clr/1989/1989_1_314.pdf

(1989)1989Jun*21 [MALACHTOS J ) MICHAELMOURTZINOS, Plaintiff, ν THESHIP«GALAXIAS», Defendant (AdmiraltyActionNo 198/88) Admiralty —Arrestofship upon exparte application— Conditionasto bailing out the ship by payment into Court of 18 millionUS Dollars ~ Claims for the refund of 256,000 US Dollars and C£15,700 paid under anagreement andfor damagesforbreach of contract— Clauseinthecontractproviding for200,000 USDollars as'agreed damages»incaseof breach— Amount forbailingoutthe ship reduced to500,000 USDollars 5 The facts of this case sufficiently appear m the hereinabove headnote Orderaccordingly Objection. Objection against the continuance in force of the warrant of arrest against the defendant ship and against the fixing by the Court the amount of 1.8 million US Dollars for bailing out the said ship for the satisfaction of any judgment or order in the 15 present action L Papaphihppou, for the plaintiff C. Velans withA. Paschahdes,for the defendantship. MALACHTOSJ read thefollowingjudgment Thequestion to be answered in this Admiralty Action at this stage of the 20 proceedings is whether the grounds on which the warrant issued on the 12th April, 1989, for the arrest of the defendant ship was issued on sufficient grounds, andif so, whether the amountof 1 8 314 10 1C.L.R. Mourl/inos v.ShipGalaxies Malachtos J. million US Dollars or its equivalent in Cyprus currency, fixed by the court for bailing out the said ship for the satisfaction of any judgment ororder inthe present action,is unjustifiable. The relevant factsare the following: 5 On the 6th December, 1988, the plaintiff instituted legal proceedings against the defendant ship claiming, as stated mthe writof summons, the following remedies: (

1. a)damages for breach of a written agreement dated 15th September, 1988, in connection with the use, exploitation and 1C chartering of theship«GALAXIAS»; (
2. b)256,260 US Dollars, or its equivalent in Cyprus currency. and C£15,700.-, sums of money paid to the owners and/or their representative in connection with the above ship and/or on the basisof the above agreement; 15 {c)149,608.90 USDollars,or itsequivalent inCyprus currency, for.costs incurred and payments made bythe plaintiff as charterer and/or for the account and at the request ofthe owner ofthe ship «GALAXIAS»and/or in connection with the supply of goods and materials and/or in connection with repairs, constructions and 20 equipment ofthe ship«GALAXIAS»; (
3. d)damages for fraud and/or misrepresentatiop and/or deceit committed byandonbehalf oftheowneroftheship«GALAXIAS» inconnection with the agreement for chartering and/or use of the ship in question; 25 (e)any further and/or other remedies; (0 interest at the rate of 9% per annum from the filing of the present action asdamages orotherwise; and (g)costs. On the 11th January, 1989, the date fixed for appearance, 30 counsel for the defendant ship appeared and disputed the claim and sothe usualdirectionswere made ordering the plaintiff to file hispetition withinone month asfrom the 11thJanuary, 1989and counsel for.the defendant ship to file his answer within 15 days thereafter. Any reply to the answer to be filed within seven days 35 from the filing ofthe answer. On the8th February, 1989,counselforthedefendant ship filed an application praying for an order of the court directing the 315 Malachtos.). Mourtzinos v. ShipGalaxias

(1989)plaintiff togivesecurity forcostsand thisapplication wasfixed for the 25th February,

1. On the 10th February, 1989.theplaintiff filed hispetition. On the 15th February, 1989, counsel for the plaintiff filed his opposition to the application for security for costs and this opposition asstated therein wasbased on Law 55/
2. 5 On 25th February, 1989 the application was fixed for hearing forthe 6thApril, 1989,whenMr.Velarisaddressedthecourtandit was adjourned to4th May, 1989 for further hearing. On the4th May, 1989,Mr.Velarisappliedforleavetowithdraw 10 the application for security for costs in view of the provisions of Law 55/
3. The application was then dismissed with costs in favour of the plaintiff. In the meantime, the plaintiff on the 12thApril, 1989,upon an exparteapplication obtained anorder fortheissueofawarrantof 15 arrest of the defendant ship, which was anchored in the port of Limassol,andwasalreadyunderarrestinanotheraction.The24th of April,
4. was fixed for hearing in case it was decided on behalf of the defendant ship to show cause against the continuance in force of the order. One of the provisions of the 20 orderisthattheMarshalshallreleasetheshipifshewerebailedout in the sum of 1.8 million US Dollars or its equivalent in Cyprus currency. Itshould benoted herethatthisamountisreferred tobothinthe affidavit in support of theapplication for the issueof a warrant of 25 arrest, on which the contract of the 15th September, 1988, was attached, and in the petition filed on the 10th February, 1988,as damagesandlossofearningsoftheplaintiff asaresultofthelossof the chartering of the defendant ship for the period of one year or lossof earnings. Counsel for the defendant ship in arguing his case submitted that the order for the issue of the warrant of arrest should be discharged as the plaintiff misled the court by not disclosing materialfacts. Hefurther submittedthateven ifweassumethatthe warrantof arrestwasissued on sufficient groundsthen takinginto 35 consideration the termsofthe contract, the amount of 1.8 million USDollarsfixed bythe court for bailing out the defendant shipis unjustifiable. 316 ^0 1C.L.R. Mourtzinos v. ShipGalexias Malachtos J. Taking into consideration all the material placed before meI hold the view that itis more than sufficient tojustify the order for the issue of thewarrant of arrest.There isnodispute,however, as totheamountsof 256,260USDollarsandC£15,700.-paid by the 5 plaintiff tothe owning company of thedefendant ship by virtue of the agreement of the 15th September,
5. According toterm 9 of thesaid agreement, thecompensationtobe paidby the owning company incase of breach totheplaintiff was fixed at200,000US Dollars.This term reads as follows: 10 15 «Party Ashall signon demandany necessary documentsfor theformation of thenew companyand/orshall duly executea bill of sale and/or shall execute any further document that should be reasonably required toenable theship tobe legally transferred tothenew company and/or enable theship to be registered with theGreekand/orany otherflag. IfPartyAfails to comply with any of the above demands,party Βwill have the right to cancel theagreement and thereuponany amount of the price paid shall be returned to it plus an amount of 200,000 USDollarsas agreed damages». 20 Taking into consideration all the above, and the fact that the plaintiff never took possession, according to his own allegations, of thedefendant ship,the amountfixed by the Courton the 12th April, 1989 for bailing out the ship, should be and it is hereby reduced to 500,000 US Dollars, or its equivalent in Cyprus 25 currency, and the order of 12th April, 1989, is amended acordingly. On the question of costs theOrder of the Courtis tobe costsin the cause. Orderas above. 30 MRPAPAPHILIPPOU: I apply under Order 203 of the Cyprus Admiralty Jurisdiction Order the fixing 1.8 million Dollars for the bailing outof theship,tobe given 1.8 million Dollarsby meansof an interim order of Your Honour's court, as I intend to file an application for review under Order 165 as our main argument is 35 that that amount of 200,000 Dollars refers to specific breach of clause 9 of thecontractandnottothegeneral damages connected with the use of the vessel and the chartering of the vessel and a breach of all thisagreement, as awhole, Isubmit itisaproper case to have this interim order granted to be in a better position to 317 MalachtosJ. Mourtzinos v.ShipOalaxias

(1989)administer justice and not to have the door open of the horse to leavethestable untiltheapplication for reviewisdealtwithbythis court in itsFull Bench. COURT: Having considered the oral application of Mr. Papaphilippou I refuse the order applied for. Oralapplication dismissed. 318 5