Republic of India v India Steamship Co Ltd (The Indian Endurance and The Indian Grace) (No 2)

For section 34 of the Civil Jurisdiction and Judgments Act 1982, a non-lien Admiralty action in rem is in substance an action against the shipowners, rather than the ship. The owners become parties when the writ is served or deemed served. A recognised foreign judgment obtained against them on the same cause of action therefore bars the continued action in rem.

Estoppel by convention requires a communicated or manifested assumption that it would be unjust to permit a party to deny. Knowledge that another claim will be pursued elsewhere does not establish an assumption that no defence based on the earlier judgment will be raised. Estoppel by acquiescence likewise requires circumstances making silence or inaction misleading. The historic personification of a ship cannot alter these conclusions.

The Indian Government obtained judgment in Cochin for the value of munitions jettisoned from the respondents’ vessel, Indian Grace. Before that judgment was delivered, it issued an English Admiralty writ in rem against the sister ship, Indian Endurance, claiming about £2.6 million for damage to the remaining cargo.

In an earlier appeal, the House had held that the Indian and English claims involved the same cause of action, but remitted questions concerning estoppel and whether an action in rem involved different parties: Republic of India v India Steamship Co Ltd [1993] A.C. 410. Clarke J subsequently held that estoppel prevented reliance on section 34 of the Civil Jurisdiction and Judgments Act 1982, that the action in rem was against the ship rather than the owners, and that the abuse-of-process principle did not bar it: The Indian Grace (No. 2) [1994] 2 Lloyd's L.R. 321.

The Court of Appeal reversed those conclusions: The Indian Grace (No. 2) [1996] 2 Lloyd's L.R. 12. The principal questions before the House were whether the foreign proceedings and the English action in rem were between the same parties for section 34, whether the owners were estopped from invoking that section, and, if necessary, whether the English claim was an abuse of process.

1. Appeal dismissed unanimously. Lord Steyn delivered the leading speech. Lord Browne-Wilkinson, Lord Hoffmann, Lord Cooke of Thorndon and Lord Hope of Craighead agreed with his reasons.

2. Per Lord Steyn, the historic theory that a ship is itself the defendant in an action in rem had been displaced by the procedural and realist understanding of Admiralty proceedings. In a duly constituted non-lien action in rem, the owners are the real defendants. The decisions in The Cristina and The Arantzazu Mendi, among other authorities, established that service upon a vessel directly impleads its owner. The contrary analysis in The Burns could no longer be accepted, and The Nordglimt was no longer good law.

3. For section 34 of the Civil Jurisdiction and Judgments Act 1982, an action in rem is therefore against the owners from the moment the Admiralty Court is seised by service of the writ, or deemed service following acknowledgement of its issue. The Indian and English proceedings were consequently between the same parties. The statutory purpose of preventing relitigation of the same cause of action reinforced that conclusion.

   The word “brought” in section 34 includes the continuation and pursuit of proceedings. It was immaterial that the English writ had been issued before judgment was delivered in Cochin. Subject to estoppel, section 34 barred the English proceedings.

4. Per Lord Steyn, estoppel by convention may arise from a shared assumption of fact or law, or an assumption made by one party and acquiesced in by the other. A concluded agreement is unnecessary, but parallel uncommunicated assumptions are insufficient. The Government had to show that the owners manifested acceptance that judgment in Cochin would not prejudice adjudication of the larger claim and that no judgment-based defence would be raised. Evidence that the owners knew of the intended English claim fell materially short of that requirement.

5. Estoppel by acquiescence also failed. Both parties had been unaware of the possible effect of the Cochin judgment. No special circumstances required the owners to warn the Government, and nothing in their conduct or silence reasonably suggested that judgment could safely be taken without affecting later proceedings. Lord Steyn declined to merge estoppel by convention and acquiescence into one overarching principle because their requirements and fields of operation remained distinct.

6. The House expressed no final view on whether the old rule permitting successive in personam and in rem proceedings survived section 34 in maritime-lien cases, or whether section 21(4) of the Supreme Court Act 1981 supplied an independent answer. Since section 34 applied and no estoppel arose, it was also unnecessary to decide whether Henderson v Henderson abuse of process barred the claim.

1. House of Lords: The present appeal was dismissed unanimously: Republic of India v India Steamship Co Ltd (The Indian Endurance and The Indian Grace) (No 2) [1997] UKHL 40; [1998] A.C. 878.
2. Court of Appeal: The owners’ appeal was allowed. The court rejected the findings that the action in rem involved a different party and that the owners were estopped from relying on section 34: The Indian Grace (No. 2) [1996] 2 Lloyd's L.R. 12.
3. Admiralty Court: Clarke J decided the preliminary issues for the Indian Government, holding that convention and acquiescence estoppels arose, that the ship was a different party, and that abuse of process did not bar the action: The Indian Grace (No. 2) [1994] 2 Lloyd's L.R. 321.
4. House of Lords, earlier appeal: The House held that the foreign and English proceedings involved the same cause of action, but that section 34 created a bar capable in principle of being defeated by agreement, waiver or estoppel. The party-identity and estoppel questions were remitted: Republic of India v India Steamship Co Ltd [1993] A.C. 410.
5. Court of Appeal, earlier appeal: The Indian Government’s appeal from Sheen J was dismissed. The court treated section 34 as applicable and incapable of being displaced by agreement, waiver or estoppel: The Indian Grace [1992] Lloyds Rep. 124.
6. Admiralty Court: Sheen J held that section 34 was an absolute bar and struck out the English proceedings.