Al Khattiya, The Owners of the Ship v Owners and/or Demise Charterers of the Ship 'Jag Laadki', Court of Appeal - Admiralty Division, March 01, 2018, [2018] EWHC 389 (Admlty)

Resolution Date:March 01, 2018
Issuing Organization:Admiralty Division
Actores:Al Khattiya, The Owners of the Ship v Owners and/or Demise Charterers of the Ship 'Jag Laadki'
 
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Neutral Citation Number: [2018] EWHC 389 (Admlty)

Claim No AD-2017-000036

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

ADMIRALTY COURT (QBD)

ROYAL COURTS OF JUSTICE

Royal Courts of Justice

Rolls Building, Fetter Lane

London, EC4A 1NL

Date: 01/03/18

Before:

THE HONOURABLE MR JUSTICE BRYAN

B E T W E E N:

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THE OWNERS OF THE SHIP ``AL KHATTIYA''

Claimants

-and-

THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP ``JAG LAADKI''

Defendants

Admiralty action in rem against the ship ``JAG POOJA''

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Christopher Hancock QC and Thomas Macey-Dare

(instructed by Reed Smith LLP) for the Claimants

Robert Thomas QC and Benjamin Coffer

(instructed by Ince & Co LLP) for the Defendants

Hearing date: 22 February 2018

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Judgment Approved

THE HONOURABLE MR JUSTICE BRYAN

  1. The parties appear before the Court on the hearing of the Defendants' application (i) to set aside an antisuit injunction granted by Knowles J on 25 April 2017, and (ii) to stay the Claimants' claim in this action (the ``Claim'') on forum non conveniens grounds.

  2. The Claim arises from a collision (or allision) on 23 February 2017, in which the Defendants' VLCC ``JAG LAADKI'', collided with the Claimants' LNG carrier ``AL KHATTIYA'' at high speed, in a designated anchorage off Fujairah, while the ``AL KHATTIYA'' was lying stationary at anchor taking on supplies. The collision caused substantial damage to the ``AL KHATIYYA''. She proceeded to the N-Kom repair yard in Ras Laffan, Qatar where that damage was repaired. Those repairs have now been completed and the ``AL KHATIYYA'' is back in service.

  3. As will appear, the Defendants now accept that they are 100% to blame for the collision (as would appear to have been inevitable at all times given the facts identified above). In consequence this considerably limits the issues that can arise in relation to this dispute, specifically the only matters that can arise in relation to the Claim are matters of quantum, a point of significance in the context of the application for a stay on forum non conveniens grounds. In the light of the admission of liability, and should I dismiss the Defendants' application for a stay, I am invited to direct that judgment be entered against the Defendants, with damages to be assessed by the Admiralty Registrar in the usual way.

  4. The Claimants are a Marshall Islands company operated in Qatar and wholly owned by Qatari interests. The Defendants are an Indian company with a large fleet of tankers trading worldwide, and in consequence they are, in that sense, present in almost all countries in the world. The Claimants founded jurisdiction for their claim against the Defendants in England as of right by serving the in rem Claim Form on the ``JAG POOJA'', a sister ship of the ``JAG LAADKI'', at Milford Haven on 22 March 2017. The right to found jurisdiction in this manner by serving on a vessel is a well-known and important feature of maritime law, which is applied around the world and is embodied in Article 1 of the 1952 Collision Jurisdiction Convention. As will appear, the fact that the Claimants have founded jurisdiction in this Court as of right has important consequences in the context of the application of the principles in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 476 (``Spiliada''), and the burden of proof in the context of the question of forum non conveniens.

    1. Limitation

  5. The Claimants' claim is for around US$ 30 million. It is apparent that the Defendants will seek to contest the quantum of the damages recoverable from them (which in large part consist of the costs of the repair and loss associated with the loss of use of the ``AL KHATTIYA'' during the time the repairs were being carried out).

  6. Part of the backdrop to the action, and the proceedings that the Defendants have commenced in Fujairah (as addressed below), is the respective tonnage limitation regimes in the UK and the UAE. The UK is a party to the 1976 Limitation Convention as amended by the 1996 Protocol. Based on the tonnage of the ``JAG LAADKI'', the applicable limit in the UK at the present time is around US$ 53.5 million, well in excess of the Claimants' claim. The UAE is a party to the unamended 1976 Limitation Convention. Under that Convention, the applicable limit is around US$ 14.7 million. The UAE also applies a domestic limitation regime, in Article 141 of UAE Federal Maritime Law No. 26 of 1981, under which the applicable limit is around US$ 5.4 million.

  7. It is accordingly self-evident that the tonnage limitation regime in the UK is more favourable to the Claimant, whereas that in the U.A.E. is more favourable to the Defendants.

  8. In this regard on or about 4 April 2017 the Defendants issued two petitions (effectively urgent applications) before the Fujairah Court (the ``UAE Petitions''), seeking to constitute a limitation fund under the 1976 Convention. After a number of hearings the Fujairah Court ultimately held that it could not determine the issues concerning the establishment of the limitation fund by way of a petition. The Defendants then commenced two sets of substantive proceedings:-

    i) In case number 395/2017 (the ``UAE Fund Action''), registered on 21 May 2017, the Defendants sought to constitute a limitation fund. If the Defendants were to be successful, they could then attempt to use the machinery in Article 13 of the 1976 Convention to prevent the Claimants from enforcing any judgment they obtained in this action in any 1976 State Party, otherwise than against that limitation fund.

    ii) In case number 370/2017 (the ``UAE Limitation Action''), commenced on 11 May 2017, the Defendants sought to limit their liability in respect of the collision to the amount provided for by the 1976 Convention and to determine the amount of their liability, if any, up to those limits. If they were to succeed, they could then attempt to rely upon the Fujairan judgment by way of res judicata in this action or in any other proceedings which the Claimants brought to enforce an English judgment elsewhere.

  9. Judgment at first instance was given in both cases on 11 December 2017. The Fujairah Court rejected both cases on the basis that the provisions of UAE law which give effect to the 1976 Convention do not apply to claims arising out of collisions. In the UAE Fund Action, the Court also held that a limitation fund could not be established because of the lack of any formal rules or regulations to govern the establishment of such a fund in the UAE. The Defendants' claims were accordingly dismissed in each of these cases. Accordingly, subject to any successful appeal, there will be no extant proceedings in the UAE going forward.

  10. The Defendant is, however, appealing against the judgments in both claims. The Defendants submit that the first instance judgments are wrong asserting that collision damage falls within the category of ``damage to property'' which is expressly covered in the 1976 Convention and the enacting provisions of UAE law, and asserting the absence of regulations does not prevent the establishment of a fund. The evidence before me is that the appeals are expected to be finally determined by the end of September 2018.

  11. The Claimants do not dispute that the Defendants are entitled to attempt to establish a limitation fund in Fujairah. However on 4 April 2017, shortly after the Claimants had founded jurisdiction in England as of right, the Defendants commenced an action in Fujairah claiming damages from the Claimants and their commercial managers (and beneficial owners) QGTC, and a declaration of non-liability, arising from the collision (``the UAE Liability Action'').

  12. The Claimants submit that that claim was hopeless, and that it was not properly arguable that the Defendants were entitled to the relief which they claimed in the UAE Liability Action and submit that the Defendants must have been aware of that at the time. Put simply it must have been obvious from the start, and before the UAE Liability Action was commenced, that the Defendants as owners of the ``JAG LAADKI'' were 100% to blame for the collision on the facts as I have already identified - with the ``JAG LAADKI'' colliding with a stationary vessel at a designated anchorage. As Andrew Baker J put it in his judgment on an earlier disclosure application, the ``JAG LAADKI'' ``crashed into'' the ``AL KHATTIYA'' that was, as it were, minding its own business, lying stationary at a designated anchorage, taking on supplies. I consider the Claimants to be right in these submissions.

  13. The Claimants have identified two possible explanations for why the Defendants might have brought the UAE Liability Claim in Fujairah:

    i) To improve their chances of obtaining a stay of the English proceedings on forum non conveniens grounds, by creating the appearance of a genuine dispute on the issues of liability and apportionment, for which Fujairah would arguably be the more appropriate forum.

    ii) To improve their prospects of establishing a limitation fund in Fujairah, by satisfying a precondition which the Fujairah court might impose, depending on how it construed Article 11.1 of the 1976 Convention - either that legal proceedings should have been brought against the Defendants in Fujairah by a party with a claim which is subject to limitation, or that the Defendants should themselves have brought proceedings in Fujairah, seeking a declaration that they are not liable for such a claim.

  14. For its part the Defendants do not accept that those were the explanations for why they brought the UAE Liability Claim. However the Claimants say that the Defendants have never offered any sensible justification as to why the Defendants brought the UAE Liability Claim. Whatever the reason for the Defendants commencing the UAE Liability Claim, I am satisfied (as...

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