Charterer

The 1952 Arrest Convention, for the first time in the history of the Admiralty law of arrest, introduced the facility of a claimant being able to bring an in rem action against either the involved ship or a ship ‘under the same ownership’ as the involved ship. Section 3 (4) of the 1956 Administration of Justice Act which adopted this facility into English Admiralty law. Section 3 (4) of the 1956 Act was replaced by Section 21 (4) of The Supreme Court Act 1981. It is in this manner of so called ‘sister-ship arrests’ that the 1981 Act has introduced changes from the 1956 Act. Judicial conflict, however, in the interpretation of the wording of the 1956 Act made it clear that this Act fell short of the intention of the 1952 Convention. The phrase ‘sister-ship’ in the context of the 1952 Convention means a ship under the common ownership with the ‘offending’ – involved ship. The wording of Section 3 (4) of the 1956 Act, however, provides that either the involved ship may be arrested or a ship under the same beneficial ownership as to all its shares as the person who would be liable in personam on the claim. The courts in the intervening years have interpreted this as demanding that there be an ‘ownership link’ between the alternative ship selected for arrest and the involved ship. This of course results in the situation that where the charterer of the offending vessel is liable in personam, no vessel actually owned by the charterer could be arrested as a sister-ship as it would not be under the same beneficial ownership as the involved vessel.