Gatoil International Inc v. Arkwright-Boston Manufacturers Mutual Insurance Co

[1985] 1 All ER 129

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(Judgment by: Lord Wilberforce J) Court:

Judges: Lord Fraser of Tullybelton J
Lord Scarman J

Lord Wilberforce JLord Keith of Kinkel J
Lord Roskill J

Subject References:
Admiralty
Jurisdiction
Action in rem
Claim arising out of agreement relating to carriage of goods in a ship or to use or hire of a ship
Agreement
Claim for payment of premiums on insurance policy over cargo
Whether claim for premiums arising out of 'any agreement relating to the carriage of goods in any ship'

Legislative References:
Administration of Justice Act 1956 - 47(2)(e)

Judgment date: 13 December 1984

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Judgment by:
Lord Wilberforce J

My Lords, I have had the benefit of reading in advance the speech to be delivered by my noble and learned friend Lord Keith. I take the benefit of his full statement of the issue in this appeal which, briefly, concerns the interpretation of s 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 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 para ( e ) is read in conjunction with the other paragraphs in s 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. It is no doubt true that earlier cases, based on similar words occurring in s 2 of the County Courts Admiralty Jurisdiction Amendment Act 1869, 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 s 1(1) of the 1956 Act, as regards English cases a more liberal approach was preferred. The relationship accepted in The Queen of the South, Corps v Queen of the South (owners ) ( Port of London Authority intervening ) [1968] 1 All ER 1163 , [1968] P 449 was quite loose: the agreement for mooring etc of a ship was held to fall within s 1(1)( h ) of the 1956 Act (in which paras (d) and (e) of s 47(2) were combined for the purposes of Scottish Admiralty jurisdiction), because it involved the use of motor boats, ie ships. As for salvage agreements, although in The Jade, The Eschersheim, Erkowit (owners) v Jade (owners ), Erkowit (cargo owners) v Eschersheim (owners ) [1976] 1 All ER 920 , [1976] 1 WLR 430 an agreement for salvage services was held to be within para ( h ) as involving the use of a salvage vessel, in The Tesaba [1982] 1 Lloyd's 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 para ( h ) (now in s 20(2) of the Supreme Court Act 1981) an agreement for the hire by shipowners of containers to be carried on a ship. My noble and learned friend Lord Keith 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 West of Scotland Ship Owners Mutual Protection and Indemnity Association (Luxembourg) v Aifanourios Shipping SA, The Aifanourios [1980] 2 Lloyd's Rep 403 Lord Wylie held that a claim for release calls under a policy of marine insurance was outwith both para ( d ) and para ( e ) of s 47(2), 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 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 Sea-going Ships (Brussels, 10 May 1952; TS 47 (1960); Cmnd 1128).

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 [1980] 2 All ER 696 , [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; second, 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, Pt V (which included s 47) was enacted to give effect to the obligations of the United Kingdom consequent on its accession to the 1952 convention (see The Jade, The Eschersheim [1976] 1 All ER 920 at 923, [1976] 1 WLR 430 at 434 per Lord Diplock), 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 art 1 of the 1952 convention was, in fact, based on the list of such claims then applicable in England under s 22 of the Supreme Court of Judicature (Consolidation) Act 1925 (see particularly sub-s (1)( a )(xii)). This list was adopted, as part of a compromise, in the 1952 convention, and was then made applicable (with minor variations) to England and to Scotland by ss 1 and 47 of the 1956 Act respectively. This derivation provides a clear justification for attributing to the provisions in the Scottish portion of the 1956 Act the meaning which they ought to receive under the convention, if that can be ascertained.

The proceedings of the conference which led to the 1952 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. As regards the list of maritime claims in art 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. 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 (Naples report, p 59):

'(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.'

This was put forward at the Brussels conference (Brussels report, p 96).

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

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

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

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 premiums on policies of insurance among the maritime claims justifying arrest. It did so, moreover, not because it thought that these premiums 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 art 1 to provide for the inclusion of premiums among arrestable maritime claims.

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

My Lords, I respectfully think that the interpretation of the 1956 Act 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.