Lloyd's Maritime and Commercial Law Quarterly
ARREST OF SHIPS
Gatoil International Inc. v. Arkwright-Boston Manufacturers Mutual Insurance Co.
The Antonis P. Lemos
Section 47 of the Administration of Justice Act 1956 sets out the circumstances in which a ship may be arrested in an action in rem in the Scottish courts. Section 47(2) provides as follows:—
“This section applies to any claim arising out of one or more of the following, that is to say—
…
(e) any agreement relating to the carriage of goods in any ship whether by charter-party or otherwise …”.
Sub-para. (e) appears in a list which runs from (a) to (s). The list is broadly similar to the list contained in s. 1(1) of the Act (which defined the Admiralty jurisdiction of the High Court and which applied in England and Wales)1 and Part I of Sch. 1 to the Act (which defines the Admiralty jurisdiction of the High Court in Northern Ireland). Paragraph (e) of s. 47(2) is the same effect as para. (h) of s. 1(1) and there are similar words in the Northern Irish Schedule. The question decided by the House of Lords in Gatoil International Inc. v. Arkwright-Boston Manufacturers Mutual Insurance Co.2 was whether para. (e) of s. 47(2) permitted the arrest of the vessel Sandrina at Sullom Voe in the Shetland Islands in a claim by Arkwright-Boston for premiums due under a war risk open cover policy taken out by Gatoil on a cargo of oil shipped from Kharg Island in Iran to various destinations. It was assumed for the purposes of the appeal that the vessel was owned by Gatoil. It was not alleged that the relevant cargo had been shipped in the Sandrina but under the Act it is sufficient if Gatoil owned the vessel and that the claim arose out of one of the matters listed in s. 47(2).
After the Sandrina had been arrested, Gatoil raised an action against Arkwright-Boston in the Lerwick Sheriff Court seeking recall of the arrestments. They pleaded that the arrestment was incompetent because the claim was not within s. 47(2) of the Act of 1956. Sheriff Russell, Q.C., sitting at Aberdeen, held that the claim for premiums on a policy of insurance over goods to be carried by sea fell within the terms of para. (e). Gatoil appealed but the Second Division of the Inner House affirmed the Sheriff’s decision. Leave to appeal to the House of Lords was given.
The discovery of oil in the North Sea has brought many benefits to the United Kingdom. Lawyers (but, perhaps, not others) will appreciate that not the least of these is that it has resulted in the courts in Scotland being able to play a greater part than hitherto in the development of maritime law. The list in s. 47(2) of the Act of 1956 is
1 The list of claims within the Admiralty jurisdiction of the English High Court has now been moved from s. 1(1) of the 1956 Act to s. 20(2) of the Supreme Court Act 1981. The list is still in the same terms as s. 1(1) and for the sake of simplicity this Note refers to s. 1(1) of the 1956 Act rather than to s. 20(2) of the 1981 Act.
2 [1985] 2 W.L.R. 74.
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