Ship arrest in Australia, by Phillips Fox
Introduction
Admiralty jurisdiction is exercised by the Federal Court of Australia and Supreme Court of each State and Territory under the Admiralty Act 1988 (Cth) (‘the Act’), which follow a uniform procedure set out in the Admiralty Rules (‘the Rules’).
Maritime Claims
There are two types of maritime claims defined in the Act:
Proprietary maritime claims
These are defined in section 4(2) as:
(a) a claim relating to:
(i) possession of a ship
(ii) title to, or ownership of, a ship or a share in a ship
(iii) a mortgage of a ship or of a share in a ship
(iv) a mortgage of a ship’s freight
(b) a claim between co-owners of a ship relating to the possession, ownership, operation or earnings of a ship
(c) a claim for the satisfaction or enforcement of a judgment given by a court (including a court of a foreign country) against a ship or other property in a proceeding in rem in the nature of a proceeding in Admiralty
(d) a claim for interest in respect of a claim referred to in paragraph (a), (b) or (c).’
General maritime claims
These are defined in section 4(3) as:
(a) a claim for damage done by a ship (whether by collision or otherwise)
(b) a claim in respect of the liability of the owner of a ship arising under Part II or IV of the Protection of the Sea (Civil Liability) Act 1981 under a law of a State or Territory that makes provision as mentioned in subsection 7(1) of that Act
(c) a claim for loss of life, or for personal injury, sustained in consequence of a defect in a ship or in the apparel or equipment of a ship
(d) a claim (including a claim for loss of life or personal injury) arising out of an act or omission of:
(i) the owner or charterer of a ship
(ii) a person in possession or control of a ship
(iii) a person for whose wrongful acts or omissions the owner, charterer or person in possession or control of a ship is liable
being an act or omission in the navigation or management of the ship, including an act or omission in connection with:
(iv) the loading of goods on to, or the unloading of goods from, the ship
(v) the embarkation of person on to, or the disembarkation of person from, the ship and
(vi) the carriage of goods or persons on the ship
(e) a claim for loss of, or damage to, goods carried by a ship
(f) a claim arising out of an agreement that relates to the carriage of goods or persons by a ship or to the use or hire of a ship, whether by charterparty or otherwise
(g) a claim relating to salvage (including life salvage and salvage of cargo or wreck found on land)
(h) a claim in respect of general average
(j) a claim in respect of towage of a ship
(k) a claim in respect of pilotage of a ship
(m) a claim in respect of goods, materials or services (including stevedoring and lighterage services) supplied or to be supplied to a ship for its operation or maintenance
(n) a claim in respect of the construction of a ship (including such a claim relating to a vessel before it was launched)
(o) a claim in respect of the alteration, repair or equipping of a ship
(p) a claim in respect of a liability for port, harbour, canal or light tolls, charges or dues, or tolls, charges or dues of a similar kind, in relation to a ship
(q) a claim in respect of a levy in relation to a ship including a shipping levy imposed by the Protection of the Sea (Shipping Levy) Act 1981, being a levy in relation to which a power to detain the ship is conferred by a law in force in Australia or in a part of Australia
(r) a claim by a master, shipper, charterer or agent in respect of disbursements on account of a ship
(s) a claim for an insurance premium, or for a mutual insurance call, in relation to a ship
(t) a claim by a master, or a member of the crew, of a ship for:
(i) wages
(ii) an amount that a person, as employer, is under an obligation to pay to a person as employee, whether the obligation arose out of the contract of employment or by operation by law, including the operation of the laws of a foreign country
(u) a claim for the enforcement of, or a claim arising out of, an arbitral award (including a foreign award within the meaning of the Arbitration (Foreign Awards Agreement) Act 1974) made in respect of a proprietary maritime claim or a claim referred to in one of the preceding paragraphs
(w) a claim for interest in respect of a claim referred to in one of the preceding paragraphs.
Proceedings in rem
Claims against ships are commenced by issuing proceedings in rem. The mere presence of a vessel in Australian territorial waters is sufficient to found jurisdiction in Australia. Proprietary maritime claims give an automatic right to proceed in rem because the cause of action relates to the vessel itself, without reference to its ownership. A general maritime claim gives right to proceed in rem but there is a further requirement relating to ownership. In particular, such proceedings can be commenced where a ‘relevant person’ (the owner or charterer) was, when the cause of action arose, the owner or charterer of, or in possession of or control of the ship or property, and is, when the proceeding is commenced, the owner or demise charterer of the ship in question.
The main difference between proprietary maritime claims and general maritime claims is that proprietary maritime claims against vessels are preserved even when ownership is transferred. Bearing in mind that most vessels are owned by one-ship owning companies with that ship being the company’s only asset, it is important for claimants to ensure that they are adequately secured for their claims.
Jurisdiction
Federal Court of Australia
The Act confers Admiralty jurisdiction on the Federal Court of Australia, which has jurisdiction over the whole of Australia, her external territories and territorial waters.
Supreme Courts
Each of the Supreme Court of a State and Territory also exercise Admiralty jurisdiction under the Act and the Rules, but are more limited in their application as jurisdiction is confined to that State, at least so far as arrest is concerned. However, the state courts are invested with Federal Jurisdiction in respect of proceedings that may, under the Act, be commenced as actions in personam (section 9) and in rem (section 10).
Arrest
Once proceedings in rem have been issued, an arrest warrant will automatically be issued upon application to the Court Registrar, unless a caveat has been lodged. If there is a caveat on the Registry, the caveator must, within 3 days, pay into court the amount specified in the caveat or the amount claimed, whichever is the less, or cause a bail bond in that amount to be entered, and enter an appearance in the proceedings. A person who enters a caveat and then fails to comply with the foregoing requirements, is liable to committal.
Australia is a signatory to the Brussels Arrest Convention 1952. Articles 2 and 8 of that Convention effectively provide a right of arrest of any vessel, whether flying the flag of a signatory country or not. In addition, the Convention specifically provides for the arrest of a vessel to obtain security in respect of proceedings properly commence in another jurisdiction.
The Brussels Convention and the Act specifically prohibit the re-arrest of a vessel in respect of the same maritime claim. However, applications may be made to the Australian court for an order permitting re-arrest, should there be a default in the performance of a guarantee or undertaking given to procure the release of the vessel from arrest or for ‘other sufficient reason’ (section 21).
Sister ship arrest
Section 19 of the Act provides:
A proceeding on a general maritime claim concerning a ship may be commenced as an action in rem against some other ship if:
(a) a relevant person in relation to the claim was, when the cause of action arose, the owner or charterer of, or in possession of or control of, the first-mentioned ship
(b) that person is, when the proceedings are commenced, the owner of a second-mentioned ship.’
Security
Australian courts will accept security for principal, interest and costs from a carrier in the form of a written undertaken given by a recognised P&I Club: Freshpac Machinery Pty Limited v The Ship ‘Joana Bonita’ (1994) 125 ALR 683 (FCA).
If the plaintiff ordinarily resides outside the jurisdiction, the court has discretion to order that plaintiff to provide security for costs.
Damages for wrongful arrest
Section 34 of the Act provides:
‘Where, in relation to a proceeding commenced under this Act:
(a) a party unreasonably and without good cause:
(i) demands excessive security in relation to the proceeding
(ii) obtains the arrest of a ship or other property under this Act
(b) a party or other person unreasonably and without good cause fails to give a consent required under this Act for the release from arrest of a ship or other property
the party or person is liable in damages to a party to the proceedings, or to a person who has an interest in the ship or property, being a party or person who has suffered loss or damage as a direct result.’
This summary has been prepared by Phillips Fox for the general information of users of www.shiparrested.com. While it directs attention to, and comments upon, aspects of the law, it is not intended to provide legal advice in the area. For legal advice, please contact the Phillips Fox contact named at the intended port of arrest.