The limits of the English Admiralty Court’s in rem jurisdiction

This recent decision provides useful guidance on the scope of the English Admiralty Court’s in rem jurisdiction, as well as the legal consequences of contractual ambiguity in commercial contracts (specifically in relation to contractual capacity). The decision, delivered in two judgments, examines whether berthing fees incurred by multiple vessels could justify the arrest of a single ship.

The background facts 

The dispute arose from the 2023 Ocean Globe Race, in which 14 sailing vessels, including the defendant’s vessel, SY Explorer (the Vessel), berthed at the claimant’s marina. The defendant was the founder and chairman of the race.

Following the race, the vessels attempted to depart from the marina. However, the claimant refused to provide clearance forms on the basis that berthing fees in the sum of £25,830 were allegedly due from the defendant and had not been paid. 

The defendant alleged that either (i) no fees were payable because the claimant had agreed to provide berthing free of charge (as part of an overall sponsorship deal) or, (ii) if fees were payable, the counterparty was not the defendant, but rather an Australian company, Ocean Frontiers Pty Limited, of which the defendant was the chief executive officer. The basis for the latter argument was premised on the fact that the defendant had countersigned a letter of intent with the words “Founder, for and on behalf of Ocean Globe Race 2023” and had also signed off emails to the claimant with “Don – OGR” or as “Don – OGR Founder”.

The disputes between the parties culminated in the claimant taking steps to arrest the Vessel in May 2024.
In resisting the arrest proceedings, the defendant made two applications to the Admiralty Court, submitting as follows:

1. That the claimant’s in rem claim did not engage the Court’s jurisdiction.

2. That the claimant’s claim be struck out under CPR rule 3.4(2)(a) for failing to disclose any reasonable grounds for the case, and/or under the Court’s inherent jurisdiction, and consequentially, for the Vessel to be released from arrest. 

The Admiralty Court decision

The issues in dispute and the Court’s findings were as follows:

1. The capacity in which the defendant had contracted
     
   A fundamental issue was whether the defendant had contracted in a personal capacity or as an agent of ‘Ocean Frontiers Pty Ltd’, where he acted in the capacity of the chief executive officer.  
      
   The Court dismissed the defendant’s argument that berthing was free. The Court referred to the defendant’s emails which acknowledged the requirement to pay fees, as well as his request for a quote for the costs of berthing the 14 vessels. 
     
   Further, the Court held that ‘Ocean Globe Race’ was not a legal entity – it was a sporting event. The defendant was clearly contracting in his personal capacity and his sign-off would have been “no more than a descriptor of the purpose and aims for which he was corresponding or intending to contract.” His sign-off as “Don – OGR” or as “Don – OGR Founder” similarly did not indicate agency, and Ocean Frontiers Pty Ltd had not been proven to be the contractual counterparty.  
     
   This finding reinforces the principle that individuals representing unincorporated entities in commercial maritime contracts risk personal liability unless they clearly establish an agency relationship.  
     

2. The limits of in rem jurisdiction 
    
   A separate issue was whether the claimant could bring an in rem claim against the Vessel for debts linked to the 13 other vessels.  
     
   The Court analysed section 20(2)(n) of the Senior Courts Act 1981, which allows in rem actions for claims related to “dock charges or dues”. 
     
   The defendant successfully argued that the in rem claim must relate to the specific vessel, rather than a broader obligation covering multiple ships. Citing authorities including The Eschersheim [1976] 2 Lloyds Rep 1 and The Lloyd Pacifico [1995] 1 Lloyds Rep 54, the Court held that: 
     

   1. Admiralty jurisdiction is ship-specific; a vessel may only be arrested for claims directly connected to it.

   2. The claimant’s argument that the Vessel was the ‘lead ship’ for which the defendant was liable did not make the total claim recoverable in rem.  

Consequently, the Court held that the claimant’s claim was to be restricted to an in rem claim for £2,171.36, being the dock dues of the Vessel itself, rather than the full £25,830. The remainder of the claim (which was comprised of the dock dues of the other ships of the flotilla) could only be pursued in personam.

Comment 

The ability to arrest a ship in rem is a powerful civil remedy available to a creditor seeking to secure a claim or maritime lien. This judgment provides useful guidance on the extent of the Admiralty Court’s in rem jurisdiction. 

It is also a welcome reminder of the importance of taking precautions to avoid ambiguity when entering into contractual arrangements, whether that be in a personal capacity or on behalf of a separate legal entity – and the potential consequences that contractual ambiguity can cause.

Hill Dickinson’s team of maritime lawyers regularly advise in relation to all aspects of vessel arrests.