Corporate

As Company A is liable in personam, any ship owned by Company A may also be arrested. It matters not whether Company A owned or did not own the ‘involved’ or ‘wrongdoing’ ship. Of course, if Company A owns no ship itself or no other ship than the ‘involved’ ship, there can be no alternative ship arrest. Suppose that the people behind the corporate entity of Company A were also to be behind the corporate entity of Company B. Would it be possible for the plaintiff to arrest a ship belonging to Company B? i.e. effect an alternative ship arrest in respect of Company B’s ship? The basic answer to this would be ‘no’ because, the two companies are distinct and separate legal entities and the fact that the persons behind these two entities are the same is for most parts irrelevant. Only where the plaintiff can persuade the court that the two companies were set up by separate legal entities as a sham or to perpetrate a fraud, will he persuade the court to look behind the corporate entities at the actual persons. It can be seen, therefore, that where the ‘wrongdoing’ or ‘involved’ ship is owned by Company A, there may be no alternative ship arrest in respect of any ship owned by Company B even though the shares in Company A and the shares in Company B are in actual fact held by the same persons. The two companies are separate and distinct legal entities and therefore the requirements of ownership as imposed by Section 21 (4) would not be met unless, of course, it was possible to persuade the court to ‘pierce’ the corporate veil.