clr/1987/1987_1_627.pdf

(1)The ambit of a Mareva Injunction has not been extended to anything outside the Jurisdiction Its object is to 627 S u n o l l B u n k e r i n g v.J a o u h a r M a r i t i m e

(1987)preserve asseib including ship within the jurisdiction n>eiiribiflihe plawinttto proceed to execution when the a i d g m c n i < i th»· Ο mrt is giv*< in hft ' d ^ o u It cannot be issued against a ahip which is outside i h e j i i n s d i c t i o n Ihis ι» a discretionaa order The Court Sdiscretion should not be ? M rcised m vain and should not h e extended-to assets ouiside umtdietto») at such an enact 5 w o u l d be at leasi difficult to enforce

(2)The ship «JAOUHAR» is outside ihejurisdii i m n d t u n k n o w n plat c m i h e w o r l d It may naturally b e sailing f r o m portto p o r t In v i ^ w o f t h e fOn. g o i n g i h f said ship is not within the assets foi which a Mareva Iniunction may be issued

(3)T h e shares are again b e y o n d the ambit nt the u b j e t t ot marewi 10 Injunction The shares cannot be charged this is a lacuna in our L a w relating to execution of a judgment or order directing payment of money The sale of shares of a c o m p a n y in execution of such a ludgment is indeed almost impossible under the relevant legislation Application dismissed 15 Vo order as loro-./s Cases referred to Polish Ocean Lines and Others ν Spyropoulos and Others XX (Part II) C L R ρ 73 Μ &eΜ Transport Co Ltd ν Fiena Astikon Leotonon I emesou Ltd 20 l l O S M 1C I R 60S Nippon Yuwn Kaisha ν Karageorghis [1975) 1 All V R 2K2 Mareva Compania Naviera S A ν International Bulkcamers S A [ 1 9 7 5 ) 2 L l o y d s Rep 5 0 9 Allen and Others ν Jambo Holdings Ltd andOfne/5119801 2 A I I F. R 502 Nemitsas fndustnes Ltd ν S &S 25 Maritime Lines Ltd and Others

(1976)1 C I R 302 Grade One Shipping <CnosII.

(1976)Consolidated Co Ltd (No 1) ν The Cargo on Board the Ship 1C L R 323 Glass Works L \nother{l977) ' pnan Seaways Agencies Another {\(U7) ! > Γκ, ι,,',, Γ <leShipping Co Ltd and 1 C I R 44 1CLR I '• 165 628 ' '· •/'· · Shipping Co Ltd and 30 1CX.R. Sunoil Bunkering v. Jaouhar Maritime London andOver.seas (Sugaii Co and Another ν TempestBay Shipping Co Lid and Otheist WS\ I C L R 367 Consiantmideiv M.ikuyioighoti and Another

(1978)1 C L R 585 Esse*OveitPd* Iι-ade Son'ice* Ltd ν The Legent Shipping Co Ltd and 5 Afiof/ie/0981) 1 C L R263. RenaK[\im\ I All ΕR 397 Clipper Maritime Company of Monrovia ν Mineral Import-export (The -Mane Leonhaidt· |1*>K11 2Lloyd sRep458 Botteghiv Bolt Head Navigation Company Ltd

(1985)1 C L R

1. 10 Compania Portuguese* De Transpoils Maritime of Lisbon v. Sponsalia Shipping Co Ltd (1987} I C L R
2. Pastella Marine Co Ltd ν National Iranian Tanker Co. Ltd

(1987)1 C L R 583 Application. 15 Application foran interim injunction restaining the defendants from selling, mortgagingorinanywaydisposing ortransferingthe shares inthe ship Jaouhar. or mortgaging, alienating or otherwise dealing with the saidvessel until the hearing ofthe presentaction. X Xenopoulos with L. Kalogerou, forplaintiffs - applicants Cur. adv. vult. 20 STYLIANIDES J. read thefollowing decision.The Plaintiffsare a registeredcompany. Thedefendantsare anon-resident shipping company registeredin Cyprus and functioning from here withthe authority ofthe Central Bank. Thedefendant 2 is aship, o w n e d by defendants 1 25 The plaintiffs by this action claim US$23,721.50. amount due and owing for necessanes or fuel and/or material supplied and rendered tothedefendant ship forheroperation or functioning at the portofCarL. ,ena and atthe port ofBordeaux atthe request of the defendants 30 The plaintiffs on the date that the writ of summons was issued filed ex parte application, whereby they pray for an interim injunction «restraining thedefendants from selling, mortgagingor in any way disposing or transferring the shares therein, or mortgaging, alienating or otherwise dealing with the vessel 629 StyllanldesJ. SunoilBunkeringv.JaouharMaritime

(1987)'JAOUHAR' untiltheheanng of thepresent Action or until further order of the Court» The application isbased on s 32 of the Courtsof Justice Law 1960 (No 14/60) theCyprus Admiralty Junsdiction Order 1893 Rules 51-56. 203 204 205 237 andthe Civil ProcedureRules 5 The facts relied upon as set out in the affidavit sworn by the manager of the plaintiff-applicant company are On/or about 13/7/87 and 30/7/87 at the ports of Cartagena and Bordeaux the plaintiffs at the request of the defendants supplied them with fuel oil at the price of US$23 721 50 The 10 defendants failed topaytheaforesaid amount oranypart thereof The plaintiffs would have been entitled toa warrant of arrest of the ship, had the ship been within the jurisdiction but the ship is outside the junsdiction The ship is registered in Cyprus The defendants 1 have within the jurisdiction only a share capital of 15 ceiooThe respondents are a non-residentCyprus shipping company operating by virtue of permitissued tothem by theCentral Bank. all theirdealings are allowed to be done in foreign currency To the best of the knowledge and belief of the deponent, the 20 respondents -defendants 1 are negotiating the sale of their said vessel to foreigners If such alienation takes place, all the money and thesalepnce may be paidabroad, andtheplaintiffs will suffer irreparable loss and injustice will follow The application is based on s 32 of the Courtsof Justice Law 25 Thisisineffect a replica of s 37 of theCourtsof Justice Law, 1953 (No 40ofl953,Cap 8ofthe 1959editionoftheLawsofG —is) Thisstatutory provision which empowers theCourttogrant an interlocutory injunction was taken from s 45

(1)of theJudicature Act of 1925, which virtually reproduceds 25

(8)of theJudicature 30 Act of 1873 The pnnciples upon which the junsdiction of the Court is exercised under s 32 of the Courts of Justice Law, 1960 (No 14/60) isthesame as in England unders 45 of theJudicature Act of 1925 (Polish Ocean Lines and Others ν Spyropoulos and ' Others,XX(PartII)C L R,p.73) 630 35 1 C.L.R. Sunotl Bunkering v. Jaouhar Maritime Styllanides J. In Μ & Μ Transport ^o Ltd ν Etena Astikon I ofonon Lemesou Ltd ,

(1981)1C LR 605, atρ oObitwas saiu - 5 10 15 20 25 30 35 40 «The interlocutoryinjunction was granted unders 32 of the Courts of Justice Law. 1960 (Law No 14/60), the relevant part of which reads as follows'32 1 - Subject to any rules of Court every Court, in the exercise of its civil junsdiction. may. by order, grant an injunction (interlocutory,perpetualor mandatory)orappoint a receiver in all cases in which itappears tothe Courtjustor convenient so to do, notwithstanding that no compensation orotherrelief is claimed or granted together therewith Provided that an interlocutory injunction shall not be granted unless the Court is satisfied that there is a senous question to be tned at the hearing, thatthere is a probability that the plaintiff is entitled to relief and that unless an interlocutory injunction is granted it shall be difficult or impossible todo completejustice ata later stage' The pnnciples governing the grant of an interlocutory injunction, because of the wording of the proviso tos 32

(1)follow closely those formulated inPreston ν Luck, [1884] 27 Ch D 497, so a party asking for an mtenm injunction must show thatthere isasenous question tobe tried attheheanng and thatonthefacts before theCourtthereisaprobability that the plaintiff is entitled to relief in contrast to the pnnciples adopted by the House of Lords in the Amencan Cyanamid Co ν Ethicon Ltd, [1975] 1 All ΕR 504, where they discouraged evaluation, at this stage, of the probabilities of success (Acropol Shipping Co Ltd and Others ν Petros I Rossis,

(1976)1C LR 38,Nemitsas Industries Ltd ν S &S Manttme Lines Ltd andOthers,

(1976)1C LR 302 Karydas Taxi Co Ltd ν Andreas Komodihs,

(1975)1 C L R 321 Constanhmdes ν Maknyiorghou and Another,

(1978)1 C L R 585) When the above requirements are satisfied, the Court must proceed to examine whether the balance of convenience favours the grant or refusal of the interlocutory relief sought Inbalancing mattersrelevant toconveniencean important consideration centres round the need to preserve the status quo By th expression 'preservation of the status quo' we mean the position prevailing when the defendant embarked on the activity sought to be restrained (The 631 StyllanidesJ. Sunoi nkeringv.JaouharMarlrjme

(1987)Cyanamid case;Smith and Othersv. InnerLondon Education Authority, [1978]1 AllE.R.411; Bryanston FinanceItd.v.de Vries(No.2),[1976] 1 AllE.R.25).» In The Polish Ocean Lines case (supra tin-· Suprt'ni·· Court relying on the English Case Law and a passage in Kerr on 5 Injunctions, 4th Edition, page 2, decided that an interlocutory injunction is merely to preserve the property in dispute in statu quo until the hearing of further order; and that a defendant could notbe restrained byinterlocutory injunction from disposingofhis property not thesubject matter ofthe action before anyjudgment 10 had been entered against him.Thiswasthe predominant judicial opinion inEngland untiltheNippon YusenKaishav. Karageorghis [1975] 3 All E.R., 282, in which itwas held that an interlocutory injunction could be granted ex parte pending trial restraining the defendant from disposing of any assetswithin thejurisdiction. 15 InMareva Compama NavieraS.A. v.InternationalBulkcarriers S.A. [1975]2 Lloyd'sRep. 509,LordDenningafter commenting on a number of authorities, had thistosayatpage510:«In my opinion that principle applies toa creditor who has a right to be paid the debt owing to him, even before he has 20 established hisrightbygettingjudgmentforit.Ifitappearsthat the debt is due and owing - and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment -theCourthasjurisdiction inaproper casetogrant an interlocutory judgment so as to prevent him disposing of 25 those assets. Itseems to me that this isa proper case for the exercise of this jurisdiction. There is money in a bank in London which stands in the name of these time charterers. The time charterers have control of it.They may at any time dispose ofitorremove itoutofthiscountry.Iftheydoso,the 30 shipowners may never gettheir charter hire.The ship isnow onthe highseas.Ithaspassed CapeTown on itswaytoIndia. Itwillcomplete thevoyageandthecargodischarged.Andthe shipowners may not get theircharter hireatall.Inface ofthis danger, I think this Court ought to grant an injunction to 35 restrain the defendants from disposing of these moneys now inthebankinLondon untilthetrialorjudgmentinthisaction.» The last case gave its name to what has become known as ' Mareva Injunctions. 632 ) 1 C.L.R. 5 Sunoil Bunkering v. Jaouhar Maritime Stylianides J. The English Case Law followed ascorrectthe Karageorghis and the Mareva Compama Naviera decisions for the grant of interlocutory injunctions and extended it to cases where theobject of the order sought was not limited to money (Allen and Others ν Jambo Holdings Ltd and Others [1980] 2 All Ε R 502) Our s 32 in regard to interlocutory injunctions came under judicial interpretation in a number of cases in Nemitsas Industries . Ltd ν S & S Maritime Lines Ltd and Others

(1976)1 C L R 302 restraining foreign defendants from withdrawing any money It) from their bank account within the jurisdiction (See, also, Grade One Shipping Co Ltd . (No 1) ν The Cargo on Board the Ship 'Cnos IV

(1976)1 C L R 323. Consolidated Glass Works Ltd ν Friendly Pale Shipping Co Ltd, and Another

(1977)1 C L R ρ 44, Cyprian Seaways Agencies Ltd . ν Chaldeos Shipping Co . 15 Ltd and Another

(1977)1 C L R 165. London and Overseas (Sugar) Co and Another ν Tempest Bay Shipping Co Ltd and Others

(1978)1 C L R 367, where Malachtos J . following the Consolidated Glass Works Ltd .(supra) held that «The application of s 32 should not be readily extended so that to cover assets other 20 25 than cash money and especially any dealing with a ship or any share therein» Loizos Constantimdes ν Gregonos Maknyiorghou and Another

(1978)1 C L R 585 where an appellate bench of this Court reviewed the authorities on the subject but not in relation to ships Reference may also be made to the case of Esse\ Overseas Trade Services Ltd ν The Legent Shipping Co Ltd and another

(1981)1 C L R 263, in which case a Mareva Injunction was refused In England in the Rena Κ [1979] 1 All Ε R 397, Brandon J at page 417 summed up the position as follows - 3'ι 35 «The power of the High Court to grant Mareva injunctions under s 45 of the Supreme Court of Judicature (Consolidation) Act 1925 has been established by a series of recent decisions of the Court of Appeal culminating in Rasu Mantima S A ν Perusahaan Pertambangan Mmyak Dan Gas Bumi Nagara (Pertamiana) [1977] 3 All Ε R 3 2 4 Further the House of Lords, while reserving the question of the correctness of those decisions, was prepared to assume the existence of the power, m pnnciple, for the purpose of its decision in The Sishna [1977] 3 All Ε R 803 633 StyHanldeaJ. SunoflBunkeringv.JaouharMaritime

(1987)A Mareva Injunction is granted in a case where a plaintiff has brought an action here against a foreign defendant, and the latter has money or chattels within thejurisdiction which. ifhe were not prevented from doing so, he would be free to remove out of thejurisdiction before the plaintiff could bring the action to trial, and, if successful, obtain and enforce a judgment against him.» 5 AMareva Injunction wasgranted inClipperMaritime Company of Monrovia v. MineralImport -export (The 'Marie Leonhardt') [1981]2 Lloyd's LawReportspage 458 for the defendants assets 10 including aship which were within the jurisdiction. Mareva Injunction under s. 32 is limited to assets within the jurisdiction. In Botteghi v. Bolt Head Navigation Company Ltd.,

(1985)1 C.L.R. 114, the jurisdiction of this Court to grant a Mareva 15 Injunction for a ship not within the jurisdiction, but flying the Cyprus flag and owned by the company registered within the jurisdiction was considered. The ambit of Mareva Injunction was notextended toanythingoutsidethejurisdiction.A.Loizou,J.had 20 thistosayat page 124:«Ihave not,however,beenabletotraceanyauthoritytothe effect that aship notwithin thejurisdiction but registered and owned bya companyregisteredwithinthejurisdiction can be the subject of a Mareva Injunction, under a provision corresponding to section 32 of our Courts of Justice Law 25 1960. By their very nature ships sailing from port to port naturally incur liabilities that may render them the subject of arrest, appraisement and sale and other encumbrances in other jurisdiction. In such circumstances an injunction may not be of any effect vis a vis such claimants with different 30 priorities. Bearing in mind that the jurisdiction of a Court in grantingsuch remediesshouldnotbeexercisedinvain,Ihave come to the conclusion that even if the registration and ownership of a ship could be the subject of an injunction under section 32 of the Law, I would not be prepared to 35 exercise my discretion ifIhad one,ingrantingsame.Iwould therefore refuse the present application to the extent that is based on the said section.» 634 1 C.L.R. Sunoil Bunkering v. Jaouhar Maritime StyiianJdes J. The object ot the Mareva Injunction is to preserve assets •Deluding ship within the jurisdiction to enable the plaintiff to proceed toexecution when thejudgment of the Courtis givenm his favour Itcannotbe issued against a ship which is outside the 5 jurisdiction This is a discretionary order The Court's discretion should not be exercised in vain and should not be extended to assets outside jurisdiction as such an order would be, at least difficult to enforce (See. also. Compania Portuguese de TransportesMaritime of Lisbon ν Sponsaha Shipping Company 10 ' Limited

(1987)1CL R 11 Pastella Manne Co Ltd. ν National IranianTankerCo Ltd Civil Appeal 7380 notyet reported)* The ship «JAOUHAR» is outside the junsdiction at unknown place intheworld Itmay naturally be sailing from port toport In viewof the foregoing thesaid shipisnotwithintheassets forwhich 15 a Mareva Injunction may be issued The applicants pray for restraining the defendants from alienating mortgaging etc . of 100 shares This asset is again beyond the ambit of the object of Mareva Injunction The shares cannot be charged thisisalacunam ourLaw relatingtoexecution 20 of ajudgment or order directing payment of money The saleof shares of a company in execution of such a judgment is indeed alriiost impossible underthe relevant legislation Forall theafore reasons thisapplicationis dismissed Noorder as to costs 25 Applicationdismissed withno orderas tocosts Reportedm

(1987)1C LR 583 635