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Court of Appeal reviews law relating to ship arrest

11/12/18

The Court of Appeal has today handed down judgment in Stallion Eight Stallion Eight Shipping Co. SA v Natwest Markets PLC (formerly known as The Royal Bank of Scotland PLC) (The M.V. Alkyon) [2018] EWCA Civ 2760, dismissing an appeal from Mr Justice Teare sitting in the Admiralty Court. 

Teare J’s judgment below (see related news article here had been the first to consider whether the Court’s discretionary power under CPR Part 61 to release a vessel from arrest could be exercised so as to release a vessel from arrest unless the arresting party is willing to provide a cross-undertaking in damages in respect of any losses caused to the shipowner in the event the arrest turns out to have been unjustified (in the form required of an applicant for a freezing order).

Importantly, the Court of Appeal confirmed that the Court had not been bound by authority to refuse the application, and confirmed that, in an appropriate case, it was open to the Court (without the intervention of Parliament or the Rules Committee) to depart from the established practice of the Admiralty Court that cross-undertakings in damages would not be required before a party could obtain or maintain the arrest of a ship.  Nevertheless, the Court concluded that the Judge had been right to decline to make an “overnight” change to the settled law and practice.  After considering the state of the law in a number of common law jurisdictions, the Court expressed itself attracted to the approach outlined by the Singapore Court of Appeal in The Vasiliy Golovnin, under which it was regarded as open to the Court to reconsider the law in relation to arrest (including wrongful arrest, and the availability of cross-undertakings), but only if “properly informed as to the views of the maritime community, including the practical ramifications of any proposed changes and the preferred route to be adopted if any such changes are decided upon”.

The underlying proceedings are due for trial in 2019.

The judgment is here.

Tim Lord QC and Geoffrey Kuehne appeared for the Defendant shipowners, instructed by Hill Dickinson LLP.