United Kingdom House of Lords Decisions

LORD JUSTICE-CLERK (Wheatley).—This action has been raised by the appellants in the sheriff court at Lerwick craving (a) the recall of an arrestment to found jurisdiction in an action at the instance of the respondents against them in the sheriff court at Lerwick and (b) the recall of an arrestment on the dependence in that same action. For administrative reasons this action was transferred to the sheriff court at Aberdeen where the legal debate in relation to these two matters was heard by Sheriff Russell. In the result, by interlocutor dated 5th March 1984, he refused to recall the two arrestments and dismissed the appellants' action.

When the debate before the sheriff took place two grounds of argument were put forward by the appellants. These were: (1) At the material time when the vessel in question was arrested the appellants were not the owners of it. (2) The claim which gave rise to the arrestments was not a relevant claim under the appropriate statutory provisions. Counsel for the appellants stated that he was not pursuing the first of these arguments before this court during the instant appeal, thereby confining the current issue to the second one.

The facts are sufficiently set out in the pleadings and in the sheriff's note to his interlocutor, and I find it unnecessary to repeat them. I would point out, however, that the sheriff has inadvertently made two mistakes in relation to the "Sandrina". She was not one of the vessels in respect of which premiums were ordered, and she is a gas carrier and not an oil carrier. These points, however, are immaterial for present purposes.

The one issue now before the court turns on the meaning and effect of section 47 (2) (e) of the Administration of Justice Act 1956. This falls within Part V of the Act which deals with "Admiralty Jurisdiction and Arrestment of Ships in Scotland". These statutory provisions do not supersede the common law of Scotland in relation to arrestments of property but merely modify them. [His Lordship quoted subsection (1) of section 47 and continued.] Subsection (2) thereof enacts:

"This section applies to any claim arising out of one or more of the following, that is to say"

—there then follows paragraphs (a) to (s) dealing with different situations. I need only quote two of these which were referred to in the debate, namely (d) "any agreement relating to the use or hire of any ship whether by charterparty or otherwise" and (e) "any agreement relating to the carriage of goods in any ship whether by charterparty or otherwise". Of these only the latter has relevance to the present situation, the former being cited since the case most heavily relied on by the appellants was a (d) case as well as an (e) case.

The basic submission by counsel for the appellants was that a contract of insurance of goods being carried in a vessel is not an agreement falling within section 47 (2) (e). Since the sheriff had found that it was, the sheriff should be reversed. Counsel posed the question—"What is the nature of an insurance contract in relation to the carriage of goods in a vessel?" He answered that by saying it was an optional cover and not a necessity, and argued that it was only when an insurance contract was a necessary condition of the carriage of goods that it could fall within the purview of section 47 (2) (e). Since a contract of insurance was an optional matter it could not be classified as "necessary". In support of this contention he prayed in aid the judgment of Sir James Hannen in the case of The Henrich Bjorn (1883) 8 P.D. 151. In my opinion that case availed him naught since the learned judge was there dealing with the provisions of another statute altogether, namely section 6 of the Admiralty Court Act 1840 which incorporated "necessaries" as a condition of the application of the section in question. This has no bearing or influence on the interpretation of section 47 (2) (e) which has to be construed and applied on its own wording.

Discussion took place on whether the wording of paragraph (e)should be given the interpretation which the words thereof would normally carry, or whether the words should be given a wider or more restrictive reading. In my opinion, unless the context so requires, words used in a statute should be given their natural meaning, and if so read they result in a wide meaning, so be it. I accordingly turn to consider the natural meaning to be given to the words "any agreement relating to the carriage of goods in any ship by charterparty or otherwise". As we are dealing here with the arrestment on the dependence, it has to be noted that it is not disputed that the conditions set out in (a) and (b) of section 47 (1) are satisfied. The first thing which strikes me in the words under consideration is the wideness of the terms used. What is provided for is (a) any agreement (b) relating to the carriage of goods (c) in any ship (d) by charterparty or otherwise. Counsel for the appellants sought to place a constricted construction on the words by reason of the use of the words "by charterparty or otherwise". He maintained that these words qualified all that went before, and so what the paragraph was concerned with was any agreement contained in a charterparty or otherwise which related to the carriage of goods in any ship. "Or otherwise" had to be construed according to the eiusdem generis rule, and so related to such things as bill of lading. It did not comprehend an insurance agreement which simply secured the value of the goods and was not related to the carriage of the goods. In my opinion this argument is not well-founded. It runs contrary to the canon of construction that a qualifying term normally related to what immediately antecedes it. I see no reason for departing from that normal rule here. Accordingly the words "whether by charterparty or otherwise" qualify "the carriage of goods in any ship" and not "any agreement". If the legislature had intended what counsel for the appellants contended for it would have been easy to give effect to it by using the word "for" instead of the phrase "relating to". The agreement here was one of insurance in respect of goods which were being carried on the ship under a charterparty or otherwise. That agreement fell within the cover of "any agreement" in the paragraph. In doing so it brought the arrestment on the dependence into the broad common law of Scotland in relation to such an arrestment, unqualified and unrestricted by any statutory provision.

That in itself is sufficient to dispose of the appellants' submission, but I find comfort in the fact that this wider reading, as opposed to the narrower one proponed by the appellants, is in line with the views expressed by Lord Diplock (concurred in by his colleagues) in The Eschershein [1976] 1 W.L.R. 430, at p. 438D (H.L.), and by Parker L.J. in a recent (14th February 1984) handed-down judgment (concurred in by Cumming Bruce L.J.) in the case of The Antonis P. Lemos [now reported [1985] A.C. 711]. Counsel for the appellants sought to differentiate these cases from the instant one on the ground that the English statutory provisions differed from the Scottish ones in two respects. In the first place paragraphs (d) and (e) of section 47 (2) were coalesced in section 1 (1) (h) of the 1956 Act aforesaid (now re-enacted in section 20 (2) of the Supreme Court Act 1981) and the last-named paragraph did not include the words "whether by charterparty or otherwise". It was contended that in these circumstances the dicta in the English cases could not be relied upon when considering the different wording of the Scottish provisions. I regard this contention as unwarranted. If the omission of the words referred to in the English version have no significance so far as the issue here is concerned, the coalescing of the two paragraphs into one is immaterial. If I am right in my interpretation of paragraph (e) in section 47 (2), and "whether by charterparty or otherwise" only relates to the carriage of goods and not to the agreement, there is nothing in the point. As attention has been drawn to this difference in the wording of the respective paragraphs it is worthy of note that the Scottish wording follows the wording of the International Convention Relating to the Arrest of Seagoing Ships 1952 on which the 1956 Act provisions were based—cf. Lord Diplock's speech in The Eschersheim. The English law on the subject has always been statutory whereas the Scots law is basically the common law, now qualified to a certain extent by the statutory provisions. That may well explain the difference in the drafting of the parallel provisions, but in my view it has no effect on their meaning and effect.

The final point taken by counsel for the appellants, and the one on which he most strongly relied, was that his claim that the narrower interpretation should be given to paragraph (e), with the resultant conclusion that the agreement here did not fall within that paragraph, was supported by the opinion and decision of Lord Wylie in the Outer House in the case of Aifanourios 1980 S.C. 346. In that case Lord Wylie held that a contract for the insurance of a vessel and its cargo did not come within the provisions of section 47 (2) (d) or (e), and this court was invited to follow that decision. The point of construction was the same as the present one, the difference being that Lord Wylie was dealing with (d) as well as (e). Lord Wylie accepted that the point was a narrow one, but came to his decision on the basis that the interpretation of the words had to be determined not simply on the words used, but in the light of the other provisions of the subsection as a whole. He considered that he found support for this approach from the fact that a number of the other paragraphs were listed in section 47 (2). He considered that if the provisions of paragraph (d)(arid so paragraph (e)) fell to be as broadly construed as was contended for it was difficult to see how any of these other provisions could fail to come within the ambit of that provision. Accordingly he felt driven to the view that a more restricted construction was called for than that which, in isolation, the words might otherwise bear. He seems to have overlooked the fact that subsection (2) starts by saying that it applies to any claim arising out of one or more of the following paragraphs, and has failed to recognise that a particular instance was not exclusive but could fall within one or more of them. He also relied on the "necessaries" argument which I have already dealt with and negatived, and which in any event is irrelevant if my construction of (e) is correct. Since in essence his argument and resultant decision run contrary to the decision which I have reached and my reasons therefor, I cannot follow that decision and must record my disapproval of it.

In the result, therefore, I am of the opinion that the appeal should be refused, and I so move your Lordships.

LORD ROBERTSON .—I agree.

LORD STOTT .—Section 47 of the Administration of Justice Act 1956, is ineptly worded. Though obviously intended to restrict the scope of warrants for arrestment on the dependence, the effect of the section, if read literally, and if one were to read subsection (1), as one is enjoined to do, subject to the provisions of the section, would simply be to maintain the common-law position. To give any content to the legislation, however, it is necessary to treat subsection (2) as comprising an exhaustive list of the claims in which a warrant will be effective, broadly equivalent to what is plainly enacted in relation to English warrants by section 1 of the Act. So reading it, I agree with your Lordship that the claim in the present action, for monies due in respect of insurance premiums on ships' cargoes, falls clearly within the terms of section 47 (2) (e), being a claim arising out of an agreement relating to the carriage of goods in a ship. It follows that the warrant is not deprived of effect by the 1956 Act, and that the appeal should be refused.

Gatoil appealed to the House of Lords. The appeal was heard on 29th October 1984.

At delivering judgment on 13th December 1984,—

LORD FRASER OF TULLYBELTON .—My Lords, I have had the advantage of reading in draft the speeches prepared by my noble and learned friends, Lord Keith of Kinkel and Lord Wilberforce. I agree with both of them and, for the reasons stated in their speeches, I would allow the appeal.

LORD SCARMAN .—My Lords, I agree with the speech to be delivered by my noble and learned friend, Lord Keith of Kinkel. For the reasons he gives I would allow the appeal.

I have also had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Wilberforce. I agree with his view that the interpretation of the Act of 1956 is legitimately aided by consideration of the travaux préparatoires to which he refers and that we should not deny ourselves the reinforcement which they provide to the interpretation which for the reasons given by Lord Keith of Kinkel we hold to be correct.

LORD WILBERFORCE .—My Lords, I have had the benefit of reading in advance the speech to be delivered by my noble and learned friend, Lord Keith of Kinkel. I take the benefit of his full statement of the issue in this appeal which, briefly, concerns the interpretation of section 47 (2) (e) of the Administration of Justice Act 1956. Do the words:

"any agreement relating to the carriage of goods in any ship whether by charterparty or otherwise"

cover an agreement to pay premiums on a policy of insurance under a War Risk Open Cover on cargo? If so, the arrestment of the appellants' ship, m.v. Sandrina, by order of the sheriff at Lerwick, was valid: if not, it must be discharged.

Taking the statutory words by themselves, it is obvious enough that they are, in a legal sense, ambiguous, or as I would prefer to state it, loose-textured. It is not possible to ascribe a precise or certain meaning to words denoting relationships without an indication what the criterion of relationship is to be. Must the agreement be directly "for" carriage of goods in a ship, or is it enough that it involves directly or indirectly, or that the parties contemplated that there would be, such carriage as a consequence of the agreement? How close, in such a case, must the relationship be between the agreement and the carriage? Is any connection of a factual character between the agreement and some carriage in a ship sufficient? If not, what is the test of relevant connection? Even when paragraph (e) is read in conjunction with the other paragraphs in section 47 (2), the statute provides no guidance: the courts are left with a choice of a broad or a narrow interpretation.

Decided authorities show that this choice is inevitable and difficult: they are analysed by my noble and learned friend, Lord Keith of Kinkel. It is no doubt true that earlier cases, based on similar words occurring in the County Court Admiralty Jurisdiction Amendment Act 1869, section 2, may have been influenced by a reluctance to attribute to county courts a wider jurisdiction than was then possessed by the Admiralty Court, but at least they show that the words were capable of being narrowly construed.

After 1956, when the provision appeared (substantially) in section 1 (1) of the Act of 1956, as regards English cases, a more liberal approach was preferred. The relationship accepted in The Queen of the South [1968] P. 449, was quite loose: the agreement for mooring etc. of a ship was held to fall within section 1 (1) (h), (in which paragraphs (d) and (e) of section 47 (2) were combined), because it involved the use of motor boats i.e.ships. As for salvage agreements, although in The Eschersheim[1976] 1 W.L.R. 430, an agreement for salvage services was held to be within paragraph (h) as involving the use of a salvage vessel, in The Tesaba [1982] 1 Lloyds Rep. 397, a claim on a salvage agreement for damages for breach of an undertaking to obtain security from cargo owners was held to be outside it. In The Sonia S.[1983] 2 Lloyd's Rep. 63, the judge held to be within paragraph (h)—now in section 20 (2) of the Act of 1981—an agreement for the hire by shipowners of containers to be carried on a ship. My noble and learned friend, Lord Keith of Kinkel, considers this decision to be wrong and the relationship to be too remote, and I agree with him, but the case well illustrates the looseness of the provision and the spectral character of the boundary between claims within and those outwith the subsection. Finally, we may note that, in Scotland, in The Aifanourios 1980 S.C. 346, Lord Wylie held that a claim for release calls under a policy of marine insurance was outwith both paragraph (d) and paragraph (e) of section 47 (1), but the Second Division in the present case held to the contrary and declined to follow The Aifanourios.

My Lords, there is here, no doubt, no more than a degree of doubt as to the meaning of statutory words not significantly greater than often arises, particularly in such cases as reach this House. They can be, and are, solved by a judicial process of interpretation. My noble and learned friend, Lord Keith of Kinkel, has followed this path, and if there were no other material to help us, I would be content to follow him. However, I believe that contentment can be converted to conviction by legitimate reinforcement ab extra, namely, by resort to the travaux préparatoires of the International Convention relating to the Arrest of Seagoing Ships, signed at Brussels on 10th May 1952.

The case for a cautious use of travaux préparatoires in aid of the interpretation of conventions or treaties of private law received some acceptance in this House in Fothergill v. Monarch Airlines Ltd. [1981] AC 251. I there suggested that two conditions must be fulfilled before they can be used: first, that the material is public and accessible; secondly, that it clearly and indisputably points to a definite legislative intention.

The case for resort to them here is, in my opinion, a strong one. The Administration of Justice Act 1956, Part V (which included section 47), was enacted to give effect to the obligations of the United Kingdom consequent on its accession to the Brussels Convention of 1952, see The Eschersheim [1976] 1 W.L.R. 430, per Lord Diplock at p. 434, and in particular to displace, in Scotland, the wide common law powers of arrestment in favour of statutory provisions which were narrower and precisely defined. The situation is slightly more complex in that the list of maritime claims set out in Article 1 of the Convention was, in fact, based on the list of such claims then applicable in England under the Supreme Court of Judicature (Consolidation) Act 1925, section 22 (see particularly subsection (1) (a) (xii).) This list was adopted, as part of a compromise, by the Brussels Convention, and was then made applicable (with minor variations) to England and to Scotland by section 1 and section 47 of the Act of 1956 respectively. This derivation provides a clear justification for attributing to the provisions in the Scottish portion of the Act of 1956 the meaning which they ought to receive under the Convention—if that can be ascertained.

The proceedings of the conference which led to the Brussels Convention are public and accessible: they have been published by the International Maritime Committee as regards the preparatory conference at Naples held in 1951, and as regards the Diplomatic Conference of 1952 by the Foreign Ministry of Belgium. They show the following:

1. 1. As regards the list of maritime claims in Article 1 the report of the Naples Conference (Bulletin No. 105) states as follows:

   "This enumeration is based on the types of claims specifically assigned under English law to the Admiralty Jurisdiction of the High Court of Justice (Supreme Court of Judicature (Consolidation) Act 1925). The International Commission thinks that the types of claims mentioned in this paragraph cover practically every maritime claim in respect of which a ship should be arrested, whilst on the other hand there seem to be no other claims of a maritime character which should, under the Convention, justify such arrest."

2. 2. A decision was made by a committee of the Netherlands Maritime Law Association to propose the addition to the list of maritime claims of a new subsection reading:

   "(q) premiums of insurance due to underwriters and contributions due to mutual insurance associations for cover granted in connection with the operation of a ship."

   (Naples Report, p. 59.) This was put forward at the Brussels Conference (Brussels Report, p. 96).

3. 3. The addition of this new paragraph was opposed by the British delegation, on the ground that the policy of insurance itself was sufficient protection for insurers (pp. 101–102).

4. 4. The Netherlands delegation maintained its proposal claiming that the claims in question were essentially maritime claims (p. 103).

5. 5. The British delegation claimed that the clause was unnecessary in the U.K. but understood that elsewhere it might be of use (p. 104).

6. 6. The French delegation considered there was no "absolute necessity" to include insurance premia in the list of maritime claims (p. 106).

7. 7. Article 1 of the Convention was agreed without the addition of the new paragraph.

The conclusion from the above is clear. The conference decided not to include premia on policies of insurance among the maritime claims justifying arrest. It did so, moreover, not because it thought that these premia were already covered (so that explicit reference was unnecessary) but because it considered it unnecessary as a matter of policy to provide for their protection by means of arrestment. The legislative intention is manifest: not by any provision in Article 1 to provide for the inclusion of premia among arrestable maritime claims.

In the face of this legislative intention the adoption of the provisions of Article 1 of the Convention in the Act of 1956 must be treated as carrying the same meaning as that evidently placed upon them in the Convention and as not extending to premia on insurance policies.

My Lords, I respectfully think that the interpretation of the Act of 1956 is legitimately aided by consideration of this extrinsic material, and that we should not deny ourselves this reinforcement to our conclusions. With that reinforcement I am of opinion that this appeal must be allowed and the arrestment recalled.

LORD KEITH OF KINKEL .—My Lords, This appeal, which arises out of certain proceedings in the sheriff court at Lerwick, is concerned with the proper construction of section 47 (2) (e) of the Administration of Justice Act 1956. [His Lordship quoted the terms of section 47 (1) and (2) (e) and continued.]

The respondents, six insurance companies and an insurance broker, raised an action against the appellants in the sheriff court at Lerwick claiming payment of premiums on a policy of insurance which they say was effected with them by the appellants over a cargo of oil shipped from Kharg Island in Iran to various destinations. In order to found jurisdiction over the appellants, a Panamanian company, and also in order to obtain security for their claim, the respondents on 24th February 1984 arrested at Sullom Voe in the Shetland Islands a ship, the Sandrina, at the time lying there. There is a dispute as to whether or not the Sandrina was then owned by the appellants, but the House is not concerned with that issue in the instant appeal, it being required to be assumed for present purposes that they were in fact the owners. It is to be remarked that there is no question of the Sandrina or any other ship owned by the appellants having been concerned with the carriage from Kharg Island of the oil cargo which was the subject of the insurance policy.

The appellants then raised an action against the respondents in Lerwick Sheriff Court seeking recall of the arrestments. That is the action in which this appeal arises. They denied ownership of the Sandrinaand in addition pleaded that the arrestment was incompetent because the respondents' claim was not one of those specified in section 47 (2) of the Act of 1956. A debate on relevancy was heard by Sheriff Russell sitting at Aberdeen. He allowed a proof on the matter of ownership of the Sandrina, and held that on a proper construction of paragraph (e) of section 47 (2), which I have quoted above, the respondents' claim for payment of premiums on a policy of insurance over goods to be carried by sea fell within its terms. The appellants appealed to the Court of Session, and on 23rd March 1984 the Second Division of the Inner House (the Lord Justice-Clerk, Lord Wheatley, Lord Stott and Lord Robertson) affirmed the decision of the sheriff and dismissed the appeal, but gave leave to appeal to your Lordships' House.

It is common knowledge that the Act of 1956, though its long title does not express this, was passed for the principal purpose of enabling the United Kingdom to ratify and to comply with the international obligations accepted by states which became parties to the International Convention Relating to the Arrest of Seagoing Ships which had been signed on behalf of the United Kingdom in 1952. (See The Eschersheim [1976] 1 W.L.R. 430, per Lord Diplock at p. 434.) Before the passing of the Act the maritime claims falling within the Admiralty jurisdiction of the High Court in England were limited to those listed in section 22 of the Supreme Court of Judicature (Consolidation) Act 1925. This list was substantially reproduced in section 1 of the Act of 1956, which is in Part 1 of the Act relating to England. Section 3 (4) of the Act provided that the jurisdiction might be invoked by action in rem against a ship in connection with which the claim arose, or a sister ship. This liberty to take proceedings against a sister ship was new. It was provided for by Article 3 (1) of the 1952 Convention. In Scotland before the Act of 1956 the right to arrest a ship did not depend upon any particular Admiralty jurisdiction provided for by statute, but upon the general common law under which any moveable property within the jurisdiction of an intended defender might be arrested ad fundandam jurisdictionem and on the dependence of an action against him. Section 47 limited this right, as respects maritime claims, to the list of such claims there set out, which follows very closely the list in Article 1 (1) of the Convention. However, section 47 (1) (b) is so worded that it is competent to arrest any ship wholly owned by the defender, even though neither that ship nor a sister ship had any connection whatever with the claim against him, which is the position in the present case.

Paragraph (e) of section 47 (2) follows verbatim (except for the opening word "any") the terms of the corresponding paragraph in the English language version of the Convention, as does paragraph (d) "any agreement relating to the use or hire of a ship whether by charterparty or otherwise". In section 1 (1) (h), however, these two heads of claim are rolled up together:

"any claim arising out of any agreement relating to the carriage of goods in any ship or to the use or hire of a ship".

A very similar form of words was used in section 2 of the County Courts Admiralty Jurisdiction Amendment Act 1869, which gave jurisdiction to county courts appointed to have Admiralty jurisdiction to try and determine, inter alia, causes:

"(1) As to any claim arising out of any agreement made in relation to the use or hire of any ship, or in relation to the carriage of goods in any ship, and also as to any claim in tort in respect of goods carried in any ship, provided the amount claimed does not exceed £300."

The proper construction of this provision came under consideration in a number of cases, and it may well be that the draftsman of section 1 (1) of the Act of 1956 had these cases in mind. In Gunnestad v. Price (1875) L.R. 10 Ex. 65 it was held that a claim by the owner of a ship against a charterer for demurrage did not fall within section 2 of the Act of 1869. This was a claim over which the High Court of Admiralty itself did not at the time have jurisdiction, and the ratio decidendi was that, reading the Act of 1869 along with the County Courts Admiralty Jurisdiction Act 1868, it appeared that the legislature did not intend to invest the county courts with any more than a portion of the then existing jurisdiction of the Admiralty Court, to a limited monetary amount. This decision was disapproved of in The Alina (1880) 5 Ex.D. 227, where a Court of Appeal presided over by Sir George Jessel M.R. held that the county court had jurisdiction over a claim for damages for breach of a charterparty. In R. v. Judge of City of London Court [1892] 1 QB 273 it was held by the Court of Appeal that, since the Admiralty Court had no jurisdiction over a claim against a pilot for damages on the ground of his negligence in causing a collision on the high seas, the county court had no such jurisdiction either by virtue of section 2 of the Act of 1869. Lord Esher expressed strong criticism of The Alina(1880) 5 Ex.D. 227. He said, at p. 291, "I will, therefore, follow The Alina so far as it actually goes, but not one inch further." In the meantime, in R. v. City of London Court (1883) 12 QBD 115, Day J., in the course of holding that a passenger's luggage was not "goods" within the meaning of section 2, had expressed the view that the first part of the material passage in that section ("use or hire of a ship") had reference to a charterparty and the second part ("carriage of goods in a ship") had reference to a bill of lading. Finally, in the ninetenth century, in The Zeus (1888) 13 PD 188 a divisional court consisting of the President Sir James Hannen and Butt J. held that an agreement by a colliery owner to load a ship with coal within 48 hours and to pay "demurrage for each hour exceeded" was not an agreement made in relation to the use or hire of a ship or in relation to the carriage of goods in a ship within section 2, and that the county court therefore had no jurisdiction.

Turning to more modern English cases, in The Beldis [1936] P.51 an action to enforce an arbitrator's award under a charterparty was held not to arise out of an agreement made in relation to the use or hire of a ship and therefore not to be within section 2. The reported cases since then have been under section 1 (1) of the Act of 1956 and its re-enactment as section 20 (1) of the Supreme Court Act 1981. In The Queen of the South [1968] P.449, Brandon J. decided that an agreement for the mooring and unmooring and other servicing of a ship fell within section 1 (1) (h), because it involved the use of motor boats for providing the agreed services, and motor boats were ships within the definition in section 8 (1) of the Act. Likewise in The Eschersheim [1976] 1 W.L.R. 430, this House held that an agreement for salvage services fell within section 1 (1) (h)because the rendering of these services involved the use of a salvage vessel. The claims were for negligence in the manner of carrying out the salvage services. Lord Diplock, at p. 438, after having considered R. v. Judge of City of London Court [1892] 1 QB 273 and The Alina said in relation to the former case:

"My Lords, this was not a decision which ascribed a specific and precise meaning to the words ‘an agreement relating to the use or hire of a ship’. The reasons given in the judgment for giving a restricted meaning to words conferring Admiralty jurisdiction on county courts, in the context in which they appeared in the Act of 1869, have no application in the context of Part 1 of the Administration of Justice Act 1956, which is dealing with the jurisdiction of the High Court itself. I see no reason in that context for not giving to them their ordinary wide meaning. That would include the salvage agreement in the present case."

The Tesaba [1982] 1 Lloyd's Rep. 397 was another case concerned with a salvage agreement. There was provision for security, and the shipowners agreed to use their best endeavours to ensure that the cargo owners provide security before the cargo was released. The vessel having been safely salved, the owners in breach of that undertaking allowed the cargo to be discharged without security given. The salvors' claim against the shipowners for damage for breach of the undertaking was held by Sheen J. not to fall within paragraph (h). He said at p. 401:

"If the ordinary businessman were to be asked ‘Is that an agreement relating to the carriage of goods in Tesaba?’ the answer would undoubtedly be ‘No’."

In The Sonia S. [1983] 2 Lloyd's Rep. 63, however, the same judge held that an agreement for the hire by shipowners of containers intended to be used by customers of the latter for packing goods to be carried on their ships was within paragraph (h) of section 20 (2) of the Act of 1981. The claim was by the owners of the containers for non-payment of hire. Sheen J. said, at p. 65:

"It seems to me that the claim arises out of an agreement which relates to the carriage of goods by sea. It relates to it, as I have said, because the only purpose of the agreement was for the shipowners to provide for their customers the facility for packing their own goods, and for no purpose other than to have those goods carried in a ship."

The most recent English case is The Antonis P. Lemos [1984] 2 W.L.R. 825. The defendants were owners of a ship of which the plaintiffs were sub-charterers, under a time charter. The plaintiffs in turn entered into a voyage charter with a third party for the carriage of grain from Houston to Alexandria, and undertook that the vessel's draught on arrival would not exceed 32 feet. The defendants loaded the vessel to a greater draught, so that the plaintiffs sustained loss for which they claimed against the defendants in negligence. The Court of Appeal held that the claim fell within paragraph (h) of section 20 (2) on the ground that it arose out of the plaintiffs' time charter or their voyage sub-charter or both, it not being essential that it should arise out of an agreement between the plaintiffs and the defendants. [Affirmed by the House of Lords at [1985] A.C. 711.]

There is one Scottish decision directly in point. That is The Aifanourios 1980 S.C. 346, where an insurance association had arrested the defenders' ship on the dependence of an action claiming payment of release calls under a contract of marine insurance over the ship and its cargo. Lord Wylie held that such a contract did not come within the provisions of either paragraph (d) or paragraph (e) of section 47 (1) of the Act of 1956, and that the arrestment was therefore incompetent. He said, at pp. 349, 350:

"Counsel for the pursuers submitted that the provisions of these two paragraphs fell to be broadly interpreted. ‘Any agreement relating to the use…of a ship’ was any agreement connected with the use of a ship. The provision was not confined to an agreement ‘for’ the use of a ship, and it could not be said that an agreement for the insurance of a ship, or for the insurance of its cargo, did not come within the broad terms of the statutory provisions. Put in these simple terms the agreement is attractive, but these provisions have to be construed in the light of other provisions of the subsection as a whole. In addition to claims arising out of damage done to or by any ship, claims in respect of salvage, towing or pilotage, they include claims arising out of the supply of goods or materials to a ship for her operation or maintenance, the construction, repair or equipment of a ship, liability for dock charges and master's disbursements, to take but a few examples of the kind of claims covered by the subsection. If the provisions of paragraph (d) fell to be as broadly construed as was contended for, it is difficult to see how any of these provisions could fail to come within the ambit of the provision. A claim, for example, arising out of the supply of goods to a ship for her operation or maintenance or arising out of her repair would certainly appear to arise from an agreement relating to the use of a ship. I am accordingly driven to the view that a more restricted construction is called for than that which, in isolation, the words might otherwise bear. Moreover, it is clear that the insurance of a vessel is a matter directed to the convenience or protection of the owner, and is not essential for the operation of the vessel as such."

That concludes the review of the authorities. It is to be observed that, while some divergences from the provisions of the 1952 Convention can be seen both in the provisions of the Act of 1956 relating to England and in those relating to Scotland, it is desirable that such provisions for both jurisdictions as can be identified as having a common derivation from particular provisions of the Convention should be interpreted alike in each of these jurisdictions, if that can be done without undue straining of language. Paragraph (h) of section 1 (1) of the Act of 1956 and paragraphs (d) and (e) of section 47 (2) are in this category, deriving as they all clearly do from Article 1 (1) (d) and (e) of the Convention. In the English cases under section 2 of the County Courts Admiralty Jurisdiction Amendment Act 1869 there prevailed a tendency to give a restricted interpretation to words almost identical to those of paragraph (h) of section 1 (1) of the Act of 1956. Lord Diplock in The Eschersheim [1976] 1 W.L.R. 430 attributed this to a disinclination on the part of the judges to attribute to Parliament an intention to give a wider jurisdiction to the county court than was possessed by the Admiralty Court itself, and said that since similar considerations did not apply to the Act of 1956 there was no reason for not giving to paragraph (h) its ordinary wide meaning. The agreement in issue in The Eschersheim [1976] 1 W.L.R. 430 was, however, one which was concerned in a very direct sense with the use of the salvage vessel involved, and as I have mentioned it may well be that the draftsman of paragraph (h) had in mind the cases under section 2 of the Act of 1869 and the restricted interpretation which had there been placed upon the words which he was using. The Zeus(1888) 13 PD 188 is perhaps a particularly important decision in this connection. It did not purport to proceed on a consideration of the unlikelihood of Parliament having intended to confer on the county court a jurisdiction which the Admiralty Court itself did not possess. There is no doubt that the agreement there in issue, to load a ship with coals within a time limit, had some connection with the carriage of goods by a ship and also with the use of a ship. But Sir James Hannen P. said, at p. 190:

"We should disturb the natural meaning of the words of the statute if we said that the agreement has relation to the use or hire of the ship. It is merely an engagement to deliver coals at a particular place."

It is necessary to attribute due significance to the circumstance that the words of the relevant paragraphs speak of an agreement "in relation to" not "for" the carriage of goods in a ship and the use or hire of a ship. The meaning must be wider than would be conveyed by the particle "for". It would, on the other hand, be unreasonable to infer from the expression actually used, "in relation to", that it is intended to be sufficient that the agreement in issue should be in some way connected, however remotely, with the carriage of goods in a ship or with the use or hire of a ship, and I think there is much force in the view expressed by Lord Wylie in The Aifanourios 1980 S.C. 346 as to the inference to be drawn from the presence of certain other paragraphs in section 47 (2). There must, in my opinion, be some reasonably direct connection with such activities. An agreement for the cancellation of a contract for the carriage of goods in a ship or for the use or hire of a ship would, I think, show a sufficiently direct connection. It is unnecessary to speculate what other cases might be covered. Each case would require to be decided on its own facts. As regards the contract of insurance founded on in the instant appeal, I am of opinion that it is not connected with the carriage of goods in a ship in a sufficiently direct sense to be capable of coming within paragraph (e).

I consider that in The Sonia S. [1983] 2 Lloyd's Rep. 63 there was likewise an insufficiently direct connection between the agreement for the hire of containers and the carriage of goods in a ship. There is clear fallacy in the reasoning of Sheen J. in the latter part of his judgment, where he equates the use to which the containers were to be put with the use to which the salvage vessel was to be put in The Eschersheim [1976] 1 W.L.R. 430. The salvage vessel there was a ship which was to be used under the salvage agreement. The containers were not a ship. In my opinion that decision was wrong and should be overruled.

The appellants argued that, should the House conclude that the provisions of paragraph (e) were ambiguous, regard should be had, for the purpose of resolving that ambiguity, to a certain aspect of the travaux préparatoires for the 1952 Convention. The particular aspect in question was that, as published records show, the Netherlands' representative in the course of the negotiation of the Convention proposed that claims for premiums on policies of marine insurance should be specifically included in the list of maritime claims, that this proposal was opposed by other representatives, and that in the event it was not adopted. Since I am of opinion that any ambiguity in section 47 (2) (e) can be resolved to the effect of holding that it does not, on a proper construction, cover the respondents' claim, it is unnecessary to deal with this branch of the appellants' argument.

My Lords, for these reasons I would allow the appeal, to the effect of sustaining the third plea-in-law for the pursuers, repelling the third plea-in-law for the defenders, and granting decree in terms of the conclusions of the summons. The appellants must have their costs in this House and their expenses of the proceedings in the courts below.

LORD ROSKILL .—My Lords, I have had the advantage of reading in draft the speeches delivered by my noble and learned friends, Lord Keith of Kinkel and Lord Wilberforce. I agree with them, and for the reasons which they give I would allow this appeal.