Ukraine

The Court held that the plaintiff cargo owners were not entitled to arrest another vessel operated by the carriers. Even if in practice the carrier enjoyed a wide measure of commercial discretion over the vessel, it did not enjoy what English law would recognise as the rights of the equitable owner. The State (the Republic of Ukraine) owned the legal title at all times. The process of liberalisation which took place in the Ukraine had led to a loosening of the bonds of state control but not to a severance of them. The State retained the right and power of ultimate decision over the use and exploitation of those assets. Thus, although the carriers were liable in personam (in respect of a cargo of tobacco damaged in the course of carriage from India to the Ukraine) they were not the beneficial owners of the (sister) ship which was arrested and therefore the in rem action under s. 21 (4) failed. This should be contrasted with the later case, involving the same defendants, of The Guiseppe di Vittorio (1998). In this case the Court of Appeal referred to the Nazim Hikmet, saying that it had been shown by the documentation in that case that the defendants were to be regarded as ‘shipholders’ rather than ‘owners’. This was not the same position in this subsequent case where the later documentation was different. In this case the plaintiffs brought an action in rem under s. 21 (1) (4) against the vessel in respect of supplied bunkers which had not been paid for. The vessel again was operated by the defendants. Here, however, the Court of Appeal held that the documentation showed that whilst it again could not be said that the defendants were the beneficial owners of the vessel, they were the demise charterers and therefore within the in rem jurisdiction of s. 21 (4).