 18.12.1986. 126 35 1 CLR. Iranian Tanker v. Pastella LorU J. On 29.11.86 respondents filed an application for leave of this Court with a view to covering their delay in filing the opposition and the filing of the supplementary affidavit of 25.11.86; such leavewasgranted with the consent of the Plaintiffs on 8.12.86. 5 On 18.12.86 the hearing of the application commenced; on notice given earlier by the plaintiffs Mr.Sarris took the oath and wascross-examined inconnection withtheaffidavits swornbyhim inopposition. Unfortunately hiscross-examination wasprotracted duetothefactthattheaffiant wasveryslowinansweringquestions 10 as he had to go through huge bundles of documents connected with his affidavits. On occasions in order to answer relevant questions he had to consult some of his files which were not in Court. (He isthe Secretary of the defendant company).And Ihad toallowbreaks in order toenable him totrace such files. 15 The hearingwas repeatedly adjourned and I had toextend the interlocutory injunction pending the determination of the application. During the period that the hearing in connection with .the interlocutory injunction wasbeing continued the defendants filed 20 a supplementary affidavit s«'nm by Mr. Sarris on 21.1.87, to his affidavit of 14.11.86insupportofdefendants' application forstay ofproceedingsalreadyreferred toabove.Theplaintiffs on 26.1.87 filed an application with aviewtosettingasidetheaffidavit ofMr.' Sarrisof21.1.87assame wasfiled withoutleave. 25 On 2.2.87th~e~defendants~prior to the commencement.of the__ continued hearing inconnection withtheinterlocutory injunction, withdrewtheirapplication of 14.11.86forstayofproceedingsand the setting aside of the writ of summons in the action and as a consequence thereof thecontroversialaffidavit ofMr.Sarrisdated 30 21.1.87wascarriedawayandtheplaintiffs withdrewtheirrelevant application of 26.1.1987. When the evidence given by Mr. Sarris viva voce was concluded, on the application of both sides Ihave directed the filing of written addresses which arenow inthe fileand finally on 35 4.3.1987 Iheard oral clarifications by counsel on both sides on matterswhich Iconsidered necessary. 127 Lorte J. Iranian Tanker v.Pastella
(1987)Ihave originally fixed the 27th March 1987 for the deliveryof the present decision but unfortunately for reasons beyond my control appearing on record, which I need not repeat, I was unable to prepare my decision in time, something for which I would like to express my regret, so I had to adjourn for today 5 extending the time of the interlocutory injunction accordingly. As already stated on 25.9.86 upon the ex-parte application of the plaintiffs-applicants an interlocutory injunction restraining dealings with the ship was granted; the period of the duration of the injunction aforesaid was initially fixed for three months and 10 after the respondents-defendants opposed the making of the ordertheduration ofthe interlocutory injunction wasextendedtill the present day. Ishall now proceed to examine in the light of all the material before me whether the interlocutory injunction granted could be 15 so granted under Sections 4 and 9 of the Civil Procedure Law, Cap.6,s.30oftheMerchantShipping(Registration ofShips,Sales and Mortgages) Law 1963 (Law45/63), and s.32 of the Courtsof Justice LawNo. 14/60: (A) UnderSections 4and 9of the CivilProcedure Law, Cap. 6 20 . Although claims(a)and (c)of theaction refertopossession and ownership of the ship and transfer of ownership and delivery of possession of same, yet itwasabundantly clear throughout from exh.SP2 thatthe plaintiffs have renounced theagreement tobuy theshipasthedefendants failed todeliverthevesselinthemanner 25 and within the time specified in exhibit SP
- The Claim of the plaintiffs was therefore in damages and the return of the 10% of the sale price they have lodged with the solicitors of the defendants. Itisclear therefore, that the shipinquestion was not anymore the subject matter of the action; therefore an 30 interlocutory injunction could notbe granted under ss.4 and 9of the Civil Procedure Law Cap.
- (Vide in this connection the JudgmentofourCourtofAppealinSophoclis MamasCo., v, Carl F.W. Borgward and the Chartertered Bank of Nicosia, 1962 C.L.R. 209,where the decision in Cyprus PalestinePlantations v. 35 OlivierandCo., 16C.L.R. 122givenbytheCourtofAppeal ofthe former Colony ofCypruswascited with approval). 128 1 C.L.R. IranianTankerv.Pastella Lori. J . (B) Under section 30 ofthe MerchantShipping (Registration of Ships, Sales and Mortgages,Law 1963 (Law 45/63) Section30 readsasfollows: 5 10 «The High Court may, if the Court thinks fit (without prejudice tothe exercise ofanyotherpower oftheCourt),on the application of any interested person make an order prohibiting for a timespecified any dealing withaship orany sharetherein, andtheCourtmaymaketheorderonanyterms orconditionsthe Courtmaythinkjust,ormayrefuse tomake the order, or may discharge the order when made, with or without costs,and generally mayact inthe case asthe justice of the case requires;and theRegistrar, without beingmade a partytotheproceedings,shallonbeingservedwithan official copythereof obeythe same.» 15 This section received judicial interpretation in a number of cases.With the exception of twocases Icould trace, which were decided by the Full Bench of this Court on Appeal (reference to them will be made later on in the present decision) all the remaining cases were decided by Judges of this Court sitting 20 alone intheAdmiraltyJurisdiction.ThusinthecaseoftheEastern Mediterranean MaritimeLtd. v.NavaShipping Co., Ltd
(1975)5 J.S.C. 666, where the applicants brought an action against the respondents claiming damages for wrongful withdrawal of their vessel from the service of the plaintiff and for breach of a charter 25 party it was decided J)y my brother Malachtos J. that the application of s. 30 of Law 45/63 should not be limited to cases where the applicant has a proprietary or beneficial interest in a ship but it should be given liberal interpretation so as to cover caseswhere a person isgenerally interested. 30 Inthesubsequent case of Verolme Dock and Shipbuilding Co. Ltd. v.LamantShipping Co.Ltd(l975) 11J.S.C. 1618,the same Courtdecidedthatsection30coverscasesofmerecreditorsofthe ownersof aship. Inthe case of the Tokio Marineand FireInsurance Co. Ltd. v. 3 5 Fame Shipping Co., Ltd.
(1976)1 C.L.R. 33, Malachtos J. after elaborating at length on the safne topic reconsidered his stand 129 Lorl· «I. IranianTanker v. Pastella
(1987)taken inthe aforesaid two cases stating verbatim: «Imustsaythatitseemstomethatininterpretingsection 30 oftheLawinboththeNavaandtheLamanfcases.1wenttoofar inholding that section 30appliesalsotomerecreditorsof the ownersof theship»(videp.340ofthereport-lines 17-20)and 5 mylearnedbrotherconcluded«Iamnow,thereforeoftheview thatsection30oftheMerchantShipping(RegistrationofShips, Sales and Mortages) Law 1963, does not apply to mere creditorsorclaimantsofdamagesagainsttheownersof theship andthat'interestedperson'inthissectionmeansa personwho 10 isinterested intheshipherself.Hemaybealegateeorheirora creditor..» Thislatter line of construction placed on section 30 of Law45/ 63 was followed by the same Judge in Gerling Konzem AUgemeine VersicherungsAG. (No.l) v. The ship *Dimitrakis»& Another
(1976)1 C.L.R.385,(aclaimforthevalueofcargowhich was destroyed or damaged by the fault or neglect of the defendants whilston board the defendant ship)where itwasheld thattheplaintiffs werenot«interestedpersons»withinthe meaning ofs.30. The sameline of reasoning wasfollowed inthecase of London & Overseas Co. v. Tempest Bay Shipping
(1978)1C.L.R.367by Malachtos J. In the case of Algemeen Vrachtkantoor B.V. & Others v.Sea SpiritNavigationCompany Ltd{1976)1 C.L.R.368 mybrother A. Loizou J. discharged the initialinterlocutory Order 25 under s. 30 of Law45/63 on the ground that the applicant wasa mere creditor and could not be considered as an «interested person» within the ambit of s. 30 of the Law. In discharging the Ordertheteamed Judge added:«Needlesstosaythatthearrestof the ship does not make the applicants 'interested persons' within 30 themeaningofsection30ofthelawasclaimedinthiscase...»(vide p. 377 of the report lines 11-13). Inthe recent case ofBotteghi v.Bolt Head Navigation
(1985)1 C.L.R. 114, (a claim for the sum of £175,564 Italian lire for materials and/or spare parts supplied to the defendant 2 ship) A. 35 LoizouJ. although subscribing fully totheconstruction placed on s. 30 by Malachtos J. in the above cited cases, granted an 130 15 20 1 C.L.R. IranianTankerv.Pastella Lorla J. interlocutory injunction restraining dealings with the defendant No. 2 ship under s. 30 of Law 45/63 basing his order «on the narrowground...whichstemsfrom thefactthatthedefendant ship had escaped from lawful arrest effected on the strength of a 5 wan-ant issued by a Court, apparently having jurisdiction in the matterand inthe circumstances the applicants canbe considered as having an interest in the ship in the sense of section 30 of the Law.»(videp. 122of the report- lines32-38). This much concerning construction placed by Courts of co10 ordinate jurisdiction, on section 30 of Law 45/63. As Isaid earlier in the present decision 1 could trace only two cases decided on Appeal concerning section 30 of Law 45/63. They are: (a) TheShip 'GeorghiosC andAnother v.MitsuiSugarLtd.and 15 Another
(1976)1C.L.R.
- In the above appeal the decision of a Judge of this Court refusing todischargetheinitialinterlocutoryinjunction grantedexparte wasaffirmed, butthefinal ordermade bythetrialJudgewas varied so as to limit its application for «a time specified» as 20 expresslyprovided bys.30 of Law 45/
- " The Court ofAppeal clearlystressed the following inthe above appeal:«... asour case-law is, inthisrespect, stillintheprocessof developing, weleave entirelyopentheissueoftowhatextentand in what circumstances a creditor, such as the respondents in the 25—present case, would-be-entitled.to.obtain an order under section 30...» (b)Reederei Schulte and Bruns BALTIC etc v.Ismini Shipping Co., Ltd.,
(1976)1C.L.R. 132. Inthisappeal the order of the trialJudge dischargingthe initial 30 Order granted ex-parte was affirmed. ThelearnedPresident ofthisCourtindeliveringthejudgment in theaforesaid appealstated interaliathat«ourown case-lawasnot yet fully defined thesituationsinwhichan orderundersection 30 may be made in the exercise of the relevant discretionary 3 5 powers...» (videp. 135of the report). 131 Lorls J. Iranian Tanker v. Pastella
(1987)It is clear from the cases cited above that our Court of Appeal has left entirely open the «issue of to what extent and in what circumstances a creditor...» would be entitled to obtain an order under s. 30 of Law 45/
- The remaining decisions cited above, are decisions of my brethren of co-ordinate jurisdiction. Having given the matter anxious consideration Ipropose to depart {Re Cushla Ltd [1979] 3 All E.R. 415) from the principles laid down orginally in the case of Tokio Marine and Fire Insurance Co. Ltd. v. Fame Shipping Co. Ltd (supra) and followed thereafter in the remaining first instance decisions. 5 The wording of section30 isclear andunambiguous. It enables the High Court (now the Supreme Court under Law 33/64) to make an order prohibiting for a time specified any dealing with a ship... on the applicationofanyinterestedperson {the underlining is mine). 10 15 The words «any interested person» are quite clear and unambiguous. They need no construction.They must be applied according totheirliteral meaning;andthisisafortiori so ifwe read the relevant part of the Greek text of the Law which was enacted by our House of Representatives (The Greek text is the original) 20 which provides as follows:«Κατόπιν αιτήσεως παντός ενδιαφερομένου π ρ ο σ ώ π ο υ » . With respect, it is quite arbitrary to construe «any interested person» so as to convey the meaning «of a person having an interest intheship herself». Ifthe legislator wanted toeliminate its 25 meaning he could do so by omitting «any»and adding «a person interested intheship». I holdtheviewthat«any interested person» covers not only persons having an interest in the ship herself but also creditors and claimants of damages against the owners of the ship. Assuming that a ship is worth three million pounds. We shall protectan heiroralegatee whohasasmall share intheship worth £10,000.-, and we shall refuse the protectionafforded by s. 30 to a creditor, say a company which has effected repairs on the ship amounting to £500,000? or is it just to refuse protection to a 35 claimant,say thedependantsof adeceased sailor who hasmethis 132 30 1 C.L.R. Iranian Tanker v. Pastella Lorls J . death on the ship due to the negligence of the owners thereof in providing safe appliances on board the ship, when such dependants would be entitled to £100,000 or £150,000 damages? 5 Havingdealtwiththelegalaspectinconnection withs.30ofthe Merchant Shipping (Registration of Ships, Sales and Mortgages) Law 1963 (Law45/63) and having held asIdid, bearing in mind the facts which have been explained earlier on in the present decision towhich Ishallmakefurther reference when dealing later 10 on with s. 32 of Law 14/60, I hold the view that the interlocutory injunction granted could be sogranted unders.30 of Law 45/
- Ishould perhaps repeat that the initial order was for a specified period asprovided bys.30and Iwasobliged toextend itpending the determination of the present proceedings for reasons already 15 stated earlier on. I shall now proceed to examine whether the interlocutory injunction grantedcouldbesogranted unders.32oftheCourtsof Justice Law 1960 (LawNo. 14/60). 20 (C) Under Section 32 of the Courts of Justice Law 1960 (Law No. 14/60) The aforesaid section readsas follows: 25 30 «32.-
(1)Subject to any Rules of Court every Court, in the exercise of its civil jurisdiction, may, by order, grant an injunction„(interlocutory, perpetual ormandatory) or appoint a receiver in all cases in which itappears to the Court just or"" convenient so to do, notwithstanding that no compensation orotherrelief isclaimed or granted together therewith: Provided that an interlocutory injunction shallnotbe granted unless the Court issatisfied that there isa serious question to be tried at the hearing, that there is a probability that the plaintiff is entitled to relief and that unless an interlocutory injunction is granted it shall be difficult or impossible to do complete justice ata laterstage. 133 Lorl* J. Iranian Tanker v. Pastella
(1987)
(2)Any interlocutory order made under subsection
(1)may be made under such terms and conditions as the Court thinks just, and the Court may at any time, on reasonable cause shown, discharge orvary anysuch order.
(3)If it appears to the Court that any interlocutory order 5 made under subsection
(1)was applied for on insufficient grounds, or ifthe plaintiff's action fails, orjudgment isgiven against him by default or otherwise, and it appears to the Court that there was no probable ground for hisbringing the action, the Court may, ifitthinks fit, on the application of the 10 defendant, order the plaintiff to pay to the defendant such amount as appears to the Court to be a reasonable compensation to the defendant for the expense and injury occasioned to him bythe execution of the order. Payment of compensation under thissubsection shallbe a 15 bar to any action for damages in respect of anything done in pursuanceoftheorder;andanysuchaction,ifbegun, shallbe stayed bythe Court insuch manner and on such termsasthe Court thinksjust.» Thissection of our Lawwasapplied insome way assection 45 20 oftheSupreme CourtofJudicature(Consolidation)Act1925was: on thebasisoftheActof 1925Mareva injunctions weregrantedin England. The first thing which I havetoconsider isthe nature and extentofMareva Injunction inthecountryofitsoriginandthenext question iswhether same isapplicable inCyrpus. 25 The basisof MarevaJurisdiction hasbeen explicitlystated inan admirable waybySirRobert MegarryV.C. inthe case ofBarclayJohnsonv. Yuill[1980]3AilE.R. i90whereatp. 193ofthereport the following were stated verbatim: «The Mareva jurisdiction takes its name from Mareva 30 Compania NavieraSAv. International BulkcarriersSA
(1975)[1980] 1 AllE.R. 213,[1975]2Lloyd'sRep509,acasewhich concerned the vessel Mareva: Ishall callit'the Mareva case', Its immediate precursor was Nippon Yusen Kaisha v. Karageorgis [1975]3 AllE.R.282, [1975] 1WLR 1093.Both 35 aredecisionsoftheCourtofAppeal onex-parteapplications, and in both cases injunctions of the type now sought before J34 1 C.L.R. 5 10 15 20 25 30 35 Iranian Tanker v.Pastella Lorls «I. me were granted against foreign defendants who had assets within thejurisdiction. I think thatitis the Mareva case which hasgiven itsnametotheinjunction because intheearlier case the court had not been referred to Lister & Co. ν Stubbs [1890] 45 Ch.D.l, [1886-90] All E.R. Rep. 797 or any of the other cases in that line which pointed in the opposite direction, and it was in the Mareva case that the Court of Appeal held that, notwithstanding those authorities, the injunction should be granted. Therearethustwo linesof authority. First,thereistheLister & Stubbs line. In broad terms, this establishes the general propositionthatthecourtwillnotgrantaninjunctiontorestrain a defendant from parting with his assets so that they may be preserved in case the plaintiff's claim succeeds. The plaintiff, likeothercreditorsof thedefendant,mustobtainhisjudgment and then enforce it. He cannot prevent the defendant from disposing of his assets pendente lite merely because he fears that by the time he obtains judgment in his favour the defendant willhave noassets against which thejudgment can be enforced. Were thelaw otherwise, theway would lie open to any claimanttoparalyse theactivities of any person or firm against whom he makes his.claim by obtaining an injunction freezing theirassets. Of course,thedue exercise of thecourt's discretion would exclude flagrant abuses: but the disruptive peril to commercial activities might be grave. This refusal to grant injunctions was well-settled law before 1975: see Siskina (Cargo owners) ν Distos Compania Naviera S.A fl"977]"3"All E.R7803"aT828 [ί979]"ΑΧΓ210 aT260 perLoFd" Hailsham; and see thePertamina case [1977] 3AH E.R. 324at 332, [1978] QB644 at659 perLordDenningMR(Thecorrect name of this case, even omitting the name of the party intervening, is Rasu Maritima SA ν Perusahaan Pertambangan Minyak DanGasBumiNegara,butinmercyto all I impose a short title by reference to the name of the company concerned). Furthermore, this doctrinewas, as itis now, apower todo so in all cases inwhich itappeared tothe courttobejustorconvenienttodoso:see theSupremeCourt of Judicature (Consolidation)Act 1925, s 45
(1). 135 Lorls J. I r a n i a n Tanker v. Pastella
(1987)The other line of authority is of course the Mareva line This was based on the statutory language that I have just mentioned and itshows thatin certain circumstances itisjust or convenient to grant such an injunction The question is what those circumstancesaie Inthe Sishna case [1977] 2All 5 ER 803 at829 [1979] AC210 at261 LordHailsham referred to foreign based defendants with assets in England In the Pertammacase [1977] 3 All ΕR 324 at333 [1978] QB644 at 659 Lord Denning MRreferred io a defendant who is out of the jurisdiction but has assets in this country The contrast is 10 with those who are within the jurisdiction of the court and have assets here, (see the Pertamma case [1977] 3 All Ε R 324 ast 332 [1978] QB 644 at 659 per Lord DenningMR)a phrase which in Chartered Bank ν Daklouche [1980] 1 All Ε R 205 at 209 [1980] 1W LR 107 at 112 Lord Denning 15 MR explained as meaning cases where the defendants 'were permanently settled here and had their assets here' He added 'if adefendant islikelytoleave Englandatshortnotice a Mareva injunction may well be granted » And thenoble Lord proceeded intheaforesaid case tohold«
(1)20 that it is no bar to the grant of a Mareva Injunction that the defendant is not a foreigner, or lS-not foreign-based, in any sense of thoseterms,
(2)thatitisessential thatthereshould be areal nsk of the defendant's assets being removed from the junsdiction in such away as tostultify anyjudgment thattheplaintiff may obtain, 25 and
(3)that,indetermining whether there issuch ansk, questions of the defendant's nationality, domicile, place of residence and many other matters may be material to a greater or a lesser degree »(vide ρ 195 letter c- d) In the case of Rasu Mantima SA ν PerusahaanPertambangan 30 Minyak Dan Gas Burnt Negara (Pertamma) and Government of Indonesia (as interveners) [1977] 3 All ΕR 324 which may be citedwiththe shorttitleas Pertamma caseLordDenningMRin his nistoncal and comparativesurvey which commencesat ρ 331 of the reportand furtherdowninexaminingthe presentlaw pp 332, 35 333 and 334 makesitclearthatthisnew procedurewas knownto the Law of England from old times and the Supreme Court of Judicature Act 1873 as well as the Supreme Courtof Judicature 136 1C.L.R. Iranian Tanker v. Pastella Lorls J. (Consolidation) Act 1925 mark the evolutionary process of the Injunction which is the offspnng of equity In the case of Allen and others ν Jambo Holdings Ltd and others [1980] 2 All ΕR 502 Mareva Injunction was granted 5 preventing an aircraft from being removed out of thejunsdiction It was held in the aforesaid case that there was no difference in pnnciple between commercial actions and actions for personal injuries or other causes of action inregard to theissue of Mareva Injunction nor was the issue of Mareva Injunction to be 10 determined solely by a plaintiff s financial standing, in each case theissueof aninjunction depended onthebalanceof Justiceand convenience It is clear from the cases cited above that the interlocutory injunction - which like all other injunctions is the offspnng of 15 Equity - was known to the Law of England from old times being exercised on the basis of the Lister ν Stubbs line (supra) up to 1975 when the Mareva line was introduced by case law The Mareva line is notsomething new itis simply theevolution of the interlocutory injunction and only its name - after the vessel 20 Mareva marks the new era of evolution Such evolution c^ntinnpd even after 1975 being extended by case law as above from 'foreign based defendants with assets in England to «defendant who is out of the jurisdiction but has assets in this country» and then onwards in 1980 tocover «a defendant whoώ 25 notaforeigner, orisnotforeign-based inanysense oftheseterms» and also «preventing an_aircraft from being removed out of the junsdiction» "~ TheSupremeCourtAct 1981 was enactedinEngland whereby the evolution of theMareva injunction by case law was embodied 30 ins 37
(3)of the Act Of course the Supreme Court Act 1981 is not applicable in Cyprus Butthedoctnnesof equity are applicable here invirtueof s 29 of our Courts of Justice Law (Law No 14/60) the relevant part of which reads as follows 35 «s 29 -
(1)Every Court 137 shall apply Lorls J . IranianTankerv.Pastella
(1987)(c)The common lawandthe doctrinesofEquitysaveinso far asotherprovision hasbeen madeorshallbemadebyanylaw made or becoming applicable under the Constitution or any lawsaved under paragraph (b)ofthissection inso farasthey arenot inconsistent with,or contrary to,the Constitution;» Asatpresent advised Iam notawareofanyexistingprovisionin any law saved by Article 188 of our Constitution or in any law enacted by our House of Representatives, which isrepugnant to the'doctrine of Mareva injunction which isas already stated the 10 evolution of the interlocutory injunction exercised invirtueof the Supreme Court ofJudicatureAct1873and subsequently invirtue of s. 45 of the Supreme Court of Judicature (Consolidation Act) 1925i.e. long before the establishment of our Republic in
- In view of the above Ihold the view that the Mareva doctrine 15 and its evolution through case law up to the enactment of the Supreme CourtAct 1981,isapplicable toCyprus;ofcourseIneed not repeat that the Supreme CourtAct 1981 isnot applicable. InCyprus the Mareva linewasfollowed inthe case of Nemitsas IndustriesLtdv.S&SMaritimeLinesLtd&others{l976)lC.L.R.
- This was an admiralty action in personam for £2,000 being an amount paid by the plaintiffs tothe defendants under two Billsof lading on account of the freight and charges, for the carriage of goods. The assets of the defendant were money;the learned trial 25 judge held that there was a reasonable fear that it may be transmitted out of the jurisdiction and granted an injunction restraining itsremoval from the Bank pending trialof the action. Inasmall number of other reported caseshere,theMarevaline was considered with scepticism and eventually Mareva Injunction 30 was refused whilstan interlocutory injunction under s.30 of Law 45/63was granted. Reverting now to the facts of this particular case: The picture now before me asitemerges from the affidavit sworn onbehalfof the applicants the affidavits sworn on behalf of the respondents 35 and the cross-examination of the Secretary of the Defendant 138 20 1 C.L.R. Iranian Tanker v.Pastella Lorls J . Company, is as follows The defendant Company, an off-shore company registered in Cyprus on3 8 86 agreed by virtue of Memorandum of Agreement (Ex SP1) dated 4 8 1986 to sell its only asset the tanker 5 "BURMBAC BAHAMAS" (Registered m Cyprus) to the plaintiff Company for the sum of US $9,950,000 The plaintiffs pursuant to terms of Μ Ο A lodged with the solicitors of the Defendant Company 10% of the purchase-money ι e U S $905.000 10 Itis the allegation of the plaintiffs thatthe Defendant Company failed under Clause 14 of Ex SP1 to deliver the vessel in the manner and within the time specified by the said exhibit The time of delivery of the vessel as stated in para 5 of Ex SP1 is as follows 15 "EndAugust/earlySeptember, with 15th September cancelling in Buyer's option" According to Ex SP2 the time of delivery was extended by agreement first tothe 19th September 1986 and subsequently to the 24th September 1986 with cancellation at buyers' option 20 Gn 25 9 86 ϊίικ ueiendonts hod net delivered ib<? WPSSPI to the plaintiffs and the plaintiffs addressed through their London Solicitors to the Defendants Ex SP1,a notice of cancellation On the same day plaintiffs filed the present action and application for interlocutory injunction Intheiraffidavit in support 25 of the application they mainTaih~tbaT"there~is~a"fear that-the Defendants will sell or alienate the said ship and such nsk as advised is imminent " Although the defendant company did not file an application with a view to setting aside the order (they have simply filed an 30 opposition for thecontinuanceof theinterlocutory ordergiven exparte) Ihave decided to treat their opposition as an application with a view tosetting aside the order Itwas the stand of the Defendant company from thetime of the filing of the opposition that the plaintiff company is to blame for 35 thebreach of thesaid agreement 139 Lorls J . Iranian Tanker v. Pastella
(1987)The Secretary of the defendant Company admitted in crossexamination (
- a)thattheonlyasset of the defendant companyisthe vessel in question (
- b)thatthe amountof US $905,000 deposited by plaintiffs η the name of the London Solicitors acting for thedefence isstill so deposited The answers of this witness on two important issues were very evasive The one issuewas in connectionwith thevessel being properly classed, the plaintiffs were alleginginEx SP2 thatthe defendants 10 failed to deliver a confirmation of class certificate from American Bureau of shipping under clause 18 of the ΜΟ A The witness did not know whether thevessel was "classed" or not, atthe date ithad to be delivered, he added thatwhat he knew was "thatthe vessel had been bombed and this event was known to both 15 parties " The other issue on which the witness could notgive a definite answer was about anapplication for the deletionof the vessel from the Cyprus Registry He was asked repeatedly and inspite of the fact that he said he would be producing such an application he 20 failed to doso atthe adjourned heanng In thisconnection itwas puttohimthatonthe 25th September 1986 at3 00 ρ m the defendants attendedthe Consul of Cyprus in England for the deletion of thevessel from the Cyprus Registry and that had itnot been for the injunction thevessel would have 25 been deleted from the Cyprus Registry of Ships The witness denied such an allegation and added that"if there willbe any deletion such deletion willhave theeffect of the vessel been transferred tothe ownership of the plaintiffs." Ineed not go further intothe facts of this case Suffice itto say 30 that I am satisfied thatthere isasenous question tobe tried atthe heanng, that there is a probability that the plaintiff is entitled to relief and in this connection it must be remembered that the plaintiffs apart from the damages which they may be entitled to recover they have deposited with the defendants almost a million 35 140 1 C.L.R. IranianTanker v.Pastella Lorls J . American Dollars which were not returned to them so far, and unless an interlocutory injunction isgranted itshall definitely be difficult ifnot impossible to do complete justice at a later stage, bearinginmindthatthedefendants havenootherassetexceptthe 5 vessel in question. Having already held that the Mareva line can be followed in Cyprussubject towhatIhavestatedearlierinthepresentdecision, Ihold theview that the particular facts of thiscase do warrant the grantingofan interlocutory injunction on thesaidline. 10 In the circumstances Iconsider itjust and convenient that the interlocutory ordergiven ex-parteshould continue inforce;asthe present interlocutoryordercouldbemadebothunders.30ofLaw 45/63 as well as under s. 32 of our Courts of Justice Law 1960 (Law No. 14/60), Ido hereby order that the interlocutory order 15 granted ex-parte and thereafter extendedtillthe present day, be continued pendingthe final determination of the action. Respondents-Defendants to pay the costs of this application incurred bytheir opposition tillto-day. Coststobeassessed bythe Registrar. Order accordingly 141