Lloyd's Maritime and Commercial Law Quarterly
IN DEFENCE OFTHE IOANNIS DASKALELIS
1. The Ioannis Daskalelis v. The Halcyon Isle
In a recent Comment,1 Michael Marks Cohen of New York, in his witty and inimitable style, decries the unanimous decision of the Supreme Court of Canada in The Ioannis Daskalelis,2 where a foreign contract lien was recognized. He hails, however, the majority Privy Council opinion in The Halcyon Isle,3 where a foreign contract lien was not recognized.
The facts of the two cases are strongly similar. In The Ioannis Daskalelis, a Greek ship, with a registered Greek mortgage, was repaired in a Brooklyn, N.Y., shipyard and sailed without paying for the repairs. The ship, on orders from the mortgagee,4 by-passed an American port and was arrested by the mortgagee in a Canadian port in 1964. The Canadian Supreme Court properly recognized the foreign ship repair claim entered into freely by the parties in the United States, thus providing a maritime lien under the law of the contract. The Supreme Court recognized the foreign law of the contract because it was substantive not procedural and because it was not against public order so to recognize such a lien. It then ranked the maritime lien ahead of the mortgage in accordance with Canadian law (the lex fori) because ranking is procedural.
In The Halcyon Isle, a British ship encumbered by a mortgage dated 27 April 1973, entered the same Brooklyn, N.Y, shipyard in March 1974 and left without paying for repairs. The mortgage was only registered on 8 May 1974. The ship was then arrested on 5 September 1974 by the mortgagee in Singapore (where English law applies). The case came to the Privy Council in London, which declared that maritime liens were remedies (and, therefore, we assume, procedural) and that, therefore, the law of the forum applied. In effect the Privy Council conflict rule would seem to be that one never recognizes foreign maritime liens unless they are identical to the law of the forum, i.e., to the law of English maritime liens.
2. Greater rights for U.S. creditors
Mr Cohen dislikes the Ioannis Daskelelis decision, not because of the conflict of laws process employed, but because it gives “American creditors greater rights in Canada than domestic creditors, which seems aberrational”.5 The solution, however, to that problem, if there is a problem, is to change American law by legislation, and not by decisions of Canadian courts.
1. “In defense of the Halcyon Isle” [1987] 2 LMCLQ 152. For a more detailed analysis of The Ioannis Daskalelis and The Halcyon Isle than is possible here, see Tetley, Maritime Liens and Claims (1985), 522–555.
2. Todd Shipyards Corp. v. Alterna Cia. Maritima S.A. (The Ioannis Daskalelis) [1974] S.C.R. 1248 (also reported at [1974] 1 Lloyd’s Rep. 174; 1973 AMC 176; (1973) 32 D.L.R. (3d) 572).
3. Bankers Trust International Ltd. v. Todd Shipyards Corp. (The Halcyon Isle) [1981] A.C. 221 (also reported at [1980] 2 Lloyd’s Rep. 325; 1980 AMC 1221) (P.C.).
4. Supra, fn. 2, at p. 1250.
5. Supra, fn. 1, at p. 154.
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