(1989)1989July29 (A.L01Z0U.Ρ) KAMALHASSANEiN, Plaintiff, v. THESHIP -HELLENICISLAND»NOW LYING INTHEPOftY OF LIMASSOLAND ANOTHER, Defendants. (AdmiraltyActiofiJVd,369/83) Admiralty— Conflict of laws— Proper law of contract— Supply of bunkers to defendantshipcarrying theSingapore flagattheport of Alexandria, Egypt, by plaintiff, who was carrying on business in Egypt — Theproper law of the contract is the Egyptian Law, but procedural questions,such asthecreationof amaritimelienor not 5 andtheorderofprioritiesamong variousclaimsaregoverned bylex forii.e.CyprusLaw. Admiralty— Conflict of laws— Maritimehens— They are considered asmeans for enforcing asubstanantiveright— They afe governed by thelexfori. Admiralty— Conflictoflaws— Orderofprioritiesamong variousclaims againstaship — Aproceduralquestiongovetned by Ihe'lexfori. Admiralty— Maritimeliens— Natureof. ·.dmiralty— Necessaries—Bunkers supplied toship— Itisasupplyfor necessaries — Thesupply does not create amaritimelien andthe 15 ship isnot chargeable untilasuitisinstituted— Astatutorylienfor necessariesrankslowerinprioritytoamortage. The action,is,ipr theprice ofbunkers delivered tothedefendant ship at the port of Alexandria by the plaintiff, who wascarrying businessinEgypt.TheshipfliestheSingaporeFlag.Theinterveners 20 are mortgageesof the ship under a mortgage duly registeredin Singapore.TheissuesraisedforconsiderationbytheCourtappearin 4QG *° I C.L.R. Hassaneinv. Ship«HellenicIsland» thenotethatfollows.TheprinciplesappliedbytheCourtinresolving themappearinthehereinaboveheadnote. Orderaccordingly. Noorderastocosts. 5 Casesreferredto: TheloannisDaskalelis11974] Lloyd'sRep.174; TheHalcyon Isle[1980]3AllE.R.197; TheMitford
(1858)Swab.362; TheTagus[1903)P.44 10 TheZigurt/s(1932] P.113; The Tolten, [1946]P.135 77ie/4oux[1965JP.391; CommercialBankoftheNearEastLtd. v. TheShip*PEGASOSlib
(1978)1C.L.R. 597; 15 TheD't/ora[1952]2AHE.R. 1127; PilefsLid. andothersv. TheCommercialBankoftheNear-EastLtd. (19S3J1 C.L.R.
- Preliminary points. .Preliminarypoints oflaw(a)astowhich isthe proper lawof the 20 contract, (b) whether under the Cyprus Law the supply of fuel givesrisetoamaritinelien(c)whether undertheEgyptianLawthe supplyof fuel givesriseto a maritine lien and (d)ifthe proper law isother than the Cyprus lawwhich of the two lawswillthe Court applyindetermingwhether lien existsfortheclaiminthisaction. 25 Chr.Pourgourides, for the plaintiffs. C Cacoyannis, for defendants
- T.Papadopoulos, for defendants
- St. McBride,for the interveners. Cur.adv. vult. 30 A. LOI2GU P. redd trie following Judgment. In this AcfrrtiraV action theplaintiff claimstheamountofU.S.$98,460:31beingthe balance of the costs of materials and servicessupplied byhim to 407 \ . Lo./ouP Hassanein v.Ship-HeUenk Island»
(1989)the defendants on the 7th October 1983and the 19th November 19S3 The plaintiff isa supplier of bunker carrying on business at the port of Alexandria, Egypt and on the aforesaid dates supplied bunker tothe defendant ship at that port 5 The defendant ship fliesthe Singapore flag The interveners, the Development Bank of Singapore are the mortgagees of thedefendant shipunder afirstpreferred mortgage dulyregistered againsttheshipintheShip'sRegisterinSingapore Itfurther appears,that theship dunng theseproceedingswassold 10 but the proceeds ofsale were insufficient tomeet the claimof the mortgagees Forthepurposeofthepresentproceedings Ineed notgointoall thevariousapplications filed inthiscase Asitwassubmitted onbehalf ofthedefendants thattheclaimsin 15 this action were not valid claims to invoke the Admiralty jurisdiction of thisCourt byanaction inremagainstthe defendant ship, itwas decided by counsel of all partiesconcerned that pnor to the hearing of the case certain questions of law were to be determined by this Court aspreliminary points of lawwhich may 20 thus dispose of the issues inthis case The relevant application to thiseffect wasfiled bythe applicant on the 23rd September 1986, wntten addresses were filed in respectthereof byorderoftheCourt,madewiththeconsentofthe parties Asregardsthe firstquestion of lawtobedecided thatiswhichis theproperlawof the contractgivingrisetothisclaimitiscommon ground toboth theplaintiff andtheintervenersthattheproperlaw ofthe contract isEgyptian Law Nonetheless the interveners further submitted that the proper 30 lawof the contract, whatever itmightbe, hasnobeanng upon the question of pnonty inthepayment outtothevanous claimantsof the proceeds of sale of the shipin question. As regards the second question that iswhether under Cyprus Law the supply of fuel gives rise to a maritime hen, it is also 35 common ground thatitdoesnot do so. 408 25 1C.L.R. Hassaneinv.Ship«HellenicIsland» A.LoizouP. Thethirdquestion isalsocommon groundthatisthatunder the proper law of the contract, which isEgyptian Law, the supplyof fuel does giverisetoamaritime lien. Asregardsthefourth questionwhichisthat«iftheproperlawof 5 thecontractisotherthanCypruslaw(lexfori)andthereisa conflict between such law and the Cyprus Law as to the existence of a maritime lien, which of the two laws will the Court apply in determining whether lien exists for the claim in the present action?»,itwascontended onbehalf oftheplaintiff thatdespitethe 10 general approach of CyprusLaw,whichfollows English Maritime Law,totreattheexistenceofmaritimeliensasgoverned bythelex fon, as in effect they are not considered as substantive rights but only procedural, nevertheless it would be a denial of justice to refuse the Egyptiansupplier, whoknew before supplyingthe ship 15 withfuelthathehadamaritimelien,torecognizesuchalienandto giveitthe prioritywhich arightof thisnatureshould begiven. He relied in support of this contention on the case of «The Ioannis Daskalefis» [1974] 1Lloyd's Rep. 174 of the Supreme Court of Canada and the dissentingjudgments inthe PrivyCouncil caseof 20 «TheHalcyon Isle»[198013AllE.R. 197,andsubmitted thatsince the Court is not bound to follow English precedent, it may therefore follow theabove twojudgments. Ontheotherhanditwascontended onbehalf ofthe interveners that since there can be no extension of the recognized maritime 25 liens except by bw and that since the law to be applied by the Admiralty Court in Cyprus is, as is provided by the Courts of Justice Law 1960(LawNo. 14of 1960)and inparticular sections 19(a)and29
(2)(a)thereof,thesameasEnglishAdmiraltyLawasat the 15th August 1960, consequently, maritime liens are 30 determined exclusively by the lex fori and are enforceable in actions in rem where the events upon which the claim is founded would have given rise to a maritime lien under Cyprus Law, if these events had occurred within the territorialjurisdiction of the Court. 35 Clearly underEnglishlawandbyextension underCyprusLaw, the existence of maritime liens isgoverned by the lex fori, in the result the only maritime liens recognised by the Admiralty Court are those which accrue under English Law (See: The Milford
(1858)Swab.362, The Tagus[1903]P.44; TheZigurds[1932]P. 40 113; The Token [1946] P. 135 at 161; TheAcmx [1965] P.391. 409 A. LoizouP. Hassanein v.Ship«Hellenic Island»
(1989)The fundamental principle behind the choice of the lexforiasthe lawto be applied isthe fact thatmaritime liensare considered not as asubstantive rightbutonlyasameans bywhicha fundamental rightmaybe enforced. The final question to be determined is that, «if the Court in determining the existenceof a maritime lien willapplyalawother than CyprusLaw(lexfori)and undersuchlawamaritimeliendoes exist whereas none existsunder the lexfori (CyprusLaw): 5 (a) What law will the Court apply in determining the rank of priorityofsuch hen inthedistribution oftheproceedsofsaleofthe 10 defendant vessel? (b)Willsuch lien rank prior toa claim under amortgage evenif under the lexfori itisnot recognised asa maritime lien and ranks lower than aclaim on a mortgage?» Itwascontended bytheplaintiff thatthoughthe lexforidecides 15 the priority of the rights which exist against a ship, it nonetheless must recognise their priority under foreign lawontheauthorityof the dissenting judgment in«TheHalcyon Isle» (supra). Itwassubmitted on the other hand on behalf ofthe interveners thatthequestion ofpriorities,beingapurelyjurisdictionalissue,is 20 a matter to be determined exclusively by the lex fori, which, ifit does not recognise a claim as creating a maritime lien, even if foreign law might do so, it can give no priority to any claim in precedence to those having a recognised priority under the lex fori. As already stated above, procedural matters are governed by the lex fori. Questions of priorities as between competing claims together with such other mattersappertaining tothe enforcement of a claim are considered purely procedural and are thus exclusively governed by the lex fori. (See: Thomas, Maritime 30 Liens, British Shipping Laws,Vol. 14),consequently the orderof priorities of the two claims must be decided in accordance with Cyprus Law (See Commercial Bank of the Near EastLtd., v. The Ship «PEGASOS ///»
(1978)1C.L.R. 597 atp. 607.) UnderEnglishLawandbyextension CyprusLaw,thesupplyof 35 fuel provided it is elsewhere than at the port to which the ship belongs isconsidered asasupply of necessaries (See TheD' Vora [1952] 2 AllE.R. 1127).The supply of necessaries does not give 410 25 1C.L.R. Hassanein v.Ship«HellenicIsland» A. LoizouP. rise to a maritime lien and the ship does not become chargeable untilsuitisactuallyinstituted. (SeeRoscoe:AdmiraltyPractice(5th Ed.)p.206).InanyeventasithasbeenheldbytheSupreme Court in the case of PilefsLtd and Others v. The Commercial Bank of 5 the Near-EastLtd.
(1983)1 C.L.R. 376 a lien for necessaries is considered a statutory lien which ranks lower in priority to a mortgage. Consequently, the legal position being as itis,itisnot possible for this Court to give the claim of the plaintiff a priority higher to 10 that which it normally has under Cyprus Law, namely lower than first preferred mortgagesduly registered. Inthe circumstances there willbe no order as tocosts. Orderas above. No orderastocosts. 411