Samick Lines Co Ltd v Owners of 'Antonis P Lemos'

[1985] A.C. 711

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(Judgment by: Lord Brandon of Oakbrook)

Between: Samick Lines Co Ltd - Respondent
And: Owners of 'Antonis P Lemos' - Appellants

Court:

Judges: Cumming-Bruce LJ
Parker LJ
Lord Scarman
Lord Diplock
Lord Roskill

Lord Brandon of OakbrookLord Templeman

Subject References:
ADMIRALTY
JURISDICTION
Action in rem
Subcharterers' loss arising from ship owners' negligence in loading ship
No agreement between sub-charterers and shipowners
Whether claim arising out of agreement relating to carriage of goods or to use or hire of ship

Legislative References:
Supreme Court Act 1981 (c. 54) - s. 20(2)(h)

Case References:
Aifanourios, The - [1980] S.C. 346
Astro Vencedor Compania Naviera S.A. of Panama v. Mabanaft G.m.b.H. - [1971] 2 Q.B. 588; [1971] 3 W.L.R. 24; [1971] 2 All E.R. 1301, C.A.
Buchanan (James) & Co. Ltd. v. Babco Forwarding & Shipping (U.K.) Ltd - [1978] A.C. 141; [1977] 3 W.L.R. 907; [1977] 3 All E.R. 1048, H.L.(E.)
Congreso del Partido, I - [1983] 1 A.C. 244; [1981] 3 W.L.R. 328; [1981] 2 All E.R. 1064, H.L.(E.)
Eschersheim, The - [1976] 1 W.L.R. 339; [1976] 1 All E.R. 441; [1976] 1 Lloyd's Rep. 81, C.A.; [1976] 1 W.L.R. 430; [1976] 1 All E.R. 920, H.L.(E.)
Gatoil International Inc. v. Arkwright-Boston Manufacturers Mutual Insurance Co - [1985] A.C. 255; [1985] 2 W.L.R. 74; [1985] 1 All E.R. 129, H.L.(Sc.)
Heyman v. Darwins Ltd - [1942] A.C. 356; [1942] 1 All E.R. 337, H.L.(E.)
Moschanthy, The - [1971] 1 Lloyd's Rep. 37
Nuova Raffaelina, The - (1871) L.R. 3 A. & E. 483
Queen of the South, The - [1968] P. 449; [1968] 2 W.L.R. 973; [1968] 1 All E.R. 1163
St. Elefterio, The - [1957] P. 179; [1957] 2 W.L.R. 935; [1957] 2 All E.R. 374
Sennar, The - [1983] 1 Lloyd's Rep. 295
Stag Line Ltd. v. Foscolo, Mango and Co. Ltd - [1932] A.C. 328, H.L.(E.)
Union of India v. E. B. Aaby's Rederi A/S - [1975] A.C. 797; [1974] 3 W.L.R. 269; [1974] 2 All E.R. 874, H.L.(E.)
Zeus, The - (1888) 13 P.D. 188, D.C.

Hearing date: 14 January 1985
Judgment date: 21 February 1985

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Judgment by:
Lord Brandon of Oakbrook

My Lords, this appeal raises a question of statutory construction relating to the Admiralty jurisdiction of the High Court.

The case concerns a Greek-registered ship, the Antonis P. Lemos ("the vessel"), which is and was at all material times wholly owned by the appellants. By a time-charter dated 22 February 1980 ("the headcharter") Containerbank Corporation, acting as managers of the vessel for the appellants, chartered her to Sammisa Ltd. ("the head-charterers") for a period of 10-12 months, later extended by agreement for a further 6-12 months, both periods at the head-charterers' option.

The head-charter contained a provision allowing the head-charterers to sub-charter the vessel, subject to an obligation to inform Containerbank Corporation of their doing so.

By a sub-time-charter dated 16 October 1981 ("the sub-charter") the head-charterers sub-chartered the vessel to the respondents, Samick Lines Co. Ltd. ("the sub-charterers") for one time charter trip. The sub-charter contained a provision similar to that in the head-charter, allowing the sub-charterers to sub-sub-charter the vessel, subject to an obligation to inform the sub-charterers of their doing so.

Nearly a month before the making of the sub-charter the respondents had already, by a voyage charter dated 21 September 1980 ("the sub-sub-charter"), chartered to Agri Industries ("the sub-sub-charterers") a ship to be nominated to carry a full cargo of heavy grains and/or sorghums and/or soya beans from a North American port to Alexandria or Port Said, at the sub-sub-charterers' option. Later, after the making of the sub-charter, the respondents nominated the vessel for the purposes of the sub-sub-charter, and the sub-sub-charterers chose Alexandria as the port of discharge. The sub-sub-charter contained an express guarantee by the respondents that the vessel's maximum draught on arrival at the port of discharge would not exceed 32 feet in salt water.

In performance of the sub-sub-charter, the vessel on 20 and 21 October 1981 loaded a full cargo of corn at Houston, Texas, for carriage to Alexandria. When the vessel arrived at the latter port on 11 November 1981, however, her draught exceeded 32 feet in salt water, in consequence of which she had to be lightened before berthing, and delay in her discharge occurred. By reason of these matters, the respondents had to pay the cost of lightening, which they would not otherwise have had to do, and incurred certain other expenses and losses.

In order to recover the cost, expenses and losses so incurred, the respondents on 20 May 1983 began an action in rem against the vessel in the Admiralty Court, and arrested her in that action in order to obtain security for their claim.

The endorsement on the back of the writ by which such action was begun reads:

"The plaintiffs, as sub-charterers of the defendants' ship Antonis P. Lemos under a time-charter dated 16 October 1981 made between Sammisa Co. Ltd. as owners and the plaintiffs as charterers, claim damages for the loss suffered by them by reason of the negligence of the defendants, their servants or agents in causing permitting or suffering the said ship to load a quantity of corn at Houston, Texas, USA on 20 and 21 October 1981 such that her draft on arrival at Alexandria, Egypt on 11 November 1981 exceeded 32 feet rendering her unable to berth without lightening."

The claim so endorsed is, as your Lordships will have observed, founded solely on the tort of negligence, and is not founded on any breach of any contract made directly between the two parties to the action.

By notice of motion dated 24 May 1983 the appellants (defendants in the action) applied to the Admiralty Court for an order that the writ and warrant of arrest be set aside and the vessel released, on the ground that the Admiralty Court had no Admiralty jurisdiction, and therefore no jurisdiction in rem against the vessel, in respect of the claim.

On 27 May 1983 Sheen J., having heard the appellants' motion, decided the question raised by it in their favour, and made an order substantially in the terms sought by them [1983] 2 Lloyd's Rep. 310. He gave the respondents leave to appeal to the Court of Appeal, and, in order to protect the position of both parties in the event of an appeal being brought, made his order conditional on

(1)

the appellants giving security for the claim in an acceptable form and

(2)

the respondents undertaking to pay the appellants' costs of giving such security in the event of any appeal brought by the former proving unsuccessful.

By notice of appeal dated 19 August 1983 the respondents appealed to the Court of Appeal against the order of Sheen J. The Court of Appeal (Cumming-Bruce and Parker L.JJ.) heard the appeal on 30 and 31 January 1984, and on 14 February 1984 Parker L.J. delivered a reserved judgment, with which Cumming-Bruce L.J. agreed, allowing the appeal ante, p. 715C and reversing the order of Sheen J. The Court of Appeal further gave leave to the appellants to appeal to your Lordships' House.

My Lords, it is common ground that the sole question for determination in this appeal is whether the respondents' claim, having regard to its nature and the facts on which it is based, comes within that part of the Admiralty jurisdiction of the High Court which is derived from section 20(2)(h) of the Supreme Court Act 1981. For the purpose of determining that question, it is necessary to assume, without deciding, that the respondents have an arguable case in law in respect of their claim.

If, on the one hand, the claim does not come within section 20(2)(h) of the Act of 1981, the Admiralty Court, to which the Admiralty jurisdiction of the High Court is assigned, has no Admiralty jurisdiction, as distinct from any other jurisdiction which it may have, to hear and determine it, and accordingly no power to arrest the vessel as security for such claim. On that view, which Sheen J. took, the respondents' action was not properly brought, and the vessel was not properly arrested in it. The result of that would be that the writ by which the action was begun should be set aside, and the security substituted for the vessel given up and cancelled.

If, on the other hand, the claim comes within section 20(2)(h) of the Act of 1981, the Admiralty Court has Admiralty jurisdiction to hear and determine it, and further, by virtue of section 21(4) of the same Act, has power to exercise such jurisdiction in rem against the vessel. On that view, which the Court of Appeal took, the respondents' action was properly brought, the warrant of arrest was properly issued and the vessel was properly arrested as security for the claim. The result of that would be that the appellants' attempt to have the writ by which the action was begun set aside, and the security substituted for the vessel given up and cancelled, must fail.

Your Lordships have now to choose between these two contrary views. In order to do this, it is first necessary to set out the relevant terms of section 20 of the Supreme Court Act 1981. That section provides:

"(1)

The Admiralty jurisdiction of the High Court shall be as follows, that is to say -

(a)

jurisdiction to hear and determine any of the questions and claims mentioned in subsection (2);

...

(2)

The questions and claims referred to in subsection (1)(a) are -

...

(h)

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

..."

My Lords, the appellants put forward two alternative contentions with regard to the construction of section 20(2)(h) of the Act of 1981. Their primary contention was that section 20(2)(h) applied only to claims of a purely contractual character, founded on some agreement of the kinds referred to in it and made directly between the two parties to an action; and that the paragraph did not extend to other claims founded on tort, even though such claims were connected, directly or indirectly, with such an agreement. Their second and alternative contention was that, even if section 20(2)(h) extended also to claims in tort, it only did so if they were directly connected with some agreement of the kinds referred to in it, and provided further (and this was the crucial limitation) that the agreement concerned was one made between the two parties to the action themselves. In terms of the present case this would mean some agreement made directly between the appellants and the respondents relating to the carriage of goods in the vessel, or to the use or hire of the vessel, which it is common ground was never made. If either of these two contentions is accepted as correct, the respondents' claim would plainly not come within section 20(2)(h). Sheen J. [1983] 2 Lloyd's Rep. 310 rejected the first contention but accepted the second. Hence his decision in favour of the appellants. The Court of Appeal ante, p. 715C rejected the first contention, and also rejected what I have described as the crucial limitation in the second contention. Hence the decision of that court in favour of the respondents.

Before considering whether the decision of the Court of Appeal was right or not, it is necessary to draw attention to certain preliminary matters. The first matter is that the provisions of the Act of 1981 which deal with the Admiralty jurisdiction of the High Court are the successors of earlier provisions in the Administration of Justice Act 1956 and are, so far as material, in substantially the same terms. The second matter is that Part I of the Act of 1956 was, as has long been recognised, enacted in order to give effect in England to the adherence of the United Kingdom to the International Convention for the Unification of Certain Rules relating to the Arrest of Seagoing Ships, made at Brussels on 10 May 1952 ("the Convention"). Parker L.J., in his judgment in the Court of Appeal, accepted the proposition put forward by the respondents that, since the provisions of the Act of 1981 relating to the Admiralty jurisdiction of the High Court was designed to give domestic effect to an international convention, a broad and liberal construction should be given to them. There is ample authority to support this as a general proposition, to some of which Parker L.J. referred in his judgment. I have no doubt that the proposition is, in general, correct, and that Parker L.J. was right to accept it.

So far as the appellants' first contention is concerned, it is clear from the judgment of Sheen J. that it was argued before him and that, following authority to which I shall refer shortly, he declined to accept it. It appears from the judgment of Parker L.J. in the Court of Appeal, that the contention was only faintly argued before that court, so that, understandably enough, it was more or less brushed aside by him. Before your Lordships the contention was fully developed by counsel for the appellants, Mr. Saville, and it follows that it is necessary for your Lordships to examine it fully yourselves.

Such authorities as there are on this question, both at first instance in the Admiralty Court, are against the appellants' contention. In The St. Elefterio [1957] P. 179, the question arose whether a claim for damages caused by the ante-dating of bills of lading, which was founded on the tort of deceit or possibly negligence, was within section 1(1)(h) of the Act of 1956, which was the predecessor of, and in the same terms as, section 20(2)(h) of the Act of 1981. It was held by Willmer J. that the claim was within that provision. He said, at p. 183:

"In my judgment the words of section 1(1)(h) of the Act of 1956 ... are ... wide enough to cover claims whether in contract or in tort arising out of any agreement relating to the carriage of goods in a ship."

That decision stood unchallenged for some 26 years until the present case, having been followed by Sheen J., in relation to section 20(2)(h) of the Act of 1981 in The Sennar [1981] 1 Lloyd's Rep. 295, another case of a claim in tort in respect of the ante-dating of a bill of lading.

In his able address to your Lordships, Mr. Saville recognised that these authorities were against the first contention for the appellants, and would have to be overruled if that contention was accepted. He relied, however, on six points, which he developed under three main heads, as supporting the view that the contention was, despite these authorities, correct.

These six points, in the sequence in which I think that it is convenient to state them, were as follows.

The first point was that the expression "arising out of," as contained in section 20(2)(h) of the Act of 1981, was, on the ordinary and natural meaning of the words used, the equivalent of the narrower expression "arising under" and not of the wider expression "connected with." The second point was that, if the expression "arising out of," as contained in section 20(2)(h) of the Act of 1981, was given the wider meaning of "connected with," a number of later paragraphs of section 20(2) would be unnecessary, because their subject matter would already be covered by paragraph (h). The third point was that the narrower construction of the expression "arising out of" was supported by The Nuova Raffaelina (1871) L.R. 3 A. & E. 483. The fourth point was that there was authority in your Lordships' House for the proposition that, in one context at least, the expression "arising out of" had the same meaning as the expression "arising under." The fifth point was that your Lordships' House had, in a recent appeal from Scotland, ^[F2] given a narrow rather than a wide construction to another expression contained in section 20(2)(h) of the Act of 1981, namely, the expression "relating to." The sixth point was that the French text of the Convention was, equally with the English text, the official text of it; that, if the expression "arising out of," as contained in the English text, was ambiguous, it was legitimate to look at the French text in order to resolve the ambiguity; and that, if the French text was looked at, it supported the appellants' case. I shall consider each of these points in turn.

With regard to the first point, I would readily accept that in certain contexts the expression "arising out of" may, on the ordinary and natural meaning of the words used, be the equivalent of the expression "arising under," and not that of the wider expression "connected with." In my view, however, the expression "arising out of" is, on the ordinary and natural meaning of the words used, capable, in other contexts, of being the equivalent of the wider expression "connected with." Whether the expression "arising out of" has the narrower or the wider meaning in any particular case must depend on the context in which it is used.

With regard to the second point, it is necessary to bear in mind that the list of claims in section 20(2) of the Act of 1981 is derived from article 1(1) of the Convention, which contains a list of what are there called "maritime claims." Paragraph (h) of section 20(2) is derived from sub-paragraphs (d) and (e) of article 1(1), although the arrangement and wording of section 1(1) of the Act of 1956, and section 20(2) of the Act of 1981, do not, as I shall have reason to point out again later, correspond with the arrangement and wording of article 1(1) itself. It was clearly the agreed policy of the states which negotiated the Convention to have, in article 1(1) of it, a full and complete list of specific maritime claims or kinds of claim, rather than a few general formulations comprehending them all. Having regard to this policy, some degree of overlap between the specific claims and kinds of claim listed in article 1(1) seems to me to have been natural and inevitable, and this overlap is reproduced in section 20(2) of the Act of 1981. In relation to this it was rightly conceded by Mr. Saville that, even if the expression "arising out of" in paragraph (h) of section 20(2) of the Act of 1981 was given the narrower meaning for which he contended, there would still be some overlap between different paragraphs of section 20(2). In view of these considerations I do not think that this second point had any real force.

With regard to the third point, I do not think that, on a proper understanding of The Nuova Raffaelina, L.R. 3 A. & E. 483, it supports the appellants' contention. In that case it was held by the High Court of Admiralty, affirming the Liverpool Court of Passage, that a claim by chartering brokers, brought in rem against a ship, to recover commission payable by the owners of such ship under the terms of a charter effected by such brokers, was not a claim "arising out of any agreement relating to a ship" or "in relation to the carriage of goods in any ship" within the meaning of section 2 of the County Courts

Admiralty Jurisdiction Amendment Act 1869 (32 & 33 Vict. c. 51). In my view the ground on which that case was decided was simply that chartering brokers, who had negotiated the charter of a ship containing a stipulation for the payment by the owners of such ship of a commission to them, were not entitled to enforce that stipulation, because they were not themselves parties to the charter, although, if the charterers had sued as trustees for the brokers, the claim might have been properly brought under the section of the Act of 1869 relied on. On that view of the case, it does not lay down any principle with regard to the construction of the expression "arising out of," as used in that much earlier statutory provision comparable to section 20(2)(h) of the Act of 1981.

With regard to the fourth point, reliance was placed on the observations of two of their Lordships in Union of India v. E. B. Aaby's Rederi A/S [1975] A.C. 797. That case concerned the scope of the expression "arising out of," as used in the Centrocon arbitration clause in a charter, which provided that "all disputes arising out of this contract" should be referred to arbitration in London. Viscount Dilhorne at p. 814G-H, and Lord Salmon at p. 817A-B, both said that the expression "arising out of," as there used, meant the same as the expression "arising under." As I indicated earlier, I do not doubt that, in some contexts, such as an arbitration clause in a commercial contract, it would be right to treat the first of these two expressions as the equivalent of the second. It does not follow, however, that it would be right to do so in all contexts, and in particular in the context of provisions derived from, and intended to give domestic effect to, an international convention, which require, in general, to be given a broad and liberal construction. For these reason I do not consider that the observations of two of their Lordships in the case referred to should be taken as applicable to the construction of the expression "arising out of," in section 20(2)(h) of the Act of 1981.

With regard to the fifth point, the decision of your Lordships' House relied on was Gatoil International Inc. v. Arkwright-Boston Manufacturers Mutual Insurance Co. [1985] A.C. 255. That case raised the question whether a claim by insurers and an insurance broker for the recovery of premiums due under a marine insurance policy on cargo was a claim arising out of "any agreement relating to the carriage of goods in any ship whether by charterparty or otherwise," as used in section 47(2)(e) of the Act of 1956, which is in Part V of that Act dealing with Admiralty jurisdiction and arrestment of ships in Scotland. Your Lordships' House, reversing the Second Division of the Inner House of the Court of Session, held that the words in question did not cover such a claim. In so doing, your Lordships' House preferred to give the expression "relating to," as used in section 47(2) of the Act of 1956, the narrower, rather than the wider, of the two meanings which it was accepted that it was capable of having.

Lord Keith of Kinkel, with whom all the other members of the Appellate Committee agreed (although Lord Wilberforce gave additional reasons for the decision, based on an examination of the travaux préparatoires preceding the conclusion of the Convention), examined a considerable number of English authorities, beginning with those concerned with the construction of section 2 of the Act of 1869, and going on to more modern authorities on section 1(1)(h) of the Act of 1956 and section 20(2)(h) itself. Having reviewed these authorities, he regarded two of them as strongly supporting the conclusion that the expression "relating to," as used in section 47(2) of the Act of 1956, should be given its narrower, rather than its wider, construction. These two authorities were The Zeus (1883) 13 P.D. 188 in England, and The Aifanourios, 1980 S.C. 346 in Scotland. In The Zeus Sir James Hannen P. had to deal with the question whether a claim under a contract to load a ship with coals was within section 2 of the Act of 1869. He held that it was not. In The Aifanourios Lord Wylie had to deal with the question whether a claim by an insurance association for the payment of release calls under a contract of insurance on a ship and her cargo was within either paragraph (d) or (e) of section 47(2) of the Act of 1956, which together corresponded in Scotland with section 1(1)(h) of the same Act in England. He held that it did not.

It is, no doubt, tempting to say that, because your Lordships' House in the Gatoil case [1985] A.C. 255 gave a narrow, rather than a wide, meaning to the expression "relating to," as used in paragraphs (d) and (e) of section 47(2) of the Act of 1956, it should likewise give a narrow, rather than a wide, meaning to the expression "arising out of" in section 20(2)(h) of the Act of 1981. In my view, however, this temptation should be resisted, on the ground that there are two significant differences between the two expressions.

The first difference is this. In article 1(1) of the Convention the expression "arising out of" is placed so as to govern all the maritime claims, or kinds of claim, which are listed in the succeeding paragraphs (a) to (q). This arrangement was followed in section 47(2) of the Act of 1956 applying to Scotland. So far as England is concerned, however, and also Northern Ireland (see section 55 of the Act of 1956), the arrangement and wording of article 1(1) of the Convention were not, for reasons which I have never understood, similarly followed in section 1(1) of the Act. On the contrary, there are to be found in section 1(1) of the Act of 1956 a re-arrangement and rewording of the claims as set out in article 1(1) of the Convention, as a result of which the expression "arising out of" no longer governs all the claims listed in paragraphs (a) to (q), but is transferred so that it appears in only three of those paragraphs, paragraph (h) the subject matter of which has already been discussed, paragraph (q) which deals with claims in general average and paragraph (r) which deals with claims in bottomry.

With the arrangement and wording of article 1(1) of the Convention, as followed in section 47(2) of the Act of 1956 applicable in Scotland, the expression "arising out of" governs, as I have already indicated, all the claims listed in paragraphs (a) to (q). If one substitutes in article 1(1) the expression "arising under" for the expression "arising out of," it is immediately apparent that the former expression simply makes no sense in relation to most of the claims set out in paragraphs (a) to (q). Indeed, it only makes any real sense in relation to paragraphs (d) and (e). By contrast, if one substitutes in article 1(1) the expression "connected with" for the expression "arising out of," it makes complete sense in relation to all the claims listed in paragraphs (a) to (q), including paragraphs (d) and (e), which are the crucial paragraphs in this case.

These considerations make it abundantly clear that, in article 1(1) of the Convention, as followed in section 47(2) of the Act of 1956 applicable in Scotland, the expression "arising out of" cannot have the narrower meaning of "arising under," but must rather have the wider meaning of "connected with." It cannot have been the intention of the legislature that, as a result of the re-arrangement and rewording of article 1(1) of the Convention in section 1(1) of the Act of 1956 applicable in England and Northern Ireland, involving the transfer of the expression "arising out of" so that it no longer governs all the claims listed in paragraphs (a) to (s) of section 1(1) but only those in paragraphs (h), (q), and (r), to give a meaning to the expression "arising under" in those two paragraphs different from, and narrower than, the meaning which it has in article 1(1) of the Convention and section 47(2) of the same Act. To attribute such an intention to the legislature would mean that the latter, when giving domestic effect to the adherence of the whole of the United Kingdom to the Convention, had enacted provisions applicable in England and Northern Ireland, which differed materially from those applicable in Scotland. I do not consider that it can be right to attribute to the legislature any such bizarre intention.

By contrast, the expression "relating to" was used in the same way in paragraph (h) of section 1(1) of the Act of 1956 as in paragraphs (d) and (e) of article 1(1) of the Convention and in section 47(2) of the same Act, and there is nothing in the arrangement or wording of article 1(1) of the Convention, of the kind which there is in respect of the expression "arising out of," to indicate whether the former expression is to be given the wider or the narrower of the two meanings which it is capable of having.

The second difference concerns the authorities on the construction of the expression "arising out of," as used in paragraph (h) of both section 1(1) of the Act of 1956 and section 20(2) of the Act of 1981. As the review of the authorities made by Lord Keith of Kinkel in the Gatoil case [1985] A.C. 255 shows, the English authorities (The St. Elefterio [1957] P. 179 and The Sennar [1981] 1 Lloyd's Rep. 295) support a wide construction of the expression "arising out of" as so used. By contrast, both English authority (The Zeus, 13 P.D. 188) and Scottish authority (The Aifanourios, 1980 S.C. 346) support a narrow construction of the expression "relating to," as used in section 2 of the Act of 1869 in the former case and in paragraphs (d) and (e) of section 47(2) of the Act of 1956 in the latter case. These authorities tilt the balance in favour of giving a narrow meaning to the expression "relating to," where it occurs in the Acts of 1956 and 1981, which, in the absence of such authorities, it might not be right to give it.

For these reasons I do not regard the decision of your Lordships' House in the Gatoil case [1985] A.C. 255 on the construction of the expression "relating to," contained in paragraph (e) of section 47(2) of the Act of 1956 as being determinative of the construction of the different expression "arising out of," contained in paragraph (h) of section 20(2) of the Act of 1981.

With regard to the sixth point, the expression in the French text of article 1(1) of the Convention corresponding to the expression "arising out of" in the English text of it, is "ayant l'une des causes." If the expression "arising out of" is to be regarded as ambiguous, which in the context of article 1(1) of the Convention I do not, for the reasons given when discussing the Gatoil case [1985] A.C. 255, I do not think that it is, I accept that it would be open to your Lordships to look at the French text in order, if possible, to resolve the ambiguity. The difficulty, however, is that your Lordships have no evidence to show what meaning, as a matter of French law, the expression "ayant l'une des causes" has. It may well be a term of art in French law, in which case it is impossible to ascertain its meaning without expert evidence from a qualified French lawyer as to what that meaning is. No such expert evidence was put before your Lordships, and in its absence, I do not consider that any assistance can be derived from a comparative examination of the French text.

My Lords, having considered the six points argued by Mr. Saville, I am not persuaded that any one of those points singly, or any combination of them together, lead to the conclusion that the expression "arising out of" in section 20(2)(h) of the Act of 1981 should be given the narrow meaning of the expression "arising under," rather than the wider meaning of the expression "connected with." On the contrary, I am satisfied, on four main grounds, that the expression "arising out of" should be given the second and wider meaning.

The first ground is the principle, referred to earlier, that a domestic statute designed to given effect to an international convention should, in general, be given a broad and liberal construction. The second ground is that, for the reasons given when discussing the Gatoil case [1985] A.C. 255, I think that there is a clear indication in the arrangement and wording of article 1(1) of the Convention that the expression "arising out of" is there used in the wider of the two meanings of which it is capable. The third ground is that, on the basis that the second ground is correct, the rearrangement and rewording of article 1(1) of the Convention contained in section 1(1) of the Act of 1956, and followed in section 20(2) of the Act of 1981, cannot have been intended to substitute a narrow meaning for the expression "arising out of" in those two subsections for the wide meaning which it clearly has in article 1(1) of the Convention. The fourth ground is that the English authorities, The St. Elefterio [1957] P. 179 and The Sennar [1981] 1 Lloyd's Rep. 295 support the wider meaning of the expression "arising out of" in section 1(1)(h) of the Act of 1956 and section 20(2)(h) of the Act of 1981. The St. Elefterio as I said earlier, stood unchallenged for some 26 years until the present case, and, in the interval, the legislature saw fit, in the Act of 1981, to reenact the provision construed in that case in the same terms as before.

My Lords, having dealt, somewhat at length, I fear, with the first contention for the appellants, I now turn to deal with the second. With regard to this part of the case your Lordships have the great assistance of the clear and cogent judgment of Parker L.J. in the Court of Appeal, which makes it possible for me to deal with it much more briefly than I have thought it necessary to deal with the first.

The reasoning on which Parker L.J. proceeded in rejecting the appellants' second contention can be formulated as follows.

First, there were, in the factual context of the case, a number of agreements falling within the classes of agreements specified in section 20(2)(h) of the Act of 1981. Parker L.J. was there referring to the head-charter, the sub-charter and the sub-sub-charter.

Secondly, unless the agreements referred to in section 20(2)(h) of the Act of 1981 were limited to agreements made directly between the two parties to an action, the only question for consideration was whether the respondents' claim was one arising out of one or more of those agreements.

Thirdly, section 20(2)(h) of the Act of 1981 contained no words which, either expressly or by necessary implication, restricted the agreements referred to in it to agreements made directly between the two parties to an action.

Fourthly, there was no good reason, in the absence of authority to the contrary, for importing into section 20(2)(h) restrictive words having that effect.

Fifthly, there was no such authority to the contrary, both The St. Elefterio [1957] P. 179 and The Sennar [1981] 1 Lloyd's Rep. 295 having been cases in which the relevant agreement had in fact been made between the two parties to the action, so that the question did not arise for decision in them.

Sixthly, having regard to these matters, the right view was that, if the respondents could establish that their claim arose out of an agreement of the relevant kind, i.e., an agreement relating to the carriage of goods in a ship or to the use or hire of a ship, then, even if such agreement was not one made directly between the respondents and the appellants, that claim fell within section 20(2)(h).

Seventhly, the respondents were, in the action brought by them, asserting negligence of the appellants, their servants or agents in loading at Houston such a quantity of corn that the vessel's draught on arrival at Alexandria exceeded 32 feet in salt water.

Eighthly, if that claim was sustainable, a matter which did not presently arise, it could only be because

(a)

it had been guaranteed in the sub-sub-charter that the vessel's draught on arrival would not exceed 32 feet in salt water;

(b)

the master or the appellants were aware of that guarantee; and, probably,

(c)

the sub-supervision of the appellants as regards employment and that loading should be under the supervision of the master (with comparable provisions also in the head-charter).

To that catalogue I would add

(d)

that it was reasonably foreseeable that, if the vessel's draught on arrival exceeded the maximum draught guaranteed in the sub-sub- charter, the respondents would suffer damage in that they would incur additional costs and expenses.

Ninthly, in the absence of authority to the contrary, the right view was that a claim based on the matters set out above plainly arose out of the sub-sub-charter, or the sub-charter, or both. This was so because, in the absence of the guarantee in the sub-sub-charter, and the master's or the appellants' awareness of it, it appeared impossible to contend that the latter owed a duty to the respondents to load only such a quantity of cargo as would enable the vessel to arrive at Alexandria with a draught not exceeding 32 feet in salt water.

Tenthly, there was again no authority to the contrary.

I find myself in complete agreement with the reasoning of Parker L.J. with regard to this second part of the case. On the grounds stated by him I am of opinion that the second contention for the appellants should be rejected.

My Lords, for the reasons which I have given, I conclude that the judgment of the Court of Appeal, reversing that of Sheen J. and deciding in favour of the respondents, should be affirmed, and that the appeal should be dismissed with costs.