Where in Admiralty proceedings a ship has been arrested, the shipowners will normally be eager to obtain its release as soon as possible, for costs and lost revenue may otherwise amount to thousands of pounds per day. What usually happens is that the shipowners procure an undertaking, from a bank or an insurance company, to the arresting plaintiff, guaranteeing the payment of all sums later agreed due or so found by the court, plus interest and costs. This guarantee is a matter entirely inter partes, and has nothing to do with the court. The plaintiff withdraws the arrest under R.S.C., Order 75, r. 13(2) and, except in the case where another party has issued a caveat against release (under r. 14), the court must thereupon order the ship’s release.

These days, agreement between the parties is almost universal, and the court is rarely troubled actually to decide whether a ship ought to be released, and, if so, on what terms. The question, therefore, of what happens if the parties are unable to agree has not been much litigated.

Last year, the question arose briefly in The Islas Galapagos. The Admiralty Registrar, before whom the matter first came, decided that if the parties could not come to terms the court could only release the ship if either a bail bond was tendered to the court by the shipowners or payment into court was made in lieu of bail. In other words, a plaintiff was under no duty to be reasonable in negotiating the terms of an inter partes guarantee: he could demand bail or payment in lieu. The shipowners appealed to the Admiralty judge, but the matter was compromised without Sheen, J., having to give any decision, although it is said that the learned judge’s interlocutory observations tending to agree with the Registrar were a considerable factor in that compromise. At all events, so far as there was any authority, it seemed to favour the plaintiff, and a note, 75/13/2, in the White Book recorded (without case citation) that “it seems an arresting party is entitled to insist on bail or payment into court”.

In the Admiralty context, bail much resembles its common law equivalent for arrested persons. Two persons other than the shipowners enter into recognisances (bail bonds), binding themselves to pay the adjudged or agreed sum if the shipowners should not. The undertaking is not with the arresting party, but with the court. The