High Court of Ireland Decisions

1. The plaintiff is a limited liability company incorporated in the State which, inter alia, engages in the business of exporting frozen meat. The defendants are the owners of a motor-vessel "Blue Ice" (hereinafter called "the vessel") which is registered in the port of Panama and flies the flag of the Republic of Panama. She engages in the business of transporting frozen produce. The owners of the vessel are Mirage Consultants Limited, a limited liability company having its registered place of business in the Isle of Man. At all times material to this action, the plaintiff was represented by ship brokers, Maritime Chartering Limited. Though denied originally, it was ultimately conceded by the defendants that in negotiations with the plaintiff's broker regarding the chartering of the vessel, it was represented by managing brokers called Scanocean.

2. In December, 1996 the plaintiff had a contract with a Russian customer which required the delivery of frozen meat from Ireland to St. Petersburg in accordance with a strict deadline in January, 1997. At or about that time, the defendants intended that the vessel would sail from Las Palmas to a port in the Baltic Sea for the purpose of maintenance and repair. She was available on route to carry cargo to a port in the Baltic area, including St. Petersburg, and was concerned to obtain business in that connection. Negotiations were entered into between the respective brokers by telex communications. The plaintiff contends that a contract was made between the parties whereby the defendant agreed to transport in the vessel a cargo of frozen meat for the plaintiff to its customer at St. Petersburg from the port of Foynes and that, pursuant thereto, the vessel was diverted to Foynes from Las Palmas. The defendant contends that no contract was concluded between the parties in that a particular term required by the plaintiff as to the absence of outstanding debts on the vessel or existing or foreseeable disputes which might hinder the performance of the voyage was not acceded to by or on behalf of the defendant or by or on behalf of Scanocean. In addition to its interpretation of the telex communications, the plaintiff's case in support of the alleged contract is also based upon the fact that the vessel arrived at Foynes on 8th January, 1997, allegedly for the purpose of taking delivery of the plaintiff's frozen meat for carriage to St. Petersburg, a contention which it is submitted is borne out by a Notice of Readiness addressed to the plaintiff dated 8th January, 1997 and duly signed by the master of the vessel which stated that she had arrived at Scattery Roads on that date and was in all respects ready to load her cargo. The existence of the latter document; the arrival of the vessel at Foynes and her inspection there by a marine surveyor on behalf of the plaintiff as to her fitness for the intended purpose, suggests the likelihood that but for the intervention of a crucial circumstance outside the control of either party, the proposed cargo would have been duly dispatched to St. Petersburg on board the vessel. In the event, it was discovered by the plaintiff's surveyor that certain classification certificates relating to the vessel had expired; that Societie Veritas, the classification society concerned, required certain matters to be attended to and that they were not prepared to issue temporary certification covering the voyage to St. Petersburg and the repair yard in the Baltic. In consequence of this, the vessel was unable to receive the plaintiff's cargo and to proceed on the intended voyage. In the circumstances, the plaintiff was obliged to charter an alternative vessel for the intended purpose at a cost which was substantially higher than the price agreed with the defendant. The plaintiff's action comprises a claim for loss which it sustained by reason of the defendant's alleged failure to honour its contract of carriage.

3. The essence of the dispute between the parties is whether a performance guarantee originally given by Scanocean regarding the contract had been lawfully withdrawn by them thus leaving the transaction incomplete. The defendant contends that the telex messages establish that there was no contract between the parties and, therefore, no basis on which the plaintiff could sustain any claim against the defendant. Accordingly, there was nothing to justify the arrest of the vessel on the plaintiff's application and in the circumstances the court should discharge the warrant of arrest. The plaintiff's case is that a completed contract was already in existence when Scanocean purported to resile from its guarantee and that the subsequent conduct of the defendant in directing the vessel to Foynes and the master's certificate of readiness furnished to the plaintiff is consistent only with the existence of the alleged contract between the parties and is an acknowledgement of it by the defendant.

4. The defendant's application for discharge of the arrest warrant is based upon Section 47 of the Admiralty Court (Ireland) Act, 1867 which is in the following terms:-

5. The foregoing provision is peculiar to Irish Admiralty law and the point at issue between the parties is whether the plaintiff has established to the reasonable satisfaction of the court that it had "good and sufficient reason" for applying for and obtaining the arrest warrant which is now in dispute.

6. In assessing the circumstances which gave rise to the arrest of the vessel, it is not the function of the court to resolve the issue between the parties as to the existence or otherwise of a valid contract of carriage between them. I am satisfied that the court is required only to decide whether or not the plaintiff has established that it has a fair statable case in support of its contention that there was a concluded contract between the parties which has not been honoured by the defendant in consequence of which the plaintiff has suffered loss. Having considered all of the relevant documentation, the various affidavits and the submissions of counsel, I am satisfied that the plaintiff has discharged its obligation to establish a fair statable case and that, therefore, there are sufficient grounds for the arrest of the vessel. The defendant is, of course, entitled to contest the action on the ground that there was no contract between the parties and, if it is successful in that regard, it is entitled to recover from the plaintiff such loss as it may sustain through the conduct of the latter in applying for and obtaining a warrant from the court for the arrest of the vessel.