Discretion

An important and practical effect which is consequent upon the instigation of an Admiralty action in rem is the issue of priorities. The term priorities as used here refers to the standing order (i.e. the ‘pecking’ order) of various creditors as against the funds in court produced by the sale of the vessel. Where the sale produces a sum sufficient to satisfy the claims of all creditors then no problem will exist. The issue of priorities becomes important when the sum produced is insufficient to meet the claims of all creditors. The basic priorities rule is that a creditor’s right to claim on the fund is dependent upon the nature of his claim. For example, a person who is enforcing a claim which gives rise to a maritime lien will have a prior or higher claim than a creditor who has, for example, supplied equipment to the vessel and who has not been paid by the owner of the vessel (this creditor is afforded a statutory lien under the provisions of the Supreme Court Act 1981 and a statutory lien is of lower priority than a maritime lien). The claimant with a statutory lien will in turn have a prior claim over a creditor such as a ship repairer who at common law is afforded a possessory lien. It will thus be seen that the in rem procedure, apart from providing a form of pre-trial security, ensures that after judgement has been obtained and the res has been solved by order of the court, that the creditor who has instigated the procedure by the in rem arrest will have an interest which is secured as against the fund. The above discussion is still true today and in respect of non-Brussels Convention cases The Eleftheria (1969) continues to reflect the judicial view that he who voluntarily agrees to a jurisdiction clause should be bound by it, unless there are strong reasons why he should not be so. The Eleftheria was considered by the Admiralty Court in The El Emira (1980) where it said that the clause would not be effective: Brandon J said that the discretion to exercise a stay in proceedings (of the arresting court) should be exercised in favour of an exclusive jurisdiction clause