Mr. Justice RIX:
The parties
In these proceedings the plaintiffs are a Chinese (PRC) company, owners
of the vessel Xing Su Hai. Their corporate name is Q. O. Shipping Co.
but I shall refer to them simply as the "owners". They chartered their
vessel to G. Shipping Establishment, the first defendants, under a time
charter dated Oct. 19, 1994 for a trip from Rotterdam to Singapore-
Japan. The charter contains a London arbitration clause. The charterers,
as I shall call the first defendants, are incorporated as an establishment
(not a company) in Liechtenstein and have an address in Vaduz. The
second defendants, Tr. Sch. G.m.b.H., are the charterers' agents or
operators. I shall refer to them as Tr.. They are a German company, based
in Hamburg. Their sole director and shareholder is Mr. Klaus O., the third
defendant, who is also based in or near Hamburg. I shall refer to him as
Mr. O.. The vessel was sub-chartered by the charterers to Gl. A.G. of Zug
in Switzerland, whom I shall refer to as the sub-charterers. The vessel
loaded a cargo of steel scrap, completing at Amsterdam on Nov. 25, 1994,
and was then ordered to South Korea. The sub-charterers are not party
to these proceedings, but their London brokers are, or at any rate at
one time were, as the fourth defendants, H. C. (UK) Ltd., a Bahamian
company with a place of business registered in the U.K. (H. C.).
The proceedings
On Dec. 13, 1994 the owners applied ex parte to Mr. Justice Gatehouse
for leave to issue and serve a writ out of the jurisdiction upon the
charterers, Tr. and Mr. O.. They obtained that leave, as well as an order
for a worldwide Mareva injunction and for disclosure by affidavit of
their assets; and for substituted service by post. The Mareva injunction
obtained was in the sum of U.S.$1,300,000. The owners' application was
supported by an affidavit from Mr. Arghyrakis, a partner in the firm of
Richards Butler, the owners' solicitors, and a draft writ endorsed with
points of claim, which subsequently became the form of the writ issued in
these proceedings on Dec. 22, 1994.
The points of claim and the affidavit were to the following effect. The time
charter between owners and charterers was referred to. The vessel was
delivered to the charterers on Nov. 17, 1994. A first hire payment for 15
days hire (up to Dec. 2, 1994) was effected on Nov. 21, 1994. The vessel
completed loading on Nov. 25 and was directed to South Korea. A bill
of lading was issued. On Dec. 2 the next 15 days hire was due (at U.S.
$12,000 per day less commissions, in the sum of U.S.$173,250) but was
not paid. Instead the owners received a fax from the charterers' London
solicitors, More Fisher Brown, to the effect that the charterers "may be in
difficulty remitting" the hire to owners for the following reasons: Tr. had
(indirectly) obtained default judgments made in Hong Kong in 1993/1994
against a Chinese (PRC) state organisation called S. F. T. Corporation
("Sh.") in the equivalent of some U.S.$2,280,000 plus interest and
costs, arising out of charter-parties that Tr. had entered into with Sh. in
1984/l985; Tr. had assigned a little under half of the proceeds of these
judgments to the charterers for DM50,000 under an assignment dated
Nov. 22, 1994; by that time Sh. had made it clear that they would not
respond to the judgments; the charterers had for many years honoured
their obligations under various shipping contracts with a number of
Chinese companies, including the owners; the fax continued:
Gr. [ie the charterers] are therefore left with no choice but to enforce
these judgments as best they can under the circumstances.
Owners will doubtless also appreciate that this is a situation that can
be quickly rectified by Sh. with Co.'s [ie owners'] intervention. Gr. have
asked us to make it very clear to Co. that they will be fully in a position
to remit any hire and other amounts due to Owners under the above
charterparty including bunkers and Suez Canal and port expenses if the
outstanding judgments are satisfactorily and promptly settled by Sh..
On Dec. 5, 1994 Mr. Arghyrakis spoke to the sub-charterers and learned
that they had already paid 95 per cent. of the sub-charter freight (in an
amount estimated to be over U.S.$900,000) to the charterers and that
the charterers had instructed them not to disclose details of where they
had paid the freight to. So on Dec. 6 owners appointed an arbitrator in
respect of all disputes under the time charter and gave notice of this
appointment to More Fisher Brown as solicitors to the charterers. On
Dec. 8 owners obtained an order from the Court in Luxembourg for
the seizure of the charterers' assets in Luxembourg. On the same day
owners obtained some indirect information from shipping circles that the
charterers were wholly owned by Mr. O..
In these circumstances the points of claim made the following allegations:
that Mr. O. was the alter ego and sole owner of both the charterers and
Tr.; that the charterers, Tr. and Mr. O. all acted as agents for one another;
that all three negligently or fraudulently misrepresented their intention
to pay the hire due under the time charter; that Tr. and Mr. O. tortiously
conspired with and induced the charterers to breach the time charter by
not paying hire; and that in the premises the owners claimed from each of
the charterers, Tr. and Mr. O. outstanding hire and other sums due under
the time charter and damages to be assessed. As for H. C. (the fourth
defendants), they were (mistakenly) alleged to be the charterers' brokers
(they were in fact the sub-charterers' brokers) and on that ground to
have become "mixed up" in the other three defendants' wrongdoing. The
affidavit explained these claims as follows (par. 8):
The Plaintiffs have begun arbitration against Gr. under the charterparty
with a view to recovering the sums due to them... They seek to join
Tr. and Mr O. to this action on the ground that Gr. and Tr. are the alter
egos of Mr O. (such that the corporate veil should be lifted) and/or his
agents and/or vehicles for his fraud (it never having been the intention
of any of the defendants, contrary to their implied representation in
negotiating and/or entering into the charterparty, to pay the plaintiffs
second or subsequent instalments of hire thereunder) and/or were
tortiously induced by him (and/or conspired with him) to break their
contract with the plaintiffs. The affidavit went on to explain the quantum
of the Mareva injunction sought in the sum of over U.S.$1,900,000, on
the basis that the owners were now committed to the voyage to South
Korea with its attendant expenses in terms of bunkers, Suez Canal and
port charges, as well as entitled to a further 75 days hire; the sum also
included over U.S.$700,000 in respect of interest and legal costs. The
injunction granted by Mr. Justice Gatehouse limited the owners to U.S.
$1,300,000.
The affidavit concluded with a brief paragraph on the basis on which leave
to issue and serve the writ out of the jurisdiction on the charterers, Tr.
and Mr. O. was being sought. I will quote it in full:
(a) to enforce or otherwise affect or recover damages or obtain other
relief under the charterparty being a contract which is by its terms or by
implication governed by English law (pursuant to RSC O. 11 r. 1(1)(d))
and/or
(b) (in the case of Tr. and Mr O.): the claim is brought against a person
duly served within or out of the jurisdiction and a person out of the
jurisdiction is a necessary and proper party thereto (pursuant to RSC O.
11 r. 1(1)(c))
and/or
(c) the claim is brought to enforce an arbitral award (pursuant to RSC O.
11 r. 1(1)(m)).
At the time of this application there had been no service on any of the
four defendants: not of course on the charterers, Tr. or Mr. O., for leave
was being sought in respect of them; nor even on H. C., who although
a Bahamian company could probably have been served at their offices
in London, but who had not been served. I mention this because sub-
r. (c) requires a person to have been "duly served within or out of the
jurisdiction".
There was nothing in the points of claim or in the affidavit to suggest
that the time charter had been terminated, either for repudiation or
under any express term. Moreover, although leave was sought inter alia
on the ground that the claim was being brought to enforce an arbitral
award, there had at the time of the application as yet been no award. An
interim award was, however, subsequently made on Jan. 4, 1995 in the
arbitration that had been commenced against the charterers: for U.S.
$519,750, being the sum of three instalments of hire due on Dec. 2, Dec.
17 and Jan. 1 respectively. This confirms that the time charter continued
in existence and had not been terminated.
It is not clear from the points of claim, or from the explanation given in
the affidavit, whether it is said that Tr. and/or Mr. O. were parties to the
time charter, although that was developed as a submission before me.
Certainly it is not expressly pleaded that Tr. and/or Mr. O. were principals
or otherwise party to the time charter.
The points of claim contain allegations of tortious misrepresentation,
conspiracy and inducement of breach of contract. However, no attempt
was made ex parte before Mr. Justice Gatehouse, or inter partes before
me, to support those allegations of tortious conduct as independent
causes of action in respect of which leave to serve out of the jurisdiction
could be sought or obtained.
Following the order obtained from Mr. Justice Gatehouse on Dec. 13,
1994, the charterers, Tr. and Mr. O. were served by post under the
provision for substituted service contained in that order. Before me, the
owners did not seek to uphold that provision for substituted service as
having been properly obtained, or to uphold that service as having been
properly effected.
At some time after Dec. 13, 1994 the owners came to realize that they
had been mistaken about H. C. being brokers to the charterers and before
me acknowledged that they would not pursue relief against H. C. in these
proceedings.
On Dec. 24, 1994 Mr. Bush, a partner in the firm of Jackson Parton,
solicitors to Tr. and Mr. O., appeared on their behalf before Mr. Justice
Longmore to seek an extension of time in which to provide disclosure
of their assets. That application was made under reserves of their right
to challenge the jurisdiction of this Court. By order of Dec. 24, 1994 Mr.
Justice Longmore did extend time, until Jan. 6, 1995 for the provision of a
schedule of assets, and until Jan. 13 for confirmation of that information
by affidavit. It is recorded in that order that Mr. Bush stated that Tr. and
Mr. O. intended to comply with the order made by Mr. Justice Gatehouse.
It was in these circumstances that Tr. and Mr. O. applied before me on
Jan. 4, 1995 and subsequent days, on notice to the owners, to discharge
the order of Mr. Justice Gatehouse as varied, under the liberty to apply
to do so contained in that order, on the ground that this Court had no
jurisdiction over them. Due to the imminence of the (extended) deadlines
contained in the order of Mr. Justice Longmore, the argument before me
was confined to questions of jurisdiction. In the event I extended time
for compliance with the orders for disclosure until after completion of the
argument and my judgment.
The submissions
A great number of points were argued before me. On behalf of Tr. and
Mr. O., Mr. Males' primary submission was that the Brussels Convention
on Jurisdiction and Enforcement of Judgments in Civil and Commercial
Matters (the Brussels Convention) applied to these claims against persons
domiciled in Germany and, by reason of art. 2, excluded jurisdiction
otherwise than in Germany. On behalf of the owners, Mr. Mackenzie
submitted first, that Tr. and Mr. O. had waived their right to contest
jurisdiction by stating before Mr. Justice Longmore that they intended
to comply with the order of Mr. Justice Gatehouse; secondly, that the
claims within the writ fell outside the Brussels Convention by reason of
the exclusion from it of "arbitration" pursuant to art. 1(4); thirdly, that
even if the claims were not so excluded, art. 6(1) permitted jurisdiction
in England on the ground that H. C. were amongst the defendants and
were domiciled here; fourthly, that even if Tr. and Mr. O. had to be sued in
Germany on the substantive claims, nevertheless the Court had the power
to maintain the worldwide Mareva injunction over them in aid of litigation
to be commenced in Germany pursuant to s. 25 of the Civil Jurisdiction
and Judgments Act, 1982 (the 1982 Act), alternatively pursuant to s. 24
of the 1982 Act; fifthly, on the basis that the Brussels Convention did not
apply, that there was jurisdiction under O. 11, r. 1(1)(b) (a new ground of
jurisdiction not raised before Mr. Justice Gatehouse) on the ground that
the Mareva injunction was an injunction sought "ordering the defendant
to do or refrain from doing anything within the jurisdiction"; sixthly, that
there was jurisdiction under O. 11, r. 1(1)(c), on the basis that Tr. and Mr.
O. were necessary or proper parties to the claims against the charterers;
seventhly, that there was jurisdiction under O. 11, r. 1(1)(d)(iii), on the
basis that Tr. and Mr. O., as well as the charterers, were parties to the
time charter; and eighthly, that there was jurisdiction under O. 11, r. 1(1)
(m), on the basis that, even if the interim award against the charterers
postdated the writ, nevertheless the writ could be amended to include a
claim to enforce that award and to do so not only against the charterers
but also against Tr. and Mr. O.. I will deal with these various submissions
in turn.
Waiver of right to contest the jurisdiction
This submission logically comes first. Mr. Mackenzie pointed to the
statement recorded in Mr. Justice Longmore's order that Tr. and Mr. O.
intended to comply with the order of Mr. Justice Gatehouse and submitted
that this amounted to a waiver of any right to contest the jurisdiction: on
the basis of that statement a concession had been obtained; Tr. and Mr. O.
had never taken out a summons under O. 12, r. 8 to contest the Court's
jurisdiction, and it was now too late to do so, because they had accepted
it.
In response Mr. Males pointed to the terms of Mr. Bush's affidavit which
was before Mr. Justice Longmore on Dec. 24, 1994, as well as to a further
affidavit made by Mr. Bush in response to the argument on waiver (Mr.
Bush's third affidavit). The former contained an express reservation of
the right to challenge the jurisdiction and evidence that Tr. and Mr. O. had
been advised by German lawyers that neither the writ nor the order had
been properly served on them as a matter of German and European law
and that they were therefore not obliged to obey it; nevertheless they
accepted that -
...they must comply with the order subject to [their] right to make
an application under Order 12 rule 8 and/or on the merits. The latter
affidavit contained further evidence about the hearing before Mr. Justice
Longmore: the learned Judge asked Mr. Bush to give an undertaking that
his clients would comply with an extended time limit, if granted; Mr. Bush
declined to give that undertaking, for he was without instructions in that
regard, but he was prepared to make a statement about their intentions
in accordance with his existing instructions. He said nothing during the
hearing to indicate that his clients would not be making an application to
challenge jurisdiction; on the contrary the outline submissions previously
delivered
to Mr. Justice Longmore with the papers had drawn express attention
to the 1982 Act and to Tr.'s and Mr. O.'s domicile in Germany and
to the reservation of their position to challenge the jurisdiction. Mr.
Males submitted that in this context the statement recorded in Mr.
Justice Longmore's order cannot be construed as anything more than
a representation that Tr. and Mr. O. intended to comply with the order
for so long as it remained in place, but that they reserved their right
to challenge the jurisdiction to make it. Since the writ had never been
properly served on Tr. and Mr. O., as Mr. Mackenzie accepted in the
course of argument, the time for issue of an O. 12, r. 8 summons had not
arrived. The application to set aside the order of Mr. Justice Gatehouse
was therefore made under the liberty to apply contained in that order.
If Mr. Justice Longmore had intended to require submission to the
jurisdiction as the price of an extension of time granted in an emergency
application made on Christmas Eve, which was itself unlikely, he would
have deleted or amended the express provision contained in the order of
Mr. Justice Gatehouse of liberty to apply to discharge it.
In my judgment, these submissions by Mr. Males were correct. There has
been no waiver of the right to seek to challenge the jurisdiction. Article
1(4) of the Brussels Convention
The next issue is whether the Brussels Convention is inapplicable to the
writ in these proceedings on the ground that it relates to arbitration.
Article 1(4) states that:
The Convention shall not apply to -
4. Arbitration.
In Marc Rich & Co. A.G. v. Societa Italiana Impianti P.A. (The Atlantic
Emperor), [1992] 1 Lloyd's Rep. 342 the European Court decided that
an originating summons asking the High Court in London to appoint an
arbitrator fell outside the Convention even though that summons could
not be decided without answering a preliminary issue as to the existence
or validity of an arbitration agreement. The relevant test was expressed
as follows (at p. 351):
In order to determine whether a dispute falls within the scope of the
Convention, reference must be made solely to the subject-matter of the
dispute. If, by virtue of its subject-matter such as the appointment of
an arbitrator, a dispute falls outside the scope of the Convention, the
existence of a preliminary issue which the Court must resolve in order
to determine the dispute cannot, whatever the issue may be, justify
application of the Convention.
In Partenreederei M/S Heidberg v. Grosvenor Grain and Feed Co. Ltd.
(The Heidberg), [1994] 2 Lloyd's Rep. 287 Judge Diamond, Q.C. held
that a French Court's decision as to whether an arbitration clause had
been incorporated into a bill of lading did not fall within the art. 1(4)
exclusion of arbitration, in part because the essential subject-matter
of the judgment was the construction of the underlying contract rather
than a pure question of arbitration, as well as for more general policy
reasons arising out of the Convention as a whole (see at pp. 298-303).
The case illustrates that the essential subject-matter of a dispute has to
be categorized and that for the purpose of such categorization a dispute
is not to be casually categorized as relating to arbitration merely because
what is really a question of construction relates to an arbitration clause.
That may have been a borderline decision; but it seems to me that in the
present case there are no similar difficulties. Here the essential subject-
matter of the writ is whether the defendants are liable to the owners
either in contract (by reason of the time charter) or in tort. There is
no mention of arbitration or of the time charter's arbitration clause in
the points of claim. No relief is claimed which is in any way related to
arbitration. If the question is whether Tr. and Mr. O. are party to the time
charter, that is probably not a question which arbitrators even have a
binding jurisdiction to determine. If the question is whether Tr. or Mr. O.
can be made liable, by some concept such as piercing or lifting the veil,
for the liabilities of Gr., that has nothing to do with arbitration.
Mr. Mackenzie nevertheless submitted that the action was related to
arbitration because it was somehow brought in aid of the arbitration claim
being pursued against the charterers, or, following the interim award,
could, if necessary by amendment, be turned into an action (at any rate
in part) to enforce the award. In my judgment these submissions were
wide off the mark. It may be that, subjectively, the owners were minded
to use the writ, in combination with their arbitration claim against the
charterers, to seek to enforce the charterers' liabilities as determined
in arbitration against Tr. and Mr. O.. That, however, in no way makes
"arbitration" the essential subject-matter of the action. Indeed, if the
owners had not already referred all disputes under the time charter to
arbitration, the charterers, upon due service, would be entitled to enforce
a reference of at least the owners' contractual claims to arbitration under
s. 1 of the Arbitration Act, 1975; and would be entitled to a stay of so
much of the action in any event. Accordingly I reject the submission that
the Convention is inapplicable to these proceedings. 22 The Brussels
Convention: art. 2 or art. 6(1)
If the Convention applies to these proceedings, as I hold it does, then Mr.
Mackenzie accepts that, unless he can bring the case within an exception
to the basic rule, these proceedings can only be brought against Tr. and
Mr. O. in Germany. For art. 2 provides:
Subject to the provisions of this Convention, persons domiciled in a
Contracting State shall, whatever their nationality, be sued in the Courts
of that state. The only exception upon which Mr. Mackenzie relied was art.
6(1), which provides as follows:
A person domiciled in a Contracting State may also be sued 1. Where he
is one of a number of defendants, in the courts of the place where any
one of them is domiciled. For these purposes Mr. Mackenzie sought to say
that Tr. and Mr. O. could be sued in England because H. C. are domiciled
here. He relied upon O'Malley & Layton, European Civil Practice, (1989) at
par. 17.76 where it is said that:
Once the jurisdiction is founded under this provision, it seems that it
continues, even if the proceedings against the primary defendant are later
dropped. He submitted that, at the time the writ was issued naming H.
C. as defendants, the owners genuinely, albeit mistakenly, intended to
seek relief against them. It therefore did not matter that following the
realization of their mistake the owners now intended to release H. C. from
the action, and indeed had not even as yet served them.
In my judgment no reliance can be placed for these purposes upon art.
6(1). In the first place there is no clear evidence that H. C. are domiciled
in England; but I will assume them to be so. Secondly, in The Rewia,
[1991] 2 Lloyd's Rep. 325 the Court of Appeal held that art. 6(1), like
O. 11, r. 1(1)(c), required a real issue that plaintiffs may reasonably
ask the Court to try between them and what O'Malley & Layton call the
primary defendant, that is to say the defendant whose domicile is made
the place where other defendants may be sued (see at pp. 328-329).
If the plaintiffs have no seriously arguable claim against the primary
defendant, then art. 6(1) cannot be complied with in relation to the
secondary defendant (see at pp. 333 and 336). The test must in my view
apply not only when the writ is issued and served, but also when service
is challenged. In any event, the first time that jurisdiction under the
Convention pursuant to art. 6(1) was asserted was during the argument
before me. The writ was moreover defective for the purposes of reliance
on the Convention in that it should have been indorsed with a statement
pursuant to O. 6, r. 7(1)(b) that the Court has power under the 1982
Act to hear and determine the claim. Since, therefore, there is no claim,
and never was any seriously arguable claim against H. C., there cannot
be any jurisdiction over Tr. and Mr. O. pursuant to art. 6(1). Thirdly, in
Kalfelis v. Schroder, Munchmeyer, Hengst & Co.,(Case 189/87) [1988]
E.C.R. 5565the European Court held that there must be a link between
the claims made against both primary and secondary defendants, in order
to avoid the possibility that a plaintiff might use art. 6(1) to avoid the
jurisdiction of the Court where a defendant is domiciled. In the present
case there is no link between the claims in contract and/or tort made
against Tr. and Mr. O. and the purely ancillary claim for disclosure of
information regarding assets intended to have been made, but not now
persisted in, against H. C.. Fourthly, the practical basis of the jurisdiction
under art. 6(1) was stated in Kalfelis (at p. 5584, par. 12) to be the need
to avoid the risk of irreconcilable judgments resulting from separate
proceedings. It is for the national court to verify in each individual case
whether that condition is satisfied. This principle was applied in Barclays
Bank Plc v. Glasgow City Council, [1993] Q.B. 429 at pp. 445-446, see
also in the Court of Appeal [1994] 2 W.L.R. 466 at p. 471. Again, no such
risk of irreconcilable judgments would exist in view of the limited (and as
now admitted untenable) nature of the claim against H. C..
It follows that by reason of the Brussels Convention Tr. and Mr. O. must be
sued in Germany. Section 25 of the 1982 Act
Nevertheless, Mr. Mackenzie in that event has canvassed before me a
new application pursuant to s. 25 of the 1982 Act to grant or maintain
the worldwide Mareva injunction in support of new proceedings yet to
be commenced against Tr. and Mr. O. in Germany. In that connection
I think the position is that the owners are on the whole unwilling to
commence proceedings in Germany on the basis that they have been
advised by German lawyers that they cannot obtain jurisdiction against
the charterers in Germany and they are reluctant to sue Tr. and Mr. O. in
Germany by themselves for fear that, if they obtain a judgment against
them there, they may lose their alleged rights in contract against the
charterers by reason of the doctrine of merger of a cause of action in a
judgment. Therefore, they are anxious if they can to sue all three parties
in the same jurisdiction. If necessary, however, that is to say if they can
obtain jurisdiction against all three parties in England, then they would
be willing to undertake to commence proceedings against Tr. and Mr. O.
in Germany. On the basis of that contingent undertaking Mr. Mackenzie
submits that I have power to grant interim relief here in support of such
an action to be commenced in Germany.
Section 25 of the 1982 Act provides as follows:
(1) The High Court of England...shall have power to grant interim relief
where -
(a) proceedings have been or are to be commenced in a Brussels or
Lugano Contracting State...; and
(b) they are or will be proceedings whose subject-matter is within the
scope of the 1968 Convention as determined by Article 1.
(2) On an application for any interim relief under subsection (1) the court
may refuse to grant that relief if, in the opinion of the court, the fact that
the court has no jurisdiction apart from this section in relation to the
subject-matter of the proceedings in question makes it inexpedient for the
court to grant it.
It is not entirely clear to me whether Mr. Mackenzie is presently making
an application before me on the hypothesis that he fails to obtain
jurisdiction over Tr. and Mr. O. in this jurisdiction; or whether he is
flagging a future application in the event that his other submissions for
maintaining jurisdiction in England fail. Certainly an application under
s. 25 would have to be in different form from the writ presently in issue
in these proceedings. Moreover, I ask myself, what are the proceedings
which the owners intend to bring in Germany? Are they proceedings in
essentially the same form as the writ before me? Or, as has at times been
intimated to me in the light of the interim award against the charterers
published since the commencement of these proceedings, would new
proceedings be essentially for the enforcement of that and subsequent
interim awards against Tr. and Mr. O. as well as the charterers? If it was
the latter, it may well be that such proceedings would, unlike the present
proceedings, fall within the exception relating to arbitration contained
within art. 1(4), in which case an application for interim relief pursuant to
s. 25 of the 1982 Act would fail by reason of the provisions of s. 25(1)(b).
Perhaps because Mr. Mackenzie was only foreshadowing a future
application it was not clear to me how he proposed obtaining jurisdiction
for such an application against Tr. and Mr. O.: but I assume it would be
under the provisions of O. 11, r. 1(2)(a). Even so, Mr. Males submitted
that where the English Court has no jurisdiction over the intended
defendants apart from s. 25 itself, the terms of sub-s. 25(2) indicate that
relief should normally be refused. This was a matter of discretion, and
the argument before me to set aside the ex parte order of Mr. Justice
Gatehouse was confined to jurisdiction; but Mr. Males submitted, in
my view correctly, that if the owners were raising a new ground for
jurisdiction not previously relied upon before Mr. Justice Gatehouse, then
they bore an initial burden to persuade me that the relief sought was one
which in my discretion I should grant.
In this connection Mr. Males submits as follows. The owners' own evidence
accepts that they are not aware that Tr. or Mr. O. have any assets within
the jurisdiction. Therefore what the owners are seeking is in practical
terms a purely extra-territorial injunction. In Rosseel N.V. v. Oriental
Commercial Shipping Ltd., [1990] 1 W.L.R. 1387 the Court of Appeal
underlined the need for very exceptional circumstances to justify an order
for a worldwide Mareva in aid of substantive proceedings elsewhere.
Moreover the appropriate Court to deal with an application for interim
relief is the Court of the state where the assets in question are situated:
see Denilauler v. SNC Couchet Freres, (Case 125/79) [1981] E.C.R.
1553,cited at O'Malley & Layton, European Civil Practice, (1989) at par.
24.10.
It seems to me that there is considerable force in these submissions. In
Rosseel N.V. v. Oriental Commercial Shipping Ltd., [1990] 1 W.L.R. 1387
the Court was asked to enforce a New York arbitration award and for that
purpose to grant a worldwide Mareva. Mr. Justice Hirst granted a Mareva
injunction over English assets, but declined to do so over assets outside
the jurisdiction. Lord Donaldson of Lymington, M.R. said, at p. 1389B-C:
I say that because, if you take a hypothetical case of rights being
determined in state A and assets being found in states B to M, you
would find a very large number of subsidiary jurisdictions – in the sense
that they were merely being asked to enforce the rights determined by
another jurisdiction – making criss-crossing long arm jurisdictional orders
with a high degree of probability that there would be confusion and,
indeed, resentment by the nations concerned at interference with their
jurisdictions.
It seems to me that, apart from the very exceptional case, the proper
attitude of the English courts – and, I may add, courts in other
jurisdictions – is to confine themselves to their own territorial area,
save in cases in which they are the court or tribunal which determines
the rights of the parties. So long as they are merely being used as
enforcement agencies they should stick to their own last. At p. 1389E
Lord Donaldson referred specifically to s. 25(2) of the 1982 Act and
added:
So it seems reasonably clear that the authors of the Convention,
or Parliament as the case may be, had well in mind this problem of
competing and confusing orders to which I have referred.
In any event, under the standard wording of a worldwide Mareva the
order of this Court cannot be enforced in another country without a
plaintiff first commencing enforcement proceedings there. It seems to me
that where there are no identified assets in this jurisdiction, but there are
presumably assets in Germany where Tr. and Mr. O. have their domicile,
and the Courts of this jurisdiction are being asked to grant interim relief
in aid of proceedings in Germany, the appropriate and expedient course
is for the owners, who ex hypothesi are to proceed in Germany, to seek
interim relief from the German Courts. After all, those Courts will know
exactly what substantive relief the owners will be seeking there, and on
what grounds; which is more than I know at present.
There is, moreover, an additional reason for my caution in the present
case. Section 25(2) is concerned not so much with the situation where the
Court otherwise lacks personal jurisdiction over the defendants, but where
it "has no jurisdiction apart from this section in relation to the subject-
matter of the proceedings in question". In the present case the Court
lacks jurisdiction under the Brussels Convention over Tr. and Mr. O. not so
much because of the subject-matter of these proceedings (save that they
concern civil and commercial matters within art. 1 of the Convention) but
because Tr. and Mr. O. are domiciled in Germany. Ex hypothesi, however,
the subject-matter of the proceedings in question will be within the scope
of the Convention, otherwise s. 25(1) would not apply, and s. 25(2)
would never be reached. It appears therefore that it may be relevant to
consider whether the Court would have had jurisdiction in relation to the
subject-matter of the proceedings under O. 11, r. 1 if jurisdiction had
not been excluded under art. 2 of the Convention. For reasons which will
appear subsequently in this judgment it seems to me that, even if I were
wrong to hold that the Brussels Convention applies to the proceedings
before me, with the result that jurisdiction in respect of them might be
sought under O. 11, r. 1(1), I would reject Mr. Mackenzie's alternative
submissions that jurisdiction can be founded under sub-r. (b), (c), (d)(iii)
and/or (m).
In all these circumstances it seems to me to be right to be particularly
cautious about making any order for interim relief under s. 25. However,
I will revisit the subject at the end of this judgment after considering the
alternative position under O. 11, r. 1(1). Order 11, r. 1(1)
Since I have concluded that the Brussels Convention applies to the
claims brought against Tr. and Mr. O. in these proceedings, the owners'
submissions in respect of O. 11, r. 1(1) do not strictly arise. Since,
however, those submissions have been fully argued before me inter
partes, and since they may be of some relevance to the argument under
s. 25, I shall at any rate briefly state my conclusions as to them. Rule
1(1)(b)
This was a ground of jurisdiction not originally relied upon before Mr.
Justice Gatehouse, but raised de novo before me. Rule 1(1)(b) permits
service out of the jurisdiction where -
... an injunction is sought ordering the defendant to do or refrain from
doing anything within the jurisdiction (whether or not damages are also
claimed in respect of a failure to do or the doing of that thing). For these
purposes the injunction relied upon is of course that part of the worldwide
Mareva as relates to assets in England. In The Siskina, [1978] 1 Lloyd's
Rep. 1; [1979] A.C. 210 the House of Lords held that such an injunction
was not a legitimate basis for jurisdiction under this wording (then listed
as r. 1(1)(i)) for two reasons: first, because it was not in itself part of the
substantive relief to which the plaintiff's cause of action entitled him, or in
other words that it was not in itself a legal or equitable right, but merely
ancillary to such a substantive cause of action; and secondly because
the substantive cause of action to which the claim for an injunction was
ancillary was not itself justiciable in England. Mr. Mackenzie recognized
that this decision, standing by itself, was a bar to his successful reliance
upon sub-r. (b), at any rate if sub-r. (b) was the sole basis of a claim to
jurisdiction. Nevertheless he submitted that in the years since The Siskina
was decided, it has come to be recognized that a Mareva injunction is
a hardier plant than might have been first realized and can be asserted
even against a party against whom there is otherwise no substantive
cause of action. For these purposes he relies upon three recent cases:
TSB Private Bank International S.A. v. Chabra, [1992] 1 W.L.R. 231,
Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd., [1993] 1
Lloyd's Rep. 291; [1993] A.C. 334, and Mercantile Group (Europe) A.G.
v. Aiyela, [1994] Q.B. 366. He submits that where there is jurisdiction
(under sub-r. (d)(iii)) against the charterers in respect of a substantive
cause of action there can also be jurisdiction against Tr. and Mr. O. to
make a Mareva injunction ancillary to that cause of action. I think that
what Mr. Mackenzie has in mind is that the owners will seek hereafter
to enforce against Tr. and Mr. O. the charterers' liability under the time
charter on the basis that the former are "mixed up" in the latter's liability.
These are deep and perhaps also troubled waters. Nor am I sure that
I have done justice to Mr. Mackenzie's argument. Nevertheless certain
things are clear to me. In none of the three cases relied upon by Mr.
Mackenzie was there the problem of the need for establishing extra-
territorial jurisdiction under O. 11 against those parties against whom
there was a question regarding the making of a Mareva injunction.
In other words the issue in those three cases concerned the first part
of the reasoning in The Siskina, namely the nature of the jurisdiction
(or power) to make an interim injunction under s. 37 of the Supreme
Court Act, 1981, rather than the additional question of finding in such
an injunction the source of extra-territorial jurisdiction. In TSB Private
Bank International S.A. v. Chabra, the defendant Chabra was resident in
England and an English company was joined as a defendant and had a
Mareva injunction granted against it, even though no separate cause of
action was asserted against it, because it held assets of which Chabra was
arguably the beneficial owner. The same situation obtained in Mercantile
Group (Europe) A.G. v. Aiyela. In Channel Tunnel Group Ltd. v. Balfour
Beatty Construction Ltd. the question was whether the Court had power
to make an order under s. 37 against parties over whom the Court had
already established jurisdiction but in circumstances where the action had
to be stayed because the substantive dispute between the parties had to
be referred to arbitration abroad.
In the present case it must be assumed that there is no extra-territorial
jurisdiction over Tr. and Mr. O. other than that which is being claimed
under sub-r. (b) by reason of the Mareva injunction. Let it also be
assumed that if those parties had been present in England a Mareva
injunction would be issued against them even though no separate cause
of action against them was alleged. Is that right to a Mareva injunction
such a legal or equitable right justiciable in England as would justify
service out under sub-r. (b)? There is nothing in either the Chabra case or
the Aiyela case to
suggest so, because both cases proceeded on the basis that the relevant
substantive cause of action, what Lord Justice Hoffmann in the latter case
called the "Siskina cause of action" (see Mercantile Group (Europe) A.G. v.
Aiyela, [1994] Q.B. 366 at p. 376D), was the cause of action against the
primary defendant, and that the injunction against both defendants was
ancillary to that. It seems to me that upon that reasoning the fact that
there may be territorial or extra-territorial jurisdiction over the primary
defendant cannot, consistently with The Siskina, bring in its train extra-
territorial jurisdiction over other defendants not resident in England. If
therefore Mr. Mackenzie is to escape the grip of The Siskina, it can only be
by reference to the Channel Tunnel Group case itself.
In that case, however, it seems to me that the House of Lords was dealing
with the more limited issue whether, by reason of The Siskina, the Court
no longer had power to make an order under s. 37 in circumstances
where the action was stayed for arbitration abroad. In holding that even
in such circumstances the Court retained in principle its power under s.
37, the House of Lords did not question the continued existence of The
Siskina doctrine. Thus at p. 306, col. 1; p. 362C-D Lord Mustill expressed
that doctrine in these terms:
For present purposes it is sufficient to say that the doctrine of The
Siskina, put at its highest, is that the right to an interlocutory injunction
cannot exist in isolation, but is always incidental to and dependent on the
enforcement of a substantive right, which usually although not invariably
takes the shape of a cause of action. If the underlying right itself is not
subject to the jurisdiction of the English Court, then the Court should
never exercise its power under s. 37(1) by way of interim relief. If this is a
correct appreciation of the doctrine, it does not apply to the present case.
At p. 307, cols. 1 and 2; p. 363B-C he said this:
Let us now make a further change, and postulate an arbitration
agreement which calls for arbitration abroad. This may indeed have an
indirect effect on the availability of injunctive relief. Very often it happens
that where there is an arbitration agreement between foreign parties the
English Court has jurisdiction only because the agreement stipulates that
the arbitration shall be held in London, thereby justifying the inference
of English law as the substantive proper law of the contract, and hence
giving the Court jurisdiction over the cause of action under O. 11, r. 1(1)
(d)(iii). If the seat of the arbitration is abroad this source of jurisdiction is
cut off, and the inhibitions created by The Siskina authorities will preclude
the grant of an injunction. Nevertheless, if the facts are such that the
Court has jurisdiction in some way other than the one just described I
can see no reason why the additional foreign element should make any
difference to the residual jurisdiction of the Court over the dispute, and
hence to the existence of the power to grant an injunction in support.
So also in the present case. It is clear from both these passages that an
injunction under s. 37 can only be made against a party against whom
residual jurisdiction exists by reason of a cause of action entitling the
plaintiff to bring himself under a sub-rule of O. 11, r. 1 other than sub-r.
(b) itself.
It seems to me that Mr. Mackenzie's argument could only begin to
work if it ever came to be accepted that a right to a Mareva injunction
was itself a legal or equitable right distinct from the cause of action to
which it is presently described as merely ancillary. If that occurred, then
the question could be asked whether it was a legal or equitable right
justiciable in England. It might then be said that that question could not
be answered without taking a view as a matter of principle about the
proper ambit of sub-r. (b). Where a defendant is resident in England, as
Mr. Chabra's company and Mrs. Aiyela were, then no problem in any event
arises. Where, however, the defendant is abroad, then the right would
be justiciable here only if the claim for the injunction were within sub-r.
(b). That would then depend not on logical deduction but on a question
of principle, for it is not suggested that a Mareva injunction over English
assets is not within sub-r. (b) as a matter of pure language, and the
injunction itself is founded in powers granted by an English statute.
None of these arguments, however, are presently available to Mr.
Mackenzie. But even if they were, it seems to me that this case could
not in any event be regarded as a proper one for service out of the
jurisdiction under O. 11, r. 4(2). I say that for these reasons. First, there
is no evidence of any assets of Tr. or Mr. O. within the jurisdiction, and
it is only upon such assets that an injunction within sub-r. (b) could in
any event bite. Secondly, the substantive cause of action to which the
injunction is said to be ancillary is a cause of action of the owners, but
any such cause of action in contract has been referred to arbitration and
will not in any event be litigated in these proceedings, and any cause of
action in tort is in any event outside the jurisdiction of this Court. Thirdly,
inasmuch as the substantive cause of action which the owners have in
mind as supporting the Mareva injunction against Tr. and Mr. O. is a cause
of action to enforce the interim award, that cause of action has not been
pleaded in these proceedings, nor could it be without consent since the
interim award postdates the writ. In any event such cause of action could
not, I think, be raised before me consistently with the decision in Metall
und Rohstoff A.G. v. Donaldson Lufkin & Jenrette Inc., [1990] 1 Q.B. 391.
For these reasons, even if it were open to me to give leave to issue and
serve these proceedings out of the jurisdiction under sub-r. (b) against Tr.
and Mr. O., I would not in my discretion do so. Order 11, r. 1(1)(c)
This is the "necessary or proper party" sub-rule. It is, however, an
essential requirement of jurisdiction under this sub-rule that a defendant
has already been duly served. Thus sub-r. (c) provides:
(c) the claim is brought against a person duly served within or out of the
jurisdiction and a person out of the jurisdiction is a necessary or proper
party thereto. Moreover r. 4(1)(d) provides:
(1) An application for grant of leave under rule 1(1) must be supported by
an affidavit stating -...
(d) where the application is made under rule 1(1)(c), the grounds for
the deponent's belief that there is between the plaintiff and the person
on whom a writ has been served a real issue which the plaintiff may
reasonably ask the Court to try. At the time of the application to Mr.
Justice Gatehouse none of the defendants had been served. Nor was there
an affidavit in the terms required by r. 4(1)(d). Since then, if I ignore the
substitute service by post upon the charterers which even the owners do
not rely upon, it remains the position that there is no party "duly served"
to support the jurisdiction under this sub-rule. However there is a further
affidavit from Mr. Arghyrakis in which he deposes to his belief that there is
a real issue between the owners and the charterers which the owners may
reasonably ask the Court to try "on the grounds set out in my previous
affidavit" and now on the further ground that the owners have the interim
award "on which the Plaintiffs may reasonably bring an action ". The
same affidavit goes on to state that Tr. and Mr. O. are to be regarded as
"necessary" parties because unless the charterers, Tr. and Mr. O. can all
be joined in the same action, then judgment obtained against any one of
them may render it impossible subsequently to obtain judgment against
either or both of the others by reason of the doctrine of merger of cause
of action in judgment.
It seems to me that there are a number of insuperable difficulties in this
application. First, it still remains the position that the charterers have not
yet been duly served. Mr. Mackenzie undertakes to see that that is done.
The language of the rule prevents me, however, from anticipating the
fulfilment of that undertaking. Secondly, what is the "real issue" between
owners and charterers which the former can reasonably ask this Court
to try? Not any issue under the time charter, for all such issues have
been referred to arbitration. Nor any issue in tort, for there is not even
an application for leave to serve out in respect of any cause of action in
tort. Nor any issue arising out of the enforcement of the interim award
for, even putting on one side the question whether a straightforward
claim to enforce an arbitration award constitutes a "real issue", the fact
is that there is no such claim at present within the writ and cannot be.
Thirdly, what is the issue to which Tr. and Mr. O. are necessary or proper
parties? That remains unclear. If the claim is one in contract against the
charterers, Tr. and Mr. O., then for the reasons given under the heading
of O. 11, r. 1(1)(d)(iii) below, there is in my view no good arguable case
against Tr. and Mr. O.. If, however, the claim is to enforce the interim
award not only against the charterers but against also Tr. and Mr. O., I
do not see why all three cannot be joined to the same proceedings in
Germany.
Nevertheless Mr. Mackenzie submits that all such difficulties can be
overcome in the future; and in the meantime, even if I cannot anticipate
the time when jurisdiction is properly obtained over the charterers for the
purpose of granting leave to issue and serve out against Tr. and Mr. O.,
I can anticipate that time and hold the position secure in the interim by
maintaining the Mareva injunction against them.
Not so, submits Mr. Males. Just as there is no power to grant a Mareva
injunction in support of a future or inchoate cause of action – see
Veracruz Transportation Inc. v. V.C. Shipping Co. Inc. (The Veracruz I),
[1992] 1 Lloyd's Rep. 353 – so a Mareva injunction cannot be granted
merely because the Court may in the future obtain jurisdiction over a
defendant. He refers me also to the dictum of Lord Justice Neill in Derby
& Co. Ltd. v. Weldon, (Nos. 3 and 4), [1990] Ch. 65 at p. 93F where the
Court's power to grant a Mareva is qualified by the expression "against
any person who is properly before the court".
The issue in The Veracruz I was the different issue whether the Court
could anticipate a cause of action. In the present case, other difficulties
apart, the issue raised by Mr. Mackenzie is whether, in a situation where a
plaintiff goes to Court with a good claim for jurisdiction against defendant
A and another good claim for jurisdiction under sub-r. (c) against
defendant B once defendant A has been served, he can obtain from the
Court at that time a Mareva injunction only against defendant A, but not
against defendant B. If that is so, it may be said to represent a lacuna in
the rules. It seems to me, however, that the question of jurisdiction and
the power to grant a Mareva probably go together. Either the Court has
jurisdiction over a defendant, because it is willing to grant leave under O.
11, in which case there is no difficulty about granting a Mareva injunction
in an appropriate case; or it does not, in which case The Siskina prevents
the grant of an injunction. In this connection I note that it was again The
Siskina which ultimately lay behind the decision in The Veracruz I, even
though in that case the practice of granting a contingent Mareva was
otherwise regarded as sensible and desirable. It is true that a Mareva
may be granted in advance of service being effected under O. 11, and
even in advance of the issue of a writ. But I do not know of a doctrine
of contingent jurisdiction which would permit the grant of a Mareva in a
situation where the Court can see that it would give leave to serve out
under sub-r. (c), but cannot yet do so because the primary defendant has
not yet been served. It seems to me, however, that it would be desirable
if a Court could, in an appropriate case, hold the ring by granting a
Mareva injunction against both defendants in those circumstances –
because of course, by the time the primary defendant is served, the
necessary or proper party, if sufficiently closely connected with the
primary defendant, may have put its assets out of reach. Nevertheless,
this is not the case for a decision on this point, for in my judgment the
owners cannot in any event bring themselves within sub-r. (c). Order 11,
r. 1(1)(d)(iii)
The time charter contains a London arbitration clause and on that basis
leave under sub-r. (d) has been obtained against the charterers. Mr.
Mackenzie submits that the same sub-rule can be invoked against Tr.
and Mr. O. on the ground that all three parties are agents and alter
egos of each other and that Tr. and Mr. O. can therefore be regarded
as undisclosed principals to the time charter. Despite the fact that
all disputes under the charter have been referred to arbitration, and
albeit that arbitration has only been invoked against the charterers, it
is nevertheless submitted that there is a good arguable case for what
is called piercing the veil between the charterers on the one hand and
Tr. and Mr. O. on the other, to the effect that the latter defendants
are liable as well as the charterers in contract. In this connection Mr.
Mackenzie relied on evidence before me indicating that the charterers
were wholly owned by Mr. O. (denied in the affidavit put in on his behalf)
and that the charterers' reliance on the assignment by Tr. of part of the
sums due under the Hong Kong judgments as an excuse for disputing
liability or ability to pay the hire under the charter, despite receiving over
U.S.$900,000 from the sub-charterers, was part of a scheme hatched
between the charterers and Tr..
It seems to me that when consideration is given to the dates involved:
payment of the first 15 days hire on Nov. 21, 1994, assignment by Tr. to
the charterers on Nov. 22, completion of loading and signing of bills of
lading on Nov. 25, the charterers' failure to pay the second instalment of
hire due on Dec. 2, despite payment to them at about that time of the
sub-freight, and on Dec. 3 the letter from More Fisher Brown on behalf
of the charterers already prepared demonstrating (in effect) that Tr.
and the charterers had arranged between themselves to use the Hong
Kong judgments against a different Chinese entity as an excuse for not
paying the hire due to the owners: there is a certain force in the owners'
submission that there is a good arguable case that Tr. and their sole
director Mr. O. have decided together with the charterers to misuse the
time charter to recoup funds due under the judgments from a separate
Chinese company. I should say at once that such a suggestion is strongly
disputed by Tr. and Mr. O.. Nevertheless, preferring to meet the claims
in these proceedings, for the sake of urgency, purely on the ground
of jurisdiction, and therefore reserving if necessary for a subsequent
occasion the marshalling of evidence relating to the substance of the
owners' complaints, Tr. and Mr. O. are hardly in a position to meet the
owners' factual case – they rather take up the position that they do not
have to. If, therefore, these considerations entitled me to conclude that
there was a good arguable case of a cause of action in contract under
the time charter against Tr. and Mr. O., I would not hesitate to say so.
In my judgment, however, there is no such good arguable case. There is
nothing substantial in the owners' evidence before me to suggest that in
entering into the time charter the charterers were acting as agents for
Tr. or Mr. O.. On the contrary, assuming the correctness of the owners'
aspersions, it might be all the more important for the charterers always to
have intended to limit liability under the charter to the charterers alone.
In this connection it seems to me that what was said on the subject of a
good arguable case and agency in The Coral Rose, [1991] 1 Lloyd's Rep.
563 is relevant. At p. 567 Lord Justice Neill said this:
The Judge considered that the plaintiffs had a good arguable case that the
relationship between Avalon and Marc Rich was either one of agent and
principal or very close to being one of agent and principal.
I regret to say that, on the facts disclosed in the documents before
the Court, I am unable to agree with the Judge as to the nature of
this relationship. It is true that the evidence of the existence of the
loan is scanty and is not supported by any contemporary documents,
but it seems to me that a relationship of debtor and creditor can be
more readily inferred on these facts than a relationship of agent and
principal. As I understand the matter, the purposes of the scheme were
to avoid the risk that Marc Rich might be liable for debts incurred in
the course of trading with the vessel and to reduce as far as possible
the incidence of taxation. It is possible to criticise the use of one-ship
companies to achieve such results, but it is necessary to bear in mind the
fundamental principle that "the relationship of principal and agent can
only be established by the consent of the principal and the agent": see
Lord Pearson in Garnac Grain Co. Inc. v. H. M. F. Faure & Fairclough Ltd.,
[1967] 1 Lloyd's Rep. 495 at p. 508, col. 2.; [1968] A.C. 1130 at p. 1137.
It is true that the question of consent has to be determined objectively
and that parties may be held to have consented even if they profess to
disclaim the relationship. In the present case, however, the evidence,
such as it is, tends to suggest that the parties took deliberate steps to
arrange matters so that the vessel was to trade for and on behalf of
Avalon alone... Lord Justice Stocker and Lord Justice Staughton expressed
views to similar effect at pp. 569 and 570-571 respectively. The relevant
passage in Lord
Justice Staughton's judgment ended with this (at p. 571):
The creation or purchase of a subsidiary company with minimal liability,
which will operate with the parent's funds and on the parent's directions
but not expose the parent to liability, may not seem to some the most
honest way of trading. But it is extremely common in the international
shipping industry, and perhaps elsewhere. To hold that it creates an
agency relationship between the subsidiary and the parent would be
revolutionary doctrine.
I therefore reject the owners' submission that there is a good arguable
case that Tr. and Mr. O. are liable in contract under the time charter
and therefore entitled to bring themselves within sub-r. (d)(iii). In the
circumstances it is unnecessary for me to deal with Mr. Males' additional
submission that, even if there was prima facie a good case in contract,
the owners had nevertheless elected to take their remedy against the
charterers (by obtaining an award against them) and could not therefore
pursue a cause of action under the charter against Tr. and Mr. O.. Suffice
it to say that I would not on that ground have rejected a good arguable
case in contract, if there had been one to find. Order 11, r. 1(1)(m)
This was one of the three grounds of jurisdiction relied upon ex parte
before Mr. Justice Gatehouse; but at the end of the day Mr. Mackenzie
did not really press continued reliance on it before me – although he
reserved the right to seek leave to serve out under it in the context
of fresh proceedings. Sub-rule (m) permits service out of a claim "to
enforce any judgment or arbitral award". The submission was that the
interim award could be enforced not only against the charterers, but also
against Tr. and Mr. O.. In as much as the argument required a contractual
nexus between the owners and those other parties, it suffered from
the same difficulties as I have described in the previous section of this
judgment. In as much, however, as the argument went wider than that
and extended to a submission either that the assets of the charterers
could be followed into the hands of Tr. or Mr. O., or that in any event
the circumstances were such as to make it just to "lift the veil" for the
purposes of execution between the charterers and the other two parties:
that is a different matter. However, Mr. Mackenzie's real and recognized
difficulty was that there was no claim in the draft writ before Mr. Justice
Gatehouse to enforce an award; and indeed the interim award of Jan.
4, 1995 postdated the writ. In the circumstances there is no case for
jurisdiction in these proceedings under sub-r. (m). Section 25 of the 1982
Act revisited
In my judgment there are no considerations in the sections above dealing
with O. 11 which cause me to doubt the views I have already expressed
regarding the owners' reliance in the alternative on s. 25 for supporting
a claim for interim relief in support of proceedings in Germany. There is
no evidence of any assets within the jurisdiction. There is no substantive
claim in these proceedings against Tr. or Mr. O. in respect of which this
Court could properly exercise jurisdiction, even if the Brussels Convention
did not apply. There is and can be no claim in these proceedings even
to enforce an award. Tr. and Mr. O. are domiciled in Germany. There
is no evidence before me that the German Court would not itself be
able and willing to protect the owners by means of interim measures
pending prosecution of appropriate claims in Germany. In the meantime,
however, the owners do not appear to be keen to proceed in Germany,
and if they do, I am not clear what claims they would be advancing.
In all these circumstances it seems to me to be inexpedient to grant
interim relief in support of proceedings yet to be commenced in Germany,
notwithstanding the case that the owners can make on the state of the
evidence before me that Tr. and Mr. O. have made common cause with
the charterers to use the hire due under the time charter as a means
of recouping Tr.'s losses under earlier contracts with a different party.
Section 24 of the 1982 Act
If all else fails Mr. Mackenzie submits that I can maintain the worldwide
Mareva injunction against Tr. and Mr. O. under s. 24of the 1982 Act,
on the ground of the expediency of interim relief in a case of doubtful
jurisdiction. Section 24(1) provides:
Any power of a court in England and Wales or Northern Ireland to grant
interim relief pending trial or pending the determination of an appeal shall
extend to a case where – (a) the issue to be tried, or which is the subject
of the appeal, relates to the jurisdiction of the court to entertain the
proceedings; I have, however, already determined the issues to be tried
relating to the jurisdiction of this Court; and as to the position pending an
appeal, that is not yet a matter before me.
Conclusion
For all these reasons I set aside the order of Mr. Justice Gatehouse as
varied by the order of Mr. Justice Longmore; and I decline to make any
order under ss. 24 or 25 of the 1982 Act.